Back in the day, there was so much available land in the U.S., especially in Kansas and other Midwestern and Western states, that the federal government was giving it away for next to nothing. Thanks to the HOMESTEAD ACT OF 1862, settlers who made their homes on land and stayed there for at least five years could take ownership of up to 160 acres, all for the price of a small filing fee.
Today, it’s obviously a different story. Though the U.S. is still a pretty big place, no one’s just giving out parcels of land anymore. If you want land, for development or any other reason, you have to buy it. That can be great news for land owners! But before you waltz out and put a “For Sale” sign on your land, it helps to understand how to sell land and how selling land is different from selling other types of real estate, such as a home.
One of the most significant differences between selling land and selling a residential property is who the buyers for the properties will be.
Homebuyers tend to have very different expectations than land buyers. Knowing those differences and how to cater to the needs of your buyers will help your property stand out and sell faster.
While it can take some work to find out what some people want, that’s just not the case with homebuyers. They aren’t going to play their cards close to the chest or make you guess about what they’re looking for. No, homebuyers are an upfront bunch. They know what they want, and if a house doesn’t deliver, they’ll let someone know — just watch an episode of House Hunters if you don’t believe us. Homebuyers care about the bones or structure of a home. They’re about to spend their life savings on a property and most likely take on years of debt. They want to be sure they’re not buying a cardboard box or a “house of cards” that will tumble down the first time a tornado or storm blows through.
That said, while homebuyers do care about the house being well made and structurally sound, they also tend to have their eyes on the cosmetic details, too. Even small, easily changeable features, such as outdated carpet or a lackluster front entryway, can be enough to turn potential buyers off and cause them to head for the hills. Homebuyers also have their eyes on the layout and design of the house. Is it modern, with an open — but not too open — layout? Is the kitchen big enough? They want to be able to envision themselves living there, comfortably entertaining friends and family, relaxing outdoors on a warm, sunny day and enjoying modern amenities at home.
A homebuyer is also going to look at the land the home sits on, but his or her expectations for that land are going to be different from those of a land buyer. Homebuyers are going to worry about the yard being big enough for their kids to play in, or about whether or not they have enough space for a pool or a garden. They’re also going to be concerned about the neighborhood. Do the people who live nearby seem friendly? Are there community events or common areas, such as playgrounds or parks, nearby?
Like homebuyers, land buyers know what they want, and they’re going to let you know it. It’s just that their needs and desires tend to be a little more pragmatic and practical than homebuyers. You won’t find them fussing about carpets or kitchens. Instead, land buyers will be looking for a property that is flexible and that they can customize to fit their needs. If it’s zoned for one thing, they’re going to want to know if they’ll be able to change the zoning, or if the current zoning is appropriate for their project.
You always hear about location whenever anyone talks about real estate. For example, a poorly maintained, dilapidated house might cost a fortune because it’s in a highly desirable part of town. Meanwhile, a piece of land that otherwise has a lot going for it might sell for a song because it’s in a remote area without a lot around it. Land buyers are going to be more interested in a property that’s in the right location than one that’s more far-flung. For example, a buyer looking to build up a housing development might be more interested in land that’s near the Kansas City metro area, as the houses built on that land will be more likely to attract buyers, especially buyers who work in the metro area. Other land buyer-specific concerns include:
Of course, if you’re selling land for a specific concern, such as recreational use or agriculture, there are many other concerns or wants your buyers are going to have.
While there are some similarities in technique when you’re selling to home buyers or land buyers, you’ll need to take a slightly different approach when you’re selling land versus a home. The one technique for how to sell a piece of land that is the same for home sales is using imagery to help buyers get a feel for the property and to help them get a sense of what they can do with it. For example, when you’re selling a home, you want to include plenty of photos with the listing and hold open houses so people can get a feel for the house. You want to clear out clutter and stage your home so buyers can visualize themselves living there, without being distracted by photos of your kids. With land buyers, it also helps to have lots of images, such as photos of the various features of the land and maps of the property. Looking at the land and viewing maps of it can help your buyers visualize how they’ll use it, and how the land will help them reach their goals.
When you’re selling a home, you want to give buyers all the details about it, such as a list of all projects you’ve had completed and a list of all updates and maintenance work performed within the last decade. You also want to show off the most desirable areas of the home, such as the kitchen or recently renovated bathrooms. Buyers are looking for details on the community, such as nearby schools, the friendliness of the neighborhood and property tax information. You should also tout the key features and benefits of the land when you get ready to sell it. Why should someone buy your tract of land and not the one a few miles down the road? What is the soil type? Is the view the best in the area? Are there interesting features such as creeks or timber? What is the topography? What’s near your land? When you’re selling land, you might have a potential buyer base in your backyard. It’d be peculiar for one homeowner to buy their neighbor’s home, but it’s not so weird for a neighboring farm or another nearby landowner to consider buying the property that’s just next door, so to speak. It could be your neighbors have been looking to expand their farm for some time now. You selling your land provides a mutually beneficial opportunity.
