Selling land is a big step for anyone to take on, and a lot of people may be intimidated to do so without the assistance of a real estate agent. In 2020, only 7% of homes sold were for sale by owner.
Is it possible to sell land by owner smoothly? What are the pros and cons of doing it yourself rather than hiring a real estate agent?
This article will quickly touch on why you should and should not sell land yourself.
One of the most noticeable pros of selling land by owner rather than using a real estate agent is that you get to keep all of the money that you make from your sale.
Real estate agents will ask for a percentage of the selling price as the cost of marketing your land and getting the asking price that you desire. On top of this, there are closing costs that the real estate agents receive.
You should expect for the broker fee on a raw land sale to cost at least 5-6% of the sale price, with half of that being paid to your listing agent and the other half going to the buyer’s agent. On a $200K land sale, those commissions could be as high as $10-12K.
On land that is designated for special use, these fees can rise even higher, sometimes reaching 10-15% of the purchase price.
Doing all of the work yourself means that you get to keep all of the benefits that go with it.
It also means that you have complete control over the sales process. You can turn down a buyer you do not trust, and you can market your land or property in any way you see fit.
In other words, you control the image that your property is presented to the outside world.
Plus, if you are trying to sell your land to someone in your social circles such as family, friends, neighbors, or a group, doing it yourself can save a lot of time and money because you don’t need to pay a realtor to market it for you.
Of course, to sell the property by yourself is not all sunshine and rainbows because there is a lot that goes into it. For example, you have to market the land all by yourself and find prospects that will be interested in it.
This can take a lot of time if you do not know how to market real estate, and it can result in your land or property sitting vacant for longer than you intend it to.
According to the National Association of Realtors, the three most difficult tasks listed for selling land by owner are preparing it to be presented to potential buyers, negotiating the right price for it, and understanding all of the paperwork associated with the sale.
Hiring a real estate agent may benefit you if they better understand what a buyer would want from the land you’re listing for sale, what it is worth based on similar comps, or how much a buyer might be willing to pay for it.
They can also process your paperwork safely and smoothly to make sure you transfer your ownership according to legal requirements in your area.
Selling Your Land as the Owner
Selling your land as the owner can be rewarding and risky, depending on your personal skillset. However, if you already have a buyer identified, then it could make sense to facilitate a simple sale yourself. In this case, I’d recommend that you have the paperwork processed by real estate lawyer to ensure that all requirements of sale are met.
Likewise, if you know how to market real estate and are a good negotiator, you might be able to do it yourself. But if you do not have these skills, perhaps you’ll want to hire a real estate agent.