Land sellers often only list terms prices and fail to list the cash price, making calculating comps difficult. Here’s what I do.
To illustrate, I see a property; the only price list is the terms price: say $185 down and $185 per month for 60 months. I’m going to calculate the total payment for this property.
$185 * 60 = $11,100
Now add the down payment of 185 for a total of $11,285
Now, I also realize that if a cash buyer came in and asked for a discount, I would negotiate with them, likely offering up to a 15 percent discount. Offering this discount means I would accept 85 percent of the terms price. Therefore, I would then determine what I think the fair cash price would be based on this discount.
$11,285 * .85 = $9,592. This is what I would list as the calculated cash price.
