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Central Oregon Vacant Land Real Estate
Vacant land is often thought of as the most basic of real estate transactions, but can actually be quite complex for both seller and buyers. Whether you are dealing with “unbuildable” recreation-only lots, vacant lots in established subdivisions, or large acreage farm & ranch offerings, you’ll find that there are many factors that can come into play during the course of a transaction – for both buyers and sellers. The sections below will give you a basic introduction of some of the more common considerations that can come into play.
Ten Tips For Sellers
Even in the best of market conditions, selling a home can be a challenge. Selling vacant land can be even harder. The average, well-priced house can usually sell in a month or two. However, vacant land can take 6 to 18-months to sell under the same conditions as only a certain amount of buyers have the imagination, determination, and means to purchase bare land. Here are ten tips to keep in mind when listing vacant land for sale.
01. Understand Who Your Buyer Will Be & What They Need To Know
When you put your home on the market, you are usually targeting buyers in a certain price range and/or those who want to live in a certain area. Selling vacant land is a little different in that buyers will be buying based on specific uses. A certain percentage will be looking for a lot upon which to build their dream home. Others may be looking for recreational, business, or agricultural uses. Some may even be developers wanting to subdivide a parcel into smaller lots. Once you have identified your likely buyer, put yourself in their shoes and imagine what they would want to know about your property. Your real estate broker can work with his/her local title company to pull together information on zoning, easements, schools, utility providers, nearby attractions, etc. But you can assist by helping to provide firsthand information the homeowners association, water rights, neighbors, and any other factors that might attract a buyer. The majority of that information won’t appear in a listing or even need to be attached to the broker side of the MLS, but it should be “in hand” the moment your property is listed so that questions from interested parties can be answered as soon as they are received. If you and your broker are prepared and knowledgeable about your lot or land, you will make the process easier for potential buyers and inspire faith with solid answers to their questions.
02. Zoning & Government Regulations.
You need to know all of the rules and regulations that affect your vacant property and its potential uses. Many of the questions from potential buyers will be directly about this. It also informs your marketing strategy. For example, if you know your lot is an unbuildable, recreational-only lot near Prineville Reservoir, your listing can (and should) address and reflect that directly. Your broker can help you identify relevant zoning codes. And your local community development department (usually a branch of your local city or county government) can answer any specific questions you may have regarding potential uses.
03. Make Intelligent Improvements.
Many sellers believe vacant land is no longer considered vacant if it is improved upon. However, there are a number of improvements that can be done to make a vacant lot or parcel more appealing to buyers. Providing utility hook-ups for future development is one. Installing a well and/or septic system could be another. A new fence along the property’s border could be a good idea. Even something as simple as clearing overgrown weeds from a property could make all the difference in selling it. Your real estate broker can help generate potential ideas with you and hiring an appraiser can put a potential dollar amount do them.
04. Have Your Land Ready.
This goes hand in hand with the paragraph above. A first impression can be everything in real estate – whether in a photo or in person. Just as you would stage a home for a photoshoot, a showing, or an open house, you’ll want to take the same sort of care when selling vacant land. You’ll want to make it as appealing as possible by removing any trash, mending broken fences, pulling significant weeds, etc. Depending on the location and size, it’s not unheard of for owners to plant wildflowers to make their vacant lots more attractive. It is also worth considering having a survey done in advance. At the very least, you’ll want the corners of your property located and marked. But you decided to go the extra mile and have a drawing made that shows building setbacks, utilities, easements, significant natural features such as trees, rock outcroppings, springs, streams, view corridors, and topography (in one-foot increments for small lots, and five or ten-foot increments for larger ones). The more useful information you can provide, the more it can help buyers to see the potential in a property and encourage a sale.
05. Understand Your Real Estate Market.
The vacant land market is almost always less volatile than the market for existing homes. Simply stated, there are fewer vacant land buyers than there are buyers looking for homes. Generally speaking, you’ll need more patience as you receive fewer calls while your listing takes longer to sell. That’s not to say there aren’t exceptions to this rule – such as in June 2005 when roughly 200 vacant lots at Brasada Ranch sold in a single weekend.
06. Price It Right.
Just like pricing a home, accurate pricing can significantly affect your success in attracting buyers. Price it too high, and you’ll scare away buyers and your property will take longer to sell. In established subdivisions, it may be easier to determine the current market value for a vacant lot based on recent sales than it is for raw land in a more rural setting. Additionally, vacant land prices can vary widely depending on the purchaser’s intended use of the property. A high-end home developer, for example, might be willing to pay more for a given lot than an investor who is buying a vacant lot in the hopes that it will appreciate in value for a future sale. Pricing is often a balancing act between your own needs, the needs of your anticipated buyers, and perceived market values. When you list, you will often have to choose between waiting to get the highest price or pricing below market value for a quicker sale.
