Lookingfor6, Other/Just Looking in Minnesota

Where can we find the going rate for acreage in MN (specifically, Carver County)?

Asked by Lookingfor6, Minnesota Wed Feb 2, 2011

Additionally, this is lender owned property with a single family home and several outbuildings onsite. We are trying to schedule a viewing, and would have inspected professionally, however not sure if the REO status affects the acreage pricing in terms of market comparisons.

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3
Cameron Piper, Agent, Forest Lake, MN
Sun Feb 6, 2011
Shelly,

I appreciate the spirit by which you are approaching this topic, but I want to caution you that you are asking a very scientific question about a very nonscientific process.

At the end of the day the question you need to answer is what is the acreage worth to you. That sounds nice and warm and fuzzy but it really can be hard to do. Emotionally you don't want to pay too much, but I would submit that as long as you are comfortable with the statement "I paid a fair price for X" then you didn't pay too much.

Consider the sale of a MN car. We all love heated seats here in MN and most would be willing to pay extra for them. Inherently the car is more valuable because it has parts and equipment that isn't found in all other cars. In fact, in MN, that car would logically sell for more than a similar car without. However if you were to offer the same two cars to someone from Texas or Arizona, I doubt that they would be willing to pay much more, if any for the car with heated seats. Are they wrong?

Now consider real estate. Some houses have Jacuzzi tubs, hardwood floors and pools, but if you hate pools, don’t ever take baths and have pets (where their hair will gather on the hardwood floors), you aren’t likely to pay anything additional for the upgrades. In fact, you might offer less for that house because it has things that you don’t like in it. I for one love a warm bath on a cold winter day, a dip in the pool on a summer afternoon and my entire house is hardwood floors. To me that house is worth a premium – even though I have pets.

Acreage is the same. Some people will pay more for it, some will pay less, but the value is in the eyes of the buyer and seller not in a statistical analysis. At the end of the day the only thing the statistical analysis proves out is the average that other buyers and sellers felt their particular acreage was worth. All totaled that is a really poor indication of the value you do or should put on that particular acreage yourself.

Now that I have you focusing on the right question (hopefully), I’m sure you are wondering how you determine for yourself what acreage is worth to you. This is where your agent (as a buyer) comes in. You need to go out and look at bunches of houses with acreage and get educated on the marketplace. That will give you an idea of the current value of acreage. Then you want to look at what other SIMILAR properties have RECENTLY sold for. Because it is a large investment that you are making, I would suggest you drive by the recently sold properties to get an idea of the overall picture and the intangibles like, view and neighborhood that aren’t in the MLS.

Good Luck!!

Cameron Piper
Coldwell Banker Burnet
Web Reference:  http://www.campiper.com
0 votes
Susan Hoffla…, Agent, Shoreview, MN
Thu Feb 3, 2011
Shelly, this is the very reason why you will want to hire an agent to be working on your behalf. The very information you request us to post here is part of the full compliment of services provided for you when you have a buyer's agent working on your behalf throughout your entire transaction. More often than not, the buyer's agent gets paid through the proceeds of the transaction, so it requires no out of pocket money up front. It's still your responsibility to see to it that the language in the purchase agreement allows your agent to get paid that way, but it still does not require you to write a check directly to your agent's company unless you want to do it that way.

REOs are a commonplace these days and that status does impact the price. Across the board, foreclosed properties are selling for approximately 15% less than the traditional sale counter parts. BUT, there are inherent risks. I advise buyers and sellers to calculate the risk vs. the reward of a transaction. So, you pay less, potentially, but your risk, in many instances, is significantly elevated with regard to condition and defects of the property.

Good luck~
Web Reference:  http://www.homestosellmn.com
0 votes
Christine Ro…, Agent, Coon Rapids, MN
Wed Feb 2, 2011
Shelly, Acreage property works a little differently than city property. First off, you have to figure out what portion of the land is for what use. Such as what is woods versus marsh versus tillable acres. From there it is comparing it to other properties that have sold with like percentages and so forth. In some areas you want to also factor in the buildings on the land if any. You asked, Does "REO status affect the acreage pricing"... You bet is has a factor. Understanding all of this takes someone who has their eye on acreage properties in the area you are looking to either buy or sell in.

Best Wishes!
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