Selling land FSBO help please

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twowheeler
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Joined: Tue Jun 25, 2013 6:19 pm

Selling land FSBO help please

Post by twowheeler » Tue May 15, 2018 11:15 pm

I have some residential land that I'd like to sell and considering FSBO. I know this has been discussed several times on this forum but I didn't see anything in regards to bare land. It seems land lends itself to FSBO better than homes because you don't have to let anyone in. Any tips? What is the best way to get on the MLS? Should I offer the typical commission to buyers agent?

Thanks!

tampaite
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Re: Selling land FSBO help please

Post by tampaite » Wed May 16, 2018 7:30 am

twowheeler wrote:
Tue May 15, 2018 11:15 pm
I have some residential land that I'd like to sell and considering FSBO. I know this has been discussed several times on this forum but I didn't see anything in regards to bare land. It seems land lends itself to FSBO better than homes because you don't have to let anyone in. Any tips? What is the best way to get on the MLS? Should I offer the typical commission to buyers agent?

Thanks!
You can use any flat fee broker for $99 or less to list on MLS and you can offer any commission between 1% to 3% to buyer's agent.

You can post details here too - maybe another bogleheads member may want to buy it! :D

daheld
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Re: Selling land FSBO help please

Post by daheld » Wed May 16, 2018 7:46 am

Maybe not the input you're looking for, but this is coming from someone who just bought a home in what my residential home realtor, who has 15 years of experience as a buyers and sellers agent with tens of millions in transactions said was easily the most complicated, convoluted sale she's been involved in: just get a realtor.

I will confess that some realtors, well, aren't great. Do your research and find one who is motivated to negotiate for you. I would wager that there's a chance someone like this will make you more money than you'd save by not having a realtor and giving them a few percent. In addition, a good realtor will have resources related to legal questions that could be of service. They know what questions to ask and when to ask them. I found that our realtor was an invaluable resource. Stuff that keeps you or me up all night thinking about is second nature to someone who knows what they're doing.

If you're selling to someone you've known your entire life, I could see potentially doing FSBO. Otherwise, pay an expert.

surveyor
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Re: Selling land FSBO help please

Post by surveyor » Wed May 16, 2018 7:59 am

daheld wrote:
Wed May 16, 2018 7:46 am
legal questions...pay an expert.
Like a lawyer. A real estate agent shouldn't be offering a legal opinion. It's a GED and a 40 hour class. At some point technology will bust that racket.

vtjon
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Re: Selling land FSBO help please

Post by vtjon » Wed May 16, 2018 8:04 am

I have noticed around here that a lot of the time the commission on raw land/lots is 10% when using an agent. I assume this is split evenly between buying and selling agents. Of course, you can still offer whatever you want to the buying agent (if any).

daheld
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Re: Selling land FSBO help please

Post by daheld » Wed May 16, 2018 8:18 am

surveyor wrote:
Wed May 16, 2018 7:59 am
daheld wrote:
Wed May 16, 2018 7:46 am
legal questions...pay an expert.
Like a lawyer. A real estate agent shouldn't be offering a legal opinion. It's a GED and a 40 hour class. At some point technology will bust that racket.
That is not at all what I said. Here is what I said:
daheld wrote:
Wed May 16, 2018 7:46 am
In addition, a good realtor will have resources related to legal questions that could be of service.
Our realtor, in our complicated transaction, was able to leverage resources (again, what I said above--NOT a realtor playing lawyer) that her agency/brokerage firm had--i.e. lawyers they can ask questions of. I would never insinuate that a realtor can or should give legal advice.

Thanks for making this fun by taking things out of context though!

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jfn111
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Re: Selling land FSBO help please

Post by jfn111 » Wed May 16, 2018 8:23 am

daheld wrote:
Wed May 16, 2018 8:18 am
surveyor wrote:
Wed May 16, 2018 7:59 am
daheld wrote:
Wed May 16, 2018 7:46 am
legal questions...pay an expert.
Like a lawyer. A real estate agent shouldn't be offering a legal opinion. It's a GED and a 40 hour class. At some point technology will bust that racket.
That is not at all what I said. Here is what I said:
daheld wrote:
Wed May 16, 2018 7:46 am
In addition, a good realtor will have resources related to legal questions that could be of service.
Our realtor, in our complicated transaction, was able to leverage resources (again, what I said above--NOT a realtor playing lawyer) that her agency/brokerage firm had--i.e. lawyers they can ask questions of. I would never insinuate that a realtor can or should give legal advice.

