How Do I Prepare Land to Sell?

Welcome to the John Hall and Company Selling Land in Alabama series. In part five, John Hall answers the question “How do I prepare the land to sell? Our founder personally has over 35 years invested in selling land and commercial real estate across Alabama.

There are several tasks most people do when they prepare to sell their home. This item might include: service the HVAC; paint and repair rotten wood, update the landscaping, and straighten up furniture and closets, etc. A similar concept applies to preparing your land for sale, but it is a vastly different process than selling residential property.

Land properties are not the same. You would treat a 60-acre wooded tract differently than a 400-acre recreational tract with amenities.

 

Selling Land- Small Wooded Tract

Let’s begin with preparing a 60+/- acre wooded tract for sale. Firstly, the owner should consider thinning some timber and using the money to install a good trail system and 1 or 2 wildlife plots. Secondly, getting a boundary survey or at least mark each corner clearly is recommended. It is important that there are no boundary line disputes or easement issues with neighbors. Finally, a sturdy metal entrance gate with a lock is a nice feature.

John Hall and Company can help the seller to find the right people to do the improvement. We have several services we offer to our sellers. For example, if an owner doesn’t know how to hire a logger and/or contractor to do the improvements we have experts who we know and trust. The main reason to do this upfront work is

“You can’t sell a tract unless you can show it.”

If the owner does not want to prepare the tract as we have recommended, he can sell it strictly to a timber buyer. The seller can expect to get 25% to 30% less i.e. $400-$500 per acre less at the closing of the sale.

 

Selling Land- Large Land Tract

Now, let’s discuss a 400 +/- acre tract of recreational property. This property has a cabin, equipment, shed, a 3 to a 10-acre fishing lake, and wildlife plots with permanent deer stands. This type of property is a land broker’s dream listing when it is maintained and “shows well.”

“What should the owner do to prepare this property for sale?

Selling a large tract of land may require similar action to the small tract discussed earlier. The owner should mark all property lines and corners and install “No Trespassing” signs. It is always helpful to have a boundary survey. The seller can expect to pay $5,000 to $7,500 for a survey. A survey is the only way to determine the exact acreage. A property this size may sell for $3,000 to $3,500 per acre.

Land management before a showing will make a huge difference in the selling price. Trails need to be bush hogged and “limbed up”. Wildlife plots need to be planted in winter or mowed in summer. Pine stands need fire lanes established.

Proper care of lakes, streams, and ponds on the land is important. The fishing lake should have some clean, mowed areas along the bank, a well-maintained boat dock, and fish feeders. Fertilizing and adding lime to the pond will provide plankton for a healthy fish population. Hopefully, the pond provides good fishing because it is such a joy to see a 3-year-old catch his or her first fish!

Click here to learn more about our free “Broker’s Opinion of Value” we offer future clients.

Selling Land- Preparing Structures

Evaluate buildings on the property. Do the required maintenance and renovations to bring the building up to standard for the selling price.  Any house or cabin on the property needs to be in very good condition with no roof leaks, no rotten wood, etc. The HVAC, plumbing, and appliances should be in good working order. Equipment shed or barns need to be cleaned up with all equipment/tools neat and orderly.

The owner should incorporate best management practices for his land, timber, and wildlife. Not every practice is cost-effective for every owner. My team can help you assess what investment will be best for you to get the best return.

You must create a good first impression for your land broker and your prospective buyer when they arrive at your property!

-John E. Hall, Jr. CCIM

What Does it Cost to Sell Land?

Welcome to the John Hall and Company Selling Land in Alabama series. Today, we answer the question, “What Does It Cost To Sell Land in Alabama?”

The first conversation with a new client involves outlining the costs associated with buying or selling property.   It is very important to understand costs. Please, note that expenses will vary among real estate transactions.

Up Front Costs

Sellers are responsible for certain closing costs along with the real estate commission to the listing broker. However, there are other up-front costs that may be required to make the property suitable to sell. The agent should do an assessment on the property and suggest to the seller what to do to get the best return on their investment.

These costs may not always be necessary, but they can greatly improve profits. For instance, the property owners will definitely want to make changes to improve the aesthetic appeal for prospecting buyers.

