Welcome to the John Hall and Company Selling Land in Alabama series. This is part four in the series. Go here to read, part one written by Pete Hall, part two written by Hoke Smith, & part three written by Josh Hall
As a land agent, initial conversations with clients usually involve cost associated with buying or selling a piece of property. These expenses vary among transactions, but it important to understand basic structuring of how these costs are distributed. Sellers will be responsible for certain closing costs along with real estate commission to the listing broker. Other up-front cost may be required to make the property suitable to sell.
Up- front costs to the seller are not always necessary, but can greatly improve chances of maximizing profits on a particular sale. A property owner will want to make needed changes to improve the aesthetic appeal for prospecting buyers. A key component to this would be having a good road system established. A good internal road system will be appealing to a future owner and also gives curb appeal with accessibility during showings. Cost of an internal road system is dependent upon condition of existing road and the size of the tract. Other important aspects a property owner can adjust for are maintenance expenses such as mowing, land clearing, spraying, planting, etc. These costs are relatively minor part of the transaction but can go a long way in getting the property sold.
A second expense a seller may want to take into consideration is the completion of a survey. A survey is not required, but is a great asset in selling a piece of property. A buyer will often want to have a clear understanding of exact acreage and boundary lines before moving forward with a purchase. This will give assurance of no underlying issues such as encroachments or any kind of boundary line disputes. Costs of surveys vary depending on size and shape of the property. It is best to consult with your listing broker to determine if having a survey done is justifiable before putting a piece of land on the market.
After an agreed upon sales price, funds will then be settled at closing. While majority of fees are negotiable as to who pays between buyer and seller, there is often standard fees assigned to each party. Sellers often account for cost such as agent’s commission, deed preparation, prorated taxes, attorney fees, and any judgments or liens tied with the property. Commission is an agreed upon percentage of the sales price between agent and seller and is the primary expense of the seller.
All land sale transactions are unique in their own way but this gives an outline of standard costs applied to the seller. All of these factors emphasize the need to consult with a qualified broker. Selling a piece of property can seem like a big task but having an experienced land agent guide the process is critical in obtaining a desired profit.