Stephen Chilcote is a Realtor and Forestry Consultant. For more information on this or other forestry and wildlife issues please feel free to contact at the number on the left. Please feel free to browse through the other articles on the left.
The most costly mistakes landowners make when selling land & how to avoid them.
I have been selling real estate off and on for over 25 years. In that time I have seen a lot of deals get done and a lot of deals fall apart and many that never got out of the starting block. Here are some common selling mistakes to avoid and tips that will net you more money and make your selling job much easier and quicker.
1. Turning Down the First Reasonable Offer
The first buyer who is ready and willing to buy your property is most often your best prospect. This is true both in land and in home sales. There is a certain dynamic involved in placing your property on the market. There are a limited number of buyers looking and, if the property is right for a buyer, he will buy it quickly. Too often, sellers will try and hold out for more money or wait and see who else makes an offer. If an offer comes in too quickly, they feel that the price must be too low and they turn it down. A year later when the property is still on the market and the buyer is gone, they are still holding out. By then, the property becomes what we call “stale”. Buyers who are shopping see the property advertized and see it in the listings and are thinking that there must be something wrong with it and it is priced too high or it would be sold by now. Meanwhile the seller has lost the opportunity cost of the money he would have made a year ago.
2. Pricing the Property Too High
It is tempting to price a property very high in hopes that an uninformed buyer will be foolish enough to pay too much. If you are selling something that is very rare, for instance it has a waterfall, a million-dollar view, rare ecosystem, etc. that may be a good strategy since it is difficult to price rare properties correctly. But, average forest and agricultural land should be priced according to what the market will bear. This ties in with tip number one. If the property is on the market too long it will become stale. Priced correctly, the buyer that is right for the property will be there because he knows what he can afford and if your property is the best one for him in his price range, he will buy. Again, don’t lose the opportunity to sell. Even if prices rise over the next year, you have lost the use of that money for a year that you could have invested and made even more money.
3. Selling Timber to a Sawmill Prior to Putting the Land on the Market
Doing this is like running your car through a demolition derby and placing a for sale sign on it. If the timber is high quality and valuable, it can be a big selling point. If a buyer is looking for timber, he will be impressed and buyers who are not harvest-friendly will be also. By letting a sawmill logger have his way with your land just prior to selling it will leave you with a carcass and a little bit of money. Most buyers are no longer interested and you will be stuck with it unless you lower your price – usually netting you less money than if you left the timber there. A much better strategy is to get a good inventory and estimate of value for your timber to put in the prospectus. This can be done by any good consulting forester (like me) or even a state service forester. State foresters are in their own world on state ground and are not as realistic about timber values as someone working on private timber sales. But they may do some work for free. A good quality timber inventory gives prospective buyers confidence in what they are buying.
4. Neglecting a Survey
If you can afford it, get a survey. And do not just set the corners – have the surveyor fletch and paint the lines. Keep in mind you are expecting a buyer to cough up a very big chunk of money, maybe his life savings to buy your land. Uncertainty causes buyers to hesitate. Often, people show me land and don’t know exactly where their corners are or where the lines are. Clearly marked corners and lines by a registered surveyor shows a buyer exactly where the land is so he can clearly see what he is buying.
I have met many landowners who listed with a local Realtor who they know or who they purchased a house from in the past. These folks place the land in the local multilist service and forget it. They have no idea how to market large tracts of land and often don’t even know where the land is. More than once I have gone to look at land when the Realtor refuses to go show it to me, can’t provide a good map and more than once doesn’t even have the Broker’s sign in front the property.
Imagine you are a buyer looking for hunting land. You just drove several hours to get to the land you are anxious to look at. Mary, the real estate lady meets with you on the road frontage, gets out of her Lincoln to meet you. She is wearing high heels and points up on the mountain “it’s up there somewhere.” She hands you photocopy of a tax map with no reference points, scale or topography. “I have to go, I have a showing appointment for a house in town” and she climbs back in her clean car and off she goes. This story sounds like an exaggeration but it is an actual event that has happened to me more than once. More often they don’t even go so far as to come and meet you.
Now picture a guy who shows up in a pickup with an ATV in case you want to see every inch of trails and fields. He hands you a topo map and aerial photos with the land clearly marked. The land is clearly marked on the ground and he takes you around the entire tract of land pointing out perc test sites, possible food plot locations, deer sign and interesting features of the property. Which scenario would you prefer as a buyer or a seller?
Find a Realtor who can get out through the woods, speak knowledgeably about hunting or farming, can read a map and find the property corners and lines in the woods. Stephen Chilcote is a Realtor and Forestry Consultant. For more information on this or other forestry and wildlife issues please feel free to contact him at 1-814-360-4510
