Selling land can be a deceptively difficult task. It’s just dirt, how hard can it be? Vacant land tends to stay on the market longer and there are less buyers out there ready to invest the time and money into developing a lot. Navigating the requirements to develop land these days requires multiple experts and professionals making the process tricky. Therefore, you must do a little bit more work to find a buyer when selling land.
Don’t worry, it’s not rocket science. It’s fairly simple, but is not easy. Spend a but more time, money, and energy and it will be worth it. Here are a few tips to get your lot sold in less time and for more money.
1. Photograph the actual property
This may sound obvious, but if you search for vacant land listings on the MLS, you’d be surprised at how many agents don’t take photos of the subject property. I’m not even saying take professional photos. Just take photos that are of value to prospective buyers. On the MLS, you will find listings with a Google Maps aerial photo only or of just one photo of the property. I recommend taking at least 15 photos to best describe the property – just like you would with a house.
Here are some ideas of what to photograph:
- An area on the site that is level and a good potential building pad site. After all, people buy raw land to build a home or some other structure.
- Looking down the street both ways to show some context. There is no sense hiding the truth. The buyer will go to the site and see it in person, so show the neighborhood a bit and be forthcoming with information.
- Any existing utilities on site or nearby like a water meter, power line, sewer connection, gas connection, etc. The more nearby or on site utilities that are existing, the more valuable the plot will be.
- Any nearby fire hydrant is good see as the local fire department may require one be within a certain distance of a new home.
- Views from the property.
- Existing trees that could become a featured landscape element in a site design.
2. Survey the property
The more prospective buyers know about the property upfront, the better quality offers you will receive. Here are some common questions land buyers may ask. A topographic survey is a 2D drawing of a property that shows accurately scaled site elements, such as property lines, slopes, trees, and utilities. Any buyer looking to build something on the lot you are looking to sell will need a survey, so it adds value, while also clearly describing the thing you are selling. You can think of it as a floor plan of your site.
3. Get a soils report
One of the biggest unknowns when buying a piece of land is knowing what’s going on beneath the surface. A soils report done by a geotechnical engineer will analyze public data and test results to provide recommendations for a foundation design. The geotechnical engineer will dig a few test pits on your property – ideally in the area where a building may go – and dig until they hit bedrock or something that a foundation can bear on. Ideally, you won’t need to have very deep foundations as deeper foundation on poor soils adds a lot of cost to a construction project. Getting a soils report – or even a preliminary soils report – prior to listing a property will help clarify to the buyer what he or she is buying as well as adding value. This is something that will likely be required – especially in California.
4. Provide basic zoning information
This gets a little tricky as you don’t want to provide incorrect information that my misrepresent your property. However, you can easily schedule an appointment with a planner at your local planning department and ask for a basic zoning code analysis. You’ll want to know the zoning designation, like R-1, so that the buyer can use it to look up the zoning restriction on your property, such as setbacks, height limits, lot coverage limits, and off-street covered parking requirements. Doing some preliminary zoning research will set your lot apart from others and give the buyer confidence in making an offer.
5. Figure out sewer or septic
If you build a home on a lot, you have to figure out how to get rid of waste water. It will either happen by connecting to a municipal sewer line or building a septic system. At the very least, you should know if the buyer can tap into a nearby sewer line (usually in the street, if there is one) or build a septic system. If a septic system is needed, a perc test will be required to determine the water absorption rate of soil for the leach field. Getting a perc test done would be a bit of due diligence to provide the buyer and add value to your property. Any test or report you prepare for your site, you should include the cost of it in your sale price, so you will get refunded the expense when you close escrow.
6. Install a water meter
This one is expensive, but adds a lot of value, especially here in California. If your property needs a well, you could have a well company prepare a proposal to share with prospective buyers. If your property is near municipal water, then you will need a water meter installed, before completion of your new building. It seems like more vacant lots don’t have a water meter, than those that do, so installing one will set you apart and add a lot of value.
7. Pay a higher percentage commission
This may sound self-serving on a real estate blog post written by a real estate agent, but hear me out. You will find vacant lot listings sit on the market for longer than a house or condo. That’s because there are less buyers actively looking for vacant land. There is also a lot more work vetting a vacant piece of land, typically for less of a commission than buying a home. Instead of the current typical commission of 5%, offer a skilled real estate agent/broker 6% or even 7% to help you find that qualified buyer. Agents tend to go after low hanging fruit (me included!) and buyers tend to lose steam when thinking about all that’s involved with designing and building a home. If you offer 3% or 3.5% to the buyer’s agent, that will incentivize agents to send prospective buyers to your lot.
Selling land is a special skill
While there are many talented, hard-working agents out there, it’s harder to find one that is familiar with the nuances of buying land. If you’re looking at selling land in San Diego county, contact me today for a free comparative market analysis and assessment of your property.