Selling Land by Owner in New Mexico without the use of a broker or real estate agent presents a unique set of challenges. In this article I will address some important topics to set you up for success.
Why selling land is different than selling a house
The difference between selling a home and selling vacant land is that with selling a home, you have rooms and features and appliances to impress the buyer, and with vacant lots, you have…,well… you have dirt.
Selling land by owner in New Mexico is one of the hardest things in the real estate market to do for a number of reasons. Selling land is all about marketing the potential, which can take some creativity and imagination. The good thing about selling land is that buyers usually already have a plan for what they want to use the land for. So if you listen carefully and use the information that they give you, you can tailor your marketing to fit their unique situation. But there are a few steps that are required before you can officially put your land up for sale. Here’s how it works:
Planning to sell your land in New Mexico
The first step to selling your land in New Mexico is determining what type of buyer you’re looking for. For instance, you could sell to residential buyers, commercial buyers or investors. Each of these target buyers has different goals with the land and needs different information from you. If you own a lot in a residential neighborhood, for example, don’t automatically assume that your target buyer is someone looking to build a single-family home. Know how your property is zoned and the realistic potential for rezoning. Do a little research to find out what your city permits, what lots have been rezoned and determine how to reach potential buyers for each possible use. Provide them with the information they’d need to know before buying your land.
Get All Necessary Documents For Your Land
Start out by obtaining all of the legal documents that show what annual taxes have been paid on the land and any additional expenses relating to the property. In this step, you can figure out details about zoning and find out if making changes to the zoning is possible. You can get most of the info on the county internet site or by calling the planning and zoning department of the county where the property is located in. If you’re the sole owner of your property, things are easy and you likely can do it on your own. However, if there is more than one owner, you might consider talking to a real estate professional or an attorney to get all necessary documents.
Pricing land in New Mexico
Getting the right price point is somewhat difficult since there are usually only a few comps, if any. The best way to get a solid market value is to hire an appraiser to get a professional quote about how much your land is worth. A professional appraiser will cost you around $500, but they will be able to give you a clear idea of what similar lots in the area are selling for so you can set a competitive price for yours. It’s important to remember that an appraisal is still an estimate, and the temperature of the market has a lot to do with how much land will sell for. In slower markets, land can sell for much less than the appraised value, and in hot markets, it can sell for much more.
The second best way is the assessor’s valuation on your property taxes. The assessed value can provide a starting point, consider factors like whether your property has utilities to the property line, views, zoning and any preapproved building plans to determine its worth. Sure, location is always one of the most critical factor. Finally, the value of your land will be based on many factors, such as the proximity to a busy road, zoning requirements, the layout of the land, proximity to local conveniences and amenities, and overall desirability of the property. A lot of things must be factored in to get a realistic price for your land. Some sellers purposely list their land below the appraised value to encourage multiple bids and hopefully start a bidding war
Do I need a land survey?
This is a question we get asked regularly from people who are selling land by owner in New Mexico. We suggest having a land survey done when selling land by owner, to establish the physical boundaries of the property and any issues with the land that could help or hurt the sale. Obtain copies of prior surveys so you can give the buyer an idea of the original state of the land and what can and can’t be done to the land to change it. However, if you sell to a professional buyer, usually this step can be omitted.
Focus On First Impressions
Since you don’t have a gourmet kitchen, a nice bathroom and a pool to “wow” buyers with or gorgeous landscaping or modern architecture to impress them, you need to work with what you’ve got to make the property as desirable as possible. Clear out dead trees, get rid of debris, and make the property look appealing. Some sellers plant wildflowers to add a pop of color and natural beauty to their land. It’s a good idea to take pictures of your lot from various angles and at different times of the day. Take pictures of your lot during the different seasons as well, so buyers can get a clear idea of what they’re buying. The better the first impression, the easier a potential buyer makes a decision.
Know Your Land Buyer Market
When it comes to advertising your land, it is important to know the types of land buyers who you are marketing to. If most of the land in your area was purchased by young families looking to build their dream home and raise a family, market your land as a place where they can do those things. Focus on proximity to schools and family-friendly attractions, and focus your marketing strategies in places where these buyers will see them. If on the other hand, most of the land around you has been sold for commercial purposes, you will have to advertise differently. If you’re not quite sure how to reach your target audience, a real estate agent can help you get your property in front of the right types of buyers (for a fee of course)
The use of both traditional and non-traditional marketing plays a big role in reaching the right buyer. Have a sign made with your contact information and basic details about lot size, price, etc, and post it in a high traffic area. Use websites tailored towards the buying and selling of vacant land and utilize social media to reach more people. Again, a real estate agent can help with this part too, but they’ll charge you for their services.
Making the sale
This is where it all comes together. You have marketed your property, you found a buyer who wants to buy your land and now the real estate transaction has to be closed. Writing a legally enforceable contract for sale with your buyer means spelling out any contingencies like the buyer obtaining financing if needed and doing due diligence to ensure the property suits intended needs. Look online to review real estate land contracts for your state to ensure that you don’t overlook crucial factors. Processing the sale through an escrow at a title company will ensure that there are no liens or other claims to the deed that could cause problems down the road. Title companies also make sure that all legal details are in order, all documents are properly prepared and signed and the deed is officially recorded.
Decide whether you are going to offer owner financing, a way for the buyer to pay you in smaller, monthly payments, (plus interest), instead of getting a large loan from the bank. Owner financing attracts more buyers because they can avoid going through the mortgage and lending process at the bank. There are two ways to do this. The first way is to have the buyer sign a promissory note committing to paying the full amount and then transferring the title for the land from your name to theirs. The other way to sign a contract that promises the title will be transferred to them after they pay the agreed upon price. If you do offer this type of financing, do a credit check to make sure the buyer is creditworthy and has the means to make the payments on time.
Selling land on your own can seem like an overwhelming task, but broken into smaller, more manageable steps makes it much more doable. You can save time and money by skipping the middleman (a real estate agent) and doing the behind the scenes work on your own.
The most important thing to remember is that selling your land is all about selling the potential. Without bells and whistles to attract the buyer, you must pay close attention to their intentions and help them visualize what the land could mean for them and their future.