Thanks for making this fun by taking things out of context though!
Bashing Realtors seems to be an encouraged sport on this site.

daheld
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Re: Selling land FSBO help please

Post by daheld » Wed May 16, 2018 8:27 am

jfn111 wrote:
Wed May 16, 2018 8:23 am
daheld wrote:
Wed May 16, 2018 8:18 am
surveyor wrote:
Wed May 16, 2018 7:59 am
daheld wrote:
Wed May 16, 2018 7:46 am
legal questions...pay an expert.
Like a lawyer. A real estate agent shouldn't be offering a legal opinion. It's a GED and a 40 hour class. At some point technology will bust that racket.
That is not at all what I said. Here is what I said:
daheld wrote:
Wed May 16, 2018 7:46 am
In addition, a good realtor will have resources related to legal questions that could be of service.
Our realtor, in our complicated transaction, was able to leverage resources (again, what I said above--NOT a realtor playing lawyer) that her agency/brokerage firm had--i.e. lawyers they can ask questions of. I would never insinuate that a realtor can or should give legal advice.

Thanks for making this fun by taking things out of context though!
Bashing Realtors seems to be an encouraged sport on this site.
I mean, I get it somewhat. Believe me--I know plenty of folks who are realtors that I would not trust to accurately balance a check book much less trust with a half million dollar transaction. But I will also say, again, that our realtor was an incredible asset. I can tell you that I would have 100% not been confident in dealing with all the negotiations we dealt with had I not had someone in my corner who knew what the heck she was talking about.

not4me
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Re: Selling land FSBO help please

Post by not4me » Wed May 16, 2018 8:30 am

I wouldn't offer much of an opinion without a better understanding of the situation. Is this big or small? city or country? (perceived to be) hot or cold area in terms of market? Big or insignificant portion of your net worth? Are you more interested in top $ or fastest close? Etc...

pshonore
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Re: Selling land FSBO help please

Post by pshonore » Wed May 16, 2018 8:30 am

When I was selling RE, typical commission rate on land was 10%. Not sure if thats still the case but you may have trouble finding a buyers agent who will accept 1%. Selling residential land is not necessarily less work than selling a house.

stan1
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Re: Selling land FSBO help please

Post by stan1 » Wed May 16, 2018 8:31 am

You have to start by making an honest assessment of the desirability of the land. It doesn't matter what you paid for it. What matters is what someone else is wiling to pay for it right now. Some land is unbuildable despite someone having sold it as such. Sometimes people pay premiums for a golf course or view lot that won't get returned on resale. If you aren't in a hurry to sell and are going to price it and wait for the "right buyer" to come along FSBO might be a starting point (realtor won't do much except list it and put a sign on the property in this situation).

If the land has complex issues such as road or utility easements then you probably need to work with a lawyer although some local realtors may have expertise but not legal education to navigate this. Attorney might end up being more expensive than a realtors commission. If the land is in a HOA with strict design requirements a realtor who specializes in that subdivision may help avoid buyers who change their minds once they understand the rules. If its in a gated community realtor might help as you won't get drive by viewers. My point is that you have to think through the situation to determine what your objectives are for a balance between speed of sale and the price you are willing to accept. Land can be harder to sell than a home. Pricing can be less certain and the number of buyers interested in land might be much smaller than the number interested in a house.

surveyor
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Re: Selling land FSBO help please

Post by surveyor » Wed May 16, 2018 9:03 am

daheld wrote:
Wed May 16, 2018 8:18 am

That is not at all what I said. Here is what I said:
I didn't say you said that. I quoted two parts of your post - hence the ...

The point is if you need an expert go to and pay the expert. The "legal resources" your agent had access to - who do you think that lawyer was working for?

DeerRunner
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Re: Selling land FSBO help please

Post by DeerRunner » Wed May 16, 2018 9:23 am

I've sold 2 townhomes FSBO. My advice;

Do your research. Every state is different. In your state-
  • What is the going rate on commission? Is the market healthy enough where thats negotible?
  • Some states let you list on the MLS system for a fee. This is what I did. Cost me a couple hundred.
  • If your doing fsbo its your job to accurately arrive at a value for your land. Buyers will challenge you, you need to know where you stand.
  • Some buyers and agents will poo-poo you for doing this, so you'll need some backbone. If you come accross as prepared and reasonable most will have no issues. Listing on your local MLS will give you more authenticity vs. throwing a handwritten FSBO sign up.
  • Who picks the title company? It sort of doesn't matter, but you probably have a right to do so.
  • Read up on differentiating between solid offers vs flakey and sketchy ones.
In my state, VA, the buyers agents real estate company had a title company they used. I said sure, why not. The details were about the down payment, closing date, loan type, etc... I spent maybe 40 hours total on each sale and saved myself @$10k each.

