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How Redfin Can Help You Find the Value of Vacant Land

CEO Khai Intela
There's a common dilemma when it comes to buying vacant land - the issue of valuation. Unlike other types of real estate, it is extremely difficult to determine the market value of vacant land due...

There's a common dilemma when it comes to buying vacant land - the issue of valuation. Unlike other types of real estate, it is extremely difficult to determine the market value of vacant land due to the lack of reliable data. So how can we have confidence in the value of what we're buying?

In this article, we will explore a trick shared by Karl James, a member of the Land Investing Masterclass, that uses Redfin to analyze data with greater mathematical precision. Redfin provides similar information to Zillow, but with the added benefit of being able to download all the sales comp data in a CSV file. This opens up a world of possibilities when analyzing the numbers and putting the data to work.

Step 1: Search the Market in Redfin

Let's start by searching for comparable listings and sales in a specific area. For this example, let's assume we have a lead on a vacant lot in the Lake Las Vegas area of Henderson, NV. Simply type "Lake Las Vegas, NV" in the "Find a Home" dialog box, and when Redfin suggests the area, click on it.

Step 2: Customize Your Search

Next, click on the filters button near the top of the screen to customize your search. Deselect all property types other than Land and change the filter from "For Sale" to "Sold" for the past year. You can also narrow down your search based on a size range if there are sufficient comps available.

Step 3: Export Property Details

Scroll down to the bottom of the properties list on the right-hand side of the screen. Click on the "Download All" link to create a CSV file with all the sales and listing information.

Step 4: Filter and Organize the Data

When you download the CSV file, you'll need to make a few edits to the list in Excel. Delete all vertical columns except for Price and Lot Size. Also, delete any rows with blank fields. Add two vertical columns after the Lot Size column and name them Acres and $ / Acre.

In the Acres column, add the formula "=C2/43560" to convert lot size from square feet to acres. In the $ / Acre column, add the formula "=A2/C2" to calculate the price per acre. Drag these formulas down to apply them to every row. Finally, scroll to the bottom of the $ / Acre column and enter the formula "=AVERAGE(D2:D27)" to find the average price per acre.

By analyzing these calculations, you can compare and contrast the price per acre of the subject property with the data from Redfin. This will give you a better idea of the general range you should be looking at.

What Does This Do For Us?

These calculations tell us how many dollars per acre were paid for each property. This information allows us to make a more informed assessment of the property's value. However, keep in mind that the reliability of your numbers depends on the filtering criteria you use. The more similar you can keep the comparable properties to the subject property, the more reliable your final number will be.

It's important to note that this method is not fool-proof and does not take into account other factors like the physical attributes and location of the property. However, if you have no idea where to start and you're not willing to rely solely on the county's assessed value, using Redfin and analyzing the data can be a great way to gauge a property's approximate market value before making an offer.

So go ahead, have fun with it, and use this method to gain valuable insights into the value of vacant land with the help of Redfin!

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