Pros and Cons of Selling to a Illinois Land Company

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Pros and Cons of Selling to a Illinois Land Company
By

Bart Waldon

When you look at Illinois on a map, you'll see it stretches all the way from the Great Plains to Lake Michigan. From north to south, the state has all kinds of different landscapes - flat prairie, rolling hills, forests, and of course plenty of farmland dotting the countryside. The nice flat fields and nutrient-rich soil makes lots of Illinois prime territory for growing corn, soybeans, and other crops.

Farming has always been huge business in Illinois. Even as the economy has diversified, agriculture is still central to daily life across much of the state. But sometimes those family farms and pieces of land get passed down through generations, and eventually some folks are ready to sell off their acres.

For landowners looking to sell some property they don't need anymore, there's a handful of options. Many choose to work with local Illinois land companies who can make the process pretty smooth and straightforward. However, going this route does have some tradeoffs compared to selling through a real estate agent or entirely on your own. Understanding the pros and cons can help sellers pick the path that's right for their situation.

An Overview of Illinois' Diverse Landscapes

Illinois became the 21st US state back in 1818. Folks here often refer to it as the Prairie State or Land of Lincoln.

Now the southern tip of Illinois has a humid subtropical climate, with hot, muggy weather much of the year. But most of the state is more continental, with cold winters where the temps can drop below 20°F and hot, humid summers where highs hit the mid-80s.

You’ve got some different terrain as you travel north to south across the state. The top third is mainly flat, open prairie and farmland. The middle has more forests and gently rolling hills. And down south you'll find a mix of prairie, hills, and dense forestland. Rivers like the mighty Mississippi, Ohio, Wabash and others have shaped the land here for centuries.

With nice flat fields and fertile soil, especially up north, Illinois quickly became an agricultural powerhouse growing corn, soy, wheat and more. Farms still drive the economy today. Other big industries include manufacturing, transportation and finance. And everyone knows Chicago dominates the northeast as a major metropolitan hub.

Why Landowners Choose to Sell Property in Illinois

Lots of families in Illinois have been working the same land for generations. So sometimes people inherit farmland that they don't have much use for anymore. Others invested in land like any financial asset, and now want to cash out that investment and put their money elsewhere.

There's all kinds of reasons folks start thinking about selling off some of their Illinois property:

  • They're retiring and moving away, or just don't want to deal with the work anymore.
  • Those big plots of land are too much trouble to properly maintain as they get older.
  • Their kids aren't interested in taking over the family farm.
  • They need some capital to put into other investments or business ventures.
  • The taxes on all that unused land start adding up.
  • After decades of ownership, they want to take out some equity they've built up.

Whatever the specific situation, many landowners eventually get to a point where selling makes good financial and practical sense for what they want out of life. The land that was in the family for ages can move on to a new owner.

The Key Benefits of Working with a Local Land Company

For landowners looking to sell acres they no longer need, local land companies offer some distinct advantages.

Speed and Convenience

A land company can move quickly, assessing property details and values to make fair cash offers. For sellers looking for expediency, this streamlined process gets properties sold and money into bank accounts fast without the hassles of traditional listings.

Land companies take care of all the legwork, from title searches to drawing up purchase agreements and handling closings. Their focus and experience facilitates smooth, headache-free transactions.

Flexible Options

Some sellers are crunched for time or live out of state, making it difficult to handle showings, open houses, or endless calls and meetings. Land companies remove these hassles, allowing sellers to offload their property while avoiding the demands and complications of a traditional sale.

Expert Negotiators

Land professionals understand acreage values and how to market rural parcels effectively. Their experienced negotiations secure optimal terms for both buyer and seller. Sellers benefit from knowledgeable professionals handling everything smoothly from start to finish.

As-Is Condition

Selling land traditionally requires substantial time and money prepping land for listing. Old barns may need repairs or removal, fences fixed, and overgrown areas cleared. Unlike selling to individual buyers, land companies purchase properties in as-is condition. There's no need to spend time or money readying the land before closing the deal. Unused acres can be sold off just as they are.

No Commissions

Properties sold through a real estate broker involve commissions, often 5-6% split between the buying and listing agents. These thousands of dollars cut into profits. Working directly with a land company means avoiding these brokerage fees. More money stays in the seller's pocket.