These are a few things. If your resourceful and don't mind doing some reading, its not that hard to do (after the first time :happy) May not be for you if your easily spooked by people (agents) telling you how difficult and time consuming the process is.

daheld
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Re: Selling land FSBO help please

Post by daheld » Wed May 16, 2018 9:27 am

surveyor wrote:
Wed May 16, 2018 9:03 am
daheld wrote:
Wed May 16, 2018 8:18 am

That is not at all what I said. Here is what I said:
I didn't say you said that. I quoted two parts of your post - hence the ...

The point is if you need an expert go to and pay the expert. The "legal resources" your agent had access to - who do you think that lawyer was working for?
I don't think anything. I know the lawyer was working for our realtor's agency. But I am an adult capable of making my own decisions, and the legal questions we had gave them zero advantage in terms of encouraging us to buy the home. In fact, our realtor, at every step, encouraged us to offer less and ask for more in terms of concessions and sellers credits.

Keep on using those ellipses to take things out of context!

bubbadog
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Re: Selling land FSBO help please

Post by bubbadog » Wed May 16, 2018 9:42 am

I sold vacant land as a FSBO and offered a 3% commission to a buyer's agent. I had no problems with the transaction. I will do the same thing in the future with another parcel of land I own. MLS exposure is cheap.

DeerRunner
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Re: Selling land FSBO help please

Post by DeerRunner » Wed May 16, 2018 10:01 am

^^ Good point, don't PO potential agents by not stating their standard, marker rate, commission. Some FSBO people think they'll do it by not providing a buyers agent commission.

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Sandtrap
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Re: Selling land FSBO help please

Post by Sandtrap » Wed May 16, 2018 10:06 am

Flat fee broker with minimal fees and commissions. FSBO.
Have done this many times with better success than Realtors.
The MLS listing is what you're paying for.
Do what you can to advertise on your own, signage, ads, etc.
j

Hockey10
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Re: Selling land FSBO help please

Post by Hockey10 » Wed May 16, 2018 10:50 am

Contact the owners of the adjacent properties and see if they want to buy your land.. Maybe you will get lucky. I once sold a vacant lot by knocking on the door of the next door neighbor. This was in a community that was about 90% vacant lots and 10% homes.

Mitchell777
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Re: Selling land FSBO help please

Post by Mitchell777 » Wed May 16, 2018 5:34 pm

Understand the value. Put a sign on the land and/or other advertisement. We once sold a house, using a realtor, in one day. A guy across the street saw the sign and bought it. Over the years I've sold a house without an attorney and sold a house without a realtor. Although I had no problems, I would not do the former again.

stan1
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Re: Selling land FSBO help please

Post by stan1 » Wed May 16, 2018 7:07 pm

Hockey10 wrote:
Wed May 16, 2018 10:50 am
Contact the owners of the adjacent properties and see if they want to buy your land.. Maybe you will get lucky. I once sold a vacant lot by knocking on the door of the next door neighbor. This was in a community that was about 90% vacant lots and 10% homes.
This is good advice. There's a fair chance the fastest and easiest sale will come through a neighbor who wants more space or doesn't want a house built on the lot (if allowed in the development) or who has a family member or friend who would like to live next door.

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oldcomputerguy
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Re: Selling land FSBO help please

Post by oldcomputerguy » Wed May 16, 2018 7:11 pm

twowheeler wrote:
Tue May 15, 2018 11:15 pm
I have some residential land that I'd like to sell and considering FSBO.
Forgive my ignorance, but what is "FSBO"?
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

123
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Re: Selling land FSBO help please

Post by 123 » Wed May 16, 2018 7:18 pm

oldcomputerguy wrote:
Wed May 16, 2018 7:11 pm
Forgive my ignorance, but what is "FSBO"?
For Sale By Owner

Note to the OP, maybe you could put a couple of used mobile homes on the property and sell it as a village.
The closest helping hand is at the end of your own arm.

freebeer
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Location: Seattle area USA

Re: Selling land FSBO help please

Post by freebeer » Wed May 16, 2018 11:29 pm

One issue with raw land is usually there will be a feasibility contingency and some offers will try to stretch that out so all the planning/permitting risk is during ir, while your property is tied up the value of land that's fully shovel ready can be much higher than true raw land where the value is discounted by a risk factor. Buyers will be happy to buy your land for the raw price but not close unless they can improve it to shovel ready.

