How Do I Sell A Large Piece Of Land

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How Do I Sell A Large Piece Of Land

Bart Waldon

Selling high-value rural land over 100 acres in size poses unique challenges compared to selling smaller residential building lots. Limited buyer demand, financing complexities, and difficulties marketing large remote parcels all impede sales of big undeveloped acreage tracts.

This in-depth guide covers proven pricing strategies, creative deal structuring approaches, targeted marketing outreach methods, and transaction risk management tactics to maximize sales value when selling large rural land holdings. We’ll also explore the option of direct cash land buying companies that purchase large rural tracts for cash, providing a convenient exit solution versus trying to sell large vacant land acreage the traditional route.

Why Selling Large Rural Land Parcels is More Difficult

Compared to selling smaller vacant residential or commercial development lots, big rural land presents several obstacles for sellers including:

- Smaller pool of qualified buyers able to purchase high value rural land. Most prospective purchasers lack the capital, financing, and operations capacity needed to buy and utilize large acreage tracts.

- Difficulty obtaining financing from traditional banks and lenders for raw undeveloped land without proven near-term residential or commercial value. Appraisers also struggle valuing remote rural lands for financing purposes.

- Extended 12-36 month average timeframes required to locate qualified buyers for high-value acreage, unless selling at deep discounts. Holding costs like property taxes, maintenance, and insurance burden sellers during these long marketing periods.

- Need for more diversified, tailored marketing outreach to multiple prospect segments - farmers, ranchers, developers, rural residential buyers, recreational land investors, etc. A wider net of targeted promotion is required to encounter potential buyers.

- Increased potential for undisclosed title issues like easements, water rights disputes, and boundary encroachments that may only be discovered deep into the transaction process after buyers scrutinize history.

- General lack of experience among many individual land owners when selling large rural land tracts for the first time. Mistakes during preparation and transactions are more likely without guidance.

However, while certainly more complex, with the right preparation strategies, pricing approaches, creative deal structures, patience during marketing, and expert guidance, the sales process for large rural land holdings can happen smoothly and successfully to maximize returns.

Should You Subdivide the Large Rural Acreage Before Selling?

One strategy worth considering with some large rural land parcels is subdividing or parceling the big acreage tract into smaller lots of 5-20 acres before initiating the sales process.

There are several potential benefits of subdivision including:

- Smaller 5-20 acre lot sizes appeal to the widest categories of land buyers - rural and hobby farm home builders, recreational and outdoor enthusiasts, investors seeking income property acreage, etc. Many expert recommend keeping lots below 20 acres for optimal marketability. Most prospective land purchasers are searching for parcels smaller than 20 acres.

- Subdivided smaller lots allow for easier buyer financing - banks and other financial institutions are commonly more willing and able to lend money on vacant properties purchasers plan to build primary residences or vacation homes on. Since prices are lower than raw 100+ acre tracts, buyers can more easily fund purchases with conventional mortgages.

- Selling land in smaller pieces allows deals to happen more quickly - each 5-20 acre lot can potentially sell to an end-user buyer in weeks or months rather than needing a year or longer to sell a 100+ acre tract to one buyer with enough capital and resources to handle the entire property.

- Total cumulative sales value is often maximized by selling the land divided into multiple smaller parcels rather than discounting for a bulk sale of the entire large tract to one buyer. Maximizing returns requires matching optimal parcel sizes with buyer demand.

- Subdividing provides the selling owner more flexibility - pieces of the land can be sold off gradually over months and years matching with market demand as buyers emerge for targeted lot sizes rather than the seller needing to find one buyer to purchase everything.

However, potential subdivision downsides also must be weighed before deciding to split large acreage into smaller parcels including:

- Survey costs to parcel the land legally into plot sizes that comply with zoning rules can run $10,000 or higher for large tracts.

- Local permitting fees, compliance costs, and paperwork bureaucracy required for legally subdividing land into multiple lots.

- Potential costs for driveway, roadway, or utility access preparation if each new parcel needs legal ingress/egress and utility or water access.

- Local zoning rules may require specific lot sizes, dimensions and attributes. Research is needed to configure optimal new lot boundaries compliant with regulations.

- Time and costs involved with site clearing, access preparation, drainage adjustments and other improvements to make each new parcel suitable for building upon.

- Initial steps like surveying, zoning approvals and site prep require upfront capital investments by the seller before sales revenue is generated.

- Buyers may negotiate discounts if they buy multiple adjoining smaller lots. Bulk pricing incentives impact returns vs. selling parcels individually.

Weighing all of these various subdivision pros and cons based on the specific property traits and local market dynamics helps determine the ideal subdivision approach to maximize sale values for large rural acreage.

How to Set Optimal Asking Prices on Large Acreage for Maximum Returns

Setting competitive yet profitable asking pricing is always critical to attract qualified buyers and ultimately sell rural land for top dollar. However when pricing land alone, large rural acreage introduces additional complexity into the pricing equation.

