Property Q&A in Claysburg>Question Details

Mark, Home Buyer in New York, NY

How do you determine the value of land alone on a property? Is there a rule of thumb?

Asked by Mark, New York, NY Fri Jul 2, 2010

Our family has a house for sale (estate) with about 6 acres of land in a rural area between Bedford and Altoona. My father is interested in purchasing about 4 acres of the land, which was surveyed separately years ago.. This land does not have road access, but as he already owns an adjacent plot with road access, this would not matter to him, and he is interested mostly for sentimental reasons. The rest of the family is concerned with how much it may diminish the value of the house for sale. I'm trying to help figure out what would be a fair price if this were to go through. I do not know the asking price for the house & don't think it is listed with a realtor yet, but I think there are people interested in it by word of mouth...

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7
This is useful: although it seems you do not have an easement issue. Landlocked must be given access to road if a separate owner takes over.
http://www.lgc.state.pa.us/deskbook06/Issues_Private_Propert…

Buildable land value is more than undeveloped land. If it is adjacent to farm land it is worth more than just timber land. If there is sewer, water adjacent it is worth more than raw timber land. If you can find a 10 acres house and lot and a 5 acre house and lot, sold in last 12-months, the difference might be calculated, close.
0 votes Thank Flag Link Tue Jul 6, 2010
Thanks to everyone for their input.. My original question probably wasn't worded carefully...
What I am interested in is a fair price to pay for the land, as opposed to a general "value"
as it seems clear the land has little value without access.

This land is located in a relatively rural area of PA, not in NY.

The main consideration would really be how much the value of the house for sale would diminish without this additional acreage.. ie: sold with 2 acres vs 6 acres. If the house could sell for $150k with 6 acres and $140k with 2 acres, then it would be fair to pay $10k, so the family proceeds for their estate stays the same.

I'd think this would be tough to determine without recent comparable data.

Of course there will be discussion in the family about this, and my understanding is they will sell it to my dad, but want to make sure there's no impact but no one involved is a real estate professional and I am just looking for impartial feedback from someone knowledgeable...

Thanks again!!
0 votes Thank Flag Link Tue Jul 6, 2010
Hi Mark, I am guessing the property is, in fact, in PA and not in NY. However, my answer would be the same.

Although you mention the property in question has access if it stays with the home for sale, or if your father purchases it, the lot itself is STILL condisidered land locked without access because it is deeded presently that way. One of the two properties would have to grant an access on their deeds to release this property from land locked status OR one of the two properties could join it in perpetuity, thereby granting the access as you originally thought, through the exisiting home or your father's property.
Ok, you may ask, why is this worth talking about? Well, because of value. You are trying to ascertain a value for this "floating" four acres. Four landlocked acres, not worth very much at all. Four acres with deed granted access can be sold and accessed, so this increases its value.
The way the property is now, it would only really be worth anything to your Dad, or the house it is "attached" to now. Once you decide if the family will grant deeded access or your Dad will, then hire an appraiser to get a fair and accurate valuation. You might call several appraisers and see if you can get a value either way before you deed access....but I concur with the others here, landlocked, unimproved acreage will not be worth much. Think about it...who save helicopter owners would want it or get to it?
I do hope these comments help!
Jim Ryan, Home Savings of America, 703 591 5626 ext 419.
0 votes Thank Flag Link Sat Jul 3, 2010
A classic in real estate, the family, the sentiment, the land with and without the adjacent house, the opinions of others who are not professionals. Unless parties agree, buyer, sellers there is no deal anyway. Even an appraiser needs to know what exactly is being sold to be objective. Land has an economic value if it is accessible. A landlocked piece must be given an easement in the public interest. Since there is no chance an agent will gain a listing and sale, a paid appraisal is your best bet. There seems to be a lot unknown. Why not ask the owner of the house, is it for sale or not? Open your mouth and simply talk to someone.
0 votes Thank Flag Link Sat Jul 3, 2010
Mark
I don't know about New York, but in Ohio the only "future buyers" would be the adjacent property owners as land locked land cannot transfer except to a parcel with road access. If there is enough frontage on those parcels and back lots or flag lots are permitted, then there is the potential to have a building lot. UNBUILDABLE Back land typically sells for a fraction of what buildable acreage would potentially be worth. In a larger parcel, the per acre price adjustment on an appraisal is also lower than what the initial acreage to create a buildable lot....example, if a buildable lot is 2 acres, those lots may sell in our rural area for $20-$30K. Yet when I am doing an adjustment for additional land I might use $3K an acre.....of lower depending on the land.
In the scenerio you are discussing, typically the party desiring the parcel pays the costs to survey & transfer and as well as the agreed upon sales price. In any situation it does come down to money.
Hope this helps.
0 votes Thank Flag Link Sat Jul 3, 2010
Thank you Terrence...

To clarify: although this land my father is interested in is indeed landlocked if looked at by itself, it is not landlocked when combined with the house to be sold, which has road access, nor when combined with my fathers plot of land which is adjacent to the house for sale and also road-front.

I agree that on a stand-alone basis the land should have little value, since there are only three plots through which it can have road access: one is through the house to be sold, one is through my fathers land, and the last is through another neighbors land.

I see that it would probably be difficult to determine the land value in any case, as I don't think there will be a lot of recent and relevant data out there to compare with.
0 votes Thank Flag Link Fri Jul 2, 2010
Mark,

Figuring out the price of land is very difficult and the approximate values can be very broad. You would need to get a real estate agent to help you with that. This would be a process involving recent sales of nearby properties similar to your family's and then find out recent sales of nearby land. They would also get recent sales data from nearby properties similar to your family's with only an acre or two.

Seeing that the property is technically "landlocked", this would diminish the value of the property because if the property is sold in the future, how would the new owner get to it? Also, would there be mineral rights involved? Or is this an area where the coal companies already have the mineral rights? The difficulty of getting utilities to the property would also affect the value.

You really should get a few real estate agents to conduct a market analysis of the property and even an appraiser. You will see that the values will have a much broader range than if you were just selling a home on half an acre of land.

Good luck!

Terrence Charest
0 votes Thank Flag Link Fri Jul 2, 2010
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