One way to deal with this is to do strategic improvements yourself. On two adjacent parcels I have getting septic designs and 2-party well setup approved increased the value by > 10x the cost of the design work, and means I can sell without buyers trying to get lengthy feasibility contingencies.

denovo
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Re: Selling land FSBO help please

Post by denovo » Wed May 16, 2018 11:35 pm

vtjon wrote:
Wed May 16, 2018 8:04 am
I have noticed around here that a lot of the time the commission on raw land/lots is 10% when using an agent. I assume this is split evenly between buying and selling agents. Of course, you can still offer whatever you want to the buying agent (if any).
I suspect it has to do with the value of the land. In an area where land is worth less than 60k, it's probably not worth it to work for less than 5 percent commission each to a seller and buyer

There was another thread I am too lazy to look up where the land was going for several million The commission on that won't be 10 percent.
"Don't trust everything you read on the Internet"- Abraham Lincoln

denovo
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Re: Selling land FSBO help please

Post by denovo » Wed May 16, 2018 11:39 pm

pshonore wrote:
Wed May 16, 2018 8:30 am
When I was selling RE, typical commission rate on land was 10%. Not sure if thats still the case but you may have trouble finding a buyers agent who will accept 1%. Selling residential land is not necessarily less work than selling a house.

See my above reply.
"Don't trust everything you read on the Internet"- Abraham Lincoln

denovo
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Re: Selling land FSBO help please

Post by denovo » Wed May 16, 2018 11:47 pm

twowheeler wrote:
Tue May 15, 2018 11:15 pm
I have some residential land that I'd like to sell and considering FSBO. I know this has been discussed several times on this forum but I didn't see anything in regards to bare land. It seems land lends itself to FSBO better than homes because you don't have to let anyone in. Any tips? What is the best way to get on the MLS? Should I offer the typical commission to buyers agent?

Thanks!

There's nothing wrong with going the FBSO route for land. There's only a couple of things to watch out for.

1. The problem with a lot of real estate transactions (for homes, at least) is people have an inflated opinion of the value of their home even though so many people live in subdivisions where there is literally 500 copies of their home. :P There's no agent to knock sense into them so a lot of FBSO sales don't work out because they don't price it correctly.

I suspect since this is raw land you may need to be quite a bit of research, looking at other listings adjusting for easements or road accessibility or anything that would affect the value materially, to get a realistic sales price.

2. Yes, you should also research the other listings to find out what a fair commission is. If this is really cheap land I suspect you may need to offer at least 5 percent commission to a buyer.

3. You should know where to advertise. Simplest thing is to put out the word with friends and family on Facebook, a bulletin or paper flyer in an area where locals congregate if this is a rural area that has one of those. Contact your immediate neighbors. If you don't know them by name, the County Registrar can usually provide you with this info. If this is a farming area, there may be a local farm bureau. If this is an area that is involved in potential industrial development, find the relevant local Chamber of Commerce or trade publication that is dominant in you area. There's cheap ways to get on to MLS.
"Don't trust everything you read on the Internet"- Abraham Lincoln

vtjon
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Re: Selling land FSBO help please

Post by vtjon » Thu May 17, 2018 2:15 pm

denovo wrote:
Wed May 16, 2018 11:35 pm
vtjon wrote:
Wed May 16, 2018 8:04 am
I have noticed around here that a lot of the time the commission on raw land/lots is 10% when using an agent. I assume this is split evenly between buying and selling agents. Of course, you can still offer whatever you want to the buying agent (if any).
I suspect it has to do with the value of the land. In an area where land is worth less than 60k, it's probably not worth it to work for less than 5 percent commission each to a seller and buyer

There was another thread I am too lazy to look up where the land was going for several million The commission on that won't be 10 percent.
Yes, that's likely true. This is $50-75K. But then I was surprised, when an agent (in a couple of towns over) listed a family member's property at 5% with a listing price of around $50K.

twowheeler
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Re: Selling land FSBO help please

Post by twowheeler » Thu May 17, 2018 3:23 pm

Thanks for all the tips. We reached out to one of the neighbors and sure enough he is interested.
A few details about the property. It is a 5 acre lot, very close to town, in a small neighborhood of nine lots with HOA, all utilities ready to go, farmers irrigation, hot market, very little inventory of similar lots. Another 5 acre parcel sold in Jan for $450k that is not quite as nice. I would expect we could get $475K, maybe 500k. I'm thinking of trying the word of mouth route first since we keep getting inquiries. If nothing pans out in the next couple weeks, then I move forward with fsbo and place it on mls.

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