Selling vacant land presents unique challenges.
Measuring value requires consultation with architects, zoning law professionals, developers, builders, and the local municipality. Many landowners prefer not to take all those steps, in part because it costs thousands of dollars and many hours. It also makes more sense for the buyer create the construction plan during due diligence because they will be financing and managing construction.
Even if you’re deferring the majority of the steps to the buyer’s due diligence, there is basic info to gather and a few simple steps to take for smooth land sale.
You want to get your vacant land sale off and running, don’t you? Give us a call (954) 676-1846 for a fair cash offer or fill out the form.
Read on for our “Vacant Land Checklist” . . .
- Pay Delinquent Taxes. Land owners often fall behind on taxes. Since nobody resides at the property and there isn’t a risk of relocation. There is less reason to stay up-to-date on taxes (of course, taxes do need to be paid before a tax auction). Paying taxes before selling accomplishes two things: (1) you will sell for a higher price, (2) there will be no “surprise” during the sales transaction that could cause a seller to back out; (3) it makes lien and title searches easier, saving time for everyone involved in the sale.
- Resolve & Pay Fines For City Code Violation. Vacant land owners are fined by cities for high grass, unsafe structures (like old sheds), unpermitted uses that tend to occur if nobody is monitoring the plot on a day-to-day basis. For similar reasons for back taxes, paying fines will let you sell for higher price and head off problems that could arrive at closing.
- Consider possible “Adverse Possession” claims. When others use your property without permission (even just passing through), this is an illegal action (trespassing) and you can notify local authorities. You might be surprised to know that a trespasser can gain owner of your land. For a trespasser to gain legal ownership via adverse possession, the trespasser use of the land must be: hostile, actual, open and notorious, and exclusion and continuous for a certain period of time. This may limit your ability to sell your land at all. If you suspect there has been continued land use without your permission, contact a local attorney before selling your property.
- Consider possible easements. Easements are a legal right for someone to use your land for a specific purpose. “Easements by grant” are formed with your permission (if you intend to grant the use). “Easements by necessity” are formed without permission, if another property owner cannot use their property without the easement. Land value is dramatically reduced if an easement prevents new construction on the empty lot. Contact a local attorney when dealing with possible easements.
- Find Out About Utility Hook-Ups. Utility hook-ups are a “game changer” for sale value. There’s three scenarios here: (1) utilities already exist on the parcel, (2) utilities are not on the parcel but on the surrounding streets, (3) no utilities nearby. Land sells for the most if working utilities are already in place – land development costs will be reduced and construction can begin faster. Where utilities exist on the street in front of the house, although some development is required, only the parcel itself (as opposed to the surrounding areas) needs to be developed. Unfortunately, if your land has no nearby utilities, it may have little to no sale value because running utilities through an entire area to build on a single parcel is neither viable or cost effective.
- Conduct a survey. Land surveys are graphic depictions of a property, outlining the exact dimensions and elevations of the parcel. The surveyor looks at deed descriptions and physically measures the land. Land surveys cut off quite a few problems. The survey can resolve disputes with neighbors as to where one’s property ends and another begins. Surveys an be a great negotiation tool – if your land is larger than anticipated it will sell for more. Surveys are also legally required before new construction, so there is little to no chance of vacant land selling without someone paying for a survey. Nationally, land surveys cost around $400. Well worth it to not waste time with “surprises” that could cause a buyer to back out.
- Research Zoning. Zoning determines how the land may be used. Land value is determined based on the potential uses. Simply put: if you don’t know the assigned zoning, you don’t understand your land. You can find the zoning code on local county appraiser website, and see the fine details at Municode. Zoning categories include residential (multi-family, single-family), commercial, industrial, among other land use categories that may be assigned. The zoning code also covers building specifications.
- Contact the City. Researching zoning law online is a great first step – but don’t stop there. City ordinances change frequently and written records lag behind. Call the city’s building department for the most up-to-date land use info. In most cases, the city is happy to help. Vacant land is a blight in the community. Developing the land improves tax collection and property values.
- Monitor the Land. Just because there is no house, that doesn’t mean there isn’t anyone using your land. Children could be playing sports. Neighbors parking cars. Drug or other criminal activity. Know what is actually happening with your land before you are looking to sell it.
- Consider Architectural Blueprints and Permits. A common strategy to sell vacant land is to do some of the legwork for the buyer. Before putting up the land for sale, hire an architect to create blueprints and get the plans approved by the city. Collect quotes from the developer and builder. This lets the buyer know the permitted structure and estimate cost. This saves some money and time on the part of the buyer. You can also use it as part of negotiations to shorten the due diligence period (which is often several months in the case of vacant land).
There are simple low-cost steps any landowner can take prior to selling their property. This makes for a quicker sale and higher price. Follow this checklist to help create an easier vacant land sale!
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