Sometimes we encounter the opinion of owners of plots of land that no price or technical analysis is necessary, because “the customer will buy it anyway”. It is obvious that every plot of land will sooner or later find its buyer, but rather later and rather at a price which differs from the expected one. Assuming that the buyer himself obtains the necessary data can only work in very few situations. Lack of reliable information on the plot’s potential results in an incorrect estimate of its value. In this case, there will usually be no interested buyers or the offers made will be only a fraction of the plot’s value.
The most popular plots of land are most often located in the areas covered by the local spatial development plan (LSDP). Such plans determine the basic parameters such as the maximum height of development, the number of storeys, the intensity of development, the biologically active area, the number of parking spaces, the binding and impassable development lines, etc. On the basis of these parameters, preliminary land absorption analyses are prepared, based mainly on numerical factors. In order to gain a more precise knowledge of a plot’s potential, it is recommended to prepare an analysis taking into account additional requirements such as: distance from other buildings, distance from the plot boundary, fire safety requirements, communication system on the plot and in the neighbourhood, zones of influence on the adjacent plots (shading, noise, etc.), terrain, type of soil, nature protection zones, flood hazard, landslides, air and ground pollution, course of power lines or other linear objects, availability of utilities, planned changes to the LSDP.
Owners of plots which are not included in the LSDP (i.e. about 70% of owners in Poland) are in an unfavourable situation. In this case, in order to consider a successful and sensible transaction, it is necessary to apply for a Land Development Decision The Decision determines development possibilities of the plot on the basis of an urban planning analysis. Sometimes the final result of the analysis differs from what the owner of the plot expected. Due to the necessity to notify parties to the administrative proceedings affected by the planned investment or parties having the so-called “legal interest”, obtaining a Land Development Decision is a time-consuming procedure.
Once the administrative decision is obtained, an absorption analysis should be carried out, as in the case of the plots included in the LSDP.
Properly performed absorption analyses make it possible to conduct a business analysis for those interested in buying and to make a potential decision to purchase a plot of land.
Investors are willing to pay a good price if they have sufficient knowledge about it. If the time to make a business decision is excessively long or even difficult to determine, they will generally not take the risk of buying a plot, or will offer a price significantly below the market price.