Land Sales Comparison
~10 min read · Compare land sales with the right units: per acre, per front foot, per buildable unit.
Land values best the way everything does — by comparable sales — but with its own units of comparison: per square foot, per acre, per front foot, per buildable unit. Choosing the unit the MARKET uses is half the skill; adjusting for entitlements and utilities is the other half.
Sales comparison for land
Vacant-site sales adjust like improved comps — rights, financing, conditions, time, then location and physical (size, shape, topography, utilities, access, zoning/entitlements). Land-specific wrinkles: plottage/assemblage premiums, corner influence, easement burdens, and the steep value cliffs at zoning boundaries. 'Vacant' comparisons also serve improved properties via the HBU-as-vacant analysis.
- Same adjustment sequence, land-specific factors
- Zoning and utilities are the big value switches
- Watch assemblage premiums in comp prices
Units of comparison
Match the market's habit: residential lots per lot or per front foot (where frontage drives value — waterfront, retail); acreage per acre; urban commercial per square foot; development land per buildable unit (approved lot/apartment) or per FAR square foot where density rules. Unit choice normalizes size differences — comparing a 1-acre and a 3-acre parcel per-acre absorbs the size gap (though size adjustments persist: larger parcels usually trade at LOWER unit prices — the quantity discount).
- Per lot, front foot, acre, square foot, buildable unit — market's choice
- Unit prices normalize; size discounts still apply
- Density-priced land trades per approved unit or FAR foot
Entitlement laddering
Land climbs a value ladder as approvals accrue: raw → zoned → entitled (approved maps) → finished (utilities in). Comps must sit on the SAME rung or be adjusted for the difference — the cost and risk of entitlement work is real value. Utilities at the street versus at a quarter-mile is a five-figure adjustment; perc-test failure on septic land can halve value.
Worked example
Value a 2.5-acre approved-for-40-units multifamily site. Comps: (A) 3.1 acres, approved 52 units, sold $2,340,000; (B) 2.0 acres, zoned but unapproved (~30 units potential), sold $1,050,000; (C) 2.6 acres approved 38 units, sold $1,748,000. Choose the unit and value the site.
The market prices development land per BUILDABLE UNIT: (A) 2,340,000 ÷ 52 = $45,000/unit; (C) 1,748,000 ÷ 38 = $46,000/unit — tight agreement between the two APPROVED comps. (B): 1,050,000 ÷ 30 = $35,000/unit — but B is unapproved: its discount measures the entitlement rung, not the market for approved units; use it only with an upward entitlement adjustment (which the A/C spread suggests is roughly $10,000/unit of approval value). Conclude ≈ $45,500/unit × 40 = $1,820,000. Per-acre math would have scattered (755k, 525k, 672k per acre) because acreage is not what these buyers buy — density is. Unit choice WAS the analysis.
Common exam pitfalls
Defaulting to per-acre for every land type.
Use the unit the market negotiates in — buildable units for density land, front feet where frontage rules.
Mixing entitlement rungs without adjustment.
Raw, zoned, approved, and finished land are different products — adjust for the rung or discard.
Ignoring the size discount.
Bigger parcels trade at lower unit prices — a per-unit basis shrinks but rarely erases the effect.
Price it in the market's own unit, on the same approval rung, with the utilities counted — then the comps agree.
Recap
- Land sales adjust through the standard sequence with site-specific factors
- Units: lot, front foot, acre, square foot, buildable unit
- Approved-density land prices per unit/FAR foot
- Entitlement rungs are value steps — adjust across them
- Larger size, lower unit price (quantity discount)
- Utilities, topography, zoning: the heavy adjustments
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