There is a phrase that is commonly repeated in many vacant land listings that states ‘Buyer to verify’. Upon reading this, the Buyer always wonders if this is because the Seller really doesn’t know about their land or whether they might be trying to hide something? This highlights that land sales can be complicated for both the Buyer and Seller. So, what can Sellers do to make their land stand out among the competition?
First, not all vacant land lots are the same. Is the parcel in a subdivision with all the utilities stubbed onto the lot, or is the land in the middle of the woods with no access to roads or utilities?
In either situation, a Buyer wants answers to as many questions as possible—before deciding whether to waive their feasibility contingency or not. So, Sellers should anticipate what questions Buyers might ask and be ready with answers. This can expedite the closing on the property and make it a more efficient process for all involved.
1. Zoning: Clearly list what the zoning type is, the jurisdiction that is in charge (i.e., name of City or County), and what the allowed Permitted Uses and Conditional uses are included. Also, note any uses that might be allowed due to grandfather contingencies. Much of this information can typically be obtained online or with a visit to the jurisdiction.
2. Access: Understand how the lot has legal access from a public road to the property line. This is very simple as the access comes directly off a public right-of-way most of the time. However, it may come via an easement or only be prescriptive use in other instances. One should always verify that an easement is sufficient and recorded.
3. Title review: Order preliminary title commitment to see if there is anything erroneously attached to the property. It is not uncommon for easements, or other items, to be incorrectly attached to a parcel of land, and it is best to get this resolved before the lot goes under contract.
4. Topography: Sometimes, all the ideal lots– flat and easy to build on– are already gone. If the lot isn’t flat, how much topography (topo) is there? Is it considered a steep slope? Can fill be brought in to make it level? Can one excavate and export material? Can one work with what is there and build a daylight basement or tuck under the home? Most of the time, a topographical survey isn’t needed at the time of the listing, but it will likely be required once one applies for a permit. Many jurisdictions or third parties have maps that include topographic contours, which can help the Buyer better understand the lot.
5. Sensitive areas: Are there any environmentally sensitive areas on the property (wetlands, streams, erosion hazards, wildlife habitat, floodways, etc.)? If so, do you want to have a study was done showing them and their impacts on the land? Many Sellers will defer and let the Buyer do their own. Some Sellers will take a more proactive approach to delineate critical areas and demonstrate how/where the land can be developed. Many Buyers will not want to spend the money to do the studies so that they will pass over a property with too many unknowns.
If someone chooses to take the sensitive areas on, they will want additional feasibility time to complete the studies. Then, Sellers have no control over which expert the Buyer hires to do the studies on their land. Moreover, they may not have access to the reports because the Buyer will own them, leaving them no better off and having wasted valuable time.
6. Soils. What types of soils are present? Will they provide adequate bearing capacity to build on?What types of soils are present? Will they provide adequate bearing capacity to build onprovide adequate drainage or perc if you are relying on septic? Sellers should consider what soils are under their land. This information might be available from the local jurisdiction, reports from neighboring properties, or hiring a professional to do on-site testing.
7. Utilities: Identify how utilities will likely serve the property:
- Water: Public water supply or well
- Sewer: Public sewer system or private on-site septic
- Storm Drainage: Tied into a public storm sewer or handled privately
- Dry Utilities: Gas, Power, Telephone, Internet, Cable TV
A lack of utilities might affect a buyer’s ability to get financing for the lot.
8. Market Study: A market analysis should be performed to determine the value of the land against other comparable lots. This can be completed on your own or with the help of a real estate professional. Two lots in the same general location are seldom the same. Some adjustments will be needed to account for factors such as the ones included in this list.
Most buyers have difficulty obtaining and understanding vacant land, and sellers who provide this information position themselves with a better chance of getting their land sold sooner. While some Sellers may hire a professional to do a feasibility report, others will collect it on their own and can have it included in their listing.
Do you have any questions on how these might impact you? Reach out for a free consultation at 206-499-3443 to discuss.