So, you want to sell your vacant land. And the faster, the better — right?
Maybe you bought your land decades ago with dreams of building on it. Or perhaps you acquired it on a whim as a speculative investment, thinking it would steadily appreciate. Or maybe, like some, you unexpectedly inherited it from a deceased family member.
Regardless of how you came to own it, you’ve likely grown tired of paying the carrying costs (taxes, HOA/POA fees, etc.) on a property you haven’t used in years — or possibly never seen. And at this point, you simply want it out of your life before it costs you another dime.
Depending on the route you choose, selling your land can be simple or complicated, take two weeks or two years, and cost you nothing or a lot. All of this depends on your patience, how fast you need the money, the local demand for land, your property’s selling points, and the method you use for selling it.
The 3 Options for Selling Your Land
There are two traditional methods for selling your property — using a real estate agent or selling it on your own. LandPocket provides a third option, but I’ll get to that later. Below, I cover the pros, cons, costs, and timeline for each option so that you can decide which route will serve you best.
Option 1: Working with a Real Estate Agent
By far, this is the most traditional way of selling a property. Generally, the process looks something like this:
- You reach out to an agent licensed in the area where your property is located and sign an exclusive listing agreement (often for six months). Together, you agree on a listing price.
- If possible, you meet with the agent at your property to discuss its attributes and to go over the listing description.
- The agent lists your land on the local Multiple Listing Service (MLS) using photos and a property description.
- The agent waits for offers.
- Once received, you discuss the offer with the agent and determine if it’s acceptable or if you need to make a counteroffer.
- Once you accept an offer, the agent handles the closing paperwork. A commission will be given to the agent(s) involved, and closing costs (including title insurance) will be taken out of your final payment.
PROS: The real estate agent takes over and markets your land on your behalf. Being the customary method of selling a property, you finally get a sense that something is being done to sell your land and that the process is moving forward. If your local market is active, and your property type is in high demand, and you’ve priced it right, you’ll likely sell it within 180 days. If your agent is well connected and active in the community, he or she may already have a buyer in mind.
CONS: If your property’s value is under $25,000, you may have difficulty finding an agent interested in listing it due to the small commission (which is customarily split between the seller and buyer agents). Depending on your agent’s attention to detail, the listing photos and description could be lackluster which can affect interest and online views. Also, poor followthrough or slow responsiveness to inquiries by your agent can lead to a lost sale. Likewise, an over-priced property (with the hopes of a higher commission) will also lead to fewer inquiries and interest. Even when an offer does come in, be prepared to have the sale fall through for any number of reasons. Also, due to the exclusive listing agreement you signed, you may not be able to sell the property using the next two options until the agreement has expired.
COSTS: While you may eventually get an offer you believe is reasonable for the area, agent commissions (often 10% for land) and closing costs can easily run into the hundreds to thousands of dollars. As the seller, you’re often expected to cover these costs. A buyer may even want you to pay for a boundary survey, soil sample, and percolation (perc) test. Likewise, it’s not unusual for land to sit on the market for a year or longer. During that time, your holding costs will continue — bills, such as your property taxes and HOA/POA assessments, will continue to arrive.
TIMELINE: As mentioned above, land can sit on the market for a year or longer. Go online to any real estate website (Redfin, Zillow, Realtor, etc.) and you will see that the majority of vacant land listings have been on the market for 200+ days — and they’re still sitting there. Obviously, the location of your land will determine its true value and how fast it can sell when priced correctly. The higher you price your land over recently sold comps, the longer it will likely sit on the market.
Option 2: Marketing & Selling Your Land Yourself
Often referred to as FSBO (For Sale By Owner), this method is generally pursued by cost-conscious property owners and those who mistrust real estate agents and brokers. These sellers want to avoid broker-related commissions and fees — and they don’t want to hear agent-directed listing advice. This is a route often taken by DIY (Do It Yourself) types. Generally, the FSBO process goes something like this:
- You go to a hardware store or Home Depot and buy a For Sale sign and stick it in front of the property with your name and phone number written on it.
- You take photos of the property yourself or hire a photographer on Craigslist.
- You go online and list your property on FSBO-friendly websites like Zillow and other platforms, including Craigslist. You might also use a flat-fee MLS service that will get your property posted on popular listing sites (Realtor.com, Redfin, Zillow, Trulia, etc.).
- You handle all calls and questions generated from your ads.
- You wait for an acceptable offer.
