How to choose who to sell your land to

What does each way of selling actually net me?

Net proceeds, not headline price, is the number to compare. A listing at full market value minus commission, closing costs, carrying costs and months of taxes can land close to a cash offer that looked lower on paper. Run all four routes to the same figure before deciding.

Start from the gross and subtract everything the route costs you. On a listing that means the commission, your share of closing costs, and the property taxes and insurance you keep paying while it sits. Land sits longer than houses: the National Association of Realtors tracks days on market for existing homes in weeks, while vacant land routinely takes months to over a year in the same county, because the buyer pool is smaller and financing is harder.

That financing gap is the part sellers underestimate. A house buyer can get a conventional mortgage; a land buyer usually cannot. Lot and land loans typically require larger down payments and carry shorter terms than residential mortgages, which is why land deals fall apart at the financing stage more often than house deals do. A cash offer removes that failure mode entirely, and the value of that is exactly the size of the discount you are being asked to accept.

Write the four numbers down before you choose. Most sellers who compare properly find the gap between a listing and a cash offer is smaller than the headline suggests — and a minority find it is much larger, which is the signal to list. Either way the decision comes from arithmetic rather than from whoever contacted you most recently.

What percentage of market value does a cash land buyer pay?

Our offers typically land between 70 and 85 percent of market value, and nothing about that is guaranteed — a parcel with a title problem, no access or a tax sale on the calendar sits at the bottom of that range or below it, and a clean, accessible, in-demand parcel sits at the top. What the percentage buys you is a date, no commission, no closing costs and no financing contingency.

Most buyers in this category will not put a number to this, which is exactly why it is worth stating. Ours is 70 to 85 percent of market value in a typical transaction. It is a range rather than a figure because the things that move it are real and they differ parcel to parcel, and it is not a promise — a specific parcel is quoted on its own facts, not on an average.

What sits inside that gap is not margin alone. Closing costs, which we pay. Back taxes, settled from the proceeds rather than by you. The cost of curing whatever the title turns up — a missing easement, an unreleased lien, an estate nobody opened. Property taxes carried for however many months the parcel sits before it resells. And the risk that diligence finds something worse than expected, which on vacant land it regularly does.

Set against that, a listing reaches a wider pool and generally a higher headline number, then takes months, costs a commission of roughly five to six percent, and carries a real chance of falling through — land financing fails more often than residential, so a signed contract is a weaker signal here than it looks. The honest comparison is not our number against a listing price. It is our number against what a listing actually nets you after commission, closing costs and the months of taxes you pay while you wait.

Two related pages go further than this section does: how to tell a real land buying company from one that renegotiates, and the seven kinds of buyer a parcel can have, since an adjoining owner or a developer often pays more than any cash buyer will.

Two things follow. If your parcel is clean, accessible and in a county where land moves, listing it will usually net more and we will tell you so. And if any buyer quotes you a percentage without being able to show you the arithmetic behind it, the number is decoration — ask what they are subtracting and why.

When is a cash land buyer the wrong answer?

When your land is clean, accessible, and in demand, and you are not in a hurry. A well-zoned parcel with road frontage, utilities and no title problems is exactly what retail buyers want, and an agent will get you closer to retail. Speed and certainty are worth paying for only when you need them.

We are the wrong answer in four situations, and it is worth naming them plainly. If the parcel is genuinely desirable and you can wait, list it. If a neighboring owner would solve an access or assemblage problem by buying it, they can often justify more than anyone else — ask them before you ask us. If you have a specific buyer already, you need a title company, not a buyer. And if the land carries development potential you have not tested, find out what it is worth entitled before selling it raw.

We are the right answer when the constraint is time, certainty, or a parcel the retail market will not touch: back taxes with a sale date approaching, an estate that has to be divided, no legal access, a failed perc test, or an owner several states away who cannot manage the property. In those cases the discount buys something real.

The honest framing is that a direct sale converts an uncertain higher number into a certain lower one. Whether that trade is good depends entirely on how much the uncertainty is costing you.

How do I tell a legitimate land buyer from a bad one?

Legitimate buyers close through a licensed title company or attorney, never ask for money up front, put the offer in writing, and can explain how they arrived at the number. Any request for an upfront fee, or pressure to sign before you have read anything, ends the conversation.

Run the same checks regardless of who contacts you. Does the offer come in writing with the buyer named? Will the closing run through a licensed title company or a closing attorney, with funds handled by them rather than by the buyer? Will they explain the comparable sales behind the number? Are they asking you to pay anything before closing? A buyer who declines to answer any of those has told you what you need to know.

Real estate fraud targeting vacant land is a documented and growing problem, and absentee owners are the specific target because the parcel is unoccupied and the real owner is not nearby. The FBI Internet Crime Complaint Center takes reports on real estate and wire fraud, and several state real estate commissions have issued consumer alerts on vacant-land title fraud. Insist that the title company verify your identity as well as the buyer’s: that step protects you from someone else selling your land out from under you.

One more check specific to this industry. Ask whether the buyer intends to assign the contract to someone else before closing. Assignment is legal and common, and there is nothing wrong with a buyer who says yes and discloses it in the agreement. There is a great deal wrong with one who hides it. We contract to purchase for our own account and may assign, and that is written into every agreement we sign.

What questions should I ask before I sign anything?

Six: who is the buyer, is the offer in writing, who conducts the closing, do I pay anything before closing, how did you reach this number, and will the contract be assigned. Any buyer worth dealing with answers all six without hesitation.

Ask them in that order and write the answers down. If two buyers give you materially different answers to "how did you reach this number", the one who cites comparable sales, access, zoning and expected costs is doing the work; the one who cites a percentage of assessed value is not, because assessed value is not market value in any state.

Read the contract for three things specifically: how long the inspection or due diligence period runs and whether the buyer can walk away during it, what happens to your earnest money, and whether the agreement is assignable. None of those are unusual clauses. What matters is that you knew they were there before you signed rather than after.

If anything is unclear, a real estate attorney reading the contract costs a few hundred dollars against a transaction worth many times that. In several states — Georgia, South Carolina, North Carolina and others — an attorney has to conduct the closing anyway, so the marginal cost of having one read the contract first is small.