Key Investments for Selling

One key investment is having a good road system on the property. A good internal road system will appeal to a future owner. In addition, the right road gives curb appeal and accessibility during showings. The cost of an internal road system is dependent upon the condition of the existing road and the size of the tract.

Other important costs are incurred with maintenance expenses such as mowing, land clearing, spraying, planting, etc. These costs are a relatively minor part of the transaction but can go a long way in getting the property sold quickly for the asking price.

Land Survey

A land survey is an additional cost that sellers should seriously consider.   Surveys are not required, but they are a great asset in selling a piece of property. Buyers will want to have a clear understanding of exact acreage and boundary lines before moving forward with a purchase. A survey gives the buyer assurance of no underlying issues such as encroachments or any kind of boundary line disputes. Costs of surveys vary depending on the size and shape of the property. It is best to consult with your listing broker to determine if doing a survey is justifiable before putting a piece of land on the market.

Closing Costs

After an agreed-upon sales price, costs will then be settled at closing. The majority of fees are negotiable as to who pays between buyer and seller. However, there are standard fees assigned to each party.  Sellers often account for costs such as agent’s commission, deed preparation, prorated taxes, attorney fees, and any judgments or liens tied with the property. The agent’s commission is an agreed-upon percentage of the sales price between agent and seller.

In closing, all land sales transactions are unique in their own way. This article gives sellers a good outline of standard costs.  These factors emphasize the need to consult with a qualified broker. Selling a piece of property can seem like a big task, but having an experienced land agent to guide the process is critical in obtaining the desired profit.

Click here to learn more about our free “Broker’s Opinion of Value” we offer future clients.

-Staff

What Is My Property Worth?

Today, Josh Hall is answering the question “What is my property worth?” or “How much is my property worth?”  He outlines how the worth or value of land is calculated. Click on the link below to see if you qualify to receive a free “Broker’s Opinion of Value”Welcome to the John Hall and Company Selling Land in Alabama series. John Hall and Company has over 35 years invested in selling land in Alabama. 

How Much is My Property Worth?

The first question sellers ask is, “How much is my property worth?”. The American Dream is owning a piece of land. Having your own property provides a getaway to the country for hunting, fishing, horseback/ATV riding, gardening, farming, and building family memories.

Consequently, these wonderful memories of activities on the land often make an owner think more highly of their land. Landowners “bake” these great times into the value of their land making it harder for them to set a realistic value.

Creating an accurate estimate of the value of your land is very important for buyers or sellers. John Hall and Company gives an accurate assessment of the value of a property based on objective data.

“Value is only an opinion and that opinion is only as good as the amount of market data and the detail of data available.” -Josh Hall

We have access to hard data like contracts, listings, and closing sales. As a result, our brokers utilize these key data points to arrive at a more accurate opinion of value while making sure the data is truly comparable.

Appraising land is more difficult to value as opposed to residential listings. This is due to the lack of availability of sales and listings data. 80% of all residential sales are inputted in a multiple listing service (MLS) and the data is readily available to the public. Land transactions are not usually included in the MLS. The most important sales data is scattered amongst land brokers and consultants. That is to say, it is difficult and time-consuming to collect this data.

Here are a few ways to start gathering additional data:

Step 1: Ask The Right Questions Of  Your Property

The first step to understanding what your property is worth is accurately assessing all of the important economic and physical attributes of your property.

I am often asked,

What is the land going for around here?

My immediate response is,

What type of property is it? Is it crop land, pastureland, wooded land, timberland, cutover land, turnkey recreational land, etc?

Where is the land located?

What do the surrounding properties look like?

These questions help clients to see that not all rural land is the same.

Step 2: Assess Land Market Value of Your Property

The second step to assessing what a property is worth is gathering sales and listing information of a similar property. Sales of similar property should follow this definition of “market value” set by the US Federal government for Financial Institutions.

A definition of “market value” is below:

The most probable price which property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably and assuming the price is not affected by undue stimulus.

