Home builders around the country have been swamped this year with news reports of public builders selling land for some fraction of its peak worth to get out from under the carrying costs on loans now worth more than the land's value.

Those large builders have teams of number crunchers and a roster of well-paid consultants and financial advisors to help them evaluate what their land might be worth, and what they might be able to get for it in a sale.

A number of smaller builders got a similar dose of high-brow land valuation thinking in October as Lee Evans Group senior consultant Jim Weigel, a former banker and land advisor, offered tips on how to evaluate finished lots, lots under development, and raw dirt, and how to present information to banks during a Webinar run by consultant Chuck Shinn of Shinn Consulting in Littleton, Colo. Watch the webinar in its entirety here.

"We've been hearing all this stuff about how land is selling at 40 cents on the dollar, 60 cents on the dollar--that doesn't matter," Weigel told builders, bankers, and manufacturers. "It really needs to be selling at 15 cents on the dollar. And that's not even for raw land. That's for a combination of raw and finished lots."

While builders have been writing down the value of their own lots to be able to sell homes closer to market prices, the prices of lots for sale have not come down nearly as far, so very little land is being sold and even fewer new developments are breaking ground.

"That's where we are now, and it's probably going to continue through 2009," Weigel said.

What to do? Weigel contends that builders need to make the case to their lenders that everyone's financial interests would be best served if builders can finish their projects and get as much return as possible on the lenders' investment. If a lender takes all of a builders' assets now and tries to liquidate them in the current market environment (assuming they could find a buyer--a big assumption), they would take a substantial loss due to flagging land values and minimal demand.

The lender would also incur a slew of costs in taking on any project. Depending on the status of the project, those costs could range from hiring new crews, buying construction materials, and marketing and selling costs all the way to the possibility that some portion of the project would have to be torn down and rebuilt due to either vandalism or weather-related damage.