Most raw land sellers price their parcel one of two ways: what their neighbor told them it was worth, or what the county assessor typed on their tax bill. Both are almost always wrong. Here is how professional land buyers actually underwrite an offer.
Step 1: Buildable Acreage, Not Total Acreage
A 40 acre parcel is not 40 acres of value. Subtract:
- Wetlands (typically zero value; sometimes negative if mitigation is required)
- Flood zones (heavily discounted; often uninsurable)
- Slopes above 15 to 20 percent (limited buildability)
- Setbacks from property lines, roads, and water
- Existing easements (utility, ingress/egress, conservation)
What remains is usable, buildable acreage. That is the number that drives value.
Step 2: Legal Access
Land without legal access is nearly worthless. A parcel that touches a public road, or has a recorded ingress/egress easement to one, is worth multiples of a landlocked interior parcel of the same size.
We verify access two ways: the recorded easement (or road frontage on the plat) and physical access on the ground. Both need to match.
Step 3: Utility Proximity
- Power at the road: normal value
- Power a quarter mile away: $5,000 to $15,000 for extension
- Well and septic possible (perc test passing): normal
- Well and septic impossible (rock, wetlands, denied perc): significant discount
- Municipal water/sewer at the property: premium
The distance to the nearest utility source is a real dollar cost that gets baked in.
Step 4: Zoning and Highest Best Use
Zoning determines what the buyer can legally do with the land:
- Residential (single family, multi family, PUD)
- Agricultural
- Commercial
- Industrial
- Mixed use
- Recreational only
Rezoning is possible but expensive and uncertain. Buyers underwrite based on current entitlements, not hoped for changes.
Step 5: Comparable Sales, Sold, Not Listed
Zillow and county assessors show listings, tax values, and asking prices. Those are noise. Real comps are:
- Sold within the last 12 months
- Same county, ideally same township
- Similar buildable acreage
- Similar access and utilities
- Similar zoning
Land comps are noisier than house comps. Professional buyers run 20 to 30 raw sales and throw out the outliers.
Step 6: The Discount for Speed and Certainty
Every offer implicitly includes a discount for:
- No financing contingency (buyer takes lender risk off the table)
- No inspection contingency (buyer accepts unknowns)
- Closing in 14 days vs. 6 to 12 months on the retail market
- No commission (5 to 10 percent saved)
- No repairs, showings, or listing overhead
The gap between a retail listing price and a cash offer is real, but so is the gap between the retail listing price and what actually closes 8 months later at market.
Step 7: The Final Number
We build a bottom up price:
- Estimate the buildable acreage
- Estimate the retail resale value per buildable acre in that county
- Subtract utility and access costs
- Subtract holding costs during resale (taxes, marketing time)
- Subtract our target margin
- Present that as the offer
The number is defensible on paper. It is also usually within a reasonable range of what a patient seller would net after 12 months on the market, once you account for taxes, commissions, and time value.
Ready to sell your land?
Liberty Property Solutions has bought raw land in 30 plus states since 2018. We give firm, defensible offers backed by real underwriting, no lowball, no guessing. Request a free offer today.