In other words, when looking for comparable sales in order to arrive at an opinion of value the comp sale should be “normal”. However, some properties are outliers. The following examples are not typically a good comparable sale:

  • Forced sell due to a court order or a bank foreclosure
  • Adjoining property owner paid a premium because it was a neighboring property
  • Owner offering below market financing (say 0%)
  • The seller accepting the first offer they received while not exposed to the open market
  • Parties involved in the transaction being uninformed, such as a party did not know the true timber value, the property was contaminated, or had a WRP easement attached.

Certainly, sellers would benefit from adjoining landowners paying a premium for their land, but this is rarely the case.

Step 3: Define Characteristics of Your Property

Fourthly, to determine what property is worth we would research the transactional and property characteristics and compare them to your property.

Transactional adjustments include:

  • Property rights conveyed: Do all rights go with the sale, mineral, surface, timber, etc?
  • Financing terms: Were terms normal or favorable due to owner financing?
  • Conditions of sale: Normal sale or not, the buyer could have paid a premium because they were on the backside of a 1031 exchange or maybe the sale was to a family member for a discount.
  • Expenditures made immediately after a purchase: Did the purchaser pay a commission, or did the purchaser have to buy access or clear a title problem after the purchase?
  • Market conditions (change in value over time): If the sale is a year or two old, has the market changed?
  • All of the above have to be known, considered, and adjusted as it compares to your property.

Property adjustments include differences in:

  • Location: Area or neighborhood differences and proximity to major cities or major interstates.
  • Physical characteristics: access, topography, interior road system, flood zones/ wetlands, size, the shape of the site, improvements on the property.
  • Economic characteristics: CRP rent, timber leases, hunting leases, surface or mineral royalties, or amount of timber.
  • Non-realty components of value: Land transactions often include personal items such as tractors, ATVs, trailers, or furnishings to name a few

Understand each sale used as a comparison to your property is vitally important. This process draws a credible conclusion in understanding what your property is worth. The more sales and listings which are available increases the credibility of the opinion. Also, having the sales data is the first step to know what your property is worth. However, accurately analyzing the data is equally important. A business analyst once told me

“Just because you have the recipe, doesn’t make you a good cook.”

Step 4: Evaluate Market Shifts Around Your Property

Lastly, when calculating the worth of your property know that market changes are not linear.  The market goes up and down. It is like a wave in which there are troughs and crests within the rise and fall of overall land market movement. If your property is listed at the same time many similar properties like yours are listed, it could a trough moment where the supply exceeds demand. Vice versa, your property could experience a crest moment where demand exceeds supply if yours is one of the few listed properties for sale at the time. In addition, the number of listings also needs to be reviewed in light of comparable sales.

How Much is My Property Worth?

Over the years, I have seen many investments not optimized and undervalued. In part, due to the seller not wanting to pay a knowledgeable broker or consultant prior to selling their land. I have been guilty of doing things myself and not hiring an expert to do the job to save a dime. In most cases, I end up wasting my time and losing money. My advice is to keep your day job and do what you do well. When selling your land, hire a professional broker or appraiser to help you with pricing your land. Hire a professional broker to show your property to a wider and more targeted market of buyers in order to maximize the return on your years of investment.

In conclusion, if the process of collecting data and researching properties concerns you, we help future clients who are serious about selling land by doing a free Broker’s Opinion of Value. Click here to learn more about our free “Broker’s Opinion of Value” we offer future clients.

– Josh Hall, MAI

How Does Selling Land Work?

Selling Land -John Hall & Company

Welcome to the John Hall and Company Selling Land in Alabama series part two. Today, agent and land expert Hoke Smith shares “How Does Selling Land Work?”

Selling land can be intimidating or even a foreign concept to those who have never sold a property. Selling land can be complicated, but it doesn’t have to be.

The following information is for those who ask themselves the questions:

“Where do I even begin?

“What are the steps I need to take in order to acquire the best value I can for my property?”

John Hall and Company agents are here to answer your questions. Above all, to provide you with the knowledge and confidence you need to make educated decisions. Ultimately, it will benefit you at the closing of the sale.

Know What You Have to Sell

Firstly, the landowner needs to know what they own. A good understanding of what your property has to offer is necessary to maximize the monetary value.

The location of a property can make a big impact on a property’s value. Depending on the location, the demand may be higher or lower than in others areas.

