You happen to have a parcel of land lying idle. You may be wondering how you can make money out of it. Perhaps you purchased it a while back intending to develop it yourself but you haven’t gotten around to doing so, or you got the property as an investment and was just sitting on it waiting for the land value to increase?
Either way, you’d be happy to know that land has never been in greater demand!
When demand exceeds supply, as is the case now, it causes property prices to spike as dictated by the laws of economics. Such a situation is called a seller’s market.
Land Sales in a Seller’s Market? In a Pandemic?
Simply put, a seller’s market is a market where sellers have the advantage.
Technically, we’re still in the middle of the COVID-19 pandemic but it has gotten harder for interested buyers to purchase land and get the best deal. Moreover, demand is expected to remain strong even in the coming years as a large number of potential real estate buyers in the United States are younger than 40.
This is great news for you, the landowner, as this presents a profitable opportunity of selling your land!
To Whom Should You Sell?
The COVID-19 pandemic has caused a massive shift in workplace culture. Surveys indicate that office workers prefer working from home nowadays which has led to an exodus from city centers and increasing demand in the suburbs.
Property developers and investors looking to cash in on this opportunity are certainly looking for at least one viable site to put up housing developments.
Does Your Land Have a Potential for Development?
Selling undeveloped land is not as straightforward as selling a house. By selling a vacant land, you are selling what could be there instead of what is there. In short, you are selling a vision.
To be able to market your land effectively as a seller, it pays to do your research in order to negotiate for the best price for your property. This includes being aware of the land’s story, the area’s zoning laws, future development by local authorities, and of course, the market value.
If your land has a wonderful view, or a nice topography (e.g. flat plain, therefore no significant earthmoving work is needed and construction will be cheaper), it could command a higher price compared to nearby properties.
In order to be certain of your land’s potential and get the most profit, you can contact real estate experts and planning consultants.
Why Sell Land to a Property Developer Directly?
It is easier to reach potential land buyers now more than ever by listing your property online. You can now directly engage with developers interested in your area. Here are the benefits of selling land to developers compared to single, residential buyers:
1. Clear Communication
Once you have decided to sell to a reputable property developer, they will propose a contract where the details of the sale are clearly stated and the responsibilities of both the buyer and the seller are outlined.
2. Less Uncertainty and Risk
The sales process can be smoother with a developer as they do not rely on conditional sales or approval of a mortgage to fund their purchase. As their business is real estate, they usually have the money to buy your property outright. This means that the risk of the sale not going through is vastly mitigated.
Furthermore, they are less likely to back out of a deal because they fell in love with another property as opposed to an individual buyer.
3. Save on Improvement Cost without Diminishing Value
Since developers have their own vision for the raw land, it would not be a problem if the land is left unchanged. This could save you significant amounts of time, money, and energy that would be spent in improving the property.
4. Quicker Sales Process in a Slow Market
In times of recession or economic downturn, the individual potential buyers may hold off purchasing a lot. This could mean waiting a long time before you will be able to sell your land. However, for a developer with vast resources at their disposal, financing would not be a problem.
Indeed, a developer may want to buy more land in order to subdivide it into smaller units which can sell quickly in a challenging market.
5. Avoid Real Estate Agents
In this age of DIY, selling directly to a developer means not having to deal with real estate agents. This means you get to take home a larger profit from the sale as you don’t need to pay the commission of your real estate agent.
6. Less Hassle
If you own a large tract of land, developers may opt to purchase portions of your land instead. This eliminates the hassle of moving out while you get to cash in on your investment. Win-win!
7. Higher Sale Price
You may be able to sell your vacant lot for more than the market value, but it depends on a couple of factors; for example, what kind of development approval is granted by the local zoning authority, or if other developers are interested, your land may be the subject of a bidding war. Lucky!
Tips To Help You Sell Land to Developers
Now that you’re ready to sell your land to developers, you must know that you’re not the only one who is looking to sell your property online. Other landowners with similar properties may have their own online listings as well.
Fret not, here are some helpful tips on how to stand out and close that sale:
1. Know Your Land
And more importantly, know what your land is worth.
Most developers are highly-skilled in getting land at a bargain, so it’s important that you find out as much as you can about your property and do not hesitate to ask for how much you know your land is worth.
2. Network with Local City and Zoning Officials
It’s good to be in the know regarding the future development of the area around your land, and who would know it better than your local zoning officials?
Zoning dictates how the site can be developed. This may or may not be the buyer’s intended development for the property so it is important to know this beforehand.
3. Talk with Fellow Landowners
Your neighboring landowners may have sold their land before you. Ask them how much they sold their land for so you can have a benchmark. You can also meet with other developers interested in the site so you can check out how much they are willing to pay.
4. Expand Before You Sell
Usually, before developers embark on a housing project, they would want to buy large tracts of land at once. This eliminates the hassle of negotiating with several individual landowners with smaller lots.
If you paid close attention to the developments in your area by following tips #2 and #3, you can consider buying more land in areas which will be more valuable soon.
5. Exercise Prudence
It is not advisable to sell to the first buyer that comes along. Sometimes, it pays to wait a few months or years for some developments to materialize and cause the price of your land to skyrocket so you can maximize your profit.
Closing Thoughts: Selling Land To A Developer
More and more buyers are looking for land ready for development. This presents a tremendous opportunity for landowners to finally cash in on your investments.
As Bill Gates said, “If your business is not on the internet, then your business will be out of business.” Here at Selling Land Fast, we have a lot of resources to help you list your land online, reach potential buyers, and sell land without a realtor.
If you have some more questions, give us a call and we’d be happy to help! (346) 207-1246