Selling vacant land? Determining fair market value for empty lots is challenging, compared to other forms of real estate.
You can’t simply hop on Zillow and find a Zestimate, because “free” search engines do not record vacant lands regularly. Adding to the complexity, city zoning codes constantly change ever year. Approvable land use two years ago, may not be approvable today. Even slight changes in the comps (being on one side of a highway or waterfont) make dramatic differences in value.
You have a few options to figure out a good sale price for your vacant lot. County appraiser websites give a “tax assessed value” which can mirror land value. Contact real estate agents for a CMA showing recent sales. Before making any final decision, understand zoning, development/building, and easements!
Vacant land value is determined by its potential, and the potential is determined by local zoning regulations. Zoning regulations are created by a governing entity (such as county, city, or municipality) to control the physical development of land, as well as designating property use for each parcel. Common zoning classifications include residential, recreational, industrial, or commercial. Further specifications may be made within a classification, for example, residential may be limited to single-family house as opposed to multi-family property.
In addition to land use, zoning code sets forth “building” specifications, including building dimensions, set-backs, stories and height limitations, dwelling density, minimum open space requirements. Not sure about the zoning of your property? Look up the zoning on the county’s property appraiser website (for example, here is Miami-Dade). Once you know the zoning code of your land, go to MuniCode and find your city.
Let’s walk through an example. You are the owner the single-family house at 1175 NE 109 Street, Miami, FL 33161. Look at this property’s county page here. Scroll to the bottom where it says “Zoning Code” – and you can see this property zoned “RU-1” defined as “SINGLE-FAMILY RESIDENTIAL DISTRICT 7,500 FT2 NET”. To learn the meaning RU-1, navigate to MuniCode’s Miami page. You can find the the specifics of R-1 here. It is definied as: “ the meaning of R-1 in Miami here defined as:
“Areas designated as single-family residential allow single-family structures with a density of up to one (1) unit per typical lot size. The typical lot size has a minimum dimension of fifty (50) feet of frontage by one hundred (100) feet of depth, except in specifically designated SD-18 areas. This category allows a maximum density of approximately nine (9) units per net acre. Allowed within this district, and subject to specific limitations, are supporting services such as places of worship, primary and secondary schools, daycare and community based residential facilities.”
Developer vs. Builder.
Before selling your property, know some of the major players in turning vacant land to new construction. This means knowing the difference between “development” (a developer activity) and “building” (a builder activity). Development and building are two distinct taks.
Land development consists of taking “raw land” and preparing it for new construction. This means draining, dreding, excavating, filing, grading, and paving. Raw land does not have
plumbing or electricity running into the property. It’s simply not ready to be built upon: and that’s the task of the developer. The builder has a different role: once the land is prepared for building, the builder organizes and manages the construction, including scheduling work, delivery of materials, maintain the construction environment. In other words, the builder oversees, coordinates, and works the process of bringing new construction to life.
According to Lew Sichelman:
“Developers develop and builders build. A developer takes raw land, obtains the necessary permits, creates building lots, and puts in the sewers, the water and electric lines, the streets and curbs. Then the builder comes in and erects the house. Builders want to be manufacturers. It’s what they do best.”
Easements can throw a major wrench into new construction – wrecking value of your land. Easements are defined as follows: “An easement is a legal right to use another’s land for a specific limited purpose. In other words, when someone is granted an easement, he is granted the legal right to use the property, but the legal title to the land itself remains with the owner of the land. Most commonly, easements are granted to utility companies to run power lines and cable lines. However, you may also grant an easement to your neighbor if your property is in the way of his access to a road, or to anyone else who needs to have a legal right to access your land.”
Easements are normally within you control. There is “easements by grant” – when you expressly transfer the easement to another party. “Easements by reservation” – when you expressly reserve the right to an easement. “Easement by implication” – created by surrounding circumstances and intended by parties but not expressly stated. Easement by implications can also be formed by “necessity” i.e. when a parcel deprives another owner of use of their property.
Want to build a brand new house on your large lot, but it blocks a neighbor’s driveway access to their home? This could form an easement by necessity. Want to divide a parcel, but the owner of the rear parcel would have to cross through the front parcel? The subdivision would require an easement by grant to be approved. If your property goals change in the future and you want to build, existing easements limit new construction possibilities.
Selling vacant land is not easy. Call us at (954) 676-1846 to discuss your options. We can refer to local builder, developer, real estate agent, architect, or attorney. House Heroes buys vacant land, develops it, and builds it. Whether you want a fair cash offer or need a referral, we look forward to hearing from you!
We Buy Vacant Land!
Just Fill Out This Form For Your FAIR Cash Offer.