Pros and Cons of Selling to a Colorado Land Company

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Pros and Cons of Selling to a Colorado Land Company

Bart Waldon

Colorado is seeing a surge of interest from developers and investors seeking to capitalize on the state's expanding tourism industry and population growth. With the majority of the state's land still undeveloped, over $3.7 billion in land deals took place in 2021 spanning 28,000 parcels - pointing to ripe opportunities. Yet for sellers, a key question looms when considering bids: to go with a specialized land company promising a quick sale, or wait potentially years for a major commercial developer planning a large project?

Both options have upsides. Land companies dish out fast cash offers and handle planning details to optimize sellable lots—very appealing perks! But commercial developers snap up land for hotels, apartment complexes or industrial parks that could translate to bigger paydays down the road for patient sellers. There are strong cases on both sides.

It's a matter of priorities and risk tolerance. Do you want cash quickly even if it means potentially leaving some money on the table? Or are you willing to wait a few years if it could mean millions more for your family? Good arguments can be made on both fronts. Ultimately it's about finding the right buyer match for your needs. This article weighs the core pros and cons of each route for your situation.

Understanding Local Land Market Dynamics

Fueled by Colorado's thriving economy and natural allure, demand for open land has swelled over the last decade. Both individual and developer buyers seek property to fulfill visions of idyllic living or strategic investments. However, intricate factors from development costs to policy changes keep the market landscape in flux. For sellers, projecting accurate pricing and timelines proves challenging as a result.

Industry experience shows land can take 1-2 years to sell under typical conditions. And even motivated sellers often dance with drawings out an optimal deal. Only a subset of buyers show genuine interest amid the state's abundant inventory too. Such variables are where specialized local companies step in to remove hurdles via cash offers. Instead of traditional sales, these market experts buy land directly - providing sellers upfront payouts and flexible closes.

Opting for cash buyers poses unique pros and cons compared to independent or agent-led sales. Sellers must weigh guaranteed returns against pricing that sits below market rates. Expert partners help illuminate the nuances at play. When evaluating paths, key considerations emerge around:

Pros of Selling to a Land Company

  • Faster sales process with cash payout
    Selling land on your own requires considerable time and effort to prepare the site, advertise it appropriately to attract potential buyers, negotiate fair offers, and handle all the sales paperwork. Land companies streamline this cumbersome process by buying land with all-cash offers and handling closings quickly. This provides sellers their payout faster without the anxiety of chasing buyers.
  • Sales not dependent on land valuation fluctuations
    Land valuations can change unexpectedly based on environmental factors, zoning policies, nearby developments, etc. By selling it to a land company, you get a fixed return through their cash offer without worrying about these fluctuations later impacting your payout.
  • No need to pay for extra fees or taxes out of pocket 

As the buyer, land companies cover the survey, title search, appraisal, and transfer tax charges related to the sale. This saves the seller from all the extra paperwork and payouts generally expected from individuals buying land plots.

  • Take advantage of market demand
    Though Colorado has a thriving land market, inventory hotspots keep shifting with new developments and infrastructure projects across the state. Land companies are better positioned to take advantage of this insider knowledge and match sellers with areas facing maximum demand from both individual and developer buyers.

Cons of Selling to a Land Company

  • Land sold below market rates
    The speed and reliability of a quick cash sale comes at the price of selling your land below current market valuation. So while you skip the hassles of traditional sales, you lose out on higher pricing only active sales efforts could've fetched.
  • Limited scope for negotiation
    For cash offers to remain profitable, most land companies put out take-it-or-leave-it offers without much scope for negotiation. So if you have emotional ties to your land or hoped for higher quotes, this inflexibility can deter deals with land buyers.
  • Closing delays if title issues exist
    While reputed companies like Land Boss thoroughly vet properties before purchase, unexpected title issues can sometimes delay settlements. Without contingencies, individual buyers may walk away completely. But Minor title issues get resolved mutually before land company deals close.

Key Considerations Before Selling Land

Every landowner's needs and priorities differ. And market dynamics keep shifting across Colorado's diverse landscape. Here are a few key considerations before picking the sales approach that works best for you:

  • How quickly do you want or need to sell your land? What's your expected turnaround time?
  • Are you open to below market all-cash offers in exchange for a faster, hassle-free sale?
  • Is maximizing the dollar value your priority or a quick closure to reinvest proceeds elsewhere?
  • Does your land have unclear title issues that could deter potential buyers?
  • Do you have the bandwidth to prepare your site, market it aggressively to buyers and negotiate optimal deals?

While only you can decide what trade-offs work best for your needs, evaluating all options is key. And that's where working with trusted land professionals pays. Companies like Land Boss bring specialized expertise through 100+ land transactions over 5 years in Colorado itself. Our deep understanding of both site-specific and macro purchase dynamics makes them reliable partners through your sales journey.

Common Mistakes to Avoid When Selling Land

Selling your vacant land, rural acreage, or raw plots to a land company may seem straightforward. But without understanding local land buying dynamics, you could lose out on value or have a frustrating sales experience. Here are a few key mistakes to avoid:

Not Researching Buyer Reputation 

With multiple land buying companies now operating, you need to assess each option carefully based on past customer reviews and better business bureau ratings. Check how long they’ve been operating locally, number of transactions closed, and how transparently they communicate land values. This builds trust in their valuation model and commitment to fair deal making.

Refusing Access for Site Inspections 

For companies to make accurate cash offers, they need to visually inspect the land condition and geography. Some sellers refuse access to avoid disruption from random visits. However, without site surveys, buyers cannot verify terrain visibility claims or assess any clean-up needs. This forces them to make conservative bids to account for these unverified liabilities.

Not Disclosing Known Issues Upfront 

Most land has at least some issues like easements, zoning limitations, title constraints etc. Being upfront about them helps buyers account for legal risks realistically. Surprises uncovered midway not only jeopardize deals but also raise suspicions on what else is being concealed. Transparency from the start - even if it means lower initial offers - makes the process less painful.

Final Thoughts

Deciding whether to sell your land to a cash buyer often comes down to personal priorities around time, money and convenience. While market rates may tempt you to wait for traditional sales, the reality of the tricky land business may drain you. Weighing the benefits of a faster and simpler process against maximizing profit potential is key. There’s no one size fits all approach - location, demand shifts and your own financial goals all impact the equation. Working with experienced local land buyers like Land Boss provides reliable insight on market dynamics across Colorado. Their expertise empowers landowners to evaluate all options and make the choice that aligns with their needs. With over 100 land deals closed and 5 years of helping folks sell faster, they can guide you to the best path for your land.

Frequently Asked Questions (FAQs)

How much below market value will a land company offer for my property?

There’s no fixed percentage. Offers depend on location, terrain, development potential etc. But to make cash-deals profitable, most Colorado land buyers offer 40-60% of the property’s market value.

Can I negotiate better pricing if I get lower offers?

Unfortunately, land buying companies make take-it-or-leave-it cash offers. Scope for back-and-forth negotiation is limited compared to selling through agents or independently.

How long will it take to get my payout after I accept an offer?

Reputed cash land buyers like Land Boss can process closings and pay sellers within a week or less once paperwork is signed. However, unexpected title issues may rarely delay transfers.

What expenses will I need to handle as the seller?

Minimal. Land buyers take care of appraisal, title search, closing costs, county tax stamps etc. You just need to provide documented ownership proof.

Can I back out if I change my mind before closing?

Breaking initial agreements affects credibility severely for future deals. But legally, nothing is binding until you sign the final closing paperwork. So while reneging is frowned upon, you can cancel up until the last stage.

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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