Nancy Chadwick
-
Why Land Values Fall or Rise
You own a property that has “prime development potential” written all over it. It’s got everything – great location, public utilities nearby, and zoning for a use that’s in demand. The market’s really hot and developers are contacting you every day to ask if you’re interested in selling. So you ask yourself “why sell now?” If you wait, you’ll get much more for the land – right? Maybe and maybe not. How much you can get for the property 3 or 4 years from now could hinge on issues that have nothing to do with interest rates and market conditions.…
-
Thinking Like A Developer
If you understand how residential developers and builders make their buying decisions, you will be likelier to achieve success in buying or selling land. Some builders search for property strictly by geographic area. Others search for parcels that would enable them to reach particular buyer submarkets, such as housing type, price range, lifestyle and age group. Either way, they begin by casting the net into their areas or markets of choice and sifting through potential acquisition candidates. They often have to pick through dozens of properties before they find one they think they can develop profitably and frequently spend varying…
-
The Art of the Residential CMA
If it’s done correctly, a Comparative Market Analysis (CMA) can be the next best thing to an appraisal in approximating the value of a property. The purpose of the CMA is to analyze data from properties similar to the subject that have sold recently in order to project the realistic price at which the subject property would sell. RE agents and brokers tend to develop their own methodologies for doing CMA’s. I’m not an appraiser, but what I’ve always done is make upward and downward adjustments to the projected value of the subject based on features and characteristics of the…
-
Some Ground Rules (and House Rules , Too)
If you were to guess that buying a home is not like buying a parcel of land, you’d be right – and you’d also be wrong. Although the house purchase is different from the land transaction, it’s actually the same in certain key respects. The reason is there are a couple of critical principles that apply to all types of property – houses, land, retail centers or whatever – and they can have a big impact on a property’s value and its market appeal.Location (Location, Location)We’ve all heard that location is the most important thing about a property, but why…
-
Property Disclosures: The Right To Know
As buyers and sellers, you should be aware of your rights and responsibilities relating to disclosure of property conditions. These exist because of laws enacted by Congress and state legislatures and from principles that have evolved from case law or court opinions. Many states have adopted laws requiring property sellers (record owners as well as equitable owners) to provide buyers with a written property disclosure statement or report prior to the signing of a purchase contract, regardless of whether they’re using a RE agent or broker.Although the requirements vary from state to state, the report typically contains questions about the…
-
Not Just Price
How Builders Evaluate LandSome builders search for property strictly by geographic area. Others search for parcels that would enable them to reach particular buyer sub-markets (housing type, price range, lifestyle, age group). Either way, builders begin the investigation by casting the net into their areas of markets of choice and sifting through potential acquisition candidates. They have to pick through dozens of properties before they find one they think they can develop profitably. Sometimes they can tell quickly if a property is worth pursuing further. More often, however, they don’t know this until they spend varying amounts of time, effort…
-
Know Your Zoning
After location, zoning is probably the most important characteristic of any type of real estate. It is the obvious starting point for evaluating a parcel’s potential for development because it spells out what you can do with the property. Zoning is a critical piece of the puzzle particularly if you want to be a land developer, an investor or work with a builder in some way. Save yourself much time, energy and frustration by checking out the zoning first, not last.Local governments enact zoning ordinances and adopt the maps that show the physical boundaries of the zoning districts, and these…
-
How Do You Subdivide or Develop a Property?
Before you can subdivide or develop a property, first you’ll have to submit plans to the local government for review and approval. Your engineer will prepare the plans in accordance with the requirements of the applicable subdivision and land development ordinance. This ordinance contains provisions relating to a variety of issues. These include construction and design standards for public site improvements (e.g., streets, curbs, sidewalks, parking spaces, landscaping, utilities and drainage), safety concerns (angles at intersecting streets and lighting), and general matters such as data to be shown on the plans, scale, paper size, and submission deadlines.Initial ReviewsThe plans are…
-
Due Diligence: How to Find the Stuff You Need
Due diligence is extremely important, regardless of the type of property you’re thinking of buying. In development property and land deals, buyers start the fact-gathering process with their first encounter with the property and it continues until they either bail out of the deal or go to settlement.Here’s a list of sources of information (people, places & things) that are good starting points if you’re trying to research a property.Sales & Ownership DataTax assessor information is available in several forms. For every piece of data, there is a primary source. The primary source is likeliest to be the most accurate…
-
Concepts of Value
All products, services and things have value, but the value is not static. It changes when events occur that increase or decrease the product’s desirability. In addition, the value of the same product, service or thing isn’t the same to everybody. Different people have different needs and wants at different times. Value is based on need and the ability of the product to satisfy that need. Real estate is no different from other commodities. Every property has value, and that value goes up or down over time. Property derives value from its capacity to be used. For value to increase,…
