If you are thinking about selling your rural land, don’t get overconfident. No matter how vibrant the real estate market is, selling your property can sometimes be a challenge. Just like life, there are always hiccups and surprises during the process of selling your land. There can be some tough pills to swallow once you have signed a listing agreement. How you handle and resolve the tough pills is the discussion here, so that your property doesn’t sit on the market longer than it should.
Improvements Don’t Always Result in Dollar-For-Dollar Return
Land is generally a good investment, but as you know, the real estate market has peaks and troughs. Ideally, landowners will earn money from the property appreciating in value, but there’s no guarantee that what your land is worth today will be the same in a few months’ time. Adding improvements to your land adds to your enjoyment and can also boost your land’s value over time, but there will be a ceiling price it can achieve. You need to ensure that the money you invest in improving your land can be recouped. Improvements to recreational land should only be made for better enjoyment of your property while you own it – unless you do a ton of research first and talk to some land professionals.
Just Because A Nearby Property Sold For a Certain Price, Doesn’t Mean Yours Will Do the Same
Most land agents will tell you that at countless listing appointments landowners will spout out that a property near them sold for $400,000 so their property should too. A sellers’ emotional attachment routinely gets in the way of making an educated decision regarding selling their land. Listen to the advice of your land agent. It’s a bitter pill to swallow, but just because two properties are similar, don’t assume they will sell for the same amount – they could be valued differently. The other owners may have made enhancements that you haven’t, it has special amenities that make it more valuable from an aesthetic appeal perspective, the configuration is different, it’s income producing, or the property market in your area could have changed. When you are emotionally attached to your property, it can be tough to hear that it’s not worth as much as you expected. Land agents value a property to sell at the highest possible price; they won’t over value your property to win your business.
Brush Off Your REALTOR® Friends
Overlook a friend with a real estate license? “Why?”, you might ask. Let’s say the wife of one of your hunting buddies has her real estate license and occasionally dabbles in selling homes, while working another full time job. Since you’re friends, you think there’s no way she can do you wrong. There are many ways that she can unintentionally do you wrong and possibly hinder you from selling your property. Is that a risk you can afford to take? Saying “no” to a friend can be difficult, but in this case, you must. Hire a land agent that specializes in land sales and will do their best to help you make money upon the sale of your property. Land agents offer a wealth of information and exceptional service. They know their way around a survey, understand access and easements, they can read maps and analyze topography. Almost every land deal has a crazy wrinkle in it, and an experienced land professional will increase a sellers’ odds of enjoying a smooth, successful transaction.
Having to Keep Your Land Ready for Showings
If you were buying a house, the last thing you’d want to see is the current owner’s mess. It’s no different when selling property. Plan on tidying up your land so when a prospective buyer visits, it will be a breeze for them to envision themselves owning or living on your property. Take a good look at your land with fresh eyes and see what kind of first-impression it might have on potential buyers. No one expects it to be perfect, but cleaning up trash, hiring someone to bush-hog your roads and trails, clearing limbs off roads and trails, and organizing around the buildings and barns goes a long way in making a good first impression.
Not Requiring a Solid Pre-Approval from Potential Buyers is Risky
Many buyers cannot afford an all-cash offer and will need to pursue financing. The reality is that not everyone can get a pre-approval. Land agents want to find prospective buyers that are “ready, willing and able” because it means they are dealing with someone that is ready to go. The buyers’ financial documents will need to be reviewed by the lender in order to get a pre-approval letter, and that letter will provide you with the best knowledge of knowing the buyer’s ability to secure a land loan. Without it, you could go through all the steps of selling your land only to find out a week before closing that the buyer’s lender cannot approve them for a loan. It’s not as bad in the current hot seller’s market, but when the real estate market levels out, having a deal fall through would be hard to swallow. In that case, your property has to go back on the market, pushing your timeline out even further. During the listing phase of selling your land, talk to your agent about the pros and cons of backup offers.
Your Land Never Sells and the Listing Expires
This one stings. You went through all the mental and physical preparation to get your land on the market and you expected it to sell fast- but boy were you wrong. You haven’t received any offers and showing requests have been few and far between. It’s a big letdown when the listing agreement expires and it is something that should never happen. There are many factors that could be the reason your property didn’t sell, but it usually comes down to pricing or poor marketing strategy. Hire an experienced land agent and heed their advice, so you don’t have to experience an expired listing.
The Best Medicine is a Quick Closing
Most of these scenarios can be avoided when you’re selling land, while others can’t; it’s all about knowing the facts and being armed with information on selling your property. Your land agent doesn’t want you to have to swallow any bitter pills, but planning for their possibility will certainly make it a lot easier. The best medicine is a signed contract from a qualified buyer at or above asking price.
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