"I've seen both buyers and sellers do this to try and gain some type of advantage in negotiations," says Robert King, a land agent with AlaLandCo; a native of Clay County, Alabama, he has over 10 years experience in marketing and selling property. "It rarely, if ever, works, and absolutely serves to drive the parties further apart." Also, don’t make a laundry list of everything that is wrong with a property you are trying to buy, cautions King. "You must like the property, or you would not have spent all that time figuring out everything that is wrong with it. That just puts the seller on guard and creates a personal barrier." When you impart your wealth of knowledge of all of the property's shortcomings to the other party, you are not likely to make a friend of the seller, says King. You want to be on friendly not adversarial terms with anyone you are negotiating with for the land deal.
I am a relatively new real estate agent and just got a land listing. This is a great article with many helpful strategies for selling land. I think selling land can be a bit intimidating because most sellers have such high expectations that you will sell their land for them quickly and it usually takes much longer, as you pointed out in your article. Thank you for the great information!
In the right location, today’s seller’s market makes it so you could put your home on the market as-is and likely still receive interest. But if there’s a possibility you’re misdiagnosing your home as a desirable purchase for a teardown, you should think about preparing the home properly for the market, as minor updates and cleaning can go a long way. You could have your property appraised to see how it would likely fare compared to similar homes in your neighborhood, or consult a real estate agent to see if they expect more builder versus homebuyer interest.
If Mark has more than one piece of land to sell per week, or if he has exhausted his buyer’s list, he posts to Craigslist. “Craigslist is the 10th most trafficked website in the US,” he said. “We use a program called Posting Domination. I’m able to automate 124 postings a day, all at the click of a button. It’s unbelievable. So we sell everyday on Craigslist and we are building our buyer’s list everyday on Craigslist.”
This issue can be overcome if you can establish a legal, recorded easement to the property. This can be done if one of the neighbors is willing to allow you access through their property – to yours. In many cases, a neighbor shouldn't be expected to do this for free, you'll have to give them a reason to help you (usually in the form of money). Again, this isn't an impossible issue to overcome, but it is definitely something you'll want to be aware of before you purchase.
Hi Chris, thanks for the comment. That’s a pretty subjective question (there are a lot of variables to consider), but I don’t see how it could hurt the value of your overall estate. The question is – what is the land actually worth? Is it worth more or less than $25K? One way to find out would be to follow the ideas in this blog post. As long as the property is worth substantially more than $25K (and assuming you actually want the additional land), it’s probably a worthwhile investment… but again – it’s impossible for me to tell you anything concrete without looking at everything (which I can’t really do).
i am very confused on what to do. i have 2 lots in the 100yr floodplain with up todate septics and electrical poles. i have rented 2 spaces in the pass for 250 each. However i am allowed to put 2 mobile homes per the permit office. i can rent each home for appox 800 a month. the land is paid for and very low taxes. or i can sell the propery on owner finance for 55,ooo, the property does have a creek behind it and the creek is a floodway. the total land is approx 1.63 acreas. should i sale the property since. its in a floodzone or put the mobile homes and have a good rental income. what would u do. would u even rent in a flood zone. thank you, please respone for 2 months i have been undecided on what o do.
Something I appreciate about the property listing platform on this site is that you can enter in A LOT of deal-specific details that real estate investors are going to care about, as explained in this video (e.g. – costs associated with owning the property, cash flow details, zoning and uses, etc.). I also really liked the ticking time clock at the top of each listing, as it helps instill a sense of urgency/scarcity for anyone who wants to take advantage of the deal.
This is a great article! I agree that there is a lot to take into consideration when investing in land. Most people fail to realize as well that investing in land is most time, if you find the right deal even better than buying properties already constructed on a piece of land. People also forget that there are many expenses involved in developing vacant land to be “usable”. All of the points made here are extremely important to consider and one should do extensive research before purchasing any property and ask yourself these 15 questions mentioned above before purchasing. I have done lots of research and have bought properties in the past, the best company/website in my opinion is http://www.cheaplands.com I have never seen deals like theirs in my real estate career.
