Evaluating the Missouri Land Market

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Evaluating the Missouri Land Market
By

Bart Waldon

Known as the “Show Me State,” Missouri’s varied landscape spans the Ozark Mountain Plateaus to the northern plains carved by the Missouri River. With over 29 million acres dedicated to more than 69,000 farms and ranches, agriculture remains the state’s dominant industry. This makes the health of the Missouri land market an essential consideration for owners when weighing options to buy, sell or hold parcels.

Situated mid-state, Jefferson City provides reasonably central proximity for landowners to access relevant county records databases and navigate required real estate filings and transactions associated with property purchases or sales. Whether you inherited vacant land, are exploring sale options, or reviewing purchase proposals from land acquisition companies, understanding land valuation dynamics can clarify next steps.

Variables That Can Influence Missouri Land Values

Similar to broader real estate markets, the law of supply and demand applies when pricing agricultural acreage and development parcels across Missouri. Additional influential factors on property valuation may include:

Location: Land situated nearer growing urban centers or hubs demonstrating strong rural population influx often demands higher per acre pricing than similar outlying properties in less desirable areas with minimal infrastructure, attractions or anchor communities.

Accessibility and Existing Infrastructure: Properties with installed utilities, established road access, and proximity to everyday services and amenities can attract buyers willing to pay premiums. In contrast, more remote rural land parcels lacking electrical, water/sewer access or linkage to maintained roads may languish on the market at lower price points.

Productivity Potential: Factors like soil quality, mineral rights, development feasibility and water accessibility guiding agricultural or commercial use potential also sway pricing. Land parcels suitable for building telecommunications towers, residential spaces, vacation properties or drill pads factor into ROI projections that translate into buyers’ investment ceiling for purchase terms.

Like broader economic shifts, land valuation in Missouri rises and falls in cycles influenced by population gains and declines in key regions, growth or contraction impacting agricultural markets, industrial development patterns, infrastructure expansion projects, tourism trends and overall commercial real estate demand.

Roadblocks Facing Land Sellers Marketing Independently

Attempting to sell vacant land without existing tenants or site improvements poses unique challenges compared to marketing more developed investment properties. Without in-place homes, businesses or ancillary buildings adding measurable value, accurately quantifying and capturing optimal land prices can perplex many independent sellers.

A host of complex factors beyond simply listing sale pricing influence potential buyer offers and net sale proceeds:

Zoning Limitations: Local development restrictions, density regulations, allowable land use codes and permitting processes can limit the scope of possible residential or commercial projects for vacant acreage, directly impacting property value.

Marketing Investment Essential: Generating buyer awareness and attracting viable prospects requires expertise plus significant outlays for listing placements on MLS databases, digital and print advertising campaigns, staging for open houses or showings. This represents sunk costs that sellers must fund upfront without guarantee of timely sales or offers aligning with asking prices.

Price Optimization Issues: Owners face finding the pricing “sweet spot” that aligns with demand forecasts and secures sufficiently fair market value sale terms to avoid leaving substantial sums on the table while still attracting qualified buyers within reasonable time horizons.

Sales Complexities: Negotiations, financing contingencies/restrictions, rezoning hurdles, title conveyance requirements and survey needs can complicate deals and hamper closing. Even solid preliminary purchase offers can unravel at critical junctures for issues unrelated to base property valuation.

Industry metrics indicate sellers of vacant land in Missouri require an average of 1-2 years to fully market properties and close transactions with qualified buyers.

For many land owners lacking the combination of available free time, specialized real estate expertise and financial resources to effectively promote their acreage independently, this lengthy timeline coupled with closing uncertainties simply adds intolerable burden. To avoid frustrations, these sellers opt to engage land acquisition companies.

Streamlining Sales Through Land Buying Companies

Rather than navigating the solo slog of attempting to sell land within compressed time horizons, many owners now choose to work with professional investment groups focused specifically on property purchase transactions. These land buying companies actively seek out, assess and negotiate purchases of vacant parcels or undeveloped land tracts matching their investment priorities to aggregate for resale, commercial development, vacation leasing or drilling lease programs.

One such specialist company serving landowners across Missouri is Land Boss, operating locally with an exclusive focus on land deals and investment for over five years. Since opening, Land Boss has purchased over 100 separate Missouri land parcels on behalf of individual high net worth investors and private institutional capital groups seeking additions to their real estate asset portfolios. Their niche business model centered solely on land transactions provides several advantages for sellers assessing options:

Market Expertise: With deep experience across hundreds of deals, the Land Boss team possesses credible insight into current land valuations and marketing trajectories required for negotiated purchase terms equitable for both parties.

Marketing Investment: As large-scale buyers, Land Boss handles upfront promotional costs and responsibilities associated with modern land sales essential for maximizing value - including digital listing creations and ad placements.

Flexibility: Unlike financing contingencies complicating deals with typical mortgage buyers, streamlined cash purchases with companies like Land Boss provide more flexibility for owners in areas like closing timelines and property condition stipulations.

Speed: For sellers seeking rapid liquidation options, Land Boss’ ability to pay cash and close deals swiftly keeps options moving that may otherwise stagnate for years on traditional open markets - or collapse entirely from buyer financing issues.

For land owners seeking to avoid the lengthy slog of personally marketing properties combined with closing uncertainties, collaborating with a trusted land acquisition company like Land Boss simplifies and speeds transactions. Under their model, professionals take the reins navigating negotiations, promotions, buyer vetting and closings - alleviating many headaches for clients who prioritize convenient exits offering reasonable equity realization.

