Here are some insights from selling and buying Real Estate for the past 36 years from deep in the Canadian Wilderness to the Southwest USA. Remember, once you have all the facts, you are the best appraiser, you can best judge the value of a parcel of Real Estate, yes YOU. You’ll have to spend a lot of time and effort and educate yourself. But you can do it. If you don’t have the kind of time it takes to go through the educating process we can save you time and be of valuable assistance. You can look around and see what other remaining parcels are selling for. Competition usually brings the price down; on the other hand if the supply you like is limited the cost is generally higher. All this is relative because if you like the land or home and the area, you’ll pay the asking price or close to it. You have then just set the value of that transaction. The selling price that is being asked does not set value, only the price paid, sets value. The next time Real Estate of the same type gets sold in that area the value you paid will help set the value of the next transaction in that area. This is the way licensed Real Estate appraisers are required to work within their regulated bank industry. The more people that like the land or the Real Estate the higher the price will go up. For example, Rainy Lake, Crane Lake, Vermillion Lake, Lake Minnetonka there are more people buying Real Estate now then there has been in history. Do you think Real Estate is going to go down in value, in very few instances does that happen, in the worst case scenario it might stay flat for a period before climbing again. Remember that the banks want some room left in the appraised value so if they get the real estate back there is some room left in the value to cover their costs.
The appraiser won’t know what the reasoning was why the purchaser paid what they paid. All they are interested in is that it was a comparable sale. Now because of this licensing appraisal practices the next properties sold could be over valued. How do you know? You have to evaluate. You need to get the CRV’s you need to investigate and spend the time to find true value.
Unless you’re a Real Estate investor and time is money and you need to make a return, you need not worry about how much your Real Estate is appreciating. You’re buying the land to enjoy and use and feel good about. This is where the real value is.