Buying land is about more than just making a purchase - it's an investment in your future. So it only makes sense to ensure whomever you're working with is the right person for the job.
With that in mind, it pays to know what questions you should ask your land broker when you first begin working together.
According to Larry Bye of Mossy Oak Properties Hoosier Land & Farm in Marengo, Indiana, there are four primary questions to start off with:
- How much experience do you have in the land brokerage business?
- How well do you know the market values for land in the area?
- What is the potential return on my investment for this land?
- What are the possible property tax advantages that might be available for land?
While the hard figures regarding market values, returns and tax breaks will certainly be important, it's Bye's first question that may be the most important.
"Experience is very important when searching for a land broker because there are many things that a buyer needs to be made aware of when searching for land to purchase," Bye said. "There are some huge differences when brokering land compared to brokering residential properties."
Blind spots regarding a broker's experience also tend to be an issue buyers struggle with.
"A lot of buyers do not take into consideration the amount of experience that the broker may or may not have in the land brokerage business," Bye continued. "Most buyers do not feel the need to choose an experienced land broker."
This is a risky path to walk for buyers hoping to get the best deal and highest quality service. Not every individual with a real estate license is qualified to help buy rural land. While a license may make it legal to practice, inexperience can end up costing buyers thousands of dollars and lead to major problems down the line.
Why are land brokers important to people selling land?
Of course, an inexperienced land broker can do just as much damage to sellers as to buyers.
If you're seeking a good price for selling your land, you want to know you have someone in your corner who not only understands how the land market works, but is up to date on trends and economic factors in your specific area.
However, it's also important not to get bogged down in your geographic location and box yourself in.
Sellers need to consider that the market for their land is much bigger than their immediate surrounding community, and out-of-region or out-of-state buyers may exist. Due to this, the need for a land specialist with a broad marketing reach is needed.
Additionally, the various finance options buyers may use to purchase your land are important to consider. Many buyers use cash, financing, or 1031 exchanges when purchasing land, and some of these options may carry specific tax implications for the seller, so it's vital to have a well-informed individual around to walk you through the process.
Sellers must also think about the help they may need making sure their deed is clean, that all paperwork is in order and that any details regarding issues like easements and surface rights are handled correctly. This is where the services of a land specialist can make the most impact and avoid any issues.
Any way you slice it, a land broker can be invaluable if you're buying or selling land. However, it all comes down to choosing the right one, and you won't be able to determine who that is without asking the right questions.
Keep that in mind the next time you find yourself seeking out a land specialist.