Appraisal for Industrial use land?

Question

Hello everyone.

My family has a 60 acre plot of farm land near a major city, the area has been booming with industrial/warehouse construction for the last 10 years, we are next up in the corridor and have decided to sell. Someone offered us 6.3 million 2 years ago, the deal fell through. We are now in a marketing agreement with an experienced well know name in the area, he has received offers for 6.75 million but says we can end up with 7 million (after counter offer). My father says he wants 8 million (with no real justification other than some questionable comps). Can we have an appraisal done for this type of land? How do we know our broker is not in cahoots with the buyer and/or underselling our land. How can we get a realistic valuation? Any advice welcome.

Henry Clark · Answer

Easements.   You can park under them or do cargo containers.

Aater Suleman · Answer

Hi @Henry Clark, sorry a little off topic, but when you say “can’t build around electric high lines,” are you referring to the  easements or are there other reasons you can’t build around them?

Henry Clark · Answer

You can get either a local or National appraiser or both.  Pay the cost for your comfort.  They should supply comparables in the area and a range of values.  Also Best Use considerations.  Look around your town for commercial lots and call them and ask who to use for appraisals.

Your family needs to put some detailed thought into the value side of things.  Examples.

Water, sewer, electric and internet out front?  Can cost possibly $500,000.

Flood plain and flood way?

Soil types

Not all dirt or property is worth the same

Road access from the highway.  Are you above or below?  Is there road frontage all along the highway side?  Number of accesses allowed from roads?  Sight line distances between road entrances?

Which side of the road going or coming to the major town are you?

How far are you from the last gas or convenience stations?  If your on the side going away from town your worth more than being on the other side going towards town.

Have you worked on zoning in the property?

Have you site prepped the above?  Have you subdivided the property for different usages?

The comparables you’re looking at did they or not do the above?  For example there are two plates of pancakes in front of you.  Each has three pancakes. One is just the pancakes.  The other is buttered and has syrup on them.  Which would you rather buy?

Are there electric high lines running across the property?  Can’t build around them, thus worth less.

There are many factors that make two properties the same size in the same local worth totally different prices.