How should you use highest and best use analysis to achieve the highest possible sale price for your real estate property?
Don’t fixate on “location-location-location” as the driver of sales price. If you do, you may leave money on the table when you sell. In addition to location, you should determine the highest and best use of your property before putting it on the market in order to harvest the best return possible.
Do you know if the way your property is currently being used is its highest and best use? To capture optimum gains in a sale, ask four questions about your property’s future use.
- What dynamics are driving the market where your property sits? The factors influencing economic growth and demand for property are not static and some demand drivers may put more money in your market when you sell. Every market is different and every location deserves evaluation for its highest and best use. In some cases, the best use may already have been determined. In others, analyzing the demand drivers may reveal a different use that might attract double or even triple pricing. One of the main values our clients appreciate is Drake Realty Group’s up-to-date market knowledge and willingness to dig deep for insightful information that can have a positive impact on a clients’ bottom line.
- What approvals will be required to change to a better use and are they worth it? In considering a change of usage, you must consider how much pain you will have to go through in gaining new entitlements, zoning, etc. For instance, Houston entitlements are usually manageable while gaining new approvals in Austin can be extremely challenging. Due to our market knowledge and expertise, Drake Realty Group is able to advise clients in Texas, or any other national market, whether extra entitlement efforts are likely to produce a significant upside.
- What is the size and configuration of the property? These factors impact pricing significantly. Even if the property’s location is excellent and re-zoning might be manageable, an odd shape or inadequate size may inhibit its highest and best use. Drake Realty Group knows what potential buyers and developers are looking for and connects the right property with the best developers and buyers.
- Does it matter who the broker is once highest and best use is determined? You bet it does. Finding a broker who will capitalize on highest and best use assessments is paramount. Without a proactive approach, no broker will secure the best price possible regardless of the designated property use, or the best buyer that knows how to maximize the overall value of the property. Our clients know that Drake Realty Group works hard and smart from the beginning, meeting with owners and doing in-depth assessments on the front end. We remain engaged in every transaction from concept to closing to ensure the best possible outcome of every deal.
Read a case study on land disposition services for highest and best use to see how Drake Realty Group helped a client achieve one of the highest historical land prices at that time in the Houston Galleria submarket. If you would like assistance with a highest and best use analysis of your property or additional information, contact Drake Realty Group.