For people who want to sell the land they’re not using and find a way to gain from their investment is very understandable. But here’s the mistake I see most sellers make, when it comes to seeking out someone who will offer more than anyone else….
1.) They look at what other people are asking for their vacant land near where theirs is.
Why is this a mistake? Because that is not always the price buyers are willing to pay. Anyone can ask the moon and the stars, but it doesn't mean buyers feel the price is right. Buyers will also look at what others are asking and compare things like road access, utilities, square footage, location, nearby amenities, conveniences, recreational activities, and so forth. So, if you have a desert square out in the middle of nowhere, and someone else wants $79,000 for their lot, that does not mean your lot is worth $79,000, nor is his. We can always ask whatever we want to ask, but again, buyers usually tend to pay what others have paid recently for similar size, and characteristics. Especially when recent sales in that area show around $20,000 to $25,000. Recent sales matter. Price matters. And if there are no recent sales, then buyers may not be interested in that area at all. The more sales, the better. The more people wanting to sell, not so good.
2.) They want what they paid for the land and then some.
Well, sometimes it’s best to cut losses if you overpaid to begin with. It’s true that land does not depreciate the way homes do, however land also does not appreciate as fast as homes do either. Wanting what you paid for the land, or wanting that along with all past year property taxes does not mean that buyers think the way you do. Chances are someone convinced you how great it would be to own that land when you bought it, and you saw the potential in it. So you may have paid more due to the emotional factor involved. You're not alone in that. Many people have been promised things that never came to fruition. What's worse is when a developer promises things, takes your money and runs, not fulfilling their obligation to stand by their word. Not so much today, but still, if they promise utilities of any kind, make sure to talk with your attorney first to review matters before agreeing to buy.
3.) They just don’t want to take a loss and are willing to hold out longer.
In this case the loss only accumulates to equal more over time in some cases, with property taxes, and possible liens that may be placed on the property. There's no guarantee that things will improve significantly, when it comes to land and the area it's in. Check with your tax advisor, but I’m pretty sure, if there’s a loss, you may benefit somewhat with Uncle Sam. Even donating the land could be a nice tax benefit.
4.) They hold onto the land forever thinking if they don’t ever use it, at least they can pass it along to a family member when they pass away.
Very nice thinking and it's something I like to do too. However, I see way too often these kind hearted caring family members do not have a way to ensure their heirs receive the property without a hassle or time-consuming probate if they pass away any time soon. Probate costs a lot more than having a Trust made up which enforces that the designated Trustee, and even Successor Trustee can take over without a problem. It’s a sad situation to hear from relatives that the owner passed away, and they cannot sell the property because it is not in their name, and there was no trust. There may have been a will, but that doesn’t always guarantee that the person who thinks they have a right to the property will get it free and clear, when it comes to the law. It’s best to check with legal counsel before the day comes when you’re called away from earth, after all, once you're gone, there's no turning back to do it then. No one knows when that day will be, so best to prepare now, today, for what could happen tomorrow if you haven't already. Don't think your heirs will know what to do when you pass away. Get all your ducks in a row, before it's too late. 🦆🦆🦆🦆🦆
5.) They don’t negotiate. Often a seller may feel an offer is somewhat acceptable, if only …..
Well, you can fill in the "If only". If only what? There’s a very popular saying that goes, “You have not because you ask not”. So, if you don’t say what is acceptable, how can the buyer see if that works for them too? It could. But buyers would rather hear it from the seller. We all know sellers want more and buyers want less, but there is a point where both parties can agree that is if you really want to sell. So, negotiations are key. 😉
6.) Motivation vs an Emotional Attachment
If an owner does not want to sell, then no price will matter to them. If they don’t have a pressing need, then no price will matter to them either. But if a seller does want to sell, or has a need for something that matters more so than the land, then they need to try to remove any emotional attachment to the land if what they want whatever it is that is of more importance and matters more so. And not just focus on the money aspect in terms of greed. But focusing more so on obtaining what does matter for their current situation.
7.) They never did a thing on or to the land, but expect top dollar. If the property was bought over 20 years ago, chances are very likely weeds, bushes, trash, and maybe even homeless people have grown on the land without your knowing about it. After a while it shows that no one cares about the land, and junk starts to accumulate over time. Land does not stay groomed on its own for the most part. So, if you're trying to sell a lot, it helps to remove dead trees and bushes that you may not have even known were there. Get someone in the area to take a photo for you. A clean lot sells better than something that requires a lot of work.
8.) Their thinking is limited to money and how much can they get financially. Yet so many never consider a trade. There could be things of more value than the land itself where a trade may be acceptable. Or perhaps whatever the buyer can afford financially to give along with something more of value. So, next time a deal doesn't seem like it's worth doing, consider what does the other person have to give that maybe you've been wanting for some time. Or something you'd love to pass along to a family member. It could be a nice car, a boat, or anything more of value. It's like thinking out of the box, when you open up to other potential agreements. A title company can always help with this type of transaction as well. So everyone wins!
There you have it. These are mistakes I see all too often that land owners make when it comes to selling their land. I’d love to hear your opinions or thoughts on this topic as well.