Clearly, identify the best use for the property. Is it a potential development property, a home site, timberland, agricultural property, recreational property, or a combination of these?

John Hall and Company is happy to help landowners wanting to sell their property understand the different aspects that will affect their property’s value. We do this by offering what we call a Brokers Opinion of Value or “BOV”. To see if you qualify to receive a complimentary BOV, complete the form here…

Know the Value of the Land You Have to Sell

Secondly, after you have listed all the aspects and potential for the property identify the value of each aspect. This is where you will need assistance.

John Hall & Company is here to give our professional opinion with data to back up our statements. In addition, we have an extensive list of professionals who can value the individual characteristics of your property to help come up with a total value for the property. Resource contacts include certified foresters who can provide timber values and appraisers who can put together an official appraisal of your property. We use recent sales of properties that are similar to yours and in the same area to identify what other properties are selling for.

Click here to learn more about our free “Broker’s Opinion of Value” we offer future clients.

Know Your Sells Broker

Once a landowner has a good grasp and understanding of their property, the next question is “How do I sell my property”.

Thirdly, look for a firm that specializes in what you are selling. Real estate brokerages that are specifically catered to selling properties similar to yours are who you need to hire.

  • Home to sell? A residential real estate agent may be your best option.
  • Commercial building, such as office space? It would be most beneficial to seek a commercial real estate brokerage.
  • Recreational hunting property, timberland property, farm, or another type of rural property, with or without a house? A real estate brokerage that specializes in the specific category (such as John Hall & Company) would your best investment is selling.

How Does Selling Land Work?

We encourage sellers to reach out to us and let us teach you how selling land in Alabama works. We want you to ask as many questions about our company and people as possible. You need to know us. Moreover, we want you to feel you can trust and depend on us to represent you and your property.

Buyers for land in Alabama come from all over the country. John Hall & Company’s marketing strategies are put in place to make sure that we are able to gain maximum exposure and in front of potential buyers.

Know Your Marketing Plan

Once you identify the broker, the next step is listing your property on the market.

A sales plan is put in place and an initial listing price is established. Next, the real estate brokerage compiles all of the marketing materials and begins to advertise the property. Ask to see monthly marketing reports on the traffic your listing is receiving through website views, phone calls, emails, etc.

When offers come in, that is the time to consulting with your listing agent and listen to their opinion. It is your real estate agent’s duty to represent you with your best interest in mind. Because your agent has knowledge of the market and experience in negotiating deals, they will have insight on how to navigate through the negotiating. In turn, getting you a contract and is beneficial and pleasing. That real estate agent should work with you. Keeping you updated through the due diligence period of the contract and on to closing.

Know Our Number

Selling land can be complicated, but it doesn’t have to be. The best advice for a landowner looking to sell their land is to find a real estate brokerage that specializes in selling property such as theirs. They should find an agent they can trust and depend on to represent with their best interest in mind.

The end result should be you, as a seller, getting up from the closing table knowing that you got a good deal in a timely manner!

-Hoke Smith

Selling Land in Alabama – How Does Selling Land Work?

Welcome to the John Hall and Company Selling Land in Alabama series.  This is part two in the series. Go here to read, part one written by Pete Hall

Selling a piece of property can be an intimidating or foreign concept to some landowners who have never sold property before. The following information is for those who ask themselves the question “where do I even begin” or “what are the steps I need to take in order to acquire the best value I can for my property”. We at John Hall and Company are here to provide you with the knowledge and confidence so that when you are selling a property, you know you are making educated decisions that will ultimately benefit you come the day of closing.

The first thing a landowner needs to recognize when deciding to sell their land is the understanding of what they own. It may sound simple, but when trying to maximize the monetary value that can be received a good understanding of what your property has to offer is necessary. Understanding what the property has to offer can be identified in several different ways. The location of a property can make a big impact on a property’s value. Depending on the location, the demand may be higher or lower than others areas. What is the best use for the property? Is it a potential development property, a home site, timberland, agricultural property, recreational property, or a combination of these? John Hall and Company is happy to help landowners wanting to sell their property understand the different aspects that will affect their property’s value. We do this by offering what we call a Brokers Opinion of Value or “BOV”.