The main problem you will be faced with when you go to sell land online is that you have to create an imaginary future for that land that the potential buyer will see and buy into. It is simply not enough to say “hey, I want to sell my land fast” you need to work with the buyer to create that vision of what the land can do for that potential new owner.
I suggest you go to your local real estate clubs and get more buyers there! You know, its like if you wanted to find a job really quick. You can go to several head hunters, several temp to hire agency, and you can put all these people to work for you - for not a dime of your money. Thats what I call people leveraging. When your at home, you are going to have several people calling you back to tell you about offers they have for you and you can then cherry pick the offers and take the one that best fits you. Real estate clubs are full of people who want to find you buyers - these people are called wholesalers. And guess what, you can have as many as you need. I say, work smart not hard!
When you sell land by yourself, this is called a private sale. So, you will need to find a private buyer. It may help you to talk with local farmers if you are looking to sell raw land; farmers have all kinds of experience in purchasing land for their crops. If you are selling your land on your own without the aid of a real estate agent, this next section is for you.
Showing: Once a prospective buyer becomes interested in your property, they need a way to see it. Land professionals can do that in several different ways: by walking over it, using an ATV or UTV, or by SUV or truck. A potential buyer must see the property and all of its key features to truly decide if they want to purchase it or not. I find 90% of the time, if a property is well-priced that its location and features are generally what convinces the buyer to make the purchase. But to become convinced they must see it, all of it. Last week a residential agent asked to show one of my tracts that is nearly 300 acres. I told the agent I would be happy to show the property and that you have to be equipped to show the property. They asked, ”Do you mean, I would need a big truck?” This agent drives a Toyota Camry, and there are water bars on the property bigger than this car. You do not want to hire an agent that is unwilling or unequipped to effectively show your property.
You can also try to contact a few local real estate agents in the area and ask them if they wouldn't mind driving by the property and snapping a few pictures when they have a chance. Most agents are regularly in the field anyway, and it isn't a huge ask for them to swing by your property and get some pictures (especially if you show an interest in using them for your future listings and/or paying them a few bucks for their trouble).
If you need to find a buyer fast, our company is in the land buying business. If you've got time to wait for a few months, then get it posted on your standard online sites (don't underestimate Craigslist!) and consider hiring an agent. If that doesn't work out or you don't feel like waiting, we've got a network of buyers at Landmark Property Buyers.
I’m sure it could be done. I actually live in a subdivision that started exactly like how you’re describing back in the 70’s. I think it can be a pretty big speculative gamble unless you’re absolutely certain that there’s a huge demand for what you’re creating… but if you end up being right, you could easily make millions (depending on how big of a project you’re looking at).
I agree with Ellen Chung, finding the right type of buyer to target is very important. Also, you should consider the amount of time you have to sell the land. If you are short on time due to back taxes owed or other financial obligations, your best bet may be to talk to a vacant land investor. You will not get the full market price for your property, but the typically can pay cash and close quickly.
Rezoning isn’t a quick process, and there are no guarantees. “Sometimes councils won’t rezone because the land is too fragmented and needs consolidation,” Coutts says. “It can easily take four to five years. Some landowners don’t have that time, so it can be a very daunting and upsetting process. You can see why they say ‘just sell it and let’s get out of here’. But if you can wait and manage the process effectively, the rewards can be considerable.”
Hi Dave, thanks for stopping by. You’re right – it’s very hard for me to give you any concrete opinion on this (because there are a lot of factors to weigh with any piece of vacant land). I’d say if you’ve looked at all the potential downsides and established that there won’t be any issues from that end… and if you’ve got a fairly decent idea as to what the property is currently worth (and you’re buying it for a price that is significantly BELOW that number), then sure – there probably is a fair chance that you can make money on it.
