Pros and Cons of Selling to a Kentucky Land Company

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Pros and Cons of Selling to a Kentucky Land Company
By

Bart Waldon

Kentucky is known as the Bluegrass State, with rolling green hills and pastures that have supported thoroughbred horse farms for over 200 years. Over 50% of the state is forested, especially in the eastern Appalachian mountain region. Farmland takes up about half the state’s total land area, focused on cash crops like tobacco, corn and soybeans. The state’s temperate climate and fertile soil make it ideal for agriculture.

As the legacy of Daniel Boone lives on, many Kentucky families still possess large acreages of undeveloped land passed down through generations. You may be considering whether selling your Kentucky land to a local land company could be the right move. This article explores some of the key pros and cons to weigh when making this decision.

Pros of Selling Land to a Kentucky Land Company

Saves Time and Expense of DIY Sale Kentucky has over 4 million rural acres on the market, making land sales very competitive. Listing through a MLS may connect you with some buyers, but significant independent marketing efforts are typically needed to actual sell land. Between placing ads, putting up signs, showing the property and negotiating offers, the process of selling land on your own can be arduous and time consuming.

Land companies have extensive buyer networks and handle all the sales tasks for you. This frees you from countless hours of effort trying to market and sell your acreage. You can use the time saved however you want rather continuing the struggle to sell. If the notion of coordinating your own sale seems overwhelming, this benefit of using a land company is invaluable.

Provides a Guaranteed Cash Offer 

Going through the traditional land sale process means waiting for an acceptable offer, then hoping the financing goes through. Deals can fall through at any point. Working with an established local land company means you get a no-hassle cash offer upfront. As long as the company vets out clean title, the funds are ready on closing day.

This certainty allows you to move forward with plans, whether paying bills, investing the funds or planning your next land purchase. You don’t have to worry that a buyer's financing might suddenly fall through. Land companies have extensive experience navigating the complex closing process to ensure their cash offers result in cash in your pocket.

Saves Significant Closing Costs DIY land sellers often get surprised by the myriad closing costs that subtract from net sale proceeds. You may have to pay commissions, transfer taxes, legal fees and more. Land companies have handled countless transactions, giving them economies of scale when it comes to negotiating favorable rates for closing costs.

For example, a land company may have developed relationships with title companies that then provide discounted services. These savings then get passed onto the land seller. With extensive experience, land companies know how to streamline the closing process to avoid excess fees that could come from errors or delays.

Provides a Simple, Stress-Free Process 

Attempting a DIY land sale means handling mounds of paperwork, various inspections, complex disclosures and financial filings. You may have to track down oil and mineral rights records, check compulsory share laws and prove clean title. This creates sleepless nights worrying over all the sale complexity.

Established land companies thoroughly vet these land details upfront and manage the entire closing process start to finish. All you have to do is sign the closing paperwork. No negotiations, no showings, no open houses. The professionals handle everything. If avoiding massive headaches is your goal, this is a major boon of selling to a land company.

Cons of Selling to a Kentucky Land Company

Receive Below Market Value for the Land The convenience and certainty provided by land companies comes with tradeoffs. To profit on their land purchases, they must buy at significant discounts to actual market value. Industry averages indicate companies typically pay 30-50% under fair market rate.

In the Kentucky real estate marketplace where demand for land currently outpaces supply, DIY sellers using extensive marketing and negotiation tactics can sometimes secure close to full market rates. Patience and persistence when selling land on your own can pay off handsomely. By selling to a land company, you trade the higher valuation possibilities for simplicity and speed.

Loss of Potential Appreciation
Raw land that is desirably located generally appreciates over longer time periods. Though the market contains ups and downs, the long view trends towards steadily increasing land values. If your acreage has strong development potential, you could see 20% value spikes when projects are announced nearby.

By selling to a company at a discount now, you lose out on riding future appreciation waves. Unless you really need immediate cash, holding onto the land may better build your generational wealth through the power of compounding. Make sure to check land comps in the area to estimate realistic growth rates before deciding.

Use of Land Unknown 

When selling to individual buyers, you can vet their plans to ensure the land’s use aligns with your wishes. Maybe you want it to stay rural and undeveloped. Perhaps you hope it will become a community park. Listing with an agent allows asking buyers intentional questions about intentions.

Companies purchase land for investment and quick resale purely to make a profit. The eventual use becomes out of your control. If specific hopes exist to influence the acreage’s future, a land company provides less guarantees. Evaluate your priorities before committing to sell to an unknown buyer.

Closing Thoughts on Selling Land in Kentucky 

Selling a Kentucky land parcel you've inherited or owned for years constitutes a monumental financial and emotional decision. Do thorough research and ask trusted advisors their thoughts when weighing options. While DIY selling promises higher potential sale prices, the simpler route of working with a reputable local land company can alleviate major headaches.

Consider your personal timeline, financial goals and risk tolerance. For those lacking the bandwidth or desire to orchestrate their own sale, companies like Land Boss make it easy. Their upfront cash offer takes the uncertainty out of the process. See if selling your land asset to a local land investment company ultimately aligns with your needs after assessing the pros and cons.

Frequently Asked Questions (FAQs)

What kind of land does a Kentucky land company typically buy? 

Kentucky land companies usually buy vacant rural land such as wooded acreage, farmland, or undeveloped tracts. They are generally not interested in residential properties, commercial land, or operating farms. Plots must at least be a few acres in size to be considered.

How long does the land sale process take with a company? 

It typically takes 4-8 weeks from first contact until closing when selling to a land company in Kentucky. They move quickly by making a cash offer upfront and handling due diligence like title work on their end. Less hassle means faster cash.

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

While deals vary case by case, most Kentucky land companies buy at anywhere from 30% to 50% under retail market value. Their discounted pricing allows profit potential when reselling the land. More flexibility on price equals higher offers.

Does the company take into account sentimental value when making an offer? 

No, land companies strictly value property based on comps of what similar vacant land is selling for in today's real estate market. They don't factor in abstract concepts like nostalgia or generational history. Their goal is buying at a discount and reselling at a profit.

Will I have a choice about future use of the land after I sell to a company? 

No, once you close the transaction with a land investment company, they assume full control over any future sale or development plans for the acreage. Part of their business model involves reselling at a profit down the road. Selling to a company means letting go of influence over land use decisions.

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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