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An Alternative Sales Analysis Approach for Vacant Land Valuation

D. Richard Wincott

The Valuation Journal, 2013, vol. 8, issue 1, 26-41

Abstract: Conventional approaches to processing comparables in the sales comparison approach, particularly when addressing vacant land, have a common objective of adjusting the sale prices of the comparables using specific dollar-amount or percentage adjustments. Often the differentiating factors are not subject to quantitative measures, which may result in precision without accuracy. The focus of sales analysis should be interpreting the data to replicate the buyer calculus that goes into the decision-making process. The price-quality regression method discussed in this article attempts to simulate the thought process buyers would go through in determining their prices for the comparable sales as well as the subject property. A learned professor and colleague once put forth the proposition that originality is the ability to conceal one's source. As profound as this statement is in its view of reality, I will admit right now that the basis of the approach about to be discussed is recycled ideas of Henry A. Babcock and Richard U. Ratcliff, dating back to the 1960s.

JEL-codes: G15 R14 R32 (search for similar items in EconPapers)
Date: 2013
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Handle: RePEc:vaj:journl:v:8:y:2013:i:1:p:26-41