Evaluating The Price of The Property

Enlarge Image Image Gallery

Article Tools

Image Gallery

Print

E-mail

Comments

RSS

Les Scher is a California back-to-the-lander who also just happens to be a practicing attorney and an expert on property deals. MOTHER is proud to present this third excerpt from his book, Finding and Buying Your Place in the Country . . . a first-rate, comprehensive layman's guide to what is probably the most important purchase you'll ever make.

by LES SCHER

Excerpted by permission of Macmillan Publishing Co., Inc. from Finding and Buying Your Place in theCountry by Les Scher. Copyright © 1974 by Les Scher. Price $6.95 paperback, $12.95 hard cover.

When you find some land that is right for you, that meets all your requirements and feels like home, you will want to evaluate what that land is worth and compare your results with the seller's asking price. Then you can begin the bargaining game described in the next chapter of this book.

To evaluate the price of the land you want to buy, regardless of where it is located, you can do a number of things without employing a professional appraiser. This chapter will tell you how to make your own appraisal of the property and how to hire a professional if you decide you need one. Finally, I explain how the seller establishes his asking price.

WHAT DETERMINES THE VALUE OF A PIECE OF PROPERTY?

Determining the value of a piece of land is a complex and ambiguous process. If there is any such thing as a formula for finding land value, it would have to be: Value is determined by the law of supply and demand. Although the supply of land is ultimately finite, its availability is constantly fluctuating as large ranches, farms, and other land parcels are split up for sale to the public.

Large landholdings are being split up at an increasingly accelerated pace. Government reports estimate that more than one million farms will go out of business in the seventies. California alone has twenty thousand farms that will fold before 1980. Many of these farms will be absorbed by larger commercial farmers, known as "agrimonoliths," but there will also be a large amount of acreage that will be subdivided and sold to the general public. The most recent estimate is that 20 percent of the land in California will be subdivided within five years after it is sold. This same pattern is developing throughout the United States.

The United States Department of Agriculture has released its study of land value increases for farmland during the year 1970. Values increased in the following areas at the following rates:

The above figures are specifically related to farmland but the value of recreational land is increasing even faster, based primarily on the increasing demand. A government study in 197' showed that the number of second-home owners has been increasing at the rate of a quarter of a million each year.

RSS | Comments | E-mail | Print