Beth:
Hi, I’m Beth with TB Properties Buys Land. Last week, we discussed how long you might expect for your property to sit on the market before it finally sells. We discussed that increased interest rates as well as the bank failures on top of record inflation might make it more difficult for land buyers to obtain a loan. In short, this may reduce number of people who can actually purchase your property and may increase the length of time it might take for you to find the right buyer who can purchase your property. Today we are going to discuss what exactly could delay the sale of your property and how to mitigate those risks. Perhaps you already have your property on the market. Maybe it was under contract but it’s fallen through for some reason or perhaps you were lucky and you found the right person right away. Despite how long it’s taken, let’s say your property is now under contract.
Is there anything that can delay the sale of your property so it doesn’t close in a reasonable period of time, say four or five, six weeks or so? The first thing we will discuss that could delay the sale of your property would be if there are any title issues. If your property was inherited or passed down but the deed was never legally transferred to your name, there could be some title issues that need to be resolved. That is something that you as the seller are responsible to pay for in nearly all cases. The cost could be fairly reasonable if it is just you and if you already have a probated will, etc. However, if there are a number of heirs, then you must recognize that every single heir that has a legal right to the property will have to sign off on the sale. This is not legal advice but that is something to be aware of and to ask your real estate attorney about when the time comes. Regarding the topic of delays in closing, having a cloud in the chain of title can most certainly delay the sale of your property. It may actually hold it up all altogether and make it utterly impossible in some cases; it just depends on how big of an issue the title is.
Another thing that can delay the sale of a vacant land property is not having an up-to-date survey. If you don’t have a recent survey on the property, the title company may require that you hire a surveyor to survey your property before it can close. Perhaps there are boundary issues that Title believes need to be cleared up or they need an updated legal description of the property. Maybe it’s just been so long since there’s a survey, that in order to provide title insurance they are requiring a survey. One thing to keep in mind is that surveyors tend to be in short supply in most areas and it could be a month wait before the surveyor can even get to your property, let alone complete the survey, have it recorded and submitted to Title. As you can see, not having an updated survey may be something that delays the sale of your property. When it comes to selling your bare land on your own, it might be worth checking on your property and asking, “when was the last time my property was surveyed?”
You may also be able to check with the county records department or even the title company right away before you list it. Find out if that’s going to work or if you need to go ahead and get that on order. Be aware of what the cost is going to be. That could be several thousand dollars depending on how long it’s been since your property was surveyed, and even how well the records were kept over time when your property was subdivided.
Another thing that could delay the sale of your property is bank approval. Perhaps you have a potential buyer and when they submitted a contract to you, they also sent you their pre-qualification letter. A pre-qualification letter is great, but it doesn’t mean that their loan is actually approved. Part of the actual approval for the bank loan may be that the property appraises for the amount of the loan so that means the bank needs to schedule their appraiser to get out to the property, make their assessment and send their report back to the bank. Similar to surveyors, appraisers are also in short supply. Keep in mind that it may be some time before the bank can get their appraiser out to your area.
It needn’t be said that if the property fails to appraise for the loan value, that can be a setback in terms of the entire sale or timing to find a new bank / new appraiser / new buyer or it may even the dollar value in which you receive for the sale of your property. If your property appraises for lower than the sale price you may have to renegotiate the price down in order for them to be able to purchase your property and salvage the sale.
Other circumstances that may delay the sale of your property have to do with the tumultuous economic environment that we are currently in and how it may affect your buyers. During the survey, appraisal, bank approval process, sometimes something may change in your buyer’s life. We saw this with COVID, and I know that in the current economic situation we are in, people lose their jobs or something happens in their family and they have to pull out of the transaction. That may be another thing that could slow down or just terminate your contract altogether.
These are a few things to be aware of when it comes to planning for how long it may take to sell your property and what might delay the sale. If you are in need of cash for immediate use or for an investment purpose, it nice to be aware of these things in order to plan appropriately. One idea to mitigate a delay in the sale of your land may be to make sure you have a backup offer in place. This can certainly help in the case of a buyer pulling out or failing to obtain a loan.
If all of this is too much to gamble with and you wish to sell your property quickly, and not have to deal with it sitting on market forever, or worry about loans and transactions falling through, feel free to reach out to us here at TB Properties Buys Land. We pay for your land in cash so that you don’t have to worry about bank appraisers and loan approvals, and that sort of thing. We always close through a title company for safety for you the seller and for us as the buyers. Remember that the Title Company requires certified funds from us as the buyer so that you don’t have to worry about a check bouncing and that sort of thing. It’s a safety situation, which is why we always close through title. In any case, if you wish to sell your bare land quickly, please reach out to us. We’re happy to answer any questions that you might have and we’re here to help you close quickly and get cash in your hands quickly. Thanks again.