Looking to sell vacant land or an empty lot?
Selling property in the today’s fast-paced real estate market is challenging. Selling a vacant lot is even harder. While a house can sell in a month or two if priced competitively, vacant land can take 6 to 18-months to locate the right buyer. Only so many people are ready, able, and willing to build a house from the ground-up.
We’ve collected some of our favorite “Do’s and Don’ts” for selling an empty lot.
What You Need To Do!
Look Up Zoning
Zoning is legislative process that divides privately-owned urban areas into different zones (such as residential, commercial, industrial) according to the specified land use. Each zone is regulated as to the density, location, size, and type of buildings permitted therein. In laymen’s terms, local zoning code determines what can be built and the corresponding specifications.
You can’t get rid of an empty piece of land if you don’t know what the land is. Vacant land’s value is determined by the “possible uses” – and the possible uses are regulated by the local zoning code. Checking zoning for every major city on Municode.
Keep in mind, however, the zoning code is not written in stone. In many cases, municipalities are open to allowing you to build a non-conforming structure (i.e. a “variance” from the code). A variance is defined as “a deviation from the set of rules a municipality applies to land use and land development, typically a zoning ordinance, building code or municipal code. The manner in which variances are employed can differ greatly depending on the municipality.”
Understand Your Buyer
It’s worth understanding who the prospective buyer of your land is. Working with the “wrong buyer” can waste a lot of time due to canceled contracts.
One thing to consider is whether selling to a developer or builder. Although one group can be both a developer and builder, they are different tasks. “Development” means taking the raw land and preparing it for new construction (such as preparing utilities such as plumbing and electricity). “Building” is erecting the structure.
You also want to make sure the buyer understands the land specifications. Is the buyer thinking about a residential building? Well, if you looked up the zoning and its commercial, you may be dealing with an amateur buyer who likely will back out before actually closing.
Resolve & Pay Fines For City Code Violations
Vacant land is often left unsupervised. Since nobody is living on the parcel, it’s a pain in the neck to monitor. The land owners often live quite far away and are simply unable to walk the land on a regular basis. For this reason, there are often outstanding city violations for high grass, broken/unsafe structures. Rather than having these violations pop-up on the lien and title search at the end of the sale, resolve it up from
What You DON’T Need To DO
Pay 6% Realtor Commission
Realtor commission is expensive. Although a great realtor can add value, paying thousands upon thousands isn’t necessary if you are capable of overseeing the sale on your own. If you have some time and effort to devote to the sale, have some familiarity with real estate procedures and contracts, and can stay in contact with prospective buyers, you should have no problem selling vacant land without a realtor. In particular, vacant lands don’t need traditional showings. You’d essentially just be paying 6% commission to an agent to answer the phone.
Underestimate Building Costs
At House Heroes, we buy vacant land for cash. We’re in contact with vacant land owners on a daily basis concerning their land. Land owners often tell us “the house across the street just sold for $300,000 and you’re only offering $30,000!” These same landowners often get stuck with their land for years and years. The is primarily because land owners are often unfamiliar that ground up construction is extremely expensive (thus – the land alone does not itself have as much value as the structure in many cases).
Here is the vacant land reality check. New construction costs – if you’re lucky – are $100/square foot. This is not including legal fees, architect blue-prints, permitting. That means if a house that was 2,000 sq/ft sold – there would be about $220,000 in costs just on the building – not even including on-going taxes, insurance, utilities, realtor fees on the sale, financing costs. New construction takes up to a year and holding costs add up.
Forget To Do A Survey!
It’s going to be tough to “set the right price” for the sale if you haven’t surveyed the land. Land surveys are a graphic depiction of a property outlining the legal boundaries. A good survey lays out the exact dimensions of a property, which includes a description or map of your property line. Having a land survey done ahead of time not only allows you to pinpoint plot size and set price, but it can also identify and resolve “boundary disputes” with the owners of adjacent properties.
Several factors shape the final bill of a land survey. The cost of hiring a professional surveyor is not so straightforward as paying for routine repair work or other general home services. The price varies widely not only by locality and surveyor, but also by dozens of project-specific details. Nationally, the average cost to purchase a land survey is about $456 with a range between $367 and nearly $490. Again, these figures can vary greatly based on location and a myriad of other factors.
Thinking About Selling Property to a Florida Cash Home Buyer? Give us a call (954) 676-1846 or fill out the form below!
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