07. Offer Financing.
While there is no shortage of lenders for home purchases, there are comparatively few lenders with loan products for vacant land. As a seller, if you are willing and able to offer some sort of “owner carry” financing, that can potentially open up a larger pool of potential buyers for your property
08. Show Your Property In Its Best Light.
The challenge in marketing vacant lots and land is that you are asking buyers to imagine the possibilities. After all, there isn’t an existing home or building that they can walkthrough. Instead, you are going to rely on photos and video to tell your story. In general, you’ll want your real estate broker to hire a professional photographer who will photograph your property in its best light – usually around sunrise and sunset. For large lots or even lots in established neighborhoods or resorts, your broker may want to hire a professional drone photographer to create a short video that not only shows your property, but also the surrounding community amenities. Your broker should also offer to “walk the property” with a potential buyer to further point out significant features and selling points.
09. Target Lot & Land Buyers With Online Listings.
The vast majority of buyers find their real estate purchases online. In fact, a 2018 study by the National Association of Realtors found that 50% of buyers found their home online rather than through other means (yard sign, newspaper ad, open house, etc.). Choosing to work with a licensed real estate broker is your first step into getting your listing onto the local Multiple Listing Service (MLS) – which in turn will syndicate it out to associated member websites. One of the many advantages of listing with a Berkshire Hathaway HomeServices broker is that your listing will not only appear locally but also globally across several thousand different real estate sites.
10. Online Listings Shouldn’t Be Your Sole Market Strategy.
While online listings are the most effective way to list a property, they are not the only way. Don’t underestimate the power of a sign in the ground, a local newspaper ad, or even a friend, relative, or neighbor. These days, many real estate “for sale” signs are doing away with flyer boxes in favor of perma-flyers – which are slightly larger flyers, printed on an eco-friendly, durable material with a UV coating, and attached to the signpost just below the traditional “for sale” sign. Perma-flyers usually have a QR code that can be scanned with a smartphone or tablet to take potential buyers to the online listing or even website created solely for that particular listing. In addition to visible signage, you may also want to have your broker target your neighborhood. If you were selling a home, most likely, your neighbors would be interested in the price and what it ultimately sells for, but they wouldn’t be interested in buying it themselves. Vacant land is more appealing. It is the opportunity for neighbors to increase the size of their own property, control what is built (or isn’t built) next to them, or simply create a larger buffer between homes. The other group to consider targeting is homebuilders. Large, buildable acreage that can be subdivided is always attractive to large-scale builders, while smaller lots can present equally attractive opportunities to builders who may only do a few homes a year.
Like most real estate types, listing vacant land for sale has its unique challenges and strategies. The tips above are several ways we’ve seen to attract potential buyers and sell your land more quickly. Whether you are just beginning to think of listing your property or would like to re-energize your efforts, we hope you find the above suggestions helpful in your quest to reach potential buyers.
Ten Tips For Buyers
Though it may seem simpler than buying a home, the purchase of vacant land can actually be more complex. When you buy a home, you avoid many of the decisions you’ll need to deal with when purchasing vacant land to build on. Here are ten tips to keep in mind as you look for that perfect lot.
01. Location, location, location.
This old real estate cliché also happens to be the most basic desire in any land purchase. One could easily make the argument that ultimately nothing is more important that location. If your intention is to build your dream home, don’t buy land that you can’t build on. Additionally, things like view, proximity to schools, shopping, friends & family, your office, etc. are going to have a significant influence on the location of the piece of property you purchase. If you are land purchase will be for a business, don’t buy a lot that is isolated from your customers and employees or doesn’t support your business model. And if you are buying to invest, don’t consider a land purchase that doesn’t have future resale value.
02. Don’t Ignore The Values Of Existing Homes In The Neighborhood.
One of the most appealing aspects of buying land to build your own home is the ability to control the design and get the exact home you want. However, as discussed in the New Construction guide on this site, it’s generally not a good practice to build above the means of a given neighborhood. If your home is built for $350 a square foot in a neighborhood of homes that were built for $150 a square foot, it will likely be very difficult to sell your home down the road. And if it does sell, it will likely sell at a loss. That’s assuming it gets built at all. If it’s overpriced for the neighborhood from the start, it will be difficult to get approved for a construction loan.
03. Know The Costs Involved.
There are numerous expenses you can incur when buying a vacant lot. At the low end, you may end up spending a few hundred dollars for a surveyor to verify the property boundaries prior to the close of the sale. Or you may need to install utilities (i.e. a well, septic system, solar power, etc.), connect to existing utilities, obtain title insurance, hire a land-use attorney to help create easements or a subdivision. If you are building, you’ll have design, permit, and construction fees as well. If you’ve never done it before and don’t do a little research beforehand, it can easily overwhelm you. But if you take a little time to familiarize yourself with the process, you’ll be more prepared and comfortable with what can be an extremely rewarding journey.
