Transcription
Over the past 15 years, land prices in America have exploded. Land owners now are seeing how much higher in value their properties's gone just over the past few years since COVID, and they're starting to think, "Hey, I think I got to sell before the numbers start to plateau out and start to come down a little bit in the market," and that's a good idea. But the problem is the market is being flooded with land listings. The problem is a lot of them aren't selling.
So for landowners that have tried to sell in the recent past, or they're looking at what's happening in the market right now, and they're a little bit discouraged; if you're one of those landowners, you just need a system. You just need a system that works. You need to understand what you're getting into in this marketplace, and a step-by-step walkthrough of how you can be successful in today's market. That's what I'm going to give you in this video. My name is Alex, and I've sold over a hundred pieces of land across the United States just in the past couple of years. So some of the things I'm going to tell you you're not going to want to hear. I want my painful lessons to be able to help you be successful without having to go through the same stuff, and that's what we're doing here in this video.
Before you even make a decision to sell, you have to know what you're up against. What you're up against right now is a stagnating real estate market. The economic data is weakening; the unemployment rate nationally is rising; listing inventory nationally is rising; median list price in many states and regions is is dropping as well; the transaction volume is slowing down; and the transactions that are getting done are getting done at lower price points. And the properties that are sitting there unsold on the market, they're unsold for a reason, or several reasons, and you just have to be totally real about what's going on. Because if you don't see reality in the marketplace clearly, there's no way that you're going to be able to implement the right strategy to be successful in today's market.
The first thing you need to do as a seller to be successful in this land market is you have to be very clear about your intention. You can't be wishy-washy: "Oh, if it sells, it sells," or, "Hey, I'll just put a big number on the property and then maybe someone will want to buy it." No, you're not going to be successful if you do that. It's just going to be another "for sale" sign with overgrown weeds around it, because that's not a property that's going to sell. You have to be clear, because your intention is what is going to win the day or lose the day, and your intention needs to be that you plan to sell this property. But not just that you plan to sell it, and being honest with yourself, but that you plan to sell it in a very specific way. You can't expect the agent to care more than you, and they won't, because here's what happens when landowners don't care: the listing agents don't care either. And the reason I know that is because I have, and I'm looking at what's happening in the market; I got to show you some of this stuff. There's a property that's listed for $750,000, and the listing description entirely, all it is, is: "Timber has been cut; timber deed released." That's it. Here's the next one: there's a listing; the entire listing agreement is just a paragraph discussing a boring tax abatement program. The property, the listing only has one photo. It's uh, this, I don't, I don't, I don't know. The next, this one's good, you'll like this: there's one property that is listed for a give or take a million dollars; this is all that you'll see in the listing is literally one photo, and it just says "site." And what's interesting, it almost looks like, like there's like spray paint, but, but then this, the arrow, it's like "site," but the arrow is pointing like past the margin of the photo. I don't want to tell you where I found these because they're not hard to find. This is literally going on as I stand here recording this.
The way you don't let that happen is you got to be clear. You got to be clear with them that you're paying attention, and because you're paying attention, if stuff doesn't look right online, if there's typos in the listing description—I mean, do you, do you think, think that I see typos and listing descriptions for properties I sell, or inaccuracies, or weird upside-down photos, and I just ignore it? No way. You want to tell them it matters to you, and it's going to matter to them when you do.
So the next thing is that you've really got to quiet down your ego. Your ego is going to be the biggest impediment to you selling this land. The reason why is very simple, and it has to do with the fact that you've been hearing stories about how the neighbor property, they sold it to Toll Brothers or Shay Holmes or one of these big Builders, and it was $50,000 an acre, and now the new Toyota plants come into town and prices are going up. It's all narrative, but the ego wants to protect you from disappointment and pain and heartache. This is what no one talks about, and I'll tell you, I've sold over a 100 properties—last I looked it was 117—I had to swallow my pride on every single one except for like five or six maybe that sold like just right away at unrealistically fast sales and just unrealistically high offers. Everything else, you don't know what you're actually going to sell the land for until you do. And even when you get the offer, the offer is lower than you thought; the buyer may try to renegotiate in escrow; a listing may expire and have to be renewed; the agent might say they'll do something and then do another thing. Your ego is going to tell you that everything's about you, and everything's about how it's not fair to you, but that's the trap, because ego doesn't matter to your buyer. Your ego, your attachment to this number or that outcome or your goals or whatever, you can't control that. And what matters fundamentally is for you to understand that you're not the hero here; the buyer is the hero of this story. For you to be successful, it helps to understand that, because the fact is that the buyer is the person in the transaction that's taking more risk. They're exchanging a very liquid asset in the form of dollars for an illiquid asset in the form of land at the top of the market; if anything goes bad, they're the one that eats it.
And part of, part of the ego is understanding how price works, okay, because you got to get real on price. A lot of people are tuning out right now, but the real seller is you're watching because you're listening to, and you understand the YouTube algorithm is punishing me; everyone's click, no, no, it's hard work; no, no, you mean I have to be modest and I have to sell for less than I thought, and there's work, guys. Like, this is why no one's recorded this video, is because people don't want to hear it. My point to you is, is I'm trying to just be honest with you; I don't, you don't have to work with me, you don't have to do business with me; we may never talk; this may be the only video you ever watch on our channel, but my point in this video is to help you, and I cannot help you if I don't tell you the full truth. You have to manage your expectations on price, and when you go on the market to list your property, the reason that you do it is to sell the property, but before that happens, there's a process of price discovery in the market. The market sets the price, not the seller. A lot of people think that, well, okay, but I'm not going to sell for less than this number. Okay, that's more than fair, but then you might not sell.
