5 Ways to Finance Land With Various Loan Products
Discover how to finance land: From USDA and FHA land loans to personal loans and seller financing, explore your options for rural land dreams come...
Learn the basics of how to price and sell land, whether you’re selling on your own or working with an agent. Discover how to sell land on Acres!
Selling land can be difficult and overwhelming to navigate on your own. A quick Google search brings up scant resources, and the process for potential buyers is no more straightforward.
To top it off, details such as property lines and access may not always be documented properly for vacant land, and hidden factors like flood zones and crop history often have enormous impacts on buyers long after the sale.
The good news on how to sell land?
With a little legwork, it’s possible to get ahead of land buyers’ questions and make your property stand out in the market.
Keep in mind there are different legal steps in each state for land transactions, so working with an experienced land agent can save you time and numerous headaches along the way. Not sure if working with an agent is right for you? We’ll cover the pros and cons of that too.
Questions to Consider First
Step 1: Value Your Land and Set the Price
Step 2: Identify the Best Use of Your Land
Step 3: Decide if You Want to Split Your Land or Sell Whole
Step 4: Determine the Best Way to Sell Your Land
Step 5: Prepare Your Land for First Impressions
Step 6: Decide if You Will Offer Seller Financing
Step 7: Market Your Property
Step 8: Close the Sale
To begin with, there are fewer land buyers in the market than homebuyers. Land buyers also have different concerns than homebuyers.
While a home’s features and condition are easy to see, land has hidden qualities that could greatly impact the buyer in the future. For example, when buying farmland, a property’s vegetation index and soil type factor into the success of future agricultural endeavors.
A few more examples of questions land buyers might ask include:
In general, it’s a much more nuanced search that requires excellent due diligence and research. If you already have detailed information about your land ready, you can help potential buyers feel more confident about your property.
While selling land on your own is doable and might save you money, working with an agent or brokerage offers additional support and expertise during the selling process. The time and headaches it saves you can be well worth paying the commission.
However, be discerning when selecting an agent. Just because a real estate agent is experienced in the residential or commercial market does not mean they are experts when it comes to land real estate. If you choose to work with an agent or brokerage, finding a land specialist is ideal.
A seasoned land agent will understand the nuances of your local market and also have specialized knowledge about your region’s land. This means they know how to better communicate important information to buyers and market your land more effectively.
Not having proof of title ready ahead of time slows down the process, and each state has different regulations around land titles. Do your research and work with an appropriate professional to understand what’s needed in order to transfer your land to a buyer.
There are two major factors that can prevent land from selling. Understanding these upfront could help you avoid pitfalls during the selling process.
Land valuation is a critical factor in selling your property. Too high of a price and your property risks not selling. Too low and you risk losing out on money.
Due to the complexity of land, working with an appraiser or an experienced land agent is wise when it comes to valuing your property at a fair market price. However, these factors can help you get a pulse on the current market:
Of course, this only scratches the surface. Other factors that might affect land value include soil productivity, location, drainage, and water access. The more information you have about your property the better.
Not sure where to start? Acres makes valuing land simple and transparent. Check comp sales, current listings, and 12 layers of land data all in one place. Get started for free.
Understanding the best use of your land helps you market to the right buyers and make better decisions during the selling process, such as setting the price or making land improvements to increase the value. There are many types of land use, but in general, these are the most common:
Evaluating your local market can give you insight into whether or not it will be more profitable to split your land into parcels or sell it whole.
These are, of course, generalizations. Take a look at comparable sales and listings in your area for a better understanding of current market trends. Your land agent can also provide this insight.
Choosing the right type of listing depends on your needs and your local market. Here’s a brief overview of common listing options:
Depending on state regulations and circumstances, there are other options available, such as selling to the government or institutional buyers. A land agent knows how to identify the best option for your situation and, in some cases, may be necessary in order to reach the right buyers.
Conduct maintenance on your property or hire a crew to increase curb appeal. This could include clearing out brush, mowing, or removing trash.
Once you’re done cleaning up your property, take photos that show off the property’s best features. Because buyers often start their search online, great photography is critical for first impressions. Consider hiring a professional photographer if this is not your strong point. Video and drone footage are also excellent ways to make your property stand out.
Tip: The type of land you’re selling impacts the type of necessary cleanup. For example, if you’re selling land for hunting, brush might be desirable and may not need to be removed.
If you accept traditional cash deals or bank financing, you would close at a certain date, transfer the deed to the buyer, and receive the full purchase price all at once. While this can be a benefit, keep in mind that you will also have to pay taxes on that full amount.
Alternatively, you may want to offer seller financing, also known as a land contract. This involves creating a payment agreement with the buyer. The buyer will make a down payment and then pay regular installments until the land is paid for in full, including interest.
Once your land goes up for sale, make sure everyone knows about it. Here are a few simple ways to reach potential buyers:
Tip: Major listing websites can be expensive, but if you work with a land broker, they likely already have access to these websites.
Once you have an offer on the table and have negotiated the price, it’s time to close the sale! A standard land transaction requires a purchase agreement, disclosure forms, contract, deed, and closing statement. Working with a land agent or real estate lawyer helps ensure these documents are created, signed, and filed correctly.
Land sales are more complex than selling a home. The market for vacant land is much smaller, and land buyers have different concerns than homebuyers. However, understanding the process ahead of time is a good step toward a smoother selling experience.
Here are a few key points to remember when getting started:
If you’re looking for land or want to quickly evaluate a potential property, join Acres for instant access to sales data and insights for millions of U.S. parcels!
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