Occasionally, having too much of a good thing can lead to problems. When you have a large amount of property, you may require assistance in maintaining it or keeping it secure. If you find yourself with too much land, you might consider selling some of it off.
If you are selling just a part of your property, it will be more complicated than if you were to sell the entire property. Any part of the property you own outright can be sold legally unless restricted by a legal agreement. In order to subdivide your property to sell a part of it, you will need to be approved by your lender if you still have a mortgage on the property. A lender’s “due on sale” clause could force the seller to pay the entire mortgage if parts of a mortgaged property are sold without permission.
Parts of your property can be sold, but the process is different from selling the entire piece of land. To sell a property successfully, we must consider the logistical, legal, and financial issues involved. Let’s take a closer look at how you can sell a piece of your land.
Land Sale Rules
The most significant difference between selling land and selling a home is that the rules for both differ. Two questions need to be answered before you can even contemplate selling a part of your property.
- Are you able to sell a parcel of land under the zoning laws that apply to your area? Find out the minimum lot size for a home by performing some preliminary research. A sale cannot occur if the lot size is below the minimum required in many areas.
- In the event that you do not own the property outright, would your lender be willing to consider a partial release? In some mortgage agreements, partial releases are prohibited as part of the loan terms. A release schedule may prevent you from selling part of your land unless you have enough equity.
In the event that zoning ordinances permit you to sell a part of your property, your lender can assist you in the process. There is a possibility that the value of your mortgage might not match the value of the remaining property once you have sold part of it.
It is possible that you will have to pay some of your loan off or make a payment from the equity in your home. It may take several weeks or even months for the approval process to complete.
7 Steps To Sell a Piece Of Your Property
Prepare The Land
Buying and selling real estate is all about making a first impression on the buyer. Land buyers may shy away from the land they don’t see potential, just like they would walk away from a house that needs repairs. As a first step, you should clean up the part of your property that you intend to sell before you list or show it.
The grass should be cut, weeds and trash should be removed, and photos should be taken in order to document the process. It is also good to have a survey done in advance so setbacks and boundaries can be marked. With this information and planning, you will be able to make your property more appealing to potential buyers.
Know Your Target Buyer
Most homes won’t need consistent advertising to generate interest, so you don’t need a target buyer. There is, however, a bit more to think about when it comes to vacant land. Is big or small development your goal? Make sure you have all the information your potential buyers will need about your land before you put it on the market.
School districts, shopping centers, and nearby amenities can all be important to potential buyers. Developers need to know where the water and sewer services are located and their capacities. A survey of your property might require hiring a contractor or contacting city officials.
It is more challenging to price land than a home, and an incorrect price could discourage buyers in a market that is already limited.
Land is a unique asset and determining the right pricing depends on a number of factors. Compared with an empty lot in a developed community, a piece of land may have fewer comparable sales to use as references.
Take into account how quickly you would like to be able to sell the property you have chosen. It may be in your best interest to price the property more attractively so that it sells faster. Your property could sit on the market for months or even years if you price it too high. It would be helpful to work with an experienced real estate agent to facilitate this process.
Marketing to homebuyers is straightforward enough; innumerable companies specialize in this field. When it comes to selling land, it is no different from selling any other type of property. There are a number of things you should include in your marketing plan for your land, including
Multi-listing services (MLS)
- Land listings should be posted on the MLS first since real estate agents look for new listings there first. However, if you are selling an existing home, you may want to consider additional listings as well.
- Hire someone to make you a custom sign on your parcel that tells the story of what your parcel offers if the property faces public areas. Ensure the sign includes essential information such as property acreage and zoning information. Signs should be placed in areas with a high level of traffic, and they should be kept clean and upright at all times.
Reach Out To The Community
- You might find that they are the most interested buyers, particularly if your property borders theirs. While you might not directly ask them if they are interested in buying your house, it is another story if they are interested in your land.
A land sale is different from a home sale. From zoning laws to your mortgage status, there are many factors to consider when selling part of your property. To complete your sale successfully, it’s best to work with professionals to help you with fair pricing, choosing your parcel, and finding potential buyers.