Do You Have to Sell Your Land Through a Realtor?

Beth:

Hey there, there’s a question that we get from time to time that I want to address today. That question is, “Do I have to sell my land through a real estate agent or can I sell it to an individual or entity like a real estate investor, such as TB Properties Buys Land?”

Hi, I’m Beth. I’m an acquisition manager for TB Properties Buys Land. I’m hoping to answer some of those questions today.

What is a real estate investor exactly? Maybe you’ve heard of for sale by owner. If you’re going to sell someone else’s land, you have to be a real estate agent. On the other hand, if you buy the land yourself, you can do whatever you want. You can resell it, you can fix it up, you can do what you want with it. That’s basically what a real estate investor might do.

Here at TB Properties Buys Land, we buy vacant land. We purchase 10 acres and above and our plan is generally to lightly improve the property. We try to fix it up, which could mean cleaning up the property a bit. Maybe there is a risk for a fire because of the brush having overgrown or the trees that need to be trimmed. Maybe the road needs to be improved. Maybe fencing, that sort of thing. Or maybe it’s a large tract of land and we’re just simply dividing it maybe into two smaller pieces like maybe 10 acres or so, so that they’re more affordable for the everyday family. That’s generally what we try to do. In sum, a real estate investor will buy land, they can flip it and resell it, or they can clean it up or lightly develop it like we do. They may even subdivide it down, to really small lots or just smaller ranchettes but that’s what a real estate investor does.

When it comes to realtors, do you have to work with a realtor? No, you don’t. You can sell your land to an investor yourself. Or you can choose to work with a realtor. I’ve worked with many realtors over the years. Some of them are great, some of them are horrible. But when it comes to land, most realtors don’t want to have to go out into the rural countryside to sell a property, to show a property. You really need a different type of realtor who specifically deals with land, who understands it and is willing to show it. Be aware that land realtors will certainly charge for it and they have to. In general, land doesn’t cost as much as say a home, so they wouldn’t make as much, yet they may have to hike around in the wilderness to show you land. For that reason, the commission charged for selling land is going to be much higher than when selling a house. You tend to see 10% commission. Plus, there may be additional marketing charges that may be required. They may need to hire a drone pilot because of your property size, or they may need to get specialized photography out there because of some of the features on your property that could prevent normal photography on their part, say water features, overgrown brush, etc. They may even suggest some cleanup, so that would cost some upfront money from you as well.

When it comes to working with the realtor, you have to find the right one. Additionally, you have to understand that listing on the MLS doesn’t mean your property is going to sell right away. It also doesn’t mean it’s going to sell for the price it is listed. When it comes to working with a realtor, plan on 10% of the sale price going to realtor commissions, also plan on closing costs. You as the seller, are generally expected to pay for the title insurance, and that can be a percentage of the sales price as well. You also have your escrow fees that are paid to the title company. All of this is dependent upon what your property finally sells for and the money you make at the end of the day could be substantially lower than what you thought you were going to bring in because maybe you had to lower the price because it’s been on the market for six months, nine months a year, and then of course, the closing costs and commissions that go with it.

When it comes to selling the property and doing the paperwork, a realtor is typically going to work with a title company. Here at TB Properties Buys Land, we do the same. We always close through title for safety and security on both sides of the transaction. You can count on the title company to do the legal paperwork. They pull the title reports; they pull what’s called a title commitment. They’re the ones who are going to put the deed together. They’ll send that out. They will work with you as the seller on closing, whether you choose to show up for an in-person close or they’ll send the deed to you with instructions on how to sign the deed and other closing documents in front of a notary. We consider the title company to be a safe intermediary. They’re the ones who, once they receive our payment for the property, they’re going to fund you as the seller. They’re also going to give us the deed to the property once both sides have closed. We do that for security purposes, and the realtor does the same thing.

Just as when working with a realtor, here at TB Properties Buys Land, if you have a specific title company that you want to use, we’re pretty amenable to working with somebody that you prefer. That’s fine too. When it comes to selling your land, your property, you have a choice. You can sell through a realtor, but you don’t have to. You can work with investment company like TB Properties Buys Land.

Here at TB Properties Buys Land, we pay in cash to speed up the process for you. Paying in cash means you don’t have to worry about us seeking out a lender and then waiting for approval or risk not receiving approval. It saves time because an appraiser is not needed and the time it takes to wait on them to schedule and perform the appraisal and get it into the bank for approval. We buy with cash because it saves a lot of time and we can close faster, but we also close through a title company and we pay all of the closing costs, so you don’t have to worry about all of the additional costs and fees that will detract from the money you make on the property sale. It saves you from worrying: “what’s the percentage cost it’s going to be for title insurance?” and “what’s my escrow fee going to cost me?” and “what’s the recording fees going to cost me on top of all of that?” That’s something that we take care of on our side when we close through title, so you know exactly how much money you are bringing home when you agree to the sale price of your property.

Another great thing is that you’re not waiting on the market. Right now, the market’s a little bit crazy. We’re seeing housing go down; we’re seeing land in some areas start to stabilize. Who knows what’s going to happen next week, next month, six months from now if your property’s still in the market? Here at TB Properties Buys Land, we can close in three to four weeks generally. It may take longer if you have some kind of a title issue that has to be worked through, but we can generally close pretty quickly and you get you paid right away.

If you have any questions about closing on your rural vacant land, you’ve got 10 plus acres, or maybe you’ve even got land in multiple counties or multiple states, (we buy land all over the country), we’re willing to look at your property and offer you a price. If that works for you, we’ll send you the paperwork, we’ll go through title, we’ll take care of everything. On the top of that, you’ve got transparency to be in contact with the title company throughout the process and ask them questions. You can always call us and ask us questions too. We try to keep it easy and transparent and honest. If you have any questions, reach out to us. We’re happy to work with you. Thanks again for listening. We look forward to working with you.