When you are thinking of selling land, the biggest motivation to sell is the thought of reaping the highest monetary gain possible, right? And it should be, you have endured all the responsibilities that come with owning land, so you have earned the right to as big a profit as possible. But unfortunately, this is when so many property owners make one of their biggest mistakes with their land.
You have to face reality that selling vacant land to a developer is totally different than selling your home. With a home, you can estimate a landlocked properties in kentucky fair sale price by doing a variety of comparisons using factors such as location, school district, square footage, exterior features, interior features, amenities, age and everything else the eye can visualize. Even the most novice seller can easily get “in the ball park” when estimating the value of their home. But, when it comes to development land, the case is totally different. Parcels of property right next to each other can have vastly different problems and opportunities. It is impossible to find out all the relevant facts about the land just by visiting the site, even if you are a seller who is intimately familiar with your land. No, much that affects the value of the property can not be seen with the naked eye and must be researched. But rather than the seller doing the research or paying to have it done, the seller makes the mistake of letting the buyer do the due diligence.
And that is why I ask you, If the buyer knows more about the property then you, how can you be sure you will get the highest possible price? Are you getting the gist of the situation? Yes, dear seller you need to have your own due diligence when you are negotiating the sale of developable land. (The same is true if you are buying land.) You can’t get by using a real estate agent who spends 10 minutes doing a back of the napkin calculation to estimate the highest possible price anyone would ever pay for the land and listing the property at that price. This doesn’t work because when the developer starts telling you reasons why the price is to high (i.e. wetlands, endangered species, soil problems, access issues, zoning conflicts, etc.), you have no way of refuting the buyers reasons. The buyer has all the power because they have all the information. So how do you get the information you need to successfully negotiate the highest price possible for your land? Well, it is a two step process.
- Hire a civil engineer to perform a due diligence and site feasibility report for your property. Include in the report some basic concept layouts showing the potential yield or development potential of the site.
- Hire an appraiser to appraise both the developed and existing value of your property.