The next question a landowner may have is “how do I value these different aspects of my property?” This is where you will need help. John Hall & Company is here to give our professional opinion with data to back up our statements, but we also have an extensive list of other professionals who can value individual characteristics of your property to help come up with a total value for the property. We have contacts such as certified foresters who can provide timber values, certified appraisers who can put together an official appraisal of your property, or we can use recent sales of properties that are similar to yours and in the same area to identify what other properties are selling for.

Once a landowner has a good grasp and understanding of their property, the next question is “How do I sell my property”. Real estate brokerages that are specifically catered towards selling properties such as yours are who you need to be looking into. If you have a home you want to sell, then a residential real estate agent may be your best option. If you are selling a commercial building, such as office space, then it would be most beneficial to seek out a commercial real estate brokerage. If you are selling a recreational hunting property, timberland property, farm, or other type of rural property even if it may have a home on it, then a real estate brokerage that specializes in that category (such as John Hall & Company) would be who you need to seek out. We encourage Sellers to ask as many questions about our company as possible so that you know we can be trusted and depended on. We want you to know that we are here to represent and serve you as our client in your best interest. Buyers for land come from all over the country. John Hall & Company’s marketing strategies are put in place to make sure that we are able to gain maximum exposure and in front of potential buyers.

After you have identified as real estate brokerage that you would like to represent you, the next step is listing your property to put on the market. A sales plan needs to be put in place and an initial listing price needs established. Once the real estate brokerage compiles all of their marketing materials and begins to advertise the property you may want to ask them to provide a monthly report on the traffic your listing is receiving through website views, phone calls, emails, etc. Upon receiving an offer(s) it would be beneficial to consult with your listing real estate agent and listen to their opinion. It is your real estate agent’s duty to represent you with your best interest in mind. Having knowledge of the market and experience in negotiating deals they will most likely have a good insight on how to navigate you through the negotiating and in turn ending with a contract and that is beneficial and pleasing to you as the seller. That real estate agent should then work with you and update you through the due diligence period of the contract and on to closing.

Selling land can be complicated in some situations, but it doesn’t have to be. The best advice for a landowner looking to sell their land is to find a real estate brokerage that specializes in selling property such as theirs. They should find an agent they can trust and depend on to represent with their best interest in mind. The end result should be you, as a seller, getting up from the closing table knowing that you got a good deal in a timely manner!

-Hoke Smith

 Click here for part three of this series, written by Josh Hall, “Selling Land in Alabama-  What is My Land Worth”

Click here for part four of this series, written by Robert Smith, “What Does it Cost to Sell Land in Alabama?”

Click here for part five of this series, written by John. E Hall, Jr, “Preparing Your Land To Sell to a Recreational Buyer”

Land – Safe Haven Asset

“Last month, the LANDTHINK Pulse posed the following question to our audience: When the stock market becomes volatile, how likely are you to invest in land?

Our informal online survey revealed that 40.6% of respondents are VERY LIKELY to invest in land amid stock market uncertainty. The stock market has responded to the COVID-19 pandemic with worrying volatility. As fears around the coronavirus spread across the global economy, investors are looking for the calm in the coronavirus storm and are moving out of stocks and into safe haven assets like land.

Many people’s hard-earned investment portfolios have already taken a beating. Stock markets around the world suffered historic losses in the first three months of the year; the S&P 500 lost 20% during the quarter, its worst since 2008. The Dow Jones Industrial Average saw its biggest quarterly drop since 1987, plunging 23%. The global turmoil has investors seeking out safer, non-traditional ways to diversify their portfolio.

For those who prefer a more stable, consistently rewarding avenue of investment, land real estate could be the answer. There are good reasons you should consider it in your portfolio:

Limited Supply and Increasing Demand
There is a finite amount of available land making it a very attractive commodity in a world where the population continues to increase exponentially. If you choose to invest in a growing area, land will become even more scarce and therefore, more valuable. Remember that smart investors invest for the long haul. Land is not liquid. Investing in land can tie up your liquid assets until you’re able to sell the property, but if you’re in the market for a solid, long-term investment, it’s worth the consideration.”

-Landthink

FULL ARTICLE

https://www.landthink.com/pulse-amid-stock-market-storm-land-safe-for-investors/