If you own a property that’s too difficult for you to maintain and secure, you might want to look for ways to sell it. If you are the land owner of the property, you are free to sell any portion of it as long as no legal restrictions prevent you from doing so.
However, if you still owe money on your house, you can only divide it into smaller pieces with your lender’s permission. Without the lender’s consent, attempts to sell a part of a mortgaged property run the risk of invoking the loan’s “due on sale” clause, which would require the seller to make the full mortgage payment at once. But, if you have the lender’s consent, selling a part of your parcel of land would enable you to use the money and pay off a big chunk of your mortgage.
Let’s look at all the things you need to consider when you decide to sell a large piece of land.
How the Land Market Differs from House Market
The undeveloped land market and the market for pre-existing homes are very distinct. You’d be better prepared to sell your land if you fully comprehend them. Here are some significant differences:
The buyers: People who purchase a plot of land differ significantly from those who buy homes. They each have different viewpoints, visions, and requirements for the property. For example, land buyers are looking for space to develop a custom structure, but most homeowners want to move in immediately.
The techniques: An open house might persuade a guest to become a customer. However, an empty lot only enthralls potential purchasers after a period of time. You might need to entice potential purchasers by highlighting the property’s untapped potential.
The market activity: The land market is less active since it is not susceptible to the same market whims as the hot housing market. Simply put, fewer people purchase land than houses. As a result, selling land will take longer, especially if you’re only looking to sell a portion of your property. But that doesn’t mean it’s impossible as long as you know the basics of selling land.
The Basics of Selling Land
The main difference between selling a house and selling raw land is that each has different regulations. Before you try selling a part of your property consider the following:
- Can you sell a portion of your land in accordance with local zoning laws and regulations? You should conduct initial research to determine the minimum lot size needed for a residence. A sale is only possible if the property is smaller than the required minimum lot size.
- Will your lender consider a partial release if you don’t own the property outright? Specific mortgage contracts expressly prohibit partial releases. Others may establish a release timetable that prevents you from selling a portion of your raw land until you acquire a particular amount of equity.
If zoning regulations allow you to sell a portion of your property, your lender will provide you with the steps to take. If you sell a portion of your property, the value of the mortgage might not match the value of the remaining property. As a result, the value of the portion you keep will decrease. In that instance, the lender can want a partial debt payoff or demand that you use your current equity to make a payment. Be aware that the approval process might take several weeks or even months.
How Do I Sell Part of My Property?
If you’re legally allowed to sell a portion of land, take the following steps to ensure you find buyers fast.
Understand Your Target Buyer
When selling a house, you don’t need a target buyer because most properties will only need constant advertising to stimulate interest. But it would help if you gave a little more thought to the type of buyer you should be selling vacant land to. Would it be more suitable to sell a large piece of land to developers or families? Who would benefit most from your property? Make sure to consider your prospective purchasers and what they will need to know about the property before you list it on the market so that you can provide that information.
Make the Property Look Good
You would likely turn around and leave a house desperate for renovations. Similarly, land buyers would steer clear of unkempt real estate property. Before listing your plot of land for sale or marketing it and displaying it to potential buyers, you should clean it. Cut the grass, prune the trees, and get rid of the weeds and trash. Also, consider getting a survey done beforehand so you can define your property lines and learn of any potential setbacks.
Be Careful When Pricing the Piece of Property
Pricing land is trickier than a house, and the wrong purchase price could turn them away in a market where buyers are already in short supply. Choosing the price is up to you and is influenced by various variables. For starters, define how big your actual property is and how much land you’re planning on selling. Additionally, establish how might a buyer put the land to use — is it suitable for the development of luxury homes or a sports complex? Or maybe it could fit a house or two? Large projects generate more revenue per acre than single-family home construction so you should factor this into your asking price.
Start Marketing Your Tract of Land
If you want to reach more people, you should have a robust marketing strategy. You could create a listing on land listing sites, leverage social media, or even create a custom website. It’s crucial to have professional-looking photographs and descriptive details that would help potential land purchasers visualize the land and its potential uses.
Another option is to hire a professional to create a unique sign for your parcel that helps convey what that piece of property offers. Without overloading the sign, emphasize important details like acreage, type of property, main features, and any zoning information you can accommodate. Place your signs in high-traffic areas and ensure they’re neat and straight.
Don’t forget to talk to your neighbors, too. If the property you wish to sell borders their land, they might be the most interested buyers.
The Bottom Line
Selling land differs from selling a house. Likewise, selling a portion of your land is different from selling the whole parcel. When you wish to sell a portion of your property, there are numerous factors to consider, including your mortgage situation and local zoning regulations. Moreover, you’ll have to clean the property, determine the right selling price, and track down the ideal buyers. And if you want to skip all these steps and sell a large piece of land fast, contact SimpleLandSelling. We’ll pay top dollar for your land and get the closing paperwork ready for you to sign within days!