Hi. I’m Beth with TB Properties Buys Land. When you’ve got rural vacant land, you have options in which you can sell it. One option is working with a realtor. Another option is working with a real estate investor such as TB Properties Buys Land.
Today I want to discuss the difference between the two. When you’re working with a realtor, similar to when you are selling or buying a house, you sign a contract with the realtor allowing them to market your property for about six months. So for six months they are going to try to market your property and sell it. When you’re working with the realtor there’s no guarantee how long it will take you to sell your property.
You might sell it within six months, and if you don’t, maybe you renew that contract and give it another six months to try to sell it. It will depend on the property, the market, the area, how fast you’re going to sell your property when working with a realtor, so that’s an unknown.
Now when it comes to costs when working with a realtor there are different costs involved. When you sell a house most of the time when you’re working with a realtor there is a split of 6% in commissions, the buyer and the seller, so each make 3%. Now because land is a lot cheaper than a house their commissions are higher generally, so when selling rural vacant land and working with a realtor the split is often 10%, 5 and 5. One thing to know when you are selling your rural vacant land is that 10% off the sale price may go directly to those realtors.
Another thing to note is that whatever your property is listed at doesn’t necessarily mean you’re going to sell it at that price. They may have to reduce the price in order to sell it. Again, whatever it sells for, that 10% is going to come off the top. Now also be aware that there are closing costs involved, so when you close with your title company you, as the seller, are going to pay for the title insurance and you’re going to split the escrow costs. Those are the fees that are paid to the title company. Depending on the size of your property and the area in which you’re selling your property, just think that it could be a couple thousand dollars with regards to closing costs, not counting the realtor fees.
Now what other costs might you have? What kind of shape is your property in? Do you need to clean it up in order to make it marketable? If you haven’t been out there in a while and trees have grown up, brush has grown everywhere, the driveway is grown over, there’s saplings, you might have to hire a crew to get out there and clean up the property.
Maybe they’re clearing out the brush, they’re clearing out the saplings that have grown up so that people can drive onto the property, they can find it in order to get there, and, again, make it marketable.
Now another thing to ask your realtor in addition to what kind of fees they’re going to charge is how are they going to market your property. Are they going to go and hire a professional drone pilot to get some aerial views, to get some ground pictures, and to have some really nice marketing pictures to post on the MLS and everywhere else?
Are they going to do that, or… I mean if you take a look at their past work, do they have just a picture from Google Earth, where they’ve got an aerial picture from satellite view? Is that all they’ve got? Or what kind of pictures? Also understand that hiring a drone pilot is going to cost them money as well, so be prepared for that.
Another question to ask your realtor is how far away are they from your property, and are they willing to get out there and show people the property? When you’ve got rural vacant land a lot of people aren’t sure how to get there. They’re a little bit scared. They get to the wide open area and wonder what is actually the property, what’s not? Th question to ask is are they going to go out there and dedicate the time to showing people the property, walking them through there, showing them the corners, and making sure that people feel comfortable with the property that they’re purchasing?
If they’re just willing to list the property and not do the work of showing people the property at all, what are you paying them this 10% split for? That’s an important question.
That’s what it’s like when you’re working with a realtor. Now working with a real estate investor, there are different types of investors. At TB Properties Buys Land when we purchase property we purchase in cash and we close through a title company. With that said, when considering working with an investor, that’s another question to ask them. Are you going to need a loan in order to push my property? If they need a loan, just factor in how much time it will take if they are not approved for the loan or if the land does not appraise well. It may take them longer to close on the land than if they were paying in cash.
With a cash transaction oftentimes, depending on the title company, we can close as fast as two to three weeks. That’s exciting. That’s the power of paying in cash, and you as the seller get paid faster.
Another question to ask them is are they closing through a title company? When you close through a title company you have the security of knowing that the Title company is doing the paperwork, it’s going to be done right, there’s going to be title insurance, the payment is going to go from the buyer, which would be us, to the title company, and title will give you the funds from the transaction.
In this way you know that everything is going to close right, it’s going to be recorded with the county correctly, and you’re going to get guaranteed certified funds from the title company, not just some investor that you don’t know a whole lot about, so those are questions to ask.
When working with a real estate investor, especially if you’re closing using cash, you’re going to get paid faster. There’s no waiting on the MLS for six months, fingers crossed, or a year or even longer. You know that you’re going to get paid in as fast as two to three weeks. Maybe the title company is running a bit longer… Maybe four to five weeks, but you’re going to get paid guaranteed cash in up to four weeks or so to close, and you’re not going to have any closing costs involved if you’re working with TB Properties Buys Land. We cover all the closing costs.
Our purchase agreement is just one page and it calls out that here’s your price if we both agree to it. Also it says that we will cover all the escrow fees, title insurance, recording, any excise tax if there’s that, so you have the security of knowing that all the closing costs are going to be covered by the buyer, it’s going to be closed through a title company.
You’re going to get paid fast, in two to four weeks, which is really exciting, and you don’t have to wait. There’s no unknowns there.
So if you’re trying to weigh the benefits and the costs of working with a realtor versus with a real estate investor these are basically what you have to look at. If you’ve got the time to wait on the realtor, if you’ve got the money to put forward to clean up the property and make it look good, and get the pictures, then go with that.
If you’re looking for guaranteed cash, you’re looking for it quickly, you don’t have to mess with cleaning up the property, you don’t have any of your old documentation, then consider us.
If you have any questions, if I haven’t answered those, please feel free to reach out to us. You can find us online on our website, via email, give us a phone call at 214-699-4455. We’re happy to talk to you. We appreciate it. Take care.