Vetting Land Buying Companies

If exploring prospective offers from land purchasing companies, thoroughly research their industry reputation, longevity and transparency before agreeing to any deal terms. Just as with any major financial move, guard against potential exploitation from seemingly easy offers that pressure distressed owners to relinquish land far under open market values without adequate property assessment or valuation data to support pricing.

Legitimate land investment firms focused on building ethical businesses center deals on creating mutually beneficial purchase terms at moderate discounts to foster strong referral pipelines, not engineering one-sided transactions that hoodwink uninformed sellers into forfeiting substantially undervalued land assets.

Analyzing Offer Trade-Offs

With savvy evaluation, selling land for a reasonable discount through a reputable investment company may provide attractive risk-reward scenarios for many owners based on their specific situations, priorities and holdings. Consider key factors like:

Market Fluctuation Allowances: Land deals factor in natural demand cycle fluctuations projected months or years ahead. As buy-and-hold investors seeking to profit reselling purchased land when valuations appreciate or leasing for interim income, pricing must account for these peaks, valleys and unknowns unavailable to one-time sellers.

Tax Liabilities and Opportunity Costs: Vacant land often generates no regular income for owners yet requires annual tax payments that can compound over lengthy listings. Removing this carrying cost burden provides financial flexibility without leaving assets and equity trapped in a non-performing holding.

Reinvestment Options: Upon sale, secured funds may fuel more optimal ROI options like securities, CDs or developed rental properties rather than remain tied up in a vacant parcel with value unlikely to rapidly appreciate before an eventual sale years down the road.

For landowners exploring liquidation options, the decision often emerges between two distinct paths forward:

Alternative A: Struggle through independently marketing a property for an unknown period (averaging 1-2 years) while attempting to secure optimal “top dollar” pricing under the pressures of limited timelines before facing reconsideration of lowering asking price. No guarantee exists of ever locating an ideal buyer or closing a deal.

Alternative B: Receive 70-80% of recent peak land valuations through reputable land acquisition companies in guaranteed, rapid timeframes. Avoid burdens and sunk costs of self-promotion. Benefit from professionals handling all negotiations, marketing investments, buyer vetting and closing processes.

While each seller's needs differ based on their liquidity needs, abilities and risk tolerance, the offer trade-offs point to key advantages partnerships with trusted land buying companies provide Missouri land owners prioritizing convenience and secured liquidity over maximum valuations. By leveraging outside specialists, clients grant themselves financial flexibility impossible via independent sales channels given realities of the land market.

Just as hiring specialized CPAs handles complex tax filings, partnering with competent land pros condenses a traditionally formidable process of maximizing land value into simple, speedy cash funding. For many property owners, slight valuation discounts prove worthy trade-offs to alleviate major headaches and open new investing opportunities through reinvestment only possible following liquidation.

As with major financial decisions, pursuing due diligence around prospective land acquisitions partners and offers tabled makes sound judgment. But when ethically structured based on transparency, selling land holdings to an established investment group can ease land sale processes to create overall “win-win” outcomes. Both parties share the motivation to transfer inactive land assets into useful liquidity addressing current needs rather than remaining tied up for months or years until locating the perfect buyer.

Final Thoughts

For landowners across Missouri, the decision to buy, sell or hold property represents major financial moves impacting family legacies and investment strategies. When exploring sales to capitalize on equity, the lengthy timelines and uncertainties of independent listings can deter many sellers. Yet for those prioritizing expedited liquidity and convenience over maximum pricing, collaborating with specialist firms like Land Boss promises to ease the property disposal process through market expertise, buyer access and streamlined closing capabilities. By weighing all options around priorities, risk factors and timing, Missouri land owners can make informed choices guided by their specific needs and financial visions. With thorough research and evaluations of prospective partnerships, engaging land acquisition companies may strategically align for owners seeking liquidity to fuel the next chapter of opportunity.

Frequently Asked Questions (FAQs)

What factors typically influence land valuations in Missouri?

Land prices in Missouri fluctuate based on supply and demand as well as influences like location, accessibility, infrastructure availability, development potential, and market cycles impacting agricultural production, population growth, and commercial investment interest.

How long does the process of selling land generally take in Missouri?

Industry estimates suggest marketing and closing land sales in Missouri via traditional channels averages 1-2 years without guarantee of securing suitable buyers or offers. The complexities of marketing, financing, negotiations and zoning issues all impact closing certainty.

What benefits can partnering with a land acquisition company provide compared to independent sales attempts?

Companies like Land Boss specializing in land buying provide experience to accurately value and market properties. They also bear upfront costs for promotions, handle negotiations, vet buyers, and finalize complicated closings. For sellers, this expertise and resource investment improves convenience and closing confidence.

What discounts from peak market value are common when selling land to a specialty buying company?

Depending on market conditions and parcel dynamics, sellers may receive 70-80% of the property's recently appraised high market value when collaborating with a reputable land buying company. This moderate discount trades for guaranteed terms and a simplified, expedited closing process.

What criteria should evaluate in a potential land buying company before agreeing to sale terms?

Conduct thorough due diligence into factors like years in business, number of completed acquisitions, marketplace reputation, business transparency, referral satisfaction, and whether negotiations involve equitable win-win purchase terms for both parties. This helps avoid exploitation and builds beneficial long-term business relationships.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.

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