Selling your land or custom home lot in Scottsdale, Paradise Valley, or anywhere in the state of Arizona is a big deal, so it’s okay to be cautious about it. Just remember, if selling is the right investment for you, your family, or business it’s worth it!
In order to fully understand real estate, one must know that the value of any property is in the land. Land holds (and increases) value. The structure or buildings depreciates. There are some iconic structures or buildings such as the playboy mansion, the spelling estate, the Wrigley mansion, frank lloyd wright home, and so on but 99.9% of all real estate value is in the land say Realtor J Pesqueira.
Understand that Selling dirt is way more complex than selling a home in Arizona. The market dynamics for lots, land, and rural property is different from the housing market as well. If you’re ready to make a move, you want to do it the smart way.
This article (by Realtor Juan Pesqueira), a how to guide will help you learn how to sell your land, custom home lot, or rural parcel for the most money, the expectations, and steps to do it right.
1st as seller you need to tailor your strategy, tools and focus for selling land. This could be a long process or short depending on many factors.
Before you even decide to put your land, custom home lot, or rural parcel for sale in Scottsdale, Paradise Valley, Phoenix, or anywhere in the State of Arizona you must know what to expect.
- Land (on average) takes much longer to sell than a home. Don’t be shocked if a Realtor request you sign a yearlong listing contract.
- Days on market for land, lot, or rural parcel does not mean much, it’s not unusual to see lots or land sit on the market for 365 to over 1000 days before it sells.
- Always best to get your property up for sale so you do not miss out on a potential buyer who comes a long not so often.
- Most land or lot transactions are cash or seller carryback.
- Check your emotions at the door, buyers don’t care!
- Don’t be surprised, upset, angry, or insulted when/if a low ball offer comes in. Always counter all low offers, even the low ball ones.
- On the other hand, if a piece of dirt is priced well or you timed the market right it will/can sell quick but for the most part it’s a longer process.
Put yourself in the buyer’s shoes.
For marketing purposes, you must evaluate who your likely buyers will be among and what questions they will have. Your buyer profile can depend on what type of property you are selling, whether the land has been developed already, its location and market conditions, among other criteria. Is your likely buyer an individual looking for a lot for a new home? Or is your buyer going to be a builder or developer looking for land for their next project? Or is your buyer some combination of those, or someone different altogether? There may be different buyers for finished lots, rural acreage or a parcel of suburban land in a thriving new home market.
After identifying your likely buyers, try to think like them so you can focus your message to convey what they need to know about your property. Have information ready about schools, shopping and other nearby amenities. For developable land you can be prepared with zoning information and insight from local authorities about the location and capacity of water and sewer service. Each property is different, so customize your information for your situation and your targeted buyers.
If you don’t know these details, then do some research. A quick call to the city or zoning department with questions will help. When you are prepared and knowledgeable about your lot or land you can make the process easier for potential buyers and inspire faith with solid answers to their questions.
Have the land or lot ready
You will never get a 2nd chance to make a 1st impressions. If possible, cut the grass (or weeds), remove trash and take professional marketing photos of your property when it is looking its best. The best photos come from above, get Ariel photography that captures not only the site but also the surroundings.
Set a price tag
There is nothing too sexy about land, it’s a piece of dirt, emotions do not exist. Pricing can determine your success in attracting potential buyers and pricing your lot, land, or rural parcel too high is one of the biggest mistakes that sellers make…and regret. The wrong price will both scare away buyers from even inquiring about your property and will cause your property to sit longer on the market or not even get sold.
One of the biggest obstacles is how to find market price for land. I cannot use the income approach because it produces no income. I can’t use the cost approach because there is nothing to build. The only method is the sales comparison approach. Unfortunately, I do not have any recent comparable sales (within a year) in LA PLACE DU SOMMET and all the others are flat land. Active or for sale properties do not support the market because those lots have not sold yet. I then must go further back to find something that has sold, and I did, three in the past few years. I can also study assessed value of home sales in LA PLACE DU SOMMET. In this method, the government is the appraiser of the official value land value for tax purposes. This give a percentage of land value vs house value. Ex. 25% for land and 75% for house.
