This episode dissects why generic broker opinions of value fail for land deals, demonstrating how vague price-per-acre averages ignore critical property-specific characteristics. Real valuation requires detailed comp analysis, active market assessment, and alignment with aggressive exit timelines rather than relying on CMAs or “low inventory equals high demand” logic.
Key Takeaways:
- CMAs provide limited value except in non-disclosure states. Most CMAs lack essential context (price cuts, view-to-save ratios, marketing history, utility access) that determines actual market demand versus listed aspirations.
- No recent sales means market risk, not opportunity. When brokers cite lack of inventory or sales as positive signals without off-market buyer lists, operators face speculative gambles rather than data-driven investments.
- Demand conservative list prices that generate calls within one week. Communicate 90-day exit timelines upfront to ensure brokers understand the aggressive sell strategy and price accordingly rather than testing higher ranges.
Listen to the full episode for the complete framework on qualifying broker analysis and pushing back on inflated valuations.
(Podcast transcript below)
Hi, Chris Duff over at Serious Land Capital, Vacant Land Funding Partner. Today, I wanted to remark on the fact that not all brokers’ opinions of value or OPVs for short are created equal. This is an extensive topic that probably we’ll return to often here.
But I wanted to share a few recent examples from deals that we’ve seen over the last week or so. First, when folks are sending us a deal and we see, okay, maybe there’s a paragraph attached from a broker, maybe it was via email or just a short summary of phone call, maybe text message with
the brokers, I really want to see specifics. You know, there was a larger subdivide opportunity that we were looking at and it had three separate broker OPVs attached to it, though all of them were more general in terms of saying, hey, know, the market’s moving at, you know,
18 to 20 K per acre I think we can you know, maybe list even right at that number or a little bit above and You know exit in X amount of months like that to me I’m gonna be fairly skeptical of because it’s not really accounting for the specific characteristics of the subject property I’m looking at in relation to
whatever those other properties are that actually moved in the market. And you know, that requires actual work, right? Like it’s, it’s where, know, and when folks will send like a CMA from a broker, I barely ever pay attention to that because we’ve already sussed out those comps anyway. It can be a bit handy when they’re in a non-disclosure state, when we’re just confirming what a true sold price was for a property.
But in terms of like trying to generate an average or really kind of like finalize our diligence just from a CMA of, know, putting together some of these numbers, like they’re just for land more often than not, they’re just not particularly helpful, particularly with more rural properties, know, infill lots might have, you know, they might be a bit more cookie cutter.
Type of scenario where the characteristics are fairly uniform across each property but you know for for anything outside of infill lots there just tend to be So many specific characteristics that have to be accounted for before that pricing actually makes sense Plus on CMAs, they’re not necessarily telling you how many times the price was cut
For instance, and you really have to dive deeper into you okay where there are actually utilities here Well, this was going on with the particular Property how it was marketed, know, sometimes like the actual MLS base listing can be included But you know, usually that’s not covering You know that full amount of info that I might be able to see if I’m pulling up, you know previous silo or redfin
listing prior to that so I can see potential price cuts and activity changes and so forth there. If there’s still active properties, I’d want to see the actual activity on it. What’s the view and saves and the ratio thereof on Zillow, for instance. That’s why I can use them, especially in non-disclosure states. Maybe it’s just confirming, are there any comps that we haven’t already seen?
But if I’m just taking this median price or whatever average time to sell and then trying to reverse engineer a list price from that, that’s a very easy way to get fooled and not a ideal way to value land purchases that much in our experience. Plus you have to ensure that the realtor understands what our situation is. That’s why no matter.
What realtor might be assigned to a certain property like I’m always going to double check personally Hey, we try to offload these things, you know, ideally in 90 days or less, you know, can’t always control What Land, you know may sell for in terms of length of time or price But you know that that’s our goal there. So, you know, what is going to be that price we can list at that you’ve
think with this high likelihood of probability that you can estimate that you’re going to get calls, maybe site visits within a week of listing. That’s how I usually phrase it to really ensure, okay, we’re on the same page and just mentioning, we’re like really aggressive active sellers. Things aren’t moving or getting any attention within like the first two, three weeks, depending where we might have priced it at. You know, we might be looking to cut.
