A tract of land is likely the largest asset you have. That means you will want to be diligent in how you price it. Listing your land for too little could mean you lose out on making money, while pricing it too high could driver buyers away.
When determining how much you should price your land for, it’s a good idea to talk with land specialists. They will be helpful in determining the value of your property, as well as clue you in on land buying trends, which might influence your pricing.
Factors that determine a land’s value
Tom Rayburn, a land specialist with Mossy Oak Properties AgriRec Land in Elk Grove Village, Illinois, said the No. 1 factor to determining the price of land right now is whether it generates income or not.
“That seems to be driving most the pricing and most the lending on it,” Rayburn said. “No. 2 is the location of it. A piece of property within an hour of Chicago – if it’s all timber – might sell for $4,500 to $5,000 an acre, and a piece of property in Hope County, Illinois, which is in Southern Illinois, will sell for maybe $2,000 an acre.”
Rayburn added that demand is the driving force behind this price difference, where the northern area will see hundreds of buyers, the southern counterpart might only get a handful. Therefore, your land’s location may warrant a higher price.
However, location and whether or not the land generates income are not the only two factors in determining the price of a property. Rayburn also noted that improvements on the land can impact price, whereas adding a building or a house might mean it’s more valuable. In addition, the general condition of the land is another important aspect of pricing, Rayburn said, adding that timberland that has been logged will likely sell for 40 percent less than land that hasn’t been logged.
Now is the time to sell
While pricing land can be a challenge for sellers, it’s equally important to know when to sell, and according to Rayburn, the time is now.
“Recreational land is always strong in August, all the way through to the following March or April,” he said. “Right now, you’re going to maximize your sales price by selling recreational land.”
Rayburn said while farm land prices might have topped out, recreational land sales are hot right now.
Advice for buyers
Rayburn had one piece of advice for individuals selling their land, and that was “to use someone that’s knowledgeable.” While he added that he’d love for sellers to use him as a broker, it’s important they get the help they need and find the right person for the job. Even though Rayburn did indicate that Mossy Oak Properties is likely the right choice, primarily because of their dedication and experience.
“At Mossy Oak Properties, we have a training program called the Certified Land Specialists training program,” Rayburn said. “We’re the only ones that have it in the industry. It’s a pretty intense training course everyone has to go through to be certified at Mossy Oak Properties.”