Say, the property is going to cost you $150 per square foot to build and you expect a return on your investment at 10 percent. So, 1,000 square feet at $150 equals $150,000; which means you expect to get $15,000 back after your expenses, including management fees and debt service on the property, and some reserve. "Although in today's market, the return on investment is less than 10 percent and more like 6 percent. Calculate the most you are willing to pay the seller based on the outcome of your cost analysis," Veissi advises. Once you have done all of the analysis and appropriate planning, he says, you still need a contingency. You can think you have it nailed down and all of a sudden something crops up, unsettling your plans, he explains.
If you have created a land contract, youll also need a memorandum of land contract. This is, essentially, an abbreviated legal document that references the main contract created. This simply serves as a public notice that the buyer is interested in the property without you and the buyer having to disclose and record the entire land contract. Because the deed of the property will not be filed until youve received full payment on the purchase price indicated in the contract, this memorandum will be filed with the county and the city to serve as a record that the buyer is interested in the property.
Whether youre selling your land yourself or with the help of a real estate professional, its important to ensure that you have all the necessary documents to complete the transaction. Its highly recommended that you consult with an attorney to ensure that your contract includes all of the necessary information and to ensure that you arent missing any important documentation. If you plan on selling the land yourself, be sure to do your research to avoid complications during the sale process.
Hey Seth, as always great article! I found the free online marketing ideas (like posting on Craigslist) especially creative and helpful. Thanks so much for helping me through the stressful process of selling my home. Since you asked what other creative tips I’ve found–I read this eBook in my research and found it so helpful that I thought I’d post it here in the chance that it could help someone else. Here it is: https://www.homelight.com/sell-your-house-online-ebook
Selling land is one of the most difficult real estate transactions to conclude. The seller must create an imaginary future for that land and market it to the appropriate buyers. This involves creative thinking on the part of the owner and the expense of illustrating the future use of the land in the form of flyers and brochures. Obtaining financing is difficult and requires the owner to be flexible on his price and terms if he wants to sell the land quickly.
This all boils down to how badly the developer needs your home, how much money he stands to gain by moving quickly and how robust the multi-unit housing market is. If the final offer falls a bit short of where you’d like it to be, factor in the negatives of staying: more construction noise, additional traffic and all the dough you’ll have to fork out to comfortably remain there. Realize, too, that condo prices, in particular, can be mercurial and turn on a dime if the greater housing market starts going south, which might give your buyer cold feet.
Overage. Put simply this is a right to receive future payments in respect of land which has been sold. It is sometimes known as a clawback. The right is triggered by the happening of a certain event, in this scenario often the grant of planning consent for development. There are many issues to consider here, beyond the scope of this note, but landowners need to think about what will constitute the trigger event, how long the overage agreement should last for, what the obligations of each of the parties should be, how the payment should be calculated and how this payment should be secured.
Selling lots is not like Field of Dreams, where “if you build it they will come.” You need to make sure there is a market for lots in your area and at a price that makes sense. Determine the size, layout and other requirements that are expected for new lots to be marketable. A good real estate agent with expertise in land can help you with this. You also may be able to get some advice from builders – reach out to the ones who are active in your geographic area and in the price range for new homes that would likely be built on your lots. Getting their input could be the key to successfully subdividing marketable lots.
If you’re looking at a vacant lot in the middle of the desert or near the top of a mountain with nothing around for miles, you will probably want to verify with a professional that water will be accessible if/when you need it (and if your only option is to have it hauled in by truck, you'll want to get an idea for how much this will cost on an ongoing basis).
I used BHW to draft up legal contracts for my business. They were highly professional and provided me with exactly what I needed and offered excellent advice throughout. The work was completed promptly and I was kept updated throughout the whole process. I would like to thank Michael Lam for being so approachable and accommodating. I would definitely recommend this firm and will be more than happy to use their services in the future!
Now I was reading about the 1450 sq ft build. A baby house maybe. I’d be more inclined toward a squad tent, (i have one 16X32 with a woodstove and 5000 kw generator and string of lights for sale. $3500.00 plus shipping and handling.), or a plains INDIAN Teepee which I also have for $2500.00 plus shipping and handling. Real Buffalo Robes, very soft and heavy, for $3500.00 a piece plus shipping and handling.