- You find a title company or attorney that can assist with the purchase agreement and closing.
PROS: You’ll avoid paying a listing agent commission. You may also avoid paying a buyer’s agent commission (depending on how you negotiate the final offer and whether or not the buyer is being represented by an agent). You won’t have a listing agent telling you how to price the property. You’ll be dealing with potential buyers directly — there’s no middle man to mess up a deal. With the internet, you’ll find that it’s fairly easy to put your property in front of hundreds of potential buyers.
CONS: While you may save money by avoiding commissions with a FSBO strategy, offers will likely come in below your listing price since buyers will want you to pass that savings on to them. Also, you’ll be fielding all the calls — including tire-kickers (those who are not necessarily interested in buying your specific property but will have tons of questions about local zoning and building regulations). Also, you’ll get a lot of requests for owner financing — that is, selling the property on terms over several years. Finally, some buyer agents may discourage their clients from making an offer on your property out of concern you may balk at paying their commission or that you’ll be difficult to work with (they may point out access or topography issues they see with your land to persuade their clients to look elsewhere).
COSTS: You’ll at least save some money by not paying a listing agent commission, but you may find that to close the deal you’ll need to pay the commission for the buyer’s agent (if they have one). You’ll also likely need to pay closing costs or a portion of them — depending on how the deal was finalized. On average, it’s been shown that FSBO properties tend to sell for less than properties sold with real estate agents.
TIMELINE: Not unlike selling with a real estate agent, FSBO properties often sit on the market for a long period of time. In fact, since many buyers will ask FSBO property owners to sell on terms (owner financing), you may find that your property sits on the market longer if you’ll only accept a full cash offer. You can shorten your DOM (days on market) by listing your property below market value or by selling on terms.
Option 3: Selling Your Property to LandPocket
As we often like to remind people: we don’t help you find a buyer — we are the buyer! The process for selling your land to us goes like this:
- You receive our offer in the mail. In some cases, people find us online and request an offer.
- You review, sign, and return the purchase agreement. Some prefer to call us first.
- We check your property’s characteristics, confirm ownership, and review the title history to ensure it meets our terms and conditions.
- Depending on the property’s value and offer amount, we process the closing in-house or with a title company.
PROS: The buyer (LandPocket) found you. You didn’t have to list your property with an agent or fuss with the marketing. You avoided paying agent commissions and closing fees. Because we pay cash, there’s no delay in closing since there’s no waiting on loan paperwork and banks. The process is quick and convenient. We often close in under 4 weeks — sometimes in as little as two. The short time frame limits your carrying costs.
CONS: In exchange for speed, convenience, and a fully-paid closing, you’ll get an offer that’s lower than recently sold comps in the area.
COSTS: You’ll avoid paying commissions and closing fees, including title insurance. You’ll avoid extended carrying costs. You’ll get an offer that’s below current listings on the market.
TIMELINE: When you consider how long land can sit on the market, this option is incredibly fast. Your land will be sold in a matter of a few short weeks.
In a Nutshell
You’ve had a lot of information thrown at you above, so here’s a quick summary that emphasizes who might benefit the most from each option:
Working with a Real Estate Agent
You’re not in a hurry to sell. You want the highest offer you can get for your property and you don’t mind relisting it a few times over several years. The carrying costs, commissions, and fees don’t bother you.
Marketing & Selling Your Property Yourself
You’re not looking for quick cash. You want to avoid agent fees and commissions. You’re up for the challenge of marketing the property yourself and dealing directly with potential buyers. You’re willing to wait a long time for the property to sell. You might consider selling on terms.
Selling Your Property to LandPocket
You’re feeling done. The property you once viewed as an asset is now a liability. You’ll happily accept a lower offer price in exchange for the speed and convenience of a quick sale. You would rather avoid closing costs, commissions, and fees. You could use the money now for yourself or a family member. You don’t want to receive another bill related to your property ever again.
Have You Already Received an offer from us?
Be sure to consider all the options above before making a decision. But if you’re ready to sell today, take the next step by signing and returning the purchase agreement or give us a call at (719) 623-7600.
Still not sure?
Use this quick little test — Ask yourself: Can I wait 12 months or longer to sell my land?
If you answered ‘No’ or even ‘Yes, but I really don’t want to sink another dime into that property’ reach out to us today. Otherwise, list it with an agent or trying selling it yourself and see what happens. We’ll happily review your property again in the future if you’re not able to sell it using other options.