If you’re new to the world of real estate, you might feel overwhelmed by the intricacies of buying and selling land. Real estate jargon, contracts, and heated negotiations are enough to make anyone feel overwhelmed!

What you need to know about buying and selling raw land is that there are more pitfalls than buying a house. 

With buying land, you need to consider zoning laws, building permits, and land inspections to ensure that you can use the land as intended. When selling land, you must be careful about overpricing the property and marketing it to the right buyers.

Especially if you plan to be involved in either one, you must know some key points to avoid any pitfalls in the process.

What to Know When Buying and Selling Land

The Process of Buying Land

Buying land can be a rewarding investment if you make the necessary preparations in advance. Understanding the key difference between buying and selling land will help you keep your finances in check while ensuring success.

What to Know When Buying and Selling Land

When Buying Land, What Do I Need to Know?

If you intend on buying land, here are the things you need to know.

Zoning Restrictions

Before buying land, understand that there could be limitations to what you can build on it. Make sure that you’ve checked the zoning laws in your area. Complete your due diligence by visiting your local zoning office or looking up records online. 

Zoning records will give you an idea of your county’s long-term construction and land use plans. This will dictate how flexible you can be with the building process on your land.

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Expectations of Cost 

Buying real estate involves spending a lot of time and money, so make sure you understand what you’re getting into. This means understanding all the costs involved in the purchasing process.

A land survey is one of the most significant expenses when buying land. Even if a survey has been done on your property, it may be outdated and cause legal issues in the future. Hiring a professional surveyor to check your property will help you draw the exact boundaries of your land. The land survey cost will depend on the size of your property, the type of survey done, the duration of the survey, and how much research the surveyor has done.

Other essential expenses to consider are utilities and building costs. In many cases, you will need to have the necessary structures installed to have road access, running water, electricity, gas, sewage, a phone line, and internet on your land.

Before getting a mortgage or a bank loan, you must protect your finances in case there are legal complications involving your property’s title. In that case, your lender may recommend that you buy title insurance to cover the investment of both parties.

Building Permits

If you’re buying land, get ready to prepare piles of building permits to start construction on your property. Almost every step of the building process will require a permit. 

Whether adding a septic system, electrical work, or plumbing, you must run the necessary paperwork before pushing through with construction. Building permits follow codes to ensure that all property construction is safe and legal. Get your dream home with zero down. https://showcaserealty.net/buy-a-home-with-zero-down/

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What Are the Pitfalls of Buying Land?

When buying land, there are some pitfalls to be aware of, which include:

Choosing the Wrong Mortgage

Securing finances to buy land might be the most stressful part of the purchasing process. If you fail to secure the correct type of loan, you may end up in an unfortunate situation where you lose money and the property.

Make sure that the loan you choose has sensible interest rates. Also, check that you can generate enough income to pay off the loan during the entirety of the mortgage.

Failing to Inspect the Land

One of the major pitfalls of buying land is when you fail to have it inspected by a professional. Make sure to check all the historical and environmental factors that will have a potential effect on your property. 

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Factors to inspect before buying land include:

  • Proximity to a flood plain
  • Area topography
  • Road access
  • Adjoining property usage
  • Presence of protected wetlands or endangered species
Understanding the Difference between Buying and Selling Land - Understanding the Difference between Buying and Selling Land

The Process of Selling Land

Selling land requires a different set of skills than buying land. It’s critical that you’re backed by solid research and effective strategies.

How Do I Start Selling Land?

Before selling land, make sure to consider the following tips:

Understand the Difference between Land Buyers and Homebuyers

If you’re selling land, you must understand your buyers’ wants and needs. 

Knowing the perspective of land buyers versus homebuyers is an excellent start. Find out the reasons behind their motivation to buy land:  what are the criteria on their checklist, and what are they planning to build?

By thinking like your buyers, you’ll convey the right message by giving them all the necessary information. It will also allow you to do more research to find solid answers to their questions. This will help you customize the sale to fit the specific needs of your buyers.

Using Online Listings

Selling land requires a whole different set of sales techniques compared to selling a home. You should research the platforms where you can reach potential land buyers.

This means you should never underestimate the power of online listings! The online real estate marketplace will help you reach your target audience of land buyers. 

Even though you’re not selling a home, try to use visual tools to make your online listing compelling and attractive. You can do this by showing off the land’s natural features and community amenities.

Staging land can also be an effective way to keep buyers interested. Routinely remove weeds, and dead shrubs, clean trash, and plant grass and flowers. Avoid these top 4 listing mistakes. Click here!

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What Are the Pitfalls of Selling Land?

Like buying, there are also pitfalls of selling land.

Overestimating the Market for Land

Selling a home is a great way to make money. However, you should understand that landowners might have a more difficult time selling raw land than homeowners selling properties with existing homes.

Land is more challenging to sell because it requires more expenses for installing utilities, such as water, gas, septic/sewer, and electricity.

In general, the land market is less active than the housing market. Make sure to prepare thoroughly to avoid any disappointments.

Pricing the Land

Pricing raw land is more complicated than pricing a home because there are fewer raw land sales to help determine a fair price.  

To appropriately price your land, you need to figure out if selling at a higher price is your priority versus selling the property quickly. You will also need to consider your buyer’s intent for buying the land since it will significantly affect how much they’ll be willing to spend.

You will also need a solid understanding of the land market, which is why most landowners hire a real estate agent to help with pricing.

Conclusion - Work With a Real Estate Agent

Buying and selling land requires in-depth market research and a solid understanding of the buying and selling process. Otherwise, you will waste time and money when you tumble into avoidable real estate pitfalls.

To find the right strategies to face the challenges of buying and selling land, get in touch with a professional real estate agent like me, Nancy Braun, at 704-870-0895.

If you want to learn about investing in land, you can check our blog here.


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