Beth:
Hi, I’m Beth with TB Properties Buys Land. This video is a part of our series on land seller pitfalls, and pitfall #2 that I’m going to discuss today is when you’re working with a land investor who doesn’t actually intend to buy your property.
Right now, there is a growing trend in the land investment industry where investors are offering really high prices to purchase your land, so that when presented with multiple offers, you choose theirs as the highest. The growing problem is that oftentimes, buried in their contract, they state that they plan to market your property before the closing date. That might not seem like an issue, but the problem comes when they aren’t able to line up a buyer for your property in time for the closing date. What often happens is that they just keep pushing your closing date back and back and back. If they never end up finding a buyer for the property, then they may not follow through on buying your property.
How might that affect you? Perhaps you had anticipated closing in 30 days due to the Title Company, had anticipated having cash in hand at that time for something in particular. Now it’s pushed back from 4 weeks to 6 weeks to 2 months and then you never end up selling it at all. What if your property’s up in an area where it’s snowy or it’s hard to get to, or it’s the rainy season? Now you’ve just lost one, two plus months of time in which you could have sold your property. It’s not only inconvenient but it’s dishonest.
What might be some things that you can do to protect yourself? This isn’t legal advice, but if you’re working with a new land investor, new to you, make sure that you understand what title company the contract is going to and get in touch with that title company. I would call the title company and ask them, “Hey, what’s the file number for the property being sold by me to the land investor?” I would follow up with them and ask when is my title commitment going to begin for me to review? Are we ready for closing? I would keep pushing on that. That’s your property and you have the right to be involved and to ask those questions, and you have the right to talk to the title company and get that information.
Before any of this, the most important thing is to always read the purchase agreement. What exactly does it say? Does it say that they can market the property while they’re trying to sell it? Are you okay with that? Do they have a reputation of actually buying the property? Those might be some things you consider looking into.
Here at TB Properties Buys land, we always close through a title company, but we purchase your property outright. Most times, we don’t market before the purchase. I’m trying to think of any time we’ve marketed before we’ve actually bought a property and can’t think of any. Our model is to purchase your property through a reputable title company. We have a very simple purchase agreement. It’s just one page and it says that we’re going to buy your property. It states a closing date, and it shows the title company we’re going to work with. We copy you on the email to the title company so that you have their contact information and you know how to get in touch with them directly at any time.
In conclusion, if you get a “too good to be true” offer to purchase your land those might be some things to consider to look into and to make sure that you don’t encounter pitfall #2 of working with somebody who doesn’t intend to actually buy your property.
I hope that makes sense and I hope that helps you avoid this painful land seller pitfall. Please feel free to reach out to us if you’ve got land that you’d like to sell. We buy 10 plus acres all over the country, and we always close your title, we pay in cash. Thanks again.