John Pesqueira when pricing a lot in Paradise Valley
Pricing land is tricky for many reasons such as: Is the lot flat? Does it sit on a slope? Does it have views? how much home can you develop? Does it have a wash or two? Is it located in a gated community? And so on. Land also has fewer comps to compare.
When comparing comps (My appraiser hat is on) focus on sales, not so much active. Walk the subject lot, land, or rural parcel – along with the comps. Drive by all comps and try to investigate the sale (reason buyer purchased). In Paradise Valley and in some areas of Scottsdale an older home with substantial work needed is best sold and marketed as land vs residential. The piece of land in Paradise Valley or Scottsdale is more valuable to a builder, developer, or dream home designer than a fix n flip or end user buyer. It does not hurt to look at pricing your property as land vs single family even if a home sits on site.
Sometimes a seller must choose between getting the highest price or possibly selling quicker. Ultimately requires an understanding of the land market as a whole, why people are buying lots or land in that area and who these people are. A good real estate agent (Realtor) with land expertise can help greatly in this process.
If you can offer seller financing
The bank or lender market for lots and land is difficult and tricky. Many buyers cannot obtain favorable financing or terms. You might need to put down more than you expect or only qualify for unfavorable terms such as high interest rate, balloon payment, large sum down, etc. With seller financing, you the seller become the bank. If the buyer does not pay an option would be to foreclose. You end up taking back the property and keeping his down payment. Always speak to a real estate attorney about this and do your due diligence before pursuing.
Tell a story… with Signage.
Effective property signs can provide a lot of information about the lot or land. Have a custom rider with property stats like acreage, zoned R-43 or commercial, ready to build, or get creative and post a website where a buyer can find all the info.
Holler at your neighbors
Your neighbors are potential buyers so ask them if they would be interested. Maybe your neighbor does not want to lose some of their views and your custom home lot will do just that once a builder buys it. Maybe your neighbor wants to expand their parcel or own more. They know the area well. This is a great start for any seller and Realtor.
Hire a Realtor
A land realtor is more of an advisor or consultant. A Realtor like myself (Juan Pesqueira) will guide you through all the steps above and below. They/I will help you understand the market, set a price, and market your land to the right buyers. A Realtor will handle all the legal paperwork, escrow, negotiations, and expectation. A Realtor will handle everything from pre-listing, to listing, to escrow, to paperwork, and so much more. 5 – 10% is worth every penny, this is a complex transaction, it will take time, and experience.
The land, lot, rural market is small with a lot of inventory. There is only a handful of online and offline (old school approaches) areas to market the property. Once you gather all your property facts (zoning, setbacks, buildable size, etc.) take professional Arial photos, posted a sign (Tells a story), created a brochure, and have signed the listing agreement. It’s time to package it all into a website for distribution.
Online marketing: As a Realtor I’ll give you my take on marketing. I would post on ARMLS, Realtor.com, Trulia.com, blog, business website, post online daily. For large residential or commercial parcels, one should consider websites like LoopNet or CoStar. Other websites like landwatch.com, landsofamercia.com, landflip.com, and landandfarm.com are the top sites for land, lots, rural, and farm for sale. Online marketing is so powerful and if done correctly will result in a sale.
Offline or as I call it Old School Marketing: This depends so let’s say you have a land zoned for a custom home then speaking to other agents/brokers who work those areas. Speaking to builders, speaking to brokers at the broker tours, and speaking to neighbors works. If you have a commercial lot then networking at the commercial agent/broker meetings works, talking to other business owners also works. Old school marketing is all about networking with agents, brokers, buyers. Shake hands, kiss babies (ok maybe not), and drink beer.
Marketing will find your buyer, or your buyer will find the marketing.
Have Fun, work with (not against) your agent, and enjoy
Buy- it | Land for sale
Your next step should you decide to sell your land. We invite you to do one of two things:
- Free Property Price and consultation. Have a confidential meeting with me to find out the price of your land or lot in today’s market. There is no charge for this service, and you are not obligated in any way to use our services.
- You can reach Juan Pesqueira – Attorneys Realty at 480.458.8007 (This cell does not have a voice message so if I dont pick up leave a detailed message), call my office 480.767.6900, of shoot me an email: Pesqueira2@cox.net or firstname.lastname@example.org.