Selling land and selling a home may seem similar, but they’re actually two different beasts, each with similar qualities. If you don’t know the differences, then it may be a little harder to get land sold. For example, you need to stage both a house and the land, but do you know how to do it? Here is a list of all of the main differences.
Selling Land Had Different Financing Options
For selling homes, potential buyers have numerous options for financing their purchase, the most common being a mortgage. Land is another story.
It's hard to get a loan for land and some land buyers may find it impossible. This is because there is nothing for a bank to leverage or guarantee when you’re buying land. Therefore, unless there's a building on the property, many land buyers must pay for the property outright.
Sometimes it's possible to find a land owner who is willing to finance the purchase for the buyer. If not, the buyer will need to have a lot of cash on hand.
Testing and Inspections
When selling a home, buyers typically want an inspection done before the deal is finalized. For land, there isn’t a traditional inspection process. Instead, there is a test and a survey the seller should have done before the land is purchased.
Environmental tests look for anything unsafe, including polluted water and contaminated soil. They determine if the land is suitable for residential or commercial buildings, or if they will be a health hazard.
The second thing that needs to be done is a land survey. This type of survey isn’t a questionnaire. It’s a detailed drawing of the land to mark important features, such as the boundary, any easements, and utilities. The survey information becomes important when it's time to buy the lot, but getting the survey done before making the purchase can prevent any nasty surprises.
Staging a Home vs. Staging Land
Yes, you still need to stage land! The idea behind staging land is the same as staging a home — you want prospective buyers to see the potential of the area.
When you stage a home, you want to focus on the main areas — the living room, master bedroom, and kitchen. This helps homeowners envision their own life there and gives them an idea of what type of furniture will fit in each room.
With land, the process is similar to staging a home’s landscaping. Remove any weeds, trash, dead plants, and spruce it up. Lay new grass, plant flowers or trees, and make it look nice so future buyers can see the appeal and the potential of the land.
How Hard it is to See the Potential
It is easy to see the potential of homes. The seller will provide a multitude of photographs, staged rooms, and clean presentations. Visualizing the properties potential, even if it’s a fixer upper, isn’t hard for an interested buyer when they can literally walk through the house and have a personal experience with it. It doesn’t have to become what they want, it already is, and they can see their family living there.
Vacant land is different. This is the hardest thing for most land sales. It is very difficult to see the potential of an open lot, especially if it doesn’t have any interesting features or natural landscaping. A land survey helps with this, as buyers can see the borders and any details of note without being on the property. A skilled seller will guide the buyer into looking beyond what the land is presently, towards what the land can become in the future.
The biggest thing is selling the land through the photos and the description. A vacant land description should take readers on a journey that shows them exactly how this land could be used. It should entice the buyer-base you’re looking to attract. For families, describe the open yard space and the room for large trees and gardens. Help them envision the potential by describing it to them right away — every word counts!
Pricing land can be trickier when compared to pricing a home. Developed lots in communities may have a clear market price based on the recent sale of similar lots. Raw land, however, may have fewer comparable sales in the area.
In addition, the price you ultimately can attract for a lot or undeveloped land can vary greatly depending on the buyer’s intended use of the property. For example, if a buyer feels that your acreage is appropriate for a high-end home development it likely will bring a higher price per acre than if a buyer only intends to build a single home on it.
To price it accurately, get a good real estate agent with land expertise on your side. If you need help, give the BC Team a call at 480-900-1991.