When you are ready to sell in Philadelphia, Pennsylvania, how do you determine the value of your land?
Use These Three Methods
The traditional real estate appraisal process has three common approaches. The first approach is called the Income approach. The appraiser will look at the market rent for other comparable properties to get a good idea of the potential income the property is expected to produce. The cost approach is where the appraiser evaluates how much it would cost to rebuild the property and exactly how it is from the foundation to the roof. This approach has many more variables, such as the current price of building materials and labor. The actual building cost is essential, but it’s not usually enough to know the property’s market value. The sales comparison approach is when the appraiser will look at the recent sales in the area for comparable properties. This method assumes a buyer will not pay more for a property than other buyers have. This third approach is the most appropriate to determine the value of your land in Philadelphia. Call Buying Property 215 at 215-359-6090 for more information on these methods!
The Area Makes a Difference
Plenty of times, we think that my land must be worth something just because they are building all over the city of Philadelphia. The truth is it makes all the difference in what neighborhood your land is in and what street it is on. Block by block in Philadelphia can make a huge difference. Sections like Brewerytown are building extensive properties all over the place. The value will change when you are in a particular neighborhood area. For instance, if you own a vacant lot west of North 25th street and South of Cecil B Moore Avenue. Then you are in a hot spot for builders willing to pay thousands of dollars more. Fishtown area, if you own a vacant piece of land on the east side of Frankford Avenue, your land could be worth well over one hundred thousand. The opposite side of Frankford Avenue would be potentially under one hundred thousand. It makes all the difference where your piece of land is located. Another factor in Philadelphia is how desirable the street is. On some roads in Philadelphia, people are willing to pay more to live. When we buy houses in Philadelphia, some people can be very selective on the street they own a home on. Just keep in mind every block may vary a little in Philadelphia.
More Than Recent Sales…
There are many more factors than the other sales in the area to determine the value of your land.
How is the property zoned? What can it be used for? If it’s zoned for commercial use at the end of a residential block, that is a different value than if the land at the end is also residential.
Does your land have road access? If it’s a residential piece of land on the main road, that might decrease the value, but on the other hand, if it’s commercial, that might add more value. What’s around your land? A shopping plaza, a grocery store, or some attractions is usually an excellent factor in increasing value. What about neighboring properties? If your neighbors have a ton of extra junk lying around their yard, this might decrease the value of your land. Also, take into consideration flood zones. If your land is in an area that is quick to flood, no one will want to build a house on it, which makes your land undesirable. What are the holding costs of the property? You also have to consider the annual taxes and any association fees.
Another considerable factor determining the value of your land in Philadelphia is the demand for land like yours. Are there tons of properties like it on the market, or is this a one-of-a-kind diamond-in-the-rough property? If there are a lot of other properties like it in the market, you will not be able to ask for more than market value because if they don’t buy yours, they will buy someone else’s land. What are similar properties listed for, and how long have they been on the market? If comparable properties have been on the market for a long time, there isn’t a significant demand for them, and you may have to ask for lower than the market price to get them sold quickly. If there are not very many properties like yours on the market, especially if it has a unique feature, then you may be able to ask for more than the average market value for your land; however, that may take a specialty buyer, and you might have to wait a little longer to reach the list price. Ultimately, your land is worth what the buyer is willing to pay for and what you are ready to sell it for.