The time may come when you have thoroughly researched a property and are prepared to submit a tender (or bid at the auction). However, before doing so, you should carefully estimate the value of the property.

Determining the value of a piece of land (developed or vacant) can be a difficult and complicated process. Included in this section is a list of factors which affect the value of a property and sources to contact for specific data on the property and surrounding area.

Often, value is determined by the simple law of supply and demand: the greater the interest in a particular type of property and the less of it there is, the greater the value will be. However, value does not depend only on supply and demand but on many other elements such as:

• usability (e.g. flat land is more valuable)
• clear title (e.g. is it encumbered by liens, right of ways, etc...)
• picture quality (e.g. the view, the architecture, the landscaping)
• frontage along a road or waterway
• zoning and building codes
• climate
• age and condition of the buildings
• location (e.g. schools, shopping areas, church, public transportation, neighbours, etc...)
• size of the property in question
• exposure (e.g. when does it get sun, where are the prevailing winds)
• utilities and their availability
• vegetation and quality of the soil
• maintenance of the property
• drainage
• quality and quantity of water
• accessibility (e.g. quality of the roads, can these be kept open year round?)
• growth in the area (e.g. economic, industrial, population).

Each of the above can contribute to increasing or decreasing the value of a property. Frequently, a piece of real estate located close to a populated area is considered more desirable and therefore it will be more expensive. If it has a picture postcard view, fronts along water, is close to all conveniences, and is easily accessible by road, it will have more value than property which does not have these characteristics.

Another key factor to consider in setting value is the potential for development. The property has value not so much for what it is now but for what it can become in the future. If the growth in a particular city is occurring in the direction of the parcel in question, there is greater potential for it to increase in value, especially if it is flat land that lends itself well to subdivision development. If you are looking at rural property, keep in mind that if the land has stands of timber, it has more potential than land that is somewhat rocky and sparse in vegetation. It doesn't really matter whether you plan to use that timber or not. The potential is there should you wish to cut down the trees. In setting value, always be sure to consider the potential use of the parcel and try to determine how soon the property will come in demand for this use. The municipal tax office (assessment department) may be able to provide some information on this matter. The officials there often know about planned land developments in the area and their possible effect on land value.

Where can you obtain more specific information on the property? One possible source of information is the municipal tax office (assessment department). From this office, you can obtain an assessor's evaluation of the market value of the property. The municipality uses this information to determine the amount of taxes payable. Looking at the assessed value and multiplying it by the tax rate will tell you the taxes due each year. By doing these calculations for other properties in the same area, you can get an idea of the value assigned to this property in relation to others of similar size and characteristics.

Another possible source of information is your local real estate agency. Real estate agents are usually familiar with land prices for most areas. They will know the selling price for properties sold in that area in the recent past and will probably be able to explain why parcels of similar size sold for different prices.

Each piece of real estate is unique and value may have increased depending on improvements made. Or, where two properties are similar in size and location, the price will vary greatly, perhaps because one property has a beautiful spring fed stream running through it.

Once you have discovered the selling price of a few properties in your area of interest, you can use something called the "comparison test" to determine the market value of the property you wish to bid on. If other local properties, being similar in size and features, are worth a certain amount, then this property is also worth about the same number of dollars.

If the property sold within the last few years and you cannot obtain any information on the selling price from a real estate agent, try the Land Titles or Registry Office. Do not forget to bring the legal description with you. (This is the description of the property as it appeared in our tax sale lists.) A clerk will help you find the appropriate document, which is the last registered deed or transfer. Consequently, you will have some idea of the value of the property at the time of the last sale.

Another method of estimating the value of the property is to hire an appraiser. You should note that the sources of information consulted by appraisers are also available to the public. If the appraiser has worked for a number of years in your area of interest, he/she will be thoroughly familiar with property values. If you should decide to go this route you can expect his/her report to include:

• an evaluation of the house and other buildings
• comparison figures on other similar sales in the area
• comments on
  • value of the location
  • anticipated economic and population growth
  • known restrictions
• present and future zoning possibilities
• availability of utilities and other services.
• (if he/she has access to the building)
• comments on
  • electrical system
  • plumbing
  • heating system
  • size of rooms
  • etc....