If you have a parcel of land you are looking to unload, putting it up for sale by owner is an attractive option. Not only do you avoid paying a commission to a real estate agent, but you also avoid competing with any other land listings the agent has. Selling land yourself requires a bit of research and work on your part, but for many, it is worth the extra time and effort.
In order to sell your own land, you will need to collect all relevant information about the property, settle on a competitive listing price, preparing your marketing materials and resolve important financial issues, such as whether or not you will be offering seller financing.
Gather Pertinent Property Information
Gather all of the relevant information about your property. This includes a recent survey and appraisal, deed records, tax information, easements, photographs, maps and available utilities. Also, take note of any problems or defects with the property.
Set the Property Listing Price
Use the information you gathered to settle on a listing price for your property. The appraisal and assessed value from the taxation department provide you with a good starting point. Factor in the final sale price of comparable land parcels in your area when coming up with a price for your property. Also consider the value of available utilities, property access and land resources such as water, minerals and lumber.
Are You Going to Offer Seller Financing?
Decide whether you would like to offer seller financing, also known as owner financing. This means that instead of the buyer securing a loan from a bank or paying cash, they will make monthly payments with interest to you directly. Offering land for sale with seller financing will attract more buyers as they do not have to go through the hassle of applying for a mortgage.
There are two ways to set up a seller financing agreement. One is to transfer title to the land to the buyer after they sign a promissory note agreeing to pay the full amount, or you can sign a contract agreeing to transfer title to the buyer once he or she has paid off the agreed upon price. The latter arrangement is known as a contract for deed. If you choose to offer seller financing, verify that the buyer is creditworthy. This mitigates your risk of having to foreclose if the buyer defaults on your agreement.
Prepare Your Marketing Materials and Attract Buyers
Market your property to the public. Prepare a package containing all of the information you gathered about the property to provide to prospective buyers. Place signs stating "For Sale By Owner" along the perimeter of the property with your contact information included. Place a classified ad in the local newspaper and online classified websites such as Craigslist.com.
Start the Closing Process
Accept an offer from a buyer. Prepare and complete all of the necessary contracts and deeds to conclude the transaction -- you can purchase the documents from a title company and even hire the title company to help you complete the transaction. Alternatively, consider hiring a real estate attorney to help you prepare the documents. Once the sale is completed, the deed must be recorded by the county.
- If you offer seller financing, verify that the buyer is creditworthy. This will mitigate your risk of having to foreclose if the buyer defaultson your agreement.
Currently living in Austin, Texas, Alexander Harris is a business journalist covering the self storage industry for SpareFoot.com and SelfStorage.com. Harris previously wrote daily news for RichmondBizSense.com, a business journal in his hometown of Richmond, Va. His work has appeared in various other publications including "Philadelphia Citypaper," Stateline.org, "RVA Magazine" and the "Virginian-Pilot." Harris holds a mass communications degree from Virginia Commonwealth University.