Common pricing mistakes land sellers make when listing big tracts include:

- Basing the overall asking price or per-acre price on appreciated values of adjacent developed residential or commercial lands rather than recent sold prices of comparable raw rural lands located farther from cities and infrastructure. This leads to severe overpricing.

- Over-weighting the desirability and valuation impact of natural features like beautiful views, stands of mature trees, ponds or creek frontage, or abundant wildlife instead of objectively assessing what 100+ acres of remote farmland or rangeland far distant from population centers is truly worth to most buyers in the current rural market. This also causes inflating prices beyond real market value.

- Only assessing the property’s potential value to farmers for agricultural uses while failing to factor in growing demand from rural residential buyers looking for large yet affordable building lots to construct primary or secondary homes. Casting a wider buyer net impacts pricing strategy.

- Not properly accounting for required costs to improve legal access with driveways or easements, clear trees/brush, survey precise boundaries, have title company remedy identified title issues, or transfer water rights and mineral rights. These costs warrant deducting from asking prices.

To avoid overpricing pitfalls and set asking prices aligned with current rural land market conditions, obtaining objective third-party property appraisals from both residential and agricultural land valuation specialists provides data-driven fair market value recommendations to inform listed prices. While appraisals cost $1,000-$3,000, they protect against underselling while overpricing leads to no sales activity. When priced competitively to recent comparable sales, large parcel listings attract more serious buyer interest and activity.

How Creative Seller Financing Enables More Large Acreage Buyers

Since buyers commonly struggle to obtain traditional bank-funded mortgages and loans to purchase expensive rural land tracts without existing residences or developed commercial value, sellers offering creative financing solutions sell land that can significantly expand the pool of buyers able to purchase large acreage.

Seller financing helps facilitate big land deals in several ways:

- Carrying back a customized land contract or mortgage allows capable buyers to make an appropriate down payment based on their available upfront capital, while the seller finances the remaining purchase balance to be paid off over months or years based on terms that work for both parties.

- Spreading the full purchase payments over future years through owner financing rather than requiring complete lump-sum payment enables sellers to potentially maximize their total return on investment long-term by earning interest and principal payments compared to accepting a discounted one-time all-cash purchase price upfront.

- Since qualifications and terms are set by the seller rather than a traditional bank, buyers often view seller financing as a more accessible lower-risk way to purchase land, avoiding headaches and uncertainties dealing with complex commercial loan underwriting and approval.

- On higher value properties, offering creative financing may allow sellers to secure a higher overall sales price above what most buyers can pay with a complete cash purchase. This benefits the seller's bottom line.

- For sellers focused on passive income over many years rather than one big payday, custom financing provides recurring annual revenue through the buyer's installment interest payments and slowly growing principal balance recapture over the loan or contract duration.

The main risks sellers incur by offering financing are the possibility of the buyer defaulting after several years of payments, which forces the seller to foreclose to retake ownership of the property outright, and the opportunity cost of waiting years for the final principal payoff rather than having those monies to reinvest. However, in many situations, the benefits of attracting qualified buyers through financing structures outweigh the risks - as long as sellers model the numbers conservatively.

How to Maximize Marketing Exposure to the Widest Pool of Potential Buyers

While pricing and deal structure impact sale feasibility, identifying the universe of prospective buyers comes down to casting the widest outreach net across multiple marketing channels tailored to each target buyer and category best aligned with the property traits and local real estate landscape:

- Advertise upcoming land auction events, for-sale listings, and desirable property attributes in agricultural publications, newsletters, online forums, and community bulletin boards frequented by serious ranchers and farmers in the region to attract potential agricultural buyers.

- Promote listings through popular land for sale websites and real estate investing blogs oriented towards buyers looking for good value recreational, residential, or commercial development deals to flag the opportunity to land investors seeking forgotten or undiscovered parcels of raw land.

- Feature engaging content about the rural amenities and history of the area surrounding large acreage listings in hobby farming magazines, homesteading websites, and other rural living publications catering to families and individuals seeking larger yet still affordable building lots for primary residential or second home use.

- Network closely with land brokers, agricultural brokers, water rights brokers, commercial developers and other real estate professionals who specialize in high-value, large parcel transactions to leverage their extensive connections with qualified high net worth buyers in the space. Finding the right specialists multiplies exposure.

- Initiate local community outreach efforts via print mailers, social media posts, bulletin board notices and event presence to locate all potential adjacent land owners who may want to strategically expand their nearby holdings by absorbing additional acreage from the listed large parcel, especially if the selling owner is an external out-of-state investor with limited local ties.

With the right blend of modern internet marketing and traditional local promotions coordinated harmoniously, sellers of high-value large rural acreage reach the most likely regional buyer candidates across all segments, multiplying the chances of timely successful deals at optimal prices.

