Land Value

[Ugly]

Hey folks, 

I'm reaching out to se if anyone here can offer land value advise. I've used the county tax base and compared surrounding land but have not found a firm answer.

 

I'm looking at 26 acres in Jefferson county, all of it is wooded and steep, pretty much useless except for hunting and wood harvesting. The owner is asking 2600+ an acre, I think 1-1.5k an acre is more like it. 

 

The county thinks it's worth about 2500 acre but the sale will remove the useful plot for a different buyer. 

 

 

Any help would be appreciated.

Edited December 1, 2014 by Ugly

[DaveTN]

The county thinks it's worth about 2500 acre but the sale will remove the useful plot for a different buyer.

What does that mean?

[Ugly]

The land will be divided, it is a 32 acre plot but I'll wind up with 26. The land I won't get is actually build able. The rest is steep wooded mountain. 

[tnguy]

Offer 1.3 an acre and tell him to think about it maybe since that is what *you* think it is worth. If you have the money ready and he is a motivated buyer, you might be able to make a deal. If not, move on or raise your bid. Sounds to me like closer to 2k is where a deal could be made though.

Edited December 1, 2014 by tnguy

[TripleDigitRide]

Assessing land value can sometimes be difficult, especially with the type of land you're describing. In a case like this, a traditional appraisal isn't always easy to figure. You need to compare apples to apples, while they are possibly comparing apples to oranges.  Have you been able to find similar plots of land in the general area that have sold in the not so distant past? The county is placing a generic value on the land because they have to. In this case, I'm not sure you can put a whole lot of faith in their assessment.

If you are serious about this land, you'll need to do your homework and put together a proposal explaining your reasoning behind an offer that's lower than the sellers asking price. If the land is truly useless, the reasons why need to be pointed out in your proposal. Is this a desirable piece of property? How long has it been on the market? Are there other similar plots for sale in the area? If so, what are they priced at, and how long have they been on the market?  You mentioned the possibility of harvesting the wood. is there any real value there to the average person? is there a significant amount of harvesting going on in the area? Can you build on this property? Are their any costs associated with making this property useful to the average person? How badly does the current owner want to sell? Is the current owner someone who the property was handed down from a deceased relative? 

There a countless factors that go into assessing the real value of land like this. In the end, like most anything, the value is determined by what someone is willing to pay for it. While it may be almost useless to you, maybe someone else will find it to be more useful and valuable.

If it were me, I'd try to set up a meeting with the land owner and/or agent to get a feel for where their head is at. I'd prefer if the land owner was present because the agent is a salesperson, and you're not likely to get a real feel for what's going on in the owners head. Have a list of questions you may want to ask, but don't reveal too much about where your head is at. Let them do most of the talking. 

After the meeting, go home and go over what you learned from them and your research. Put together your offer and the reasons why you feel it's an appropriate and acceptable. Including your reasoning behind the offer can sometimes open their eyes to a reality they may not have considered. The worst they can say is "no".

Edited December 1, 2014 by TripleDigitRide

[Raoul]

First of all remember that a tax assessment is not an appraisal. The assessment process is typically done by what's referred to as "mass appraisal". In some cases the value rendered can be remarkably accurate. However in the case of land I don't think so. Too many factors.

I recommend having it appraised by a certified appraiser if you want the supported value.

[Ugly]

Good points TDR and I could elaborate. It's not on the market, yet. The land is leftover from a subdivision that never really happened and it's not really build able, I would need to cut a steep drive to the top of the mountain, it'd be narrow and steep. No way to get concrete up there except helo or bags.

 

The land had already been select cut so the only harvesting I would do would be for firewood. I have searched similar properties in the area and came up with my thought of 1500 on that. 

 

The main reason I'm considering it is it borders my property and I don't want some wing nut to get it and do who knows what. The property line boarders my home  and someone could actually look in my windows from there. Granted it's 4wd access only but you never know what people will do.

 

If I had the cash it wouldn't be much of a problem but I don't, so I'd rather not pay more than needed. 

 

I will draw up an offer with taking all of the factors into consideration, put it in writing and mail it to him. He's in a different state. I appreciate the input folks! Truly helpful!

Edited December 1, 2014 by Ugly

[Motasyco]

I bought a property similar to what you describe in neighboring Grainger county for about $1600 per acre.  I was after wooded, rural land where I could shoot, camp, ride 4 wheelers, or generally just play in the woods.  Recreational property.  I made a spreadsheet tracking the 23 properties that I looked at before buying.  The average cost per acre based on all of those properties came out to $2457.70.  The lowest price was $1222 per acre and the highest was $5210 per acre.   This was in late 2011 to early 2012.