cut price or explore some other marketing methods that might not have already been accounted for upon the initial list. So that helps us assure that we’re on the same page here. Something else that I’ll see on some of these kind of just broker OPVs here is
And it’s just something that just doesn’t really make sense to me. So I think it’s so speculative, um, where they’ll, they’ll be saying, Hey, you know, there, there haven’t really been any or many sales of this certain type of acreage within the last six months, maybe 12 months. And Oh, by the way, there’s not much inventory here either. And treating that as a good thing. Um, so
I just I fundamentally think that is high-risk business to get in You know, it’s entirely possible at some of these local realtors They might have you know off-market buyers lists people who are personally speaking to them and saying hey I’m looking for you know, this 10 acre tract in this particular area and you know, it’s nothing’s being listed Let me know whenever something’s available. Yeah, if if they’re providing a rationale
like that where they’re saying, Hey, there’s not really an active market at the moment. But by the way, I have these potential buyers. That’s something to dig a lot deeper into. Usually it’s, not going to be the case. And even if a realtor indicates that we’ve had that experience of, yeah, we think there could be this larger off off market buyer list here, but you’re taking a big gamble because if those, you know,
If those buyers dry up and you even if the broker indicates there’s some activity, how many do they know personally? You know, is it one person, two people? Maybe a couple more. Are they really going to be in the in the actual market for the specific property that you bring to them? Yeah, there could be some risk if you’re presenting the property that you’re about to close on, you know, how savvy are some of these buyers? Do you run some, you know, circumvention risk?
Before you close on the property there there is some inherent risk to that depends on the area depends on the relationships the broker might have With these people but you know if they’re purporting that I’ll usually be pretty comfortable. Hey, just and if we’re feeling pretty secure Hey, we’ve got this thing in escrow. We’re about to close on it You know just start soft selling it. See what type of interest you can generate And see see what’s that actually real out there
besides just kind of taking their word for it and, you know, potentially buying a property without, you know, any real data points outside of what the broker is saying in terms of interest. So that’s one that I just, again, fundamentally disagree with because, yeah, I would just always want to see, okay, there’s at least some type of real activity for properties like this.
And, you know, if, if we have to take a loss on, um, you know, missing out on a potential buyer by not funding a certain property that that’s okay. Because if I can’t show the data points, um, know, internally to my own partners, to other employees and contractors within the business, like it just, it’s really shaky decision-making again, unless you have, um,
kind of extensive analysis from a broker that’s really pointing in the direction. Yes, these parcels are in very high demand. There hasn’t been any inventory available for even like a year at a time. But if that’s truly the case, again, I would still be super cautious about that because that’s just telling me that the land market is still slow on average.
Anyway, you know, maybe you’re in like a crazy high demand area where there’s not really acreage of this size around at all. Then yeah, it might be a little, you know, to me that that would be closer to like a main metro area, like larger acreage that is just kind of uniquely qualified for certain buyers that just, you know, rarely if ever comes up on the market.
But if you’re anywhere outside of that, like rural acreage should be routinely trading at least one parcel in the last year for a certain acreage range. Otherwise, it’s insanely slow. So that’s my kind of thinking there. And I’m going to say, there’s no inventory. That’s a good thing to see as well. Yeah, you want to see a higher sold to active.
ratio, but you know, I also Don’t like being the only parcel on the market for a certain acreage range either because then again I might be first mover advantage and there just might not be that much demand. I don’t know Especially if you don’t routinely operate in a certain area So those are some initial thoughts there and again, you know going back to like those price per acre ranges like you gotta
them look more specifically at a property. You got to have a site visit in place. If it hasn’t been conducted already, like you’re going to have to schedule on that one out. Um, so that that’s how I start to qualify, uh, broker OPVs, um, a little quicker here, um, just based on, our experience. you know, we, we have a lot, you know, years worth of experience in this industry now. Like I have no problem pushing back.
on brokers, OOPV, CRE, you know, some of them are extremely valuable. We work with brokers basically at every transaction. not trying to discount their utility on a Dispo and for information perspective, it’s just, you really have to align with all of your research that you’re needing specific to that subject property and not just taking, you know, blanket email statement that, you know, the broker spent.
You know less than five minutes on to provide just an overall Opinion of the market, you know land is just it’s too specific per property to To use such such general general language there And so, know the one that we were looking at even earlier today, you know these brokers like yeah 18 20k per acre can list there But you know when I’m looking at the actual market
Yeah, there are a whole bunch of properties in that acreage range listed for that, but a lot of them are been listed for well over six months. That’s just telling me it’s saturated for actual sales. It’s probably closer to like 15 K top end. Uh, you know, especially if you’re doing a subdivide, want to offload a whole bunch more child parcels, probably a blended price per acre exit of even a bit below that. um, you know, that was our feedback back there and like, yeah, I just fundamentally disagree with, uh,
with what these brokers were indicating. And here’s our rationale. I wouldn’t be opposed to working with those brokers in the future if we really show them, here’s the subject, here’s these other parcels we think are more specific, where we are actually set to engage working with you. We plan a list with you, get them more focused and believing that you’re not just treating them as a commodity.
That would just be another strategy there. That’s a whole nother conversation. But hopefully this is helpful here today. If you’re looking for funding SeriousLand.Capital or Land Daily Diligence Facebook group for all of your zero cost diligence on land deals and landpricer.ai for the most simple and accurate way to price land, subscribe and share. been getting a lot more views and feedback. Much appreciated. We are keeping this thing rolling. Take care.