04. Zoning Restrictions.
What can and can’t be done with the land is governed by zoning laws. Just because you own a piece of land, doesn’t mean you will be allowed to build a house upon it. It needs to carry some sort of residential zoning designation. Alternately, if it carries another zoning designation, say commercial or industrial, home construction would need to be an allowed “conditional use” within that zone. It’s usually not a problem for your real estate broker to look up the zoning on a given piece of real estate. However, more specialized questions relating to zoning restrictions should always be taken to the local community development department for “official” answers.
05. Ordinances And Covenants.
Many vacant lots are to be found within developments that are recorded subdivisions. Lots within these neighborhoods typically have Covenants, Conditions, and Restrictions (CC&Rs) upon them that you will need to be aware of before you make your purchase. In many (but not all) subdivisions, a Home Owners Association (HOA) is in place to collect monthly fees and enforce these rules. CC&R’s are specific to the neighborhood they apply to are basically deed restrictions, which separates them from the larger zoning code. Land within city limits may also fall under the auspices of city ordinances that further restrict certain behaviors or land uses (for example, the way trash removal is handled). HOAs, CC&Rs, and City Ordinances may all sound like restrictive nuisances, but in reality, they are in place to prevent nuisances from occurring. Knowing and understanding them can help you to determine if a certain land purchase is right for you or not.
06. Utilities, Access, & Easements.
In cities and towns as well as designated resort areas and suburban subdivisions, road access is rarely a problem. But in rural settings, it can present a significant issue if the lot in question can potentially be cut off from a major road or is only accessible via a privately owned and maintained road. Land that isn’t accessible by public roads may not have access to established water and/or sewer systems and so a well and/or septic system would need to be installed to handle those utilities. The same goes for electricity, gas, cable TV/internet, etc. All of which are problems that have established solutions, but not without their associated costs. But getting back to access, the ability to use a public road guarantees a route to undeveloped land. However, when private roads are used, the situation becomes a bit more complicated and one or more easements will likely be involved. Easements are deed restrictions upon one property than benefit another. They can be for access (i.e. a driveway), or utility lines, or even such things as view corridors and wildlife migration paths. Unless it’s a completely private transaction, during the course of a vacant land sale, a title search will be performed by the escrow company that will determine any existing related easements in place. If an easement is needed but doesn’t yet exist, it will need to be determined and recorded. That is a legal process that is outside the scope of this guide and will likely require the services of a real estate attorney.
Just as you would have a home inspection done with buying a house, it is in your best interest to have vacant land inspected. In most cases, you’ll want to have a licensed surveyor locate and mark each corner of the property. With newer subdivisions this may be a non-issue, however, the longer an established property has been vacant, the more important this is as neighbors, intentionally or not, may have encroached beyond the property lines. If you are buying land to build on it, you will likely require a more in-depth survey that shows topography, utilities, setbacks, easements, significant natural features, etc. as required by your local building department. Additionally, you may need to order a soils report as part of any structural engineering and/or environmental tests to check for potential contamination from previous uses. Floodplains and significant wetlands can also pose threats to future development and should be identified prior to the close of any sale. These days, many counties have sophisticated mapping tools that have located these areas. However, if your purchase is in a county that doesn’t have such resources, it may be in your interest to hire an expert to map them for you.
If you are buying land to build on, at some point you are going to have to deal with permits. Just about any development will require a specific permit. Wells, septic systems, demolition of existing structures, and construction of new ones all require permits. In fact, the construction process itself will require separate permits for many of the subcontractor work including plumbing, electrical, HVAC, etc. It may sound like an expensive and overly fussy hassle, but when it’s all said and done, you will have a completely legal and sound investment.
As mentioned above in Ten Tips For Sellers, paragraph #7, land financing is harder to come by than home financing. Because there is no structure on the land to use as collateral for a loan, many purchases are cash transactions. As mentioned above, seller financing can also be an option. Construction loans can also work, as the house or building you construct can serve as collateral on the loan.
10. Avoid The Neighbors (For Now).
When considering the purchase of a home, speaking with the neighbors can be a great way to familiarize yourself with the neighborhood. This can still be done when purchasing a vacant lot but requires a bit more tact and restraint. Neighbors who are used to having vacant land adjacent to their own may become upset at the prospect of a new home or building and might try to keep you from building. In general, it’s often better to make friends with the neighbors after a home is built and you have moved in. It’s better to avoid a neighbor dispute before you’ve even broken ground.
Purchasing vacant land can be just as rewarding as buying a home. Perhaps even more so. However, you should be aware of what can be involved before you start your journey. If you have any questions, please reach out via the contact form and/or information at the bottom of this page.
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