Things can move fast in the residential real estate market. Homes can seem to fly off the shelves in some cases when the number of people looking to buy outpaces the number of people trying to sell. Kansas City has recently seen its version of a seller’s market, as housing inventory has DROPPED BY MORE THAN 55 PERCENT between 2012 and 2017. Desperate for a house, some buyers are doing crazy things, like making offers without seeing a property and agreeing to finalize the deal without a home inspection. You likely won’t see that kind of action when you’re selling land. It’s usually a much quieter market. You won’t have buyers trying to flatter and woo you with cookies or videos. In fact, after you list your land for sale, even if the price is right and the land ticks all the boxes, you might hear crickets, at least initially. It’s just going to take longer for you to sell a parcel of land than it would to sell a house, since there are fewer buyers out there.
When you’re selling land, it helps to think like a buyer. Put yourself in their shoes and make a list of what they want, what they might be concerned about and what else they need to know about the property.
Imagining what your buyers might ask can help you decide what information to include in your property listing, and can help you fill in any gaps in knowledge. Here are just a few things your buyers are going to want or need to know:
If you don’t know the answers, you want to do some digging to find them out. That research means a trip to your local historical society or diving into public records.
One thing selling land has in common with selling a residence is that you’re going to need a stack of paperwork before the deal is done. You can’t just shake hands with a buyer, take the cash and be done with it. Here’s a list of the documents needed for selling land, when you need them and why they matter.
When people are selling their homes, they hear a lot about the value of staging to make the home look better and to speed up the sale process. While you can’t really “stage” your land — unless you want to strategically place a few cows or sheep here and there to make farmland look more “farmy” — there are several things you can do to speed up the process of selling your land.
As with selling a residential property, you have a few options when it comes to the methods you can use to sell your land.
One of the best ways to sell land in the Kansas City metro area is via auction. SELLING LAND BY AUCTION has several benefits over other options. For one thing, it can significantly speed up the time it takes to make the sale.
When you sell land more traditionally, either for sale by owner or by working with an agent, you need to wait for the buyers to come to you, usually on their own schedule. With an auction, you set the time and date of the sale, and potential buyers come then. Another benefit of selling your land by auction is that buyers end up bidding and competing with each other for the property. You might expect to get a specific dollar amount for your land, but if it ends up being in high demand and a bidding war breaks out, you might walk away with a lot more. You can sell pretty much any type of land at auction. Cates Auction & Realty Company has experience with a variety of land types and uses, including:
Fill out a PROPERTY ANALYSIS and see if selling your land at auction is a good option for you.
You might also try to sell your land by promoting it to potentially interested friends and neighbors. Maybe the person who owns the land next to yours is looking to expand, or a friend is hoping to get into real estate or property development. The major drawback of trying to sell your land through word of mouth is that you might never talk to the person who would pay the most or you might not find anyone who’s interested in purchasing it at the moment.
Some people prefer to cut out the middleman when selling property, which means selling land without a Realtor. If you go the FOR SALE BY OWNER (FSBO) route, you don’t have to pay a commission to an agent. The drawback is that you’re likely to sell for less than you would at auction, and selling land privately might take considerably longer for the sale to go through.
Private sales of land also require more work on the part of the owner. You have to manage all the advertising, negotiations and paperwork yourself! For owners, selling land by yourself means you will have to do research to figure out who to target with your marketing. You will also need to list the property on your own, create advertising materials like signs and make the land look presentable for potential buyers.
Once you have found a buyer, you will need to negotiate with them to find the right price, then work through all the paperwork that accompanies a large sale.
For some landowners, the idea of working with an agent is appealing. Real estate agents, especially those who specialize in land sales, know the market well and can help you get a reasonable price for your land. But the problem with working with an agent is you have to wait for the buyers to come to you. When they do come, they are often the ones dictating the terms of the sale, meaning you might end up getting less for your property than you had hoped.
If you’re looking to sell your land yourself, be sure to take notes while completing all the previous steps, like gathering necessary documents, hiring a land surveyor and taking photos of the property, so you know where you are in the process. Since you will do all those things yourself, you should make sure that you keep all the necessary information organized to make the selling process more manageable.
Beyond that, you should develop a plan for a payment strategy. There are two main options you can offer when selling your land.
Using this process, interested buyers go through a mortgage and lending process at their bank. This way, buyers may pay the full price of the property with help from a bank and then pay the loan off over time.
Many people who buy land with a home on it use loans or mortgage payments to pay off the cost of the property. While loan payments may be an attractive option for sellers hoping to be paid upfront, buyers often want a more flexible payment option.