Patience and Realism Required When Selling Parcels Exceeding 500 Acres  

On the extreme end of the spectrum, finding qualified buyers for massive land holdings exceeding 500 acres in size often requires even greater patience and realistic timeline perspectives from sellers. A few key tips and reminders when seeking a buyer for an ultra high-value 500+ acre rural property include:

- Conduct even more thorough due diligence prep work upfront before officially listing the mega-parcel - carefully inspect for any interior easements or boundary encroachments, complete updated land surveys, perform water rights verifications, evaluate mineral rights, document vegetation and timber value, confirm certified legal access, etc. Skipping important inspections risks major undetected issues arising later to possibly derail deals.

- Broker pricing must be set conservatively to attract buyers with multi-million dollar capital - be prepared to sell your land for a lower per-acre price compared to smaller ranches since massive parcels sell at a steep bulk discount. Yet avoid underselling through data-driven pricing guidance from multiple appraisers experienced in 500+ acre transactions.

- Ensure your personal or business balance sheet retains ample financial reserves to comfortably cover the ongoing taxes, maintenance upkeep, and insurance premiums for what likely will be 24 months or longer before a qualified buyer emerges who can procure financing and close at your full ask price. Holding costs accumulate over years for mega parcels.

- Be prepared if needed to initiate interim revenue-generating activities on mega acreage while marketing, such as timber harvesting, surface leasing for cattle grazing, permitting seasonal use for hunting or recreation, or installing billboards along road frontage. This supplemental income helps offset carrying costs until a major buyer surfaces.

- Maintain patience and willingness to get creative with deal structures if needed to incentivize buyers and allow sales to happen profitability - land contracts, lease-to-own terms, seller financing, earned equity arrangements, contingent sales, and other flexible offerings may enable buyers lacking full capital today to still purchase if they see ongoing upside.

With a flexible, pragmatic, financially-fortified posture, even selling vast 500+ acre rural tracts can happen profitably within a 24 month target sales window under the guidance of top-tier land sales professionals. But preparation and patience are mandatory.

Navigating Common Risk Factors When Selling Large Rural Land Parcels

While not necessarily deterrents against pursuing a large acreage deal, a few risks unique to big land sales deserve awareness and preventative mitigations:

- Buyers forfeiting initial non-refundable down payments or earnest monies if they are ultimately unable to close due to zoning denials restricting planned usage, inability to secure financing before deadlines, or failure of inspections/assessments during due diligence. This results in wasted time re-listing the property after initial buyers walk away. Always confirm financing is locked and major zoning questions resolved before accepting down payments.

- Costly hidden title defects like obscure easements, water sharing disputes, and boundary/survey discrepancies remaining undiscovered until deep into the transaction process after buyers scrutinize deed history and conduct updated surveys. Thorough preliminary title research and proactive boundary marking helps avoid this.

- Engineering studies, environmental assessments, water tests, timber cruises or other technical reviews during a buyer’s due diligence period revealing significant issues making the property unsuitable or less attractive for the buyer's intended usage. Having these assessments done upfront helps avoid problems.

- Legal disputes over dividing water rights, mineral rights leases, easements, or other land-related rights during attempts to separate or parcelize large tracts as part of sale. Clear documentation helps, but sometimes resources lack legal clarity.  

- Buyer reliance purely on speculative future commercial development value rather than current reality when building budgets and offer pricing, with unrealistic projections leading to substantial appraisal gaps that kill deals as closing approaches. Prefer buyers who understand current market conditions.

While dedicated preparation, pricing discipline, patience and guidance from professionals adept at handling large transactions helps mitigate risks, large acreage sales still demand extra care and contingency planning compared to selling smaller building lots. But challenges can be overcome through diligence and creativity.

Selling Large Rural Land Tracts Directly to a Cash Land Buying Company

An alternative route for those seeking to sell large rural acreage tracts of land quickly and efficiently compared to traditional listing methods is contacting a reputable direct cash land buying company. These specialized real estate investment firms focus on purchasing a wide range of rural lands strictly for cash, with parceled sizes ranging anywhere from 5 acres on up to 500+ acre parcels.

Some of the primary benefits rural land sellers can realize by selling directly to a cash land buyer rather than listing through a traditional real estate agent or broker include:

- Receive an initial cash purchase offer backed by proof of funds within 10 business days in most cases after submitting basic details on their large rural property for sale like acreage size, county location, available studies/surveys and estimated market value. Avoiding months of delays makes financial planning easier.

- Eliminate any need to try parceling or subdividing massive acreage into multiple smaller lots to attract individual residential buyers and qualify for buyer financing. Experienced land buying companies have the capital and financing resources to buy approved large rural tracts intact. Less hassle for sellers.

