Land is a finite resource. Some say that if you have land, you would want to hold onto it. But circumstances change and, when they do, selling land may become an option for some when in the past it wasn’t.
For others, though, their reasons for selling land can be a simple matter of money. Maybe they just want to become more liquid, or cash out on a piece of inherited land, or maybe they want to reinvest into things other than land.
You may be here because you’re interested in maximizing the pay you get from selling that parcel of land that you’ve been holding onto for a while. You may have learned that the best way to sell land is to not hire a realtor and simply do the paperwork and sell on your own.
But how should you go about doing it? Can you even sell land on your own? What is the information that you need to know to make a buyer sign and pay for the value of your property?
Industry jargon like seller financing or title company may seem daunting. But don’t let these sway you from trying to sell your land. With the right guidance, you’ll learn the meaning of these words, as well as the things that you need to know to sell your land.
In this short piece, we will guide you through the processes that you need to know about selling land by owner. We’ll also give you some insights and valuable information about other important concepts related to selling land. Finally, we will include a small FAQs section to address some common questions that you may have about how to sell your land.
What Does Selling Land By Owner Mean?
Selling land by owner is a method or sale process where the owner is listing a property or vacant land for sale without the help of a real estate agent or broker. One of the main reasons an owner may opt for this kind of sale is to avoid paying commission to real estate agents.
In the world of real estate transactions, this method is also commonly referred to as “For Sale by Owner” or FSBO.
Selling Land Privately Versus With a Real Estate Agent
Other than avoiding the payment of a sale commission, the fundamental difference between selling vacant land privately and selling it with a real estate agent basically boils down to paperwork and how long it will take to sell land.
The major benefit of having a real estate agent sell land for you is that you no longer have to worry or stress about everything related to or leading to the sale. All you need to worry about is signing your contract with the real estate agent, and that’s basically it. This contract then obligates the realtor to perform everything that is necessary in pursuit of that sale.
Without a broker, almost everything will fall on you. This includes doing research on land buyers in your state, the land market, doing a land survey, or studying land listings in your area so that you can gauge your purchase price for your vacant land better.
Whether you think paying the agent his or her commission to avert these responsibilities is a reasonable price to pay is your decision to make. Some, however, would recommend that engaging a realtor is essential if you want to sell land fast.
Selling Land Versus Selling a Home
There is a stark difference in the market for selling land and selling a home.
One obvious difference is that the sale of a home will always refer to residential use. The sale of vacant land, however, may not always be for residential reasons, but can be for commercial use. In fact, vacant land that is in the right location can be at the center of a bidding war between large corporations.
For land sales, the focus of most potential buyers is the features of the vacant land. Interested land buyers will normally have the desire to start from scratch, meaning that they have a dream or an idea for a home that they plan on building and that they need a certain type of vacant land on which they could construct it.
In contrast, home sales have potential buyers that focus more on the features of the structure that is already built. Home buyers also like to pore over minor details, such as the size of the kitchen or the type of crown molding used. There is even an aspect of intuition involved, as some may even dislike a certain tile type or color in a certain room because they didn’t “feel it”.
Outside of buyers, the steps and requirements between selling land and selling a home also differ. This is something that we can discuss for another time. For now, let’s focus on how to sell land by owner.
A Step-by-Step Process on How To Sell Land by Owner
Here are the steps that you can take to sell land by owner:
1. Do your research
This may seem like a generic step, but this is arguably the most important step among the rest. It would not be advisable to set the terms of your purchase agreement without first having the basis for it.
When doing research, learn everything that you can about the property. You should study other vacant lots in your vicinity, county, or state to learn about the market. From there, try to determine who would be your most perfect target audience for your land.
We also recommend that you consult with a title company or real estate attorney during this process. You can even have your buyer with you when you do. But, make sure that you sign a document about who should shoulder any costs that may come with it, like title company fees or documentary expenses and other charges.
Finally, you should also study the possibility of offering seller financing, specifically the pros and cons of going this route.
2. Create a small marketing plan
You don’t need to have a comprehensive marketing strategy. A simple marketing plan is all that you’ll need to gather interest from prospective buyers for your land.
In marketing, first impressions matter a lot. When you market your property, present all available options that you can give to your buyer.
For instance, would you be willing to accept a down payment, or would you prefer an uncommon arrangement? Who should answer for the costs of preparing the legal documents? What’s a standard or rule you want to impose for the issuance and receipt of a promissory note?
Try to answer these questions and have them serve as a sound basis for your marketing strategy.
3. Prepare your contracts
Once you’re all set with your marketing plan, you can start planning and preparing your contracts. Ideally, you would have a real estate attorney draft your contracts for you. Some of the information to be put there, though, must come from you.
This includes the price of your land, any special arrangements that you may want to offer, or other essential information that the buyer may want or need.
Frequently Asked Questions
As promised, here are some quick FAQS for you.
What are the documents needed to sell land by owner?
Documentary requirements for selling land to land buyers varies by state. For example, some states require certain documents that other states do not. There are also some states that require a real estate attorney or a title company in all real estate transactions in its jurisdiction, especially during the closing process.
It would be better to talk to a public officer in your state about these requirements. Alternatively, you can also consult with a real estate attorney about this matter, too.
A good rule of thumb to follow, though, is that to sell land by owner would mean securing or preparing a proper purchase agreement, a disclosure form, and a closing statement.
Of course, it would be better to do your research to confirm what documents you actually need to sell land.
What are other things I should know about how to list land for sale by owner?
When making your land listing, be transparent. Include only actual, recent, and good photos of the land. Do not include sensitive or confidential information in your listing. You can share this information with a prospective buyer at the right time and location. Do, however, include all the details that your targeted buyers may need for them to determine, decide, and, hopefully, sign.
Also, a good way to attract prospective buyers is to create an online listing in social media. Depending on how active you are on any of the major social media platforms, you can attract more buyers in a brief span by making a legitimate social media listing.
What are other things I should know about how to sell vacant land by owner?
One way to make your listing more attractive to land buyers is to offer owner financing. Owner financing, which can also be called seller financing, is a transaction process where the owner (or seller) finances the purchase for the buyer instead of, say, a bank or a financial institution.
Offering seller financing poses some risks to the owner, so be wary about this financing option before choosing it. To be safe, study your potential buyer and see if they have some red flags that are worth noticing.
We mentioned earlier that you should learn more about this kind of transaction but, ideally, consult an experienced realtor or attorney about the
Another excellent strategy on how to sell land by owner is to include drone footage in your marketing. Your land or property can be huge and viewing them on foot may not give your buyer the perspective that can convince him or her to sign with you.
Arguably, anyone can sell anything and a plot of land is no exception. You being a private individual is not a barrier to selling a property or any piece of land that you own.
We discussed how crucial it is to do research. As we said in the beginning, selling land privately means everything falls on you. Proper research will be your first line of defense against anything that could go wrong with you selling land yourself.
We hope that the information we provided here has given you a solid research foundation.