If buyers do not want to rely on a traditional mortgage, owner financing is an alternate option. As a seller, you can offer owner financing in two ways — a promissory note or a contract. With a promissory note, a buyer promises to pay the full price of the land, and you transfer the title to their name immediately. A contract works the opposite way. Here, you promise to transfer the title to the land after the buyer has paid the agreed-upon price.
If you choose to offer this option for repayment, you should do some additional research through a credit check to determine whether a buyer has the means to make timely payments.
Cates Auction & Realty Company has been working with property owners and selling land at auction since 1942. We use accelerated auction marketing methods and competitive bidding to generate interest in and increase the market value of your land. We’re committed to getting the best price for your property, in the shortest amount of time. To learn more about the benefits of selling your land at auction, CONTACT US TODAY.
In an unpredictable economy, selling real estate can be a frustrating and sometimes intimidating process.
Auction is one of several choices available to sellers and it offers many unique benefits to property owners who wish to maintain control of the selling process. When buyers search for property or homes for sale in Kansas City MO and surrounding areas, they recognize a Cates Auction property as a unique opportunity.
Whether you are just beginning to consider selling or you’ve already tried multiple methods, you are wise to explore the auction option. This website has a number of resources to assist you in this process. The “Auction vs. Ordinary” section will give you a side-by-side comparison of auction and a traditional sales approach. In the “Questions & Answers” section we’ve collected some of the most common questions sellers have asked us over the years and provided the answers for you.
The best way to see if auction is right for you and your property is to talk with us. We’ll consult with you regarding the real estate auction process and provide a recommendation for your property. Complete a Free Property Auction Analysis today so we can explore if auction is right for you!
Special Message for Realtors: If you are a realtor assisting a current or prospective seller, we have several partnership programs available to allow you to offer a professional Cates auction to your clients. We are happy to help you determine if auction is an appropriate strategy for your seller.
| AUCTION | ORDINARY SALE |
|---|---|
| Focuses attention on your property alone. | One of many properties being offered for sale. |
| Seller sets the day of the Auction. | Property may remain on market for months or years. |
| You know when the property will be Sold! | Length of time to sell is unknown. |
| Aggressive Targeted Marketing utilizing Signs, Brochures, Newspapers, Email, Internet, Direct mail, Telephone, MLS & more. | Heavy reliance on Multiple Listing Service, minimal advertising. |
| Seller sets the terms of the Auction. | Seller must negotiate all aspects of the sale. |
| Auction creates a sense of urgency. | Price reduction commonly used to create buyer interest and activity. |
| No limit on upside potential. | Upside potential limited by asking price. |
| Realizes the property’s true market value. | Seller risks overpricing and thus, property sitting on the market; or underpricing and selling too cheap. |
| Eliminates guesswork in determining the asking price of the property. | |
| Eliminates prolonged negotiations. | Negotiations can draw out over a long period. |
| Buyers compete to own and all offers are presented at the auction. | Multiple offers at one time are rare. |
| Property sold in 30 days thus eliminating expensive carrying costs. | Mortgage payments, taxes, insurance, etc. continue until the property is sold. |
| Property sells contingency free. | Normally contingent upon buyer’s financing, inspections, appraisal, etc. |
| Non-refundable earnest money. | Refundable earnest money, buyer can back out easily. |
Q: Why should I sell my property using the Auction Method?
A: To accelerate the sale of your property by generating additional consumer interest and activity. Advertising a property for auction creates a sense of urgency, bringing all interested parties together in a specified timeframe.
An auction provides multiple bidders competing to buy, generally bringing a higher price than negotiating with a single buyer. Your property is sold in “as is” condition, with a non-contingent contract, non-refundable deposit, and 30-day settlement is required of the buyer. This means a quick and easy transaction for you without the hassle of negotiations, and the uncertainty of an unknown sale date.
Q: What types of property do you sell?
A: We auction all types of real estate. Residential, Commercial, Land are the primary categories. From investment properties to luxury estates, from $50,000 to multiple millions, from fixer-uppers to new construction, from a single acre to thousands of acres, we have successfully sold it all at auction.
Q: How will my property be marketed?
A: A key advantage of auctioning real estate is the benefit of a customized advertising and marketing program. While every campaign is unique to the property, auction marketing typically consists of professional brochures, online advertising, print ads in key publications, targeted direct mail, e-mail marketing, realtor promotions, preview events, property signs, telemarketing, and a full-featured webpage with photo galleries and downloadable documents. Of course, your property will also be featured on Multiple Listing Service (MLS), realtor.com, and a variety of specially chosen listing sites. We have marketing professionals producing all advertisements and marketing material, with an eye toward highlighting your property’s strongest features. This means that your property is exposed to the widest possible buyer audience, thereby increasing your possibilities of a successful sale at the highest possible price. When multiple properties have for sale signs posted, the property with the CATES AUCTION sign will always garner most of the attention. Our custom marketing ensures that your property stands out when buyers and Realtors are evaluating commercial properties, land, or homes for sale in Kansas City MO and surrounding areas.