Factors to Consider When Weighing Options

Of course, there are also some aspects landowners should weigh when deciding whether to sell directly to a land company.

Profit Potential

Land companies need to make a profit on their purchases, so their offers may be below full retail market value. However, their valuations are research-based and aim to be fair deals benefitting both parties. For some sellers, the speed and convenience outweigh maximum profits.

Marketing Exposure

With a broker, properties get wider exposure to potentially interested buyers through listings on MLS, online ads, open houses, and more. This wider net could garner higher offers. Land companies have existing networks of buyers and may purchase properties themselves. Less exposure can mean fewer bids, lowering potential sale prices.

Title Work

Reputable land companies conduct proper title searches, boundary surveys, and document filing. But sellers should still verify that the company handles title work thoroughly to validate ownership and prevent disputes later. Checking these details is smart due diligence.

Tax Implications

Some sellers may owe capital gains taxes on property sales, depending on ownership length, tax bracket, profit amount, and other factors. Working with an accountant beforehand can help determine any tax liabilities.

Local Knowledge

Land companies may lack intimate knowledge of an area's land values, zoning changes, development plans, and other local factors that could influence value. Local realtors may provide better insights into these nuances.

Key Questions to Ask Up Front

Before picking a land company to work with, smart sellers will take the time to vet them thoroughly. It's always a good idea to ask plenty of questions upfront:

  • How long have you been operating as a company? You'll want to look for those with a long track record of doing business in the area.
  • Are you fully licensed in Illinois to buy and sell land? Any reputable company should have all their state registrations in order.
  • Can you connect me with some past sellers you've worked with? Speaking to other landowners can give helpful insight into how they operate.
  • What exactly will you handle in the sale - title work, surveys, closing, etc? Understand who is responsible for what duties.
  • How do you go about valuing properties and making offers? Their process for figuring out fair sale prices should be clear.
  • Do you buy land directly, or just facilitate sales between buyers and sellers? Some companies do one but not the other.

Doing this due diligence is important to ensure you pick the right partner.

Weighing the Pros and Cons of Using a Land Company

Selling off land takes a whole lot of know-how and effort, that's for sure. In Illinois, many landowners find that going through an established local land company makes the process smoother and less of a headache than trying to sell it themselves or using a traditional real estate agent. But you still need to weigh the pros and cons carefully based on your own situation.

The nice thing about land companies is they'll make reasonable cash offers quickly, handle all the negotiations and paperwork, and buy the land as-is. But their offers might be a bit under the max value you could maybe get on the retail market. Real estate agents can get your property in front of more buyers which could drive up the price, but you pay them commissions and have to deal with showings and such.

By thinking through the benefits and tradeoffs of each route, you can decide what will work best for you and your financial goals. For many folks looking to sell their Illinois land without a fuss, a reputable local land company can be a great fit. But do your research and look at your options. The right approach depends on what you need.

Final Thoughts

Selling land is a big decision that takes careful thought and planning. While utilizing a professional land company can streamline the process, landowners need to weigh the pros and cons for their specific situation. Do your due diligence on any company you consider working with. Ask questions, understand the services they provide, and research what approach will best serve your needs. With patience and the right partner, selling your Illinois land can be an easy process that achieves your financial goals and gives you peace of mind knowing your property is in good hands. Though saying goodbye to long-held family land can be difficult, the next chapter brings new possibilities.

Frequently Asked Questions (FAQs)

How quickly can a land company purchase my property?

Many reputable land companies can make an offer and close within approximately 1-2 months, though timing varies. They aim to streamline the process much faster than traditional sales.

How do land companies determine what to offer for my land?

They research recent comparable sales in your area, assess your property's specifics like acreage and condition, and factor in current market conditions to present a reasonable offer.

Will I get the full value by selling to a land company?

Their offers may be slightly under full retail value but aim to be fair prices benefitting both parties. You trade some profit for the speed and convenience.

What fees or commissions do land companies charge?

Most don't charge any commissions or fees to the seller. More money stays in your pocket compared to selling through a broker.

Can I sell my land in pieces or must I sell the whole parcel?

Land companies have the flexibility to purchase all your acres or just a portion that you want to sell. You decide what and how much you want to sell off.

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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