- Avoid the lengthy 1-2 year traditional listing period trying to locate qualified end-user land buyers with the ability to purchase high value rural parcels through extensive promotional efforts. Qualified cash buyers already exist.

- Final sale closing dates as fast as 2-4 weeks in some cases if the seller is highly motivated and the buyer's due diligence verifies no significant defects or limitations with the property documents or condition. Typical closing timeframes range from 30-60 days. Much faster exits than traditional sales.

- No need for sellers to offer complicated or time consuming owner financing, land contracts, lease-to-own arrangements, or other creative deal terms to try to enable buyers who lack sufficient lending or capital. Cash buyers simplify transactions.

- The land buying company handles completing all title work, documenting the final purchase agreement and contract, securing closing services, recording the deed transfer, and transmission of final payment funds to conclude the hassle-free cash sale. Less work for motivated sellers.

While pricing offered by cash land buying companies is typically discounted 15-30% or more below full current estimated market values compared to optimally listing the rural asset through a real estate agent or land broker, the high speed, convenience, and lack of hassles the direct cash sale route provides still offers many unique advantages that appeal strongly to a subset of rural acreage owners pursuing an urgent sale or convenient exit from a large parcel investment.

Land sellers specifically seeking to liquidate larger rural land holdings of up to 1,000 acres smoothly and quickly for cash should strongly consider contacting a reputable land buying company like Land Boss. We focus on purchasing all sizes of rural lands nationwide for cash, handling everything directly from initial offer through closing while providing fair prices based on acreage. Reach out today online or by phone for a free no-obligation consultation on a potential cash sale of your large rural tract!

Common Pricing Methods for Large Rural Tracts

Several pricing models help set competitive asking prices for large land holdings:

- Check prices per acre of recent comparable sales of nearby rural lands with similar attributes. Average the per acre values.

- Consult both residential and agricultural land appraisers to benefit from both valuation perspectives.

- Calculate value of home sites, river/pond frontages, or other sub-parcels separately based on higher best-uses.

- If zoning allows denser development, project potential commercial or residential lot yields, values, and sale timelines. Discount to today's value based on projected holding and improvement costs.

- Consider discounted cash flow models factoring rents from interim surface leasing for grazing, camping or recreation. These provide income until a buyer emerges.

Weighing various valuation methods helps set asking pricing competitively to attract qualified buyers while avoiding overpricing that stifles activity.

Why Patience and Realism Are Required for Successful Large Acreage Sales

Among the most crucial mindsets and temperaments sellers need when endeavoring to sell large rural land holdings at optimal valuations include:

  • Maintaining realistic timeline expectations - be mentally and logistically prepared for an extended sales process lasting between 6-36 months in many cases before the right buyer willing to meet pricing emerges, unless substantially incentivizing buyers through discounted pricing.
  • Exercising patience during the marketing process without panicking if initial weeks or months go by without serious buyer bids.
  • Accepting the likely need to price competitively and reasonably within current rural market rates documented by recent comparable sales rather than chasing unrealistic asking valuations detached from actual data.
  • Ensuring adequate financial reserves and a stable personal or business balance sheet able to comfortably sustain carrying costs like taxes, maintenance and insurance for at least 12-24 months while finding and vetting buyers.
  • Remaining open to creative deal structures like land contracts, lease-to-own terms, owner financing or discrete subdivision that could enable the right buyer to close a mutually beneficial deal under the right circumstances for both parties - even if unconventional.
  • Avoiding emotional attachment to the property that causes rejecting fair market offers solely because the price spread between ask and offer is unsatisfying or disappointing. Transacting pragmatically usually works best when a viable deal materializes.
  • Dedicating time and budget to high quality marketing outreach and messaging that appeals to multiple buyer segments through varied channels. Promotion directly impacts outcomes.

With the right broker or agent guiding you, large, complex land sales can unfold profitably and satisfactorily through aligning expectations, prudent budgeting, responsive negotiation and allowing the marketing process sufficient run time to provide buyer optionality.

Pricing Considerations When Selling Parcels Above 100 Acres in Size

On rural tracts exceeding 100 acres, pricing complexity increases because far fewer buyers can handle larger properties, forcing deeper discounts:

  • Research sells of comparable large tracts - lower per acre prices likely needed versus smaller ranches.
  • Weigh parceling into sections like 20-60 acre lots to open more buyers - model projected returns from subdivision.
  • Discount aggressively if an ultra-remote location hours from population centers.
  • Easements for access, utilities often required - deduct these infrastructure costs.
  • Derive value from selling surface rights, timber, minerals separately if possible.
  • Offer seller financing to enable buyers lacking cash or financing for the full price.
  • Consider lease-to-own arrangements allowing buyers to make payments towards eventual full purchase.

With creativity and reasonable expectations, even 100-500 acre parcels sell in most market conditions. But prices must align with realities of limited demand.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.


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