Q: I am not in financial trouble, and I am concerned about what people may think if I should auction my property. Can you give me any insight on this?
A: You are not alone in your concerns. Many people initially think of the old, limited perception of auctions as what happens on the courthouse steps. There are great differences in the marketing and the public image of a voluntary, ‘by choice’ auction, such as ours, versus a distress auction. Our sellers have desirable properties and have chosen auction as a means to expedite and control the terms of the sale. Our auctions are positive, enthusiastic events designed to generate competitive bidding to secure the highest possible market price. For more information on the changing view of Real Estate at Auction, see “Media on Auctions”.
Q: I am concerned about the net amount I will realize from the auction and my ability to cover my existing mortgage. What advice do you have to offer on this?
A: We understand your concerns and many of our sellers need to cover an existing mortgage or lien on their properties. The broad exposure of an auction, coupled with the competitive bidding requirement, generates the most accurate valuation of the property. Said simply, it is only worth what the person who wants it the most is willing to pay. That amount is determined on auction day.
The fact that you are selling at auction does not change the market value of your property. If the market value is at a level below your existing mortgage, then that is the price that you have to work with regardless of what selling method you choose.
Q: Who pays the Auctioneer’s commission?
A: The Auctioneer is paid via the buyer’s premium, which is added to the buyer’s final bid. There is no auction commission charged to the seller. Sellers are only required to invest in the advertising and expenses of their auction event. This way you can be sure you receive the maximum advertising exposure possible for your property at the lowest possible cost.
Q: Will we still have to consider contingent contracts?
A: Everything that we sell at auction is sold “as is” and “non-contingent,” with a 30-day projected settlement date. According to the auction terms, a prospective buyer cannot make his or her bid contingent on any outside factors such as financing or inspections.
Q: Where will the auction of my property be held?
A: While we hold most auctions on-site, there are several other options available including, an off-site “gallery style” event, a sealed bid format, and an online-only auction. We will recommend the strategy we believe will be most beneficial for you.
Q: Does “as is” mean that I do not need to disclose any known defects?
A: Though we are selling “as is,” we must abide by applicable state and federal laws. The Broker-Auctioneer will offer full disclosure to all interested parties in accordance with the law. “As is” simply means that you are not offering to make any additional improvements to the property and the buyer is bidding on and buying it in the condition it is in at the time of the auction.
Q: How often is Cates successful in selling property at auction?
A: Rarely does a Cates auction purchase contract fail to proceed to closing. Buyers who are unlikely to close are dissuaded from bidding because of the stringent terms of auction. With no contingencies and a sizable non-refundable deposit on the line, auction buyers are qualified and highly incentivized to complete the transaction. This contrasts with traditional real estate listing contracts, in which buyers typically maintain many options for easily exiting the purchase contract.
Q: Can I attend an auction before agreeing to sell my home through the Auction Method?
A: Certainly. In fact, we encourage your attendance so you can experience a live example of the auction process firsthand. Check out our Upcoming Auctions or give us a call at 816-781-1134. If you come to one of our auctions, be sure to introduce yourself!
Now, see if auction is the right strategy for your property by completing our Free Property Auction Analysis form. We’ll walk through the process with you, answer your questions, and help you determine the best approach to getting your property sold.
There are two main reasons people selling real estate miss out on the benefits of a professional auction strategy. Either they assume (incorrectly) that the process is for distressed properties or they assume (incorrectly) that the process is mysterious.
If you’re thinking about selling your home or already trying unsuccessfully, you owe it to yourself to explore the auction strategy. Who doesn’t love massive targeted marketing and buyers competing with each other to own your property? The hotter the market, the higher the price goes, and there’s no negotiating or hidden costs to deflate the great price you got. Definitely worth a quick look!
Though professional real estate auctions have been around for years, most homeowners don’t really understand how they work. As a result, they stick with what they know and end up taking the first offer that comes along, or endure the ongoing swirls of an ordinary listing approach.
While professional real estate auction firms like Cates Auction are highly selective about properties they will accept for auction, the process for the fortunate sellers is surprisingly simple. Herewith, the six simple “S’s” to selling your home at auction…
It really is that simple! Cates Auction and other top-ranked firms will provide a free property analysis so that you can explore the option and evaluate the company with no obligation or risk. If you like what you see and your property is accepted for auction, you’ll enjoy a short, hassle-free sale for true market value on the date you choose.
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