I requested a quote 13 days ago & I accept the fact that you are back logged & it could take up to 14 days to get a written response. I just hope that you seriously consider our property for purchase. It really is a great lot. We had plans 13yrs ago to build a house with a walkout basement & even add a pole barn to the property. Times change, situations change & we've been trying to sell this since 2008. I'll keep my fingers crossed & hope that I hear a response with an offer very soon. I appreciate that you look at every property & realize it might take a little longer than 2 weeks to hear something. Thank you very much for your consideration. Amy
Although the process of selling land is less complex than selling a piece of property with a home, this is still a process that requires the help of a professional. Real estate laws vary from state to state, so its important to work with an experienced real estate attorney when selling your land. The help of a professional becomes even more important if youre creating a land contract.
You also have to bear in mind that you cannot be exactly sure how the development will change the landscape of your street, or impinge on your privacy, or cause other problems, until it is actually built. David Henry of FPD Savills cites one case in which the owners of several large Victorian houses clubbed together and sold part of their gardens for development, only to find that their baths would no longer drain properly at certain times of day. The existing drainage systems could not cope with the extra load.
Especially when I'm buying vacant land out-of-state, my first line of business is to understand the topography of the property. There are many, many places around the world that have very unpredictable elevations, cliffs, mountains, valleys, ravines and more. In many cases, the topography of the land can have a huge impact on the build-ability of a property. For the same reasons you can't build a house on 90-degree cliff, you should be doing some preliminary research to find out where your property is located, and what the lay of the land is.
I have a home on a lot that is large enough to be subdivided. I met with the city to discuss subdividing and they said that each lot needs a 20′ street frontage (currently I only have a 20′ street frontage. They said that I can subdivide if I put in a drive tract to the subdivided section. However, they would consider the drive tract a road and as a result I would need to remove an attached carport because the rules indicate that a house needs to be 20′ from a road. The only reason that I need the drive tract instead of a typical driveway was to create the 20′ street frontage.
My grandmother is thinking of selling me her lakefront parcel that has been sitting for 40 years. My wife and I have recently began to look into real-estate investment homes but think we might want to go this rout instead. My question is how you generally attract people out to land that is rural ( no airport within an hour rural)? And do you recommend any websites, companies, or law firms that can help us build a house on the site from scratch purchase laws. We are also looking into premade cabin homes.
Ideally, you should employ a realtor and real estate attorney that know what restrictive covenants there are and what you can and can’t build on that piece of property, says Veissi. "But you still may need to do some grunt work. Find out how the property is zoned." Zoning ordinances and regulations are laws that define how you can use the property. Depending on your needs, will you have to change the zoning? For instance, if the property is zoned for an industrial warehouse or office building and you want to build a retail outlet. Also, zoning ordinances will typically limit the total height of a building or require a certain number of parking spaces for a commercial building. Opposition to zoning changes by local residents or other invested parties can be fierce—time consuming and costly.
Mortgagee’s consent. If your land is subject to a legal charge you will require the lender’s consent to the sale. If you are selling off part of a larger parcel of charged land you will need to obtain a release. This might mean the renegotiation of your financial arrangements, which again, is sensibly addressed early in the transaction. Speak to your relationship manager and your solicitor.
A Perc Test (also known as “Perk Test”, and more formally known as a “Percolation Test“), is a soil evaluation that tests the rate at which water drains through the soil. If a property doesn't have easy access to the local sewer system, a perc test is required to determine whether a septic system (the alternative to a sewer) can be installed on the property.
It was a very simple process. Even though everything was done remotely, it was just as good as if I was standing in front of the person doing the deal. Paperwork was received really shortly after I spoke with Jake. We got it all signed, sent it back, and shortly thereafter we received the money. Everything was done very simply and it was very easy to do.