[Motasyco]

Good points TDR and I could elaborate. It's not on the market, yet. The land is leftover from a subdivision that never really happened and it's not really build able, I would need to cut a steep drive to the top of the mountain, it'd be narrow and steep. No way to get concrete up there except helo or bags.

 

The land had already been select cut so the only harvesting I would do would be for firewood. I have searched similar properties in the area and came up with my thought of 1500 on that. 

 

The main reason I'm considering it is it borders my property and I don't want some wing nut to get it and do who knows what. The property line boarders my home  and someone could actually look in my windows from there. Granted it's 4wd access only but you never know what people will do.

 

If I had the cash it wouldn't be much of a problem but I don't, so I'd rather not pay more than needed. 

 

I will draw up an offer with taking all of the factors into consideration, put it in writing and mail it to him. He's in a different state. I appreciate the input folks! Truly helpful!

 

There's your bottom line.  What is that worth to you?  I would pay more for property adjacent to my property than I would for other property just to keep some wing nut out of my hair.

[Ugly]

Thanks for sharing, you mentioned riding 4 wheelers and this property is too steep, I rolled my sportsman while scouting it out, I realized then, it was steeper than it looked. 

[DaveTN]

I will draw up an offer with taking all of the factors into consideration, put it in writing and mail it to him. He's in a different state. I appreciate the input folks! Truly helpful!

 

Thanks for sharing, you mentioned riding 4 wheelers and this property is too steep, I rolled my sportsman while scouting it out, I realized then, it was steeper than it looked.

I don’t know anything about land values in your area, but if it can’t be developed and it’s too steep to even run four wheelers on; it doesn’t sound like it would have much value to anyone except you. I may be way off base here but I would think you would be better off having someone else negotiate the price; if I was the seller I would think you would be willing to pay a premium. I wouldn’t want to show my hand just yet.

[Ugly]

Good point, I've really got nothing to lose by waiting or shooting very low.

[runco]

No need to justify any offer, just make a offer you are comfortable with.  You will never know until they say no.  Just remember they may wait until Mar 1 to take you up on a low offer due to the land taxes re-setting for the new year. 

[FUJIMO]

Any idea what year the owner bought it ?

[jwinter]

Use the following link shown below. You should be able to see what the previous owner paid for it. Also, see if the county health department has any record if the property will "perk" for a drain field. If the area being cut off won't perk, it is not developable for residential use unless there is sanitary sewer service available. That coupled with the property already being logged drops the value substantially to anyone not wanting to add it to there existing property.

http://www.assessment.cot.tn.gov/RE_Assessment/

[Cherokee Slim]

When we moved back to the states in 2010 we bought a house in Lakesite and didn't need the property where I would have built a house to retire.  Just into Marion County near the Hamilton County line, Highway 127.  It had three building sites on 10 acres.  On a paved highway with Prentiss Cooper on the back side with a view of the Sequachee Valley.   Rural area.  I paid $1200 per acre about 15 years ago and sold in in 2010 for $2400/acre.  That was about average for the area average.  FYI hoping to help.

Cherokee Slim

[Lumber_Jack]

Not much rural land worth that much. People still want 2007 prices. It wasn't worth it then either. Just ask those that bought it.

[Ugly]

Use the following link shown below. You should be able to see what the previous owner paid for it. Also, see if the county health department has any record if the property will "perk" for a drain field. If the area being cut off won't perk, it is not developable for residential use unless there is sanitary sewer service available. That coupled with the property already being logged drops the value substantially to anyone not wanting to add it to there existing property.

http://www.assessment.cot.tn.gov/RE_Assessment/

I've used the link for the states data extensively, it's a great tool. The land is available due to a bankruptcy, the attorney handling that realized he couldn't get crap for it and gave it back to the owner to sell. I will use time and lack of options for the seller to my benefit.
I appreciate you guys sharing your experiences and opinions. It's been difficult to get a realtor in the area to do the same.

[jwinter]

If you wind up paying more than you really want, I would try to work into the deal that the land be surveyed and that the bounday lines are clearly marked. You don't want to pay more than you want for additional problems such as bounday overlaps, title issues, easement issues, access issues, etc. Also as a land surveyor I have seen land purchased for assumed amounts of acreage that were no where near what was actaully legally transferable once the people had it surveyed. Do your homework and protect yourself and you should be good.

[Hershmeister]

Lots of great advice here. I agree about having a surrogate make the low initial offer. It lets
You sniff out the sellers motivations and willingness to sell while avoiding the potential emotional issues that a lowball price can sometimes create.

Definitely make the offer contingent on a survey, and clear title work, all paid by the seller.