Valuation of Land in California

Hey everyone, I just got a land listing and am looking for anybody who has insight or experience to selling raw, undeveloped land. It has no improvements on it and is way out in the desert area. Based on a comparable sales approach I was able to ballpark a value. I am guessing cost approach would be better?
It is currently zoned as "RC". According to the county website, I found this:
RC (Resource Conservation). The RC (Resource Conservation) land use zoning district provides sites for open space and recreational activities, single- family homes on very large parcels and similar and compatible uses.

It seems like the going commission is 10% (judging by the 5% given to buying agents on the MLS in that area for land). Any insight is appreciated.

 
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From a developer's view we back into what the land value is. We take the land, say 1 acre and then check the zoning which may be 30 units per acre (multifamily). From there we underwrite what it would cost to build a 30 unit deal and the cash flows that deal would produce. Then we just back into the land price we would pay for the deal in order to hit our return metrics. Same process for office, sfh, retail etc.

 

+1 sb - agree with this approach.

Few other considerations for raw land: (1) need to determine highest/best use. Buyers could be looking at this for a lot of purposes (master plan community, distribution center, solar?) which could come up with very different values. (2) that "cost to build" part is going to be harder to nail down - if this is really out there, there are going to be infrastructure costs to consider. On top of zoning - which, depending on location can be flexible (lot of those desert communities are going to be willing to work with developer who is going to bring jobs/development to their city (town? oasis?)) - you may need to consider water rights?

Don't have any insight on commission percent - although I have seen a variety of structures on more complicated large-tract purchases out in the desert.

 

Stoo and bolo up Thank you very much for helping me with this! I am planning on meeting with the county to try and figure some of those answers out. As it sits, the "by right" development would just be single families homes and recreation centers. And for reference, another plot of land near there just sold for $20,000 with similar acreage. Both this plot and the other plot are connected to a major freeway. This is really out in the desert area with a lot of undeveloped land.

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
 

Might recommend asking the City what kind of higher density use they would support on the site. Then, you can price the parcel and market it as a politically viable re-zone case. Easier to price the land on a comp approach for that asset type instead of backing into the value. Especially in CA, where with entitlement risk you are making a lot of wild assumptions on CEQA timeline, legal costs, etc. that will affect how much the land value gets compressed.

 

Appreciate the insight. I think @Doekim really nailed it with his response. Even though things can be built on it.. I cannot see a reason why. The only idea I could think of is someone who wants to just ditch society and build their own house out in the middle of nowhere. Again, unless the area just completely gets developed by some Bugsy Siegel type guy who creates a massive city in the middle of nowhere.

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
 

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“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb

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