Selling Land “By Owner”
By Ultimate Land Listings, LLC
Thinking of selling land “by owner” to save some money? It can be done. But is it as easy as you imagine? In this post, I detail some of the pluses and minuses of this approach. I’ll also give detailed pointers for selling your land faster and as pain-free as possible!
Okay — so you have a piece of land and are thinking of selling?
Where do you start? What do you do?
The first thought is probably about saving money.
That is, avoiding that pesky neighbor who is a licensed real estate agent who would like the listing — and a big commission!
Good idea. It seems. But is it really?
It certainly can be and what’s more you can certainly save some serious coin by listing and selling on this site — because there are no costs! (no costs for selling land “by owner” or for real estate professional’s listings either!)
But…
You see, by avoiding the real estate agent you take on a whole world of things to do yourself.
Selling land “by owner” brings on various things you’ll need to do yourself to get the job done efficiently and to put the most profit in your pocket!
Taking it all on yourself
Things like setting the price, taking the phone calls, negotiating the price, doing the showings, and various other things like dealing with attorney’s, banks, and court house officials to search for legal documents: These are things a real estate agent will do for you.
And a real estate agent also fills out all the necessary documents needed along the way too (and, trust me, there are allot of them!)
Of course, if you are reading this then you are smart enough and are more than capable enough to do all of this yourself – right?
I’m sure you are!
And things have gotten easier in that regard, in recent years, with so many things — just like this article — being online and right on your computer desk.
There are several sites on the Internet — such as Legalzoom.com — where an individual can get all the necessary legal documents. One can also get them from any local real estate attorney.
And if you are selling land “by owner” you should get a good local real estate attorney to help you fill out these forms and to guide you along the way.
There are a lot of “things” here to do, for sure. But, alas, all of these things can be done!
Save Big Money?
Will you save money by selling land by owner?
You certainly could! But will you?
It just depends.
It depends on your ability to find certain things out yourself and upon your ability to accept the responsibility of taking on the above said “hassles” yourself.
Remember — when the phone rings — you have to answer it! And when someone wants to see your land tomorrow, right when little Jimmy’s little league game starts, well, you’ll have to figure out a way to say yes to the potential buyer and say no to Jimmy. That’s something that is not easy to do and it’s something you certainly may not want to do!
But — if you really want to sell your land, then you must bend over backwards to show your property when potential buyers want to see it…not just when you want to show it!
That is, again, if you are serious about selling your land and not just serious about listing your land.
Establishing Price
You will have to establish a price for the land, too, when selling land “by owner”.
Easy right? Could be…but often, it’s not!
This is something a good agent will help you do accurately.
A good agent can often pull comparable land tracts that have sold within the last year or so within a certain distance of your property. And, a good agent will help you nail down a realistic and an accurate price.
Price it too high — and it won’t sell.
And if a property sits on the market too long it starts to look and smell like a dud!
People don’t want duds!
And people certainly won’t pay too much for something that they perceive to be a one either.
The last thing you want to do is to put up a red flag to potential buyers by advertising an unrealistic price.
While getting a really high price would certainly be nice, a seller should be realistic and price his/her property within the market. That is, if they don’t want to be holding on to a dud piece of land with a red flag sticking out of the top!
Can you price your land so that it is correct within the market?
Certainly. I’m sure you can! And it’s something you will need to be able to do if you plan on selling your land on your own.
Keep in mind that this is harder without the help of an agent who has access to MLS data and collections of previous sales. Remember, they call these people professionals for a reason. Most are very good at what they do. So, it’ll take some leg work and or computer time on your end.
One thing you can do is you can review “sold” listings at the county assessor’s office or check for these on the web in the county of your property.
And this site helps everyone in that regard as well, anyone can quickly and easily browse for pending and/or sold listings within the region that they live to get an idea for what comparable properties are selling for as well!
You can also talk with other nearby friends, neighbor’s, and relatives about anything they know of that has sold recently. Also, your real estate attorney may be some help here. Pester him/her a bit. Don’t worry, they get paid for it!
Offer owner financing…
One way an owner can get a higher price upon the sale is to advertise, “seller or owner financing”.
In fact, do this and I can assure you your phone will ring!
Your position here would be to offer what is called a “land contract” and offer easy enough terms so that potential buyers will favor you over the usually much tougher terms of a lending institution. By selling with owner financing, a seller can usually command a higher price because they are allowing better financing terms than a buyer could probably find elsewhere.
The potential land buyer loves to see “owner financing” ad’s because they realize it’s easier for them to qualify to buy the land being offered.
This is good for the buyer and the seller. The seller gets more potential land buyers this way and can command a higher price and the seller gets better terms.
The seller gets more potential land buyers this way, and can command a higher price, and the seller gets better terms. Sort of a win-win deal!
So what’s the catch?
1.) The seller does not receive all the money upon the transaction.
The seller receives something of a down-payment (whatever both sides agree upon, 5-20%, for example) and the buyers receive “equitable title” which gives the buyer title in a way that says they have the right to pay taxes and insurance on the land and to make payments.
The seller retains the “legal title” which means the buyer does not have the right to sell the property without paying the original seller in full and cannot drastically alter or change the property before it’s paid for in full.
2.) The seller could stop making payments at any time!
This sounds bad but in reality isn’t always the case. Should the buyer stop paying on the land, then the seller files a court action and basically “evicts” the seller from the land and then automatically regains full ownership rights back. Here the buyer is left with nothing and the seller keeps all payments made and regains full legal rights to the land.
Going the land contract route certainly has it’s perks. And it is something to consider when selling your land.
Also keep in mind that selling land is certainly different than selling a home. (And I’m pretty confident that you’ve already thought of this, but thought I’d point out the obvious anyway).
That is, there could be things like dumping sites, burial grounds, old wells, septics, pits, etc., that should be identified and locations noted.
Easements are something else you’ll need to identify if there are any.
Income sources make land more valuable
And Income…income..income…..does the land offer any?
This could be in the form of government payments coming in via some sort of land program such as CRP (Conservation Reserve Program), grazing rights, hunting leases, cash rents, etc. You’ll need to identify and total all the income streams according to the years that they come in, noting when they expire, and how much they produce.
The amount of income that the land produces is directly related to price. So keep that in mind.
Other things such as timber values and mineral rights are things to keep in mind as well. If you have a lot of timber, for example, it may be a good idea to have a qualified forester come in and do a timber inventory cruise. This will cost you some bucks but may save you a lot of dough in the long run!
As you can see here — there are allot of things to keep in mind when it comes to selling your land.
Going the real estate agent route or the land for sale “by owner” route is a big decision.
The choice is up to you!
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