- Dana Jackson
Selling land is NOT like Selling a Home
Updated: Aug 19, 2021
You may have had success selling a home in the past, but you may now be wondering why it seems harder to attract buyers to your vacant land sale. Perhaps this is your first property sale and it doesn’t include a house or building. Whatever the circumstances, it can be in your best interests to be aware of the differences between selling a home and what it takes to sell land on its own.
Marketing an empty lot typically requires adding more informative visuals to a listing than real estate postings that highlight gourmet kitchens and designer bathrooms. Individuals responding to residential ads need less engagement. An in-person visit of a completed home confirms they’ve found the features that they've been searching for.
Serious land buyers often require ample and detailed information regarding a particular lot’s income-generating possibilities. Many vacant land buyers have honed their business tactics and may expect you to renegotiate your asking price with them. It can be helpful to remain aware of some of the differences between home buyers and lot buyers if your intent is to sell land fast.
What Are the Different Types of Land Buyers Like?
Qualified land investors may be difficult to attract. They're typically concerned with a lot's location more than residential buyers are. Prospective homeowners prefer buying attractive and accommodating turnkey housing that offers an easy move, a comfortable layout and an affordable price.
Each land buyer, however, will have his or her unique needs and individualized plans for your land’s future. Your lot must typically fit a buyer’s vision of future income streams if it’s going to be viewed as an investment. If your land is situated near a fast-growing commercial development, you may have a greater chance of attracting a buyer who is ready to make an offer. Although you can’t physically move your lot, you may be able to provide clever and persuasive reasons why a seemingly less-than-desirable area has a better revenue potential than another location.
To launch an effective land-selling campaign, you'll be off to a good start by learning about your potential buyers. Some common lot and land investor profiles include:
Residential housing builders: Depending on a lot's acreage, buyers may be attracted by details showing how many single-family homes it can fit. If your land can contain only one home, it may be better suited for a young couple starting a family and looking to build their dream house. A larger lot may be subdivided to hold more than one home, but this may not be what a family-starter buyer is looking for.
Commercial project developers: Zoning can be a critical issue when targeting real estate developers. The local zoning board may have strict requirements regarding construction projects. You may need to know the details about the type of buildings that can be erected on the land you intend to sell. Commercial zones permit office centers, shopping malls and restaurant establishments. Residential zoning, however, may allow only single-family houses, multi-unit dwellings or apartment buildings.
Mixed-use developers: Some municipalities provide zoning for mixed-use developments that can include both commercial and residential opportunities on a large tract of land. A three-story building, for example, may have a restaurant operating on its ground floor and several apartments housed on the other two floors.
By researching and familiarizing yourself with your location's zoning laws, you can better target a specific investment buyer and promote practical ways to increase their return-on-investment prospects. Knowing how your city and county have zoned your property can help you sell land to an appropriate developer when you understand their commercial interests. Check with local officials to learn if your land is zoned for agricultural production, hunting or industrial buildings, such as warehouse space. Describing how close your land is to water, sewer and utility hook-ups can also help draw in a qualified buyer.
Can a Multiple Listing Service Database Help Sell Land Fast?
If you’ve already had experience selling homes, you're probably familiar with how a multiple listing service is used. Either you or a realtor takes pictures of your residential property and then uploads them to the MLS database, which can be accessed by hundreds of real estate brokers. With attractive images, video tours and enticing text descriptions, an online posting of an available home is created and circulated. Interested buyers can see how the residence fits their lifestyle and can contact any licensed realtor to visit the property in person.
Vacant land listings, on the other hand, reflect altogether different circumstances. Selling vacant land can require patience because there are fewer buyers. Interested parties generally look for highly illustrative details about a lot's best possible uses coupled with an appealing price. It may not be unusual for several months to pass before you find a buyer, settle on an offer and close a deal.
How Does Land Financing Differ From a Home Loan?
Residential housing buyers typically depend on mortgages to finance their properties. If you've had home-selling experience, you may have run into buyers who couldn’t afford to go through with the sale. Although eager to make the purchase, there may not have been sufficient funds for a down payment or meeting last-minute closing expenses, such as mortgage insurance and taxes.
