In a perfect world, selling land would be a breeze. You’d receive countless offers that exceed your asking price and closing the deal would be a simple matter of choosing the highest number.
Unfortunately, selling your rural land quickly and at a fair price takes hard work. It’s for this reason that many land owners turn to experienced land specialists to assist in the process.
Even then, however, you may have to contend with an expired listing.
When you put up land for sale, you enter into an agreement that has a specific term length. If your land does not sell within that timeframe, it’s considered an expired listing that you will then have to list again.
Once this happens, most sellers begin wondering what they did wrong.
“If the listing is properly exposed, 90 percent of listings will expire due to overpricing,” said Rex Bumpus of Mossy Oak Properties of Texas – Lampasas. “Other reasons may be the property is in a ‘niche’ market and difficult to sell or it is not properly marketed.”
As with any type of real estate, selling land successfully depends a combination of factors, with price and marketing topping the list.
If you price your land too low, you’ll be selling at a loss. However, a price tag that is too high will discourage buyers and lead to a dearth of offers on your land.
Meanwhile, even if your land is priced perfectly, buyers won’t be able to express interest if they’re not made aware of the opportunity. This is where effective marketing becomes essential.
According to Bumpus, a good land broker will make this clear to sellers if they’re forced to contend with an expired listing.
“Being honest with the seller [is the role of the broker],” Bumpus said. “It may not be what the seller is wanting to hear, but I believe it is best to be upfront with values and market conditions. Use comparable sales to back up your data.”
Reexamine your strategy
Bumpus went on to say that expired listings call for a reexamination of your selling strategy, especially as it pertains to pricing.
As far as marketing goes, that can be trickier, and may call for a new land specialist.
“[I]f the broker does not feel he or she has the property marketed correctly, he or she should not be listing the property,” Bumpus said.
Another option is to use a different form of sale. For instance, selling land by auction could result in a quicker process and represents the opportunity to benefit from competing bidders. Dividing up the property is also an alternative.
“If possible, dividing the property would be a good solution … to a seller who insists on a higher value and a property which will not bring the desired price,” Bumpus said. “If the property can be divided … it does not hinder the desirability and resale of the remaining land. It is a great idea to reach buyers in a different market. Typically smaller acreage will bring a higher price per acre and reach a different market of buyers.”
Work with the right land specialist
Bumpus continued by saying it’s up to brokers to help sellers understand what hurdles they may need to clear.
“It should be the job of the listing broker to communicate to the seller well before the property expires the reasons for not selling,” he said. “In many cases, listings are only six months and the marketing period is 12 to 24 months. Many times it is hard to convince a seller the need for one-year listings, however, larger tracts of land sometimes require longer marketing periods. The broker should have been preparing the seller with feedback and information on why the property has not sold throughout the listing period.”
Good land brokers should also be able to back up their reasoning with cold, hard facts, Bumpus maintained.
“[O]ffering necessary changes with comparable sales data [is important],” he said. “Typically, that change is price, but it could be other conditions which affect the property’s appeal – junk or debris on the property, location, overgrazing.”
However, like many things in life, Bumpus also believes it mostly comes down to dollar signs.
“Ultimately, any condition will affect the price,” he said. “All types of property will sell regardless of positive or negatives conditions if it is priced correctly.”