Why offer your Maine land for sale by owner? Most who consider this option will say "I want to save the commission that would be paid to a real estate agent or broker". So what do you need to know and do to sell your land yourself?
THE PRICE IS RIGHT - RIGHT?
Assuming you have a good idea of what you own, with good property boundaries, good title with insurance and legal access the first thing you need to do is establish a price for your land that will cause it to sell. Because there is no rule of thumb that will dependably set a price, you need to do a lot of research of sold properties and those land parcels for sale that your real estate will be competing with for buyers. This is critical for two very important reasons. First, you need to be sure that you do not underprice your property. Obviously if you do you will be leaving cash on the table. Second, and more important than the first, setting a price too far above market value will result in no sale at all or may cause you to sell below market value many months or years later. Accepting a less than market price after a longer time waiting for your cash, your losses may be hard to calculate.
FINDING MONEY
Next, you need to be prepared with ways for prospective buyers to get financing. Do you know what current requirements are for credit score, down payment and acceptable income to debt ratios that will satisfy conventional lenders? Call a few and see what the underwriting guidelines are. Are you going to offer owner financing? If so, what will your terms be? Do you have an attorney and loan originator ready to go with the legal documents and disclosures?
CYA
Do you have a Purchase and Sale Agreement ready to fill in when you locate the right buyer? If not, you need to see your attorney and get one drafted. Have you prepared disclosures about the land that will help limit future liability? These and other legal details should be covered before the property is shown or marketed.
FSBO MARKETING
Now that you have decided on an appropriate asking price, not too low not too high, you need to attract prospective buyers; hopefully lots of them. The amount of land out there for buyers to see is vast. How do you make your property stand out? Spend some money and invest some time. To reach buyers interested in your land you need to understand who you are marketing to and how to reach them. What are the minimum of things to do to get your property noticed?
With nearly 95% of all buyers using the internet to locate property, you will need to build a web page or pay someone else to do it. Then you will need to buy space on sites that will get your webpage found. There are a number of webpages that do not charge for listings but most usually don't appear high in searches. Do not discount print advertising as some prospective buyers still look there. Which publications you should use depends on your target market. Also, have you put together an informative package of details, high quality photos, maps, disclosures etc. that buyers want to know and see. You need to do this because most buyers outside your immediate area will want those details before making a trip to look at your acreage.
QUALIFYING - SHOWING - NEGOTIATING
Now that you are getting emails and phone calls from prospective buyers; how do you separate qualified buyers from the unqualified? Ask a lot of questions. If you need to travel any distance to your property gasoline alone can eat into your bottom line. So showing your land to someone who is not ready, willing and able to buy should be avoided. Do they have a down payment, good credit? Are they ready to buy now or next year?
Showing your land should be easy for you. Make a plan to show the property's best features. Be sure to bring a map and your compass. On land of any substantial size you can get confused walking in the woods while talking with someone. Getting lost in the Maine woods is a sure way of turning off a prospective buyer.
It pays to make a plan and try to stick with it when negotiating a transaction. Decide what your bottom line is and stick with it. This decision should be made with the knowledge you gained while studying the market data mentioned earlier.
WRITE THE OFFER - DISCLOSURES - ESCROW MANAGEMENT
You had a successful showing and your customer wants the land. What's next? Fill in the purchase and sales agreement you got from your attorney. Enter the names, dates, price, terms, disclosures etc. Both of you sign it, get that deposit to seal the deal and consider letting your attorney keep it in his/her escrow account. Follow through with any due diligence items agreed to in negotiation. Finally close at the location both you and the buyer agreed to. Let an attorney or title company handle this to be sure all required tax forms are done. You don't want Uncle Sam or the state tax man looking for you and your buyer after a closing.
IN CONCLUSION - WILL YOU SAVE MONEY
If all of this seams overwhelming consider this. Why do buyers like to buy for sale by owner property? Why would they go to an owner who has just one property to offer them? They look directly with the owner because they hope to discount the price by the cost of a real estate brokerage commission or more. Wait a minute, how is it possible for you and the buyer to both save on the commission?
Unless you are a professional land dealer (often mistaken by buyers as a "for sale by owner") with multiple properties available and all systems above in place, you are going to pay a real estate commission. The real question is do you want to pay it to the buyer of your property, or to a professional land broker who will take care of all the above items, takes the risk of paying the cost of all or most of the marketing expenses, and not get paid unless and until the land is sold?
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