Explaining the sales process: Part 2
Rather than jumping into the land sales industry on a whim, it's best to consult with a leading expert who has years of experience handling the exact type of transaction sellers wish to make.
In Part 1 of our Explaining the Sales Process series, we discussed what you need to look for in broker, understanding what is expected of you as a seller and the many factors that go into a beneficial broker-client relationship.
Continuing with this theme, it's important sellers are aware of their responsibilities to their agent and vice versa. It's crucial that sellers are conducting their own research and due diligence while also allowing brokers to do their jobs to the best of their ability. Though you are responsible for contacting a broker, stating your desires with the sale and ensuring your expectations are met, the broker is more in charge of the procedural elements of completing a sale.
Because they have access to large networks of buyers and truly understand the market factors and regional laws that may affect a sale, brokers are the linchpin in any successful land transaction. They guide clients through the sales process from start to finish and can clear up any confusion sellers may have along the way.
Rather than jumping into the land sales industry on a whim, it's best to consult with a leading expert who has years of experience handling the exact type of transaction sellers wish to make. That's why many people choose Pristine Properties. With the largest national network of Certified Land Specialists in the country and the personal touch to close every deal, Pristine Properties is recognized as the go-to resource for buyers and sellers alike.
We'll hear from two of the best brokers to find out why.
The realities of pricing land
Even if you have sold land before, each successive transaction is different from the next. Nowhere is this more apparent than when deciding how to price the land you wish to sell. That's because the larger economy around you plays a large part in determining fair market price, and unfortunately, this is largely out of yours and your broker's control. However, a good broker can still guide you in the right direction and help you interpret what the latest industry trends means in relation to your sale.
There are many theoretical questions pertaining to the market that should be asked before settling on a hard price.
You need to determine the highest and best use of the area and your property. Is it good for hunting? Does it have access to utilities? How many other properties are available, and how many days is the average listing sitting on the market?"
Thomas went on to say that comparable sales, ie., similar properties in the area, can tell you how much money your land is likely to bring in.
"You need to know what the dirt value is," Thomas stated. "What is the per capita income in that area? Where are most of the buyers coming from?"
In the same vein, it's also important to think of things from the buyer perspective. Buyers today are better educated than ever before.
That means buyers have access to all of the same information you as a seller do, so there's no need to try and pull a fast one on unsuspecting buyers because at the end of the day, both sides are expecting to benefit from the deal.
After factoring in all of the potential external items that could impact your land, you should discuss with your broker to finalize a listing price. The price should be in line with comparable sales in the region and should also be high enough to warrant the transaction in the first place.
The listing should then be officially posted and made public to all prospective buyers.
Fielding offers from buyers
At this stage of the sales process, a stellar broker from Pristine Properties can assist to an even greater extent. Many sellers may expect to make a sale pretty quickly. However, these deals can take weeks or months, which means your land will be sitting on the market for a while, meaning you'll have to continue making payments on it in the meantime.
Don't be worried if your property doesn't sell right out of the gate, as the waiting game could be played to your advantage.
If there is a lot of interest in your property, then you can potentially force the sale price higher. On the other hand, if interest is scarce, it could mean you have outpriced yourself.
We tell our sellers that every 30 to 45 days they should reduce the price to promote activity on the property until showings and offers start to come in.
Thomas also recommended sellers lower the price if necessary.
"Look at what can be changed," said Thomas. "For instance, you cannot change the location. Possibly, take it off the market and give it a rest for a while. It depends on what your needs and goals are."
Because brokers / agents at Pristine Properties have access to the largest networks in the country, your listing can be distributed throughout the U.S. to field offers from more than just those in your immediate area.
It typically takes a month or so to get a buyer locked in. From then, it could take another 45 days or so to completely finalize the details of the transaction and fully transfer ownership of the property.
Wrapping up loose ends
A broker can handle many of the specifics from this point on. While you're glad you've found a buyer, there are still a few items that need to be addressed, such as closing fees, potential taxes, etc.
In a perfect world land transfers can be done quickly and efficiently; and that's one reason sellers turn to Pristine Properties. All of these associated questions and expenses should hopefully be looped into the transaction itself so that everything is settled at once.
I tell the sellers that we will make the transfer and sale as easy as possible. We want them to be able to move on and not have anything left to do.
The property taxes are usually prorated. Closing fees are taken care of before the deed is transferred. Normally, you would want to know before that point what the tax consequences are.
Once the dust has settled and the property is firmly in the hand of the new owner, you can rest easy knowing that your job is done. This could mean you've been rewarded with a handsome profit, a comfortable influx of capital or simply less stress on your end.