Land buyers are different from home buyers because many of them already have hard cash or its equivalent available through a financial institution. Sophisticated lot buyers want to know about a possible return on their investment and how soon they could obtain that return. With certain investors, a high rate of return over the next year may be worth every dollar of a seller’s asking price. Accordingly, you and a prospective lot buyer may be able to work out your own financing terms without considering the impact of a 15- or 30-year residential mortgage.
Some financial strategies you may find a potential lot buyer inquiring about could include:
Seller financing: If your land has significant development potential, you may be able to act as a bank and offer financing on your own terms. Under certain and often limited circumstances, these types of arrangements could work when a buyer has a less-than-stellar credit rating or a small down payment. A contract's terms can be flexible; it's a customized agreement between both parties. It could also include higher interest rates than a traditional mortgage loan. The drawback is you'll need to work out terms detailing what happens if a buyer defaults on payments. You may need to specify when you can file a lawsuit to recover your property before an enforceable agreement is signed.
Lease with the option to buy: A land lease may provide you with a steady income and include an option for a buyer to purchase your land with a balloon payment at the end of the lease. Rural land, for example, may have numerous possibilities for farmers and ranchers to generate income by growing crops or raising livestock. Agricultural buyers may be interested in large tracts of land at the lowest possible price but might not have ample cash when farm mortgages are difficult to obtain. A leasing deal through a seller, however, may include accepting cash as a down payment and financing the rest of the lease from the land's revenue over the next few years.
All-cash sales deal: Many land buyers have unique business acumen, and some sophisticated investors may enjoy the thrill of scoring a bargain. Unlike residential real estate, vacant land doesn't usually come with completed sales listings that provide similar property prices for comparison. You may need to determine a comfortable price range for your land and give qualified buyers some options to strike a mutually desirable deal; the deal could also include several partners. If you’re good at negotiating and have done ample research to determine your land’s current and potential value, you may be able to work with a buyer on an offer that meets both of your financial needs.
What Are Some Ways I Can Help Sell My Vacant Land Fast?
When you've identified your land's particular appeal to specific buyers, a well-tailored marketing strategy can focus specifically on those buyers’ purposes. An effective targeted selling strategy can help connect you with someone willing to pay the asking price for your land.
Some ways you can help reduce the time it takes to sell your land include:
Preparing the land for visitors: You may have spent time painting walls or changing carpets so that a house is in pristine condition before showing it to potential buyers. Raw land, however, may require clearing debris, hauling fallen trees and getting rid of outdoor pests or insects. Simple cosmetics, such as planting grass seed or wildflowers, could turn a tract of dirt into an appealing frontage for a planned home or business.
Using technological tools: Compelling images and video footage can be viewed online or on mobile devices at any convenient time. Be sure to take intriguing pictures and videos of your land and its possibilities. For example, if there are successful commercial enterprises located near your lot, you may wish to communicate to an investor the options your land has for building a single home or residential community. If you're shy about using technology, there's plenty of how-to videos online to brush up your skills or you could hire an affordable freelancer to make them for you.
Surveying your property: Before listing your land, research its borders and order a map or graphical images of its perimeter from a professional surveyor. This can help your buyer avoid legal actions concerning neighboring properties in the future. A survey describes your property's precise dimensions and boundary lines; it could also reveal a prior easement or right-of-way that was given to another business or individual. Land buyers can appreciate learning about nearby roads, commercial dwellings and recreational areas, such as lakes or rivers. Be sure to also include any potential hazards located on or near your land, such as ponds or marshes.
Having a soil test performed: Your land could also stand out from your competitors by providing a soil test to show it’s clear of contaminants and has potential for agricultural production. While water and sewer hookups are necessary for someone hoping to build a dream home, land investors may want to know the lot's drainage capacity before making their construction plans. If there are any valuable commodities such as oil, mineral or gas that can be extracted from the ground, you may include their income potential in your price. The more you learn about your lot's hidden gems, the higher you may list its selling price. Promoting a lot's environmental or tax-reduction benefits could lead to a faster closing.
How Do I Sell My Land Quickly to a Qualified Real Estate Investor?
Land marketing involves much more than attractive visuals, a desirable location and a lot with income-stream potential. Spreading the word about your property's availability and benefits to qualified buyers can be best accomplished by working with an established real estate investment firm. Expand your selling and professional outreach network through a seasoned land acquisition company, reach the right investors and reduce the time it takes to find buyers with offers that meet your pricing goals. When selling land, having the right market-experienced connections can make a significant difference in time and money.
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