How to Negotiate a Fair Deal When Selling Your Land

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By mishel

Real estate transactions can be complicated. Your agent is an expert at navigating this process.

Negotiating with the seller is one way to ensure you’re getting a fair deal. 

Do Your Research

Knowledge is power and the most powerful tool to level the negotiating table with land sellers. Before making any offers, do everything you can to gather as much information as possible about a property. This includes not only the physical characteristics of a plot of land and its zoning status but also its history, such as why it was sold and who it was sold to.

The best way to determine the value of a piece of land is to have an appraisal done by a professional. They have the expertise to provide a more accurate estimate and are aware of the market trends, development plans, and future zoning changes that could affect the value.

Buyers should also request a survey, an inspection, and a title review before closing. In addition, the purchase agreement should specify a closing date with a provision for extensions if the buyer cannot complete their inspections by the specified time.

Make Your Offer Contingent on Satisfactory Answers

Land sales have historically been more volatile than mortgage-backed real estate, as the seller can maintain legal ownership until the contract is fulfilled. That’s why making any offer contingent on the buyer passing a background check is essential.

This information will not only determine whether a potential buyer can qualify for a loan, but it can also tell you if they have any felony or serious misdemeanor convictions that would prevent them from purchasing the land. Ensure you get more info in writing and never rely on verbal agreements or opinions.

Including an initial deposit into escrow is also a good idea, signaling the seller that you are making a serious offer. This amount can be refunded if you change your mind or do not pass a background check, but it is a sign that you are committed to the deal.

Set a Maximum Amount You’re Willing to Pay

Land sales are typically subject to broker fees like other real estate types. These can go as high as 10%, depending on the property type and location. Land buyers should always be prepared to negotiate, especially regarding the price. Understanding a property’s worth before making an offer is crucial, which requires more than simply previewing the property and ballparking its value. Buyers should also be ready to discuss any concerns or potential complications with the seller, including zoning issues that could affect its value.

The seller likely knows more about the land than you do, so gathering as much information as possible is vital to leveling the playing field. This includes everything from the physical characteristics of a lot to why it’s for sale and how long the seller has owned it. This research can save buyers time, money, and headaches later on. It can also mitigate the risk of unexpected fees and legalities arising from the purchase.

Make a Counteroffer

When negotiating land purchases, bringing some value-based information is a good idea. This may include an independent appraisal or a professional market analysis from a real estate broker. These professionals have the experience and knowledge to create a more precise estimate of property value and may be aware of local development trends.

Also, consider ordering a survey to confirm the metes and bounds of the land you’re purchasing. This will help avoid any disputes over boundaries after the sale.

Sellers want a fair price for their land, and buyers need to be sure they’re not paying more than it’s worth. Taking the time to gather as much information as possible will give you the knowledge you need to level the negotiating table.