Pricing 38 acres when the only nearby sales are two miles closer to town

Question

Asking is $310,000 on 38 acres, so $8,158 an acre. The parcel is outside the utility service boundary, paved county road on the south line, gently rolling, maybe 6 acres of it in what looks like a drainage on the aerial.

Comps I've been given by the listing broker: a 12 acre piece at $14,000 an acre that's two miles closer to town and inside the service boundary, and a 160 acre working ag tract at $4,900 an acre further out. Those two numbers bracket the asking price so widely that the bracket is useless. My state doesn't make sale prices public, so I can't verify either figure independently. The assessor has the parcel valued at $91,000, which I understand is a taxation number and not a market one.

So how do people here get from that to a number they'd actually sign? I'd rather ask this plainly than pretend I have a method. If I'm off by 20% on a 12 year hold, does the hold bury the error or does the error eat the hold?

Rena Expert · Accepted Answer

Price per acre doesn't scale linearly, which is why your bracket looks broken. Small parcels sell for more per acre than large ones because the buyer pool is households rather than operators, and 12 acres inside a utility service boundary is a different product from 38 acres outside it. The $14,000 figure and the $4,900 figure aren't two ends of one range. They're two separate markets, and your parcel sits nearer the ag number than the broker would like you to conclude.

The adjustments that carry real weight on this kind of ground are utility availability, legal access and road frontage, usable acreage after drainage and floodplain, and current zoning plus what the comprehensive plan designates. Your 6 acres of drainage may be unbuildable, so run your math on 32 usable acres and see what happens to the per acre number. That alone moves $8,158 to roughly $9,700 on the acres that actually matter.

In the dozen or so states that don't publish sale prices, the workaround is triangulation. Assessor records still show ownership changes and transfer dates even where price is withheld, so you can date sales and then ask a local ag lender or an appraiser who does farm and ranch work what per acre range those trades ran. Brokers keep their own closed files and will often share ranges rather than specifics.

On your last question, entry price is the one input you fully control, and a 12 year hold does not forgive it. Overpaying 20% means appreciation has to cover your error before it starts covering your carry, and you'll feel that most if you ever need to sell early. Before you commit, get a floodplain determination and find out whether a wetlands delineation is warranted on that drainage, because a jurisdictional finding there changes the usable acre count and it's cheaper to learn now than in year 11.

stephen_ok9 · Answer

You can order an appraisal on raw land, and for 38 acres expect roughly $2,500 to $5,000 and several weeks. The catch is the appraiser works from the same thin comp set you already have, so what you're buying is a defensible adjustment methodology rather than better data. Still useful if you're borrowing, since the lender will require one anyway.

ehernandez74 · Answer

What does a wetlands delineation actually run? I've seen $2,000 to $6,000 quoted for small acreage depending on how much fieldwork the consultant needs, but I've never commissioned one and I'd like to know what I'd be committing to before I ask for a quote.

raj_mehta14 · Answer

If the seller offers to carry paper on this, watch whether the price goes up to pay for the terms. A $310k cash number and a $310k seller financed number aren't the same deal, and the financed one is usually padded. I don't fully understand how to strip the financing premium back out, but I know it's in there.

brandonlee36 · Answer

Don't build anything on that $91,000 assessed value. Ratio of assessed to market varies wildly county to county and some assessors haven't touched raw land valuations in years. I've compared two adjacent counties where one ran near market on vacant ground and the other sat at maybe a third of it. It tells you what your tax bill is and roughly nothing else.

nicole_adeyemi · Answer

The 160 acre ag tract is the comp the broker is hoping you ignore, and it's the one that shows you the floor. Different question though: what does the comp plan designate for your 38 acres, and what's the minimum lot size in the current zoning? Outside a utility boundary with a 10 acre minimum you have three lots and a long wait. Inside a future service area with a 1 acre minimum you have something a developer eventually cares about. Same dirt, completely different pricing logic, and it's a two hour trip to the planning counter to find out.

karen_whitfield · Answer

I stopped chasing precision on raw land. I set a price per usable acre I'm willing to pay based on what similar ground trades for in that band, I write my walk away number on paper before I talk to anyone, and I let deals go. Most of them go! Compass, your instinct that the bracket is useless is the right read on your inputs, and the answer isn't a cleverer method. It's needing fewer of these to work and being willing to wait for one that prices obviously well rather than arguably well.

tonyv88 · Answer

Add access maintenance to whatever number you settle on. Paved county frontage is good, but the interior track will wash and a gate plus a culvert is real money.

Pricing 38 acres when the only nearby sales are two miles closer to town

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