You always want to get the best deal possible when buying land. But is the price of land something that you can negotiate—and if so, how should you go about doing it?
Here’s what to know about negotiating on land deals, plus some quick tips for ensuring that you do it right.
Can you negotiate when you’re buying land?
Yes! Land, like all other types of property for sale, doesn’t have a fixed price. Instead, prices are set by the seller, often with the help of a land appraiser.
Sellers want to get the highest price for their land, and will usually list their property at or above market value. Buyers, meanwhile, want to make smart investments and ensure they’re not paying more than a property is worth. Somewhere in the middle lies the ultimate selling price, and it’s by negotiations that you’ll get there.
Keep in mind that savvy sellers expect negotiations and account for them in their initial listing price. While there’s a limit to how low you can go, it’s standard practice to negotiate when buying land and you may go back and forth a couple of times before finally settling on a price that works for both parties.
5 land buying negotiation tips
If you’ve bought land or other types of real estate before, then you may already be familiar with the negotiation process. Beyond the basics though, there are a number of things that you can do to show the seller you’re serious about closing the deal, even as you do your best to arrange a fair price.
Next time you negotiate, follow these five tips to increase your chances of getting an optimal deal.
1. Do your research
Before presenting your first offer, do a bit of research so that you’re not just shooting in the dark when it comes to determining a property’s worth. This includes digging into the highest potential use value of the space, as well as any zoning or other restrictions that may reduce that value.
2. Know what your limit is
Always go into land negotiations with a clear idea of how much you can spend. Just as the seller knows the lowest number they’d be willing to sell it for, the buyer needs to know the highest number they’d be willing to pay.
3. Keep negotiations professional
Present your initial offer in writing and give a brief explanation for it based on your research. Be kind and concise, and if there’s an opportunity to do so, try to build some rapport as well.
4. Don’t low-ball your offer
Obviously buyers want to pay the least amount they can on a land investment. However, offering too little can be offensive, especially if you’re clearly undervaluing the land in pursuit of a steal. Be realistic with your initial offer and make it reasonable to prove to the seller that you’re serious.
5. Be patient
If negotiations come to a standstill, it doesn’t mean you’re out of the running. Wait another 30 to 45 days and if the property is still on the market present your offer again and see if the seller is more willing to discuss.
Work with an experienced real estate agent who will be able to help you navigate the negotiation process. Done well, you should get a great deal with both you and the seller happy at closing day.
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