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How to sell land in Sequim  

By Dave Tall, Associate Broker for Strait Realty in Sequim.  

Gain an advantage - Selling land is a business that requires knowledge, experience and dedication to be successful. A great deal of what I’m writing about has to do with the seller’s agent being informed about the property for sale because unknown variables kill land deals. If buyers have questions about a property they are considering purchasing and don’t receive answers promptly they will often look elsewhere. Hiring a Broker who knows the land business to list the property usually doesn’t cost a dime extra. This is the easiest way to gain an advantage over your competition.

Technology - A lot of what a real estate agent does is to provide information and finding one who is proficient at it will go a long way towards selling a property. In addition, most land buyers are shopping on the Internet now and it’s getting complex.  A good web site will have a multimedia presentation including audio description and numerous photographs, driving instructions, mapping program. Documents associated with the property should be available as pdf’s for buyers and buyer’s agents via e-mail at a moments notice.

Make your property showable – Like selling homes, lots can be prepared or staged for market. Clearing brush, saplings and trees can open views and allow buyers to access more of the parcel. Mowing cleared lots allow buyers see the contours of the land and make the lot easier to walk or drive.  This is known as parking out a lot. It helps buyers imagine their future homes location on the lot. This obviously is psychologically useful in selling land.

Identify the corners – more often than not buyers, after looking at a lot don’t have a clear idea of what they just looked at. Around Sequim most all property has steel rebar stakes at the corners that have long since been buried under by sod and undergrowth. Locating and making clearly visible survey pins are something that will be done eventually before building so doing this before listing the property is a real value to the eventual buyer. This can gain an advantage over the competition that didn’t locate the pins and even increase the price. If possible locate and mark with ribbon as many corners as possible before listing the property.

Know the costs to build on your lot - Almost all offers will come with a feasibility contingency that will allow the buyer to find out the cost to build on the lot. The buyer can walk away from the deal with his earnest money if he doesn’t like the findings. This time lost during the feasibility can hurt if the “meant to be” buyer buys another property because he didn’t want to waste time in a backup position waiting to see if your lot would close or not. Having cost estimates for Utility facilities fees, connection fees, service agreements, usage rates etc. will give buyers one more reason to write an offer on your dirt instead of the other guys and one less reason to back out of the deal after he does. It also could enable a seller to negotiate a quicker feasibility and closing. The City’s, P.U.D’s and community utility companies don’t like to but will provide cost estimates if someone who knows the ropes requests them in the right way.

 Understand government regulations affects on the property – Zoning classifications, open space, shoreline management and critical areas such as wet lands, eagle habitat and the salmon recovery act are some of the governmental issues that could affect the value of your land. Tax classification changes for example are just one area that most agents who sell houses understand very little about. In Washington State land owner’s sign tax affidavits in order to purchase the land, this document gives the local government the right to change the tax classification. Inexperienced agents and their sellers sometimes do not determine this until just before closing. When this happens in order for the title to transfer and the seller to provide clear title the seller will typically be liable for years of extra back taxes dating back to before they ever owed the property even though the classification change was made after their purchase! Sellers getting stuck with thousands of dollars in back taxes can and does happen, knowing its coming however allows the seller to adjust the asking price and negotiate accordingly.

Consider carrying the contract – Owner financing is when a seller acts as the bank in a land deal.  If the property is owned free and clear, meaning the seller has clear title without any loans, the seller might agree to carry all the financing. In that instance, the buyer and seller agree upon an interest rate, monthly payment amount and term of the loan, and the buyer pays the seller for the seller's equity on an installment basis. Typically a buyer will pay 20 to 25% of the purchase price as a down payment, this money pays for the closing costs leaves some net proceeds for the seller at closing. The 75 to 80% balance is usually amortized over 20 to 30 years in order to keep the monthly payments affordable but is payable in just 3 to 5 years because of the fact that the lender is a person not a financial institution. When short term loans have long-term amortization schedules the last payment is many times larger than the previous payments this last payment is called a balloon payment. Often the land is refinanced with a construction loan when the balloon payment is due or earlier.  Because there are no fees typically associated with the lending institutions owner finance rates are usually higher than what a bank will charge. Unless the property is subordinated (in second position) to another lender, the owner will be able to take back the land in the case of a default by the buyer.

If you have land you would like to sell land on the Olympic Peninsula please contact me at dave@sequimland.com   

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