Pros and Cons of Selling to a New Jersey Land Company

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Pros and Cons of Selling to a New Jersey Land Company
By

Bart Waldon

New Jersey is home to diverse landscapes, from the sandy beaches of the Jersey Shore to the rolling hills and forests of the northwest. With over 7 million acres of land area, there is ample opportunity for everything from housing developments to farmland and recreational properties across the Garden State.

If you own vacant land in New Jersey, you may be considering selling it for any number of reasons. However, the process of selling land on your own can be complex and time consuming. Working with a local land company that specializes in buying and selling land can streamline the process - but is it the right option for you? Here are some of the key pros and cons to weigh when deciding whether to sell your New Jersey land to a local land company.

The Pros of Selling to a New Jersey Land Company

Cash Offers and Quick Sales

One of the biggest advantages of selling to a local land company is that they are able to make cash offers and can close quickly, which enables you to get your money faster. For example, a company like Land Boss that specializes in buying and selling land in New Jersey can make an offer and close within days or weeks. This avoids the lengthy listing and sales process if you were to work with a real estate agent.

Less Marketing and Negotiation Needed

Attempting to sell land on your own requires a significant amount of marketing, advertising, showing the property, and negotiation to try to get top dollar. This can take months or even years. Land companies have the experience to determine property value and make fair offers, so you avoid the headaches of these sales and marketing activities.

Guaranteed Sale

Land can be difficult to sell, especially if it has any complications like terrain challenges, access issues, zoning restrictions, or is an odd shape or size. Land companies are experienced with these types of properties. They can buy the land “as is” and take on the risk, whereas you may struggle finding another buyer willing or able to take on these challenges.

Expertise and Experience

Reputable local land companies have specialized expertise when it comes to transactions, valuations, zoning and regulations, and determining potential uses for the land. Their experience with hundreds of land deals gives them unique insight into local market conditions and values.

No Commissions or Fees

If you were to list your land with a real estate agent, you would pay commissions and other transaction fees that can add up to 6% or more of the sale price. Working directly with a land company avoids these extra costs altogether.

The Cons of Selling to a New Jersey Land Company

Below Market Value Offers

The biggest downside of selling to a local land company is that their offers will likely be below full retail market value. Companies need to buy properties below market value so they can make a profit when reselling the land. However, “lowball” is subjective - an offer may seem low but still be fair based on costs to hold and resell the property.

Loss of Potential Appreciation

Similar to selling your land below market value, opting to sell now also eliminates the potential for future appreciation if you were to hold the land longer. However, land values can also decline and entail holding costs like taxes, so there are risks in waiting as well.

Risk of Rezoning

Local land companies may look to rezone and repurpose your land, which could be seen negatively by the local community. Again, reputable companies follow zoning policies and try to repurpose land responsibly, but loss of control is a risk.

Unknown End Use

You will not know how the land company plans to use, redevelop or resell your land once purchased. They assume control and could develop it, resell it to developers, repurpose it, or keep it as an investment. Some sellers want to know how their land will ultimately be used.

Tax Implications

There may be tax consequences from selling your land for a substantial gain depending on your specific situation. Consulting with a tax advisor prior to selling your vacant land is recommended to understand implications.

Key Tips for Selling Land in New Jersey

If you are leaning towards selling your New Jersey land to a local land company, keep these tips in mind:

  • Research land values in your specific area and zoning to gauge fair market prices. Online sites like Zillow can provide estimates.
  • Understand all your costs - taxes, liens, mortgages or loans that would need to be paid off, commissions and fees if selling through an agent.
  • Weigh offers not just on purchase price but also on speed and simplicity. Higher offers may take longer to close and have more complexity.
  • Do your due diligence on the land company - check their reputation, Better Business Bureau rating, experience, and number of transactions.
  • Negotiate for win-win solutions - a fair purchase price, specific closing timeframe, minimal contingencies, etc.
  • Consult a tax advisor about any tax implications from the sale.
  • Obtain a land survey if boundaries are unclear. Work to remove any encumbrances on the title.
  • Hire an attorney to review the purchase contract before signing.

Selling your land does mean giving up control and potential upside from holding it longer term. However, for many New Jersey landowners, selling to an experienced local land company can make the process much simpler and faster while still fetching a fair price. Do your homework on land values and the company, understand tax impacts, negotiate win-win solutions - and you can have confidence that selling your property is the right move.

How to Choose the Right Land Company

If you decide that selling your land to a local land company is the best route, it's important to vet potential buyers to find one you can trust. Here are some tips on choosing the right land company:

Research Their Reputation

A simple online search can uncover reviews and feedback on a land company’s reputation. Check sites like Google, Facebook, and the Better Business Bureau. Look for key indicators like longevity in business, number of transactions, and satisfied customer reviews.

Ask About Their Process

Reputable land companies will have a clear, defined process for working with sellers. Ask how they determine property valuations and make offers. Understand their purchase agreement terms. Inquire about their closing process and timeline. Look for companies with fair, transparent processes.

Learn About Their Portfolio

Ask a prospective land company about properties they currently own as well as examples of land they’ve purchased in the past. The types of land they buy and sell offers insights into their business model. Their portfolio also indicates their experience with different types of land transactions.

Confirm Licensing and Credentials

Verify that the company and agents are properly licensed in your state. Ask about any affiliations, accreditations, or memberships that speak to their expertise and credibility within the land industry.

Vetting potential land buyers thoroughly gives you assurance that you are working with a reputable company that will handle your transaction professionally and ethically. Taking the time to research and ask questions helps find the right fit.

Final Thoughts

Selling your vacant land does require giving up some potential upside as well as control over the property. However, for many landowners, the speed and simplicity of selling to an experienced local land company in New Jersey outweighs those factors. As long as you take the time to thoroughly research land values and potential buyers, you can feel confident that you are making the best decision for your situation. With the right local land company as your buyer, you can streamline the sales process, avoid significant marketing and negotiations, and walk away with a fair cash offer in hand - often in a matter of weeks. If your goal is to sell your New Jersey land quickly and efficiently, partnering with a reputable local land company may be the optimal route forward.

Frequently Asked Questions (FAQs)

How long does the process take if I sell to a land company?

The process can be much faster with a land company compared to selling the land yourself or listing with an agent. After an initial consultation, an offer can be made within days or weeks. Once an offer is accepted, closing can happen within a few weeks as well. The whole process may take 4-8 weeks with an experienced land company.

How is the purchase price determined?

Reputable land companies have extensive experience determining the fair market value of properties based on location, acreage, zoning, access, terrain, development potential, and other factors. They research values of comparable land sales and make offers factoring in their costs to resell.

What expenses will I have to pay?

Most land companies cover all closing costs, so the net proceeds you receive should be very close to the purchase price. You would be responsible for paying off any loans, mortgages, liens, or taxes on the property prior to closing.

What happens if I accept the offer but it falls through?

Reputable land companies are cash buyers, so they have the funding ready and aim for quick closings. But if for some reason they rescind an offer that you already accepted, you should be able to keep their earnest money deposit.

How do I know I’m getting a fair deal?

Do your own research on land values in the area and understand all your costs. Negotiate a win-win deal with favorable terms like a fair price, quick closing date, and minimal contingencies. Hire an attorney to review the purchase contract before signing.

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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