Give you an idea: I have a property that is listed for sale right now, and when I, when I bought it, I, I thought I could sell it in the low to mid-30s, 30,000. I listed at 39; no bites. And I was getting ready to drop price to 35,000 because I thought it would sell better at 35, but then we had an offer at 38,000. Ooh, ooh, we went under contract at 38; took it off the market; but then the buyer backed out. There wasn't really a reason; they just backed out. Went back on the market at 35; no takers. Couple months pass; went back on the market at 325; we dropped price 32,500; we got an offer at 28,000, cash offer, quick close, three-week close. Okay, now we're selling to an investor; it's a little lower than we thought, but that's fine. They back out; now we're on the market at $299, and it's available for sale, and it's, it's definitely worth it, but does that mean it's going to sell for that amount? And what's it going to sell for? If you think that, oh, it's $30,000, that's like not that expensive, and my property is more valuable, well my reply to you is just add a zero; add two zeros: 300,000, 3 million. Because the reality is a lot of land that today is listed at $4.9 million is going to sell at 1.8, if it sells. And it's not going to sell at 1.8 because the market crashed or some other such; it's going to sell at 1.8 because it's not worth 4.9.
Next, you have to understand your buyer. Every property has an identity, and every property has an essence and a spirit, and your buyer does too. So you have to understand: is this a residential buyer? Is this a recreational buyer? Is this an investor? Is this a developer? Is it a commercial property? Who's my buyer, and what exactly do they want with the property? A lot of properties that we sell, the buyer is going to be a family that wants to buy the land as part of a land-home package and, and build a nice home in the country. That's very typical; that's most of—from a zoning perspective—that's the majority of what property in the country really is. Those buyers are very clear on what they need. Because once you understand your buyer, the next step is that the buyer has a problem. What's the problem? Well, you show me a buyer and you show me a property, I'll tell you what the problem is. A lot of the buyers that I described, the residential family buyers, they love the land, and they can even afford it because it's priced well, but, oh, does it perk? Can I, can I put septic on there? Am I allowed to build manufactured homes, or no? What kind of homes can I build? Wait, so what are the setbacks? Is that a flood zone back there? How far from the flood zone are we in the front? Can we build outside the flood zone? How big of a house can we build outside the flood zone? Are the soils going to be good outside the flood zone? If I have to put a septic in the front of the property, does that push the house to the back into the flood zone? I mean, it's tedious stuff, but if you really take a few minutes and you review your property on the county maps, you can get caught up pretty quickly. And if you understand who your buyer is and you have empathy for that buyer, you'll see what it is that they like in the property, and you'll see where the obstacles are. The important part of this is that you have to clear those obstacles. The property that is priced correctly still probably won't sell until you solve those problems, because the buyer is not going to do this research. I wish they did. Land buyers are not the most imaginative people in the world; if they can't see it, it doesn't exist, and if there's a better listing with more clear descriptions and storytelling down the road, they're going to buy that one at a higher price. We don't—if, if you go to market with a property that has—it's listed at 25,000, and the comps are at 30,000, so it's underpriced for the market, but you don't have a soil report or a septic permit, it'll just sit. It's, oh, the buyer is going to do that. It's like, yeah, when? Who? And what happens is stuff just sits, even when it's great, because the buyer stubs their toe on this little thing, and then they just don't squeeze the trigger because they lack confidence. But if you spend 500 bucks on a soil report or 200 bucks on a septic permit, it'll sell quickly at 30,000. This, I see it, and I live it every day. So the buyer's got a problem, but you get paid; you get compensated to solve that problem.
Finally, you got to choose a marketing channel, and you got to stick with it. Again, it's either you choose the, the listing agent and you go on the market, or you choose to sell to an investor and you pick the best offer out of the bunch. If you go on the market with a listing agent, you got to choose wisely, because most listing agents don't know what they're doing with land, and even some of the ones that get the good listings, they're never going to sell them, even if you wanted to, because for various reasons we don't have to get into. You just got to be smart, and understand that a lot of the top land brokers in these regional offices or the top land brokerage firms, some are great, some aren't; some have all the listings and all the sales and all these markets, but then they just don't pick the phone up. It's just like bewildering; they just like get the leads through word of mouth, through the website; they convert the big listings that, you know, the buyers are just, you know, the buyer agent knows them; they, they make a deal happen, but, and they work hard, they do, but not for you; not if your property is lower dollar; not if the commission check isn't as high. They're some of them aren't that organized; they're just not. And so a lot of times the stuff that gets it done is, yeah, experience is good; local market sales history is essential; you want someone that's sold in that market, but you don't always have that. What, what's really essential is someone that has the heart; they have the hustle; they have the drive; and they have the motivation to help you be successful. Sometimes even like associate brokers, land brokers with a little less experience, a little younger, but they're hungry, are great. Sometimes residential agents and brokers that have sold building lots in those markets are great, and people that are scrappy; they pick the phone up; they're smart; they do their homework; they understand if they don't know something they're not going to let a lead go to voicemail; they pick up on the first ring; they call people back; they make stuff happen. That's who you want.
So if you go to sell to an investor, a lot of investors are going to pay you a pretty good price that, by the time you factor in for closing costs, it can be pretty close to retail value, depending on the investor, depending on what they're going to do with the land. So I got to tell you, you know, the same reason you sell to an investor is the same reason that you sell on the market to any other buyer, then that reason is that you're a human being on Earth who's got a million and one things going on that have nothing to do with owning this property, and the fact is you received an offer, and the offer price makes sense.