Ready to sell your land in Montreal, Quebec, but don’t know how to determine its value?
Use these three methods
There are three traditional methods for estimating the value of a property. The first is the capitalization valuation method. With this in mind, the estimator will observe the rents paid by tenants of similar properties to determine the income that could potentially be generated by the property.
The cost approach, on the other hand, estimates the costs involved in rebuilding the property, from foundation to ceiling. This method involves a large number of variables, such as the price of materials and workers’ wages. The current value of the property must be taken into account, but is not in itself sufficient to establish its fair market value.
Finally, the comparison appraisal method involves observing the prices at which properties similar to yours have recently sold. This method assumes that a buyer will not pay more for a property than others have.
This last method is certainly the most appropriate if you’re looking to determine the value of your land. Contact the Vendre Maison Vite team at 514-320-1000 to learn more about these three methods!
Recent sales are not enough…
However, there are many other factors that affect the value of a property.
How is your property zoned? How can it be used? A
property located in a commercial zone near a residential section and an ordinary residential property will be assessed in completely different ways.
Does your land face a main road? If a residential lot is located on a main street, its value could be affected. On the other hand, a commercial property in the same location could see its value rise. What’s around here? If there’s a shopping mall or grocery store, that should work in your favor. And what about neighboring properties? If you have messy neighbors, this can work against you. You should also consider the risk of natural disasters. If, for example, your land is at risk of flooding, no one will want to build a house on it. This would make your property much less attractive. What are the costs of ownership? You must also take into account the total annual taxes.
Current demand has a major impact on the value of Montreal land. Are there tons of properties like yours for sale? Or do you have a unique property? If there are many properties similar to yours on the market, you won’t be able to ask for more than its market value. Indeed, in these circumstances, buyers know they can get other land for less, so 
they won’t buy yours. What is the asking price for properties similar to yours? Have they been announced for some time? If similar properties have been advertised for a long time, it means there isn’t much demand. If you want to sell quickly, you may have to ask for a lower price than the market price. On the contrary, if there are few or no properties similar to yours, you may be able to ask a higher price than the market, especially if your land has certain unique features. If you ask for a high price, however, you may have to wait a little longer to find the right buyer who will recognize the value of your property. At the end of the day, your land is worth what a buyer is willing to pay for it and what you’re willing to receive for it.
