Performing Market Analysis, Part 1: Land

Market Analysis: Comparable Property Research for Land

If you are researching raw land, use the following sources:
http://www.ebay.com/
http://www.bid4assets.com/
Local Realtors (see part 2 of "Performing Market Analysis")
Instructions for finding comparable sales on eBay
Go to the top right and click on “Advanced Search”. (Make sure that you are registered with ebay.com first.)
Keyword = the area that you are researching; subdivision, city, county, or state.
Category = Real Estate
Check the box next to “Completed Listings Only”. This will do a free search that will show you what has ended in the last 15 days.
Click “Search”
Once the search results are displayed:
Gather all properties that are similar or comparable to the one that you are researching on the tax sale list.
Document these properties on a sheet of paper or using Microsoft Excel.
Document the following information on each property:
Did the property sell Y/N? (If the ending bid is Green = Sold, Red = did not sell.)
What is the size of the lot?
What was the ending bid?
Figure out a price per acre using the size of the lot and the ending bid.
Analyze data once documented.
Set a market value for the potential investments according to their size, using the price per acre.
Set a price cap for each one. (Max price you would be willing to pay at the auction according to the market value.)
http://pages.ebay.com/marketplace_research/
This feature will allow you to look at more that 15 days, however it will cost you.
FastPass – $2.99 for 2 day access. 60 days of historical data.
Basic – $9.99 per month. Monthly ongoing subscription fee. 60 days of historical data.
Pro $24.99 per month. Monthly ongoing subscription fee. 90 of historical data.
Avoid the fees to look at listings older than 15 days by the use of the “Save this search” option.
Click advanced search.
Put in the search criteria as listed above except for the “Complete listing only.”
When the search results come up, next to the number of items found it will say “Save this search”
With eBay and bid4assets listings, look at the listing. If the property did not sell for very much, it may be that it was just a bad listing. A better listing will usually yield a higher sales price. So you need to take into account the effectiveness of the listing to determine whether or not the listing you are looking at is an accurate representation of what you might be able to sell the property you are researching for.
Instructions for finding comparable sales on Bid4Assets
Go to the top right and click on “Power Search”
Keyword = the area that you are researching; subdivision, city, county, or state.
Channel = Real Estate
Category = leave alone
Sub-category = leave alone
Location = use state not zip code
State = (desired state)
Status of Asset = Closed & Sold
Date range = leave at 6 months
Sort by = leave alone
Click “Search”
Repeat the same process you just completed on eBay.
Going through this process on both sites will give you a better idea of what the property can sell for through the online auction method and it may help you determine which of these two sites would be better for listing the property you are researching when it comes time for you to sell it.
When you are looking at these auctions on both eBay and Bid4Assets, don't just look at what the prices are, but also look at the ads to see what the differences in the ads are. What is bringing in the better prices? What is wrong with the ads that are not bringing in as much money?
Assignment:
Get comparable sales reports for any land on your lists that you are interested in purchasing.
Try to determine based on the information you have how much you can sell the property for.
Establish your maximum bid on the property based on the results of your market analysis.
Disclaimer: "The information contained herein is meant for educational purposes only. By presenting this information, Mentoring of America (MOA) and its employees do not render legal, accounting or other professional advice. It is your own personal responsibility to seek professional advice for any specific transaction or investment from those licensed to render such advice. If you require specific legal, tax or accounting advice, seek the advice of a qualified professional."