How To Sell Land | Bankrate
When you list a house for sale, it is not difficult for potential buyers to imagine what they will do with it. They can easily imagine watching the sunset from the patio, their kids or grandkids using the backyard slide, and turning one of the bedrooms into a remote work office.
But it’s much more difficult to get buyers to envision how they will use a simple parcel or plot of land. How difficult depends on whether it’s an empty lot in a populated neighborhood or vacant land in an idyllic area.
In any case, however, successfully selling land requires some preparatory work, figuring out what the “highest and best” use of the land is, and then getting prospective buyers to see the potential.
How does the land sale work?
The easiest thing to sell is land that already has a clearly defined purpose. Much in a subdivision requires little imagination. If the neighborhood is already developed, buyers can clearly see what types of homes they could build for themselves. Similarly, a vacant commercial lot is a little easier to sell when surrounded by examples of other businesses.
However, when selling raw land, it is crucial to guide your buyer’s imagination and prove to him that the desired use is possible – and make the most of it.
prepare for sale
With raw land, you should find out the zoning for the area and, if possible, reallocate it to a more valuable purpose.
For example, if you have a lot that is currently designated for low-density housing near a university or downtown, try designating that land for higher-density housing or mixed-use housing. This could attract a developer looking to build an apartment building with commercial offices on the ground floor and apartments on the top floor.
Obtaining topographical surveys, utility estimates, renderings, and projected income calculations can help your land sell better. Show potential buyers what’s possible and how to recoup their costs.
When you’re ready to provide seller financing, finalize the details before listing your property. Finding a local lender that provides home loans and works with buyers for your specific property can also help you sell it faster.
listing of the property
Once you’ve figured out your country’s highest and best use, it’s time to list it in a way that attracts buyers. Where you list your country depends on potential usage. If your land could become residential or commercial, then contacting local real estate investment groups will likely put you in touch with potential buyers. If your land is more suited to agricultural use, reaching out to nearby farms to see if they’re looking to expand is a good place to start.
Working with a real estate agent who has experience with the type of property can help you determine the best place to list your property. Just like selling a home, you want to showcase the best qualities of your property. If you have surveys, drawings or income estimates, include them in the listing.
complete the agreement
If you work with a real estate agent, they will negotiate on your behalf, but if you’re not, it’s a good idea to hire a real estate attorney to draft and review the contracts.
How is selling land different from selling a house?
Selling land and selling a home both require you to own the property, find a buyer, negotiate the sale, and complete the transaction. But how each of these steps is performed can be very different.
While investors are increasingly investing in residential property — real estate analytics firm CoreLogic reports that investors bought a record-high 28 percent of all single-family homes in the first quarter of 2022 — the majority of homebuyers are still people looking for a home.
In contrast, people who buy land are almost always investors of some sort. They don’t need elaborately staged pictures of living rooms to see themselves in, they need to see how their investment might turn out. How and where you advertise them varies widely.
The due diligence period for land purchases is also usually much longer. You can avoid some of this lengthy process by preparing estimates and surveys beforehand, but you can still expect to close a home much faster than selling a property.
Do you need a real estate agent to sell properties?
Technically, you don’t need a real estate agent to sell real estate, but you don’t get anything you don’t pay for. Just as a real estate agent can help you sell your home by knowing how and where to best market it and negotiate deals, they can help you sell your property in the same way. Of course, you need someone who specializes in vacancy or commercial sales.
A real estate agent can help you “understand the future development plan and zoning of the area and [has] the ability to present the buyer with the highest and best use and return on investment,” said Karen Hatcher, CEO of Sovereign Realty and Management, an Atlanta-based firm.
Tips on selling land
- Working on the zoning: “It’s best for the seller to have the land reassigned. Promoted to highest and best use as needed to maximize price,” says Hatcher.
- Conduct polls: If you’re selling a large lot to become a commercial property, “get a full topographical survey done [to] eliminate the need for long wait times and the need to keep your property off the market in the meantime [buyers] Determine feasibility,” says Kristen D. Conti, real estate agent and owner of Peacock Premier Properties in Englewood, Florida.
- show them the money “Have a conservative financial pro forma and optional development render done so the developer can see the potential ROI,” says Hatcher.
- Prepare signage: “It may sound silly these days, but a fabulously large, easy-to-read sign is extremely important, [with] Visual aids and some key facts about the lot to grab buyers’ attention,” says Conti.
- List on specialized sites: Some locations are more country-focused than others. Loopnet.com, Landflip.com, LandandFarm.com, HomeandLand.com, LandofAmerica.com are among the favorites Conti names. “Depending on the object, I will focus on some more than others,” she adds.