Selling Rural Land
Before we begin, a question …
I took the picture for this post from a local rural residential project. How could any developer let their project entry road look like this? Ugh…
Selling Rural Lots:
Let’s say you have come to the end of the long, dusty trail of a land development project and now it’s time to market and sell your finished lots. First of all, congratulations! Over many years and thousands of acres sold, I have discovered certain things that can help expedite the sale of my dirt. They might be of help to you as well.
Forecast revenue early:
I usually hold land for years while permitting and constructing a project, so I have plenty of time to plan for the future sale price of my lots. Having a decent estimate of what gross sales might be when coming to market is important from the start, otherwise you are just speculating based on pure hope.
Market conditions change and we typically see one of three things when coming to market - a market that is appreciating, a flat or stagnant market, or a declining market. Let’s hope an appreciating market is where you wind up with for your project
Marketing and sales:
Marketing and sales are not the same thing, but they work in tandem, so let’s look at each separately.
Marketing:
There are many theories and principals of marketing but no matter how you slice it we always seem to get around to the following basics:
Know your buyer:
Knowing your buyers in land development revolves around understanding exactly what buyers will be looking for and knowing that you can provide it, along with some extras if you want to separate yourself from the crowd.
Develop product for the target market:
In my land development projects there are two main buyers - spec builders and private parties. They are very different target markets and they don’t prioritize the same things.
Features must create value:
This is simple. What features of your lots and your community will your target buyers see as most valuable?
Grow the business:
Good marketing results in current growth, great marketing results in current and future growth.
Sales:
Sales in land and real estate in general is a different animal than is typical for most products. Classical product sales techniques are consultative in nature and usually contain the following elements:
Quality engagement.
Questions to uncover the buyer’s wants and needs.
Present the features of the product and convert them into benefits the customer will realize.
Clarify to make sure that the needs are fully met.
Close for a commitment.
However, real estate sales is different and I don’t consider it to be a classic sales environment as described above. In fact, many real estate agents will tell you their job is not sales at all and I agree. It’s really facilitating transactions with buyers sourced from quality marketing efforts.
Whether marketing and selling rural land, the goal is to meet customer needs in a way that causes them to take action in the form of a closed sale.
Putting “POP” in rural lots:
I see tired rural lots for sale all the time and they sell for tired prices … eventually. I can’t figure out why some guys will work so hard to subdivide a project and then not bother to create a dynamic marketing and sales program.
Visualizing rural lots:
Providing easy ways for buyers to visualize a rural lot is essential and this is a huge miss for a lot of developers. They plant for sale signs somewhere in the middle of the lots and call it good. Buyers need to figure out the rest as they drive by, or walk the property. They have to guess where the lot boundaries and corners are. This is just plain sloppy and this “all to commonly seen” problem can be easily avoided.
Here’s what I do:
Drive stakes topped with flagging tape at the surveyed corners of each lot.
How many times have we all stood on dirt and tried to find the surveyors rebar at the corners? It’s an exasperating task and a needless one if the corners are already staked and flagged. Why not make it easy on everyone?
If the lots are irregular in shape, drive flagged stakes at the angle points.
Irregular lots require enhanced reference points. If the lot line turns 15 degrees to the west, 160’ down the east line, how is anyone supposed to know that if the turn point isn’t staked and flagged?
Brush cut lot boundary lines and mark perimeter lines with flagging tape.
In the Pacific Northwest there is a lot of brush, salal, blackberries and ferns that block foot travel. Since most buyers want to walk the property lines I always have them brush cut. The cost of this is minor and anything that helps the buyers and their agents more easily understand the size and shape of a lot is a good thing. I also put flagging tape along the brushed lines.
Each lot has a flyer box with a scaled map of that exact lot.
Good flyer boxes are an asset, cracked or broken flyer boxes are an eye sore. I place and keep the flyer boxes for each lot stocked with a flyer that has the scaled lot on one side and the project map on the other. Enough said, except keep the flyers fresh and dry. Who wants to reach for a flyer and find a wet and runny blob of stuck-together paper?
Clear suggested building sites.
Some guys think I am nuts for doing this but I know it speeds up sales for me. I always put in a rough driveway to a cleared building site. It is not mandatory that the buyers use these locations, but I would say 90% of the time they do. Nothing helps a buyer get the “feel” for a lot than to actually stand where their home will be placed … then start dreaming!
Maintenance.
All these enhanced efforts do more harm than good if they are not maintained in top condition!
Listing agents:
Some of you might say “A lot of this is the job of my listing agent, that’s what I am paying him/her for”! Maybe so, but if the owner does not set clear standards for development of the marketing and sales program, along with the maintenance expectations for the on-site materials and markers, then I guess you just get what you get. As owners, it is our ultimate responsibility to make sure whether we do it ourselves, or delegate it in a listing agreement, that our marketing and sales efforts work in the eyes of the customer.
Make it easy for your customers:
Vacant land and lots are not easy for many buyers to visualize, especially when they are heavily wooded or there is brush obstructing a clear line of sight. Failure of the seller to account for this unnecessarily frustrates potential buyers and slows the process. When the momentum for a buying decision is interrupted, sales decisions are similarly interrupted and these few tips can help avoid all of this.
Developers get to know their land really well over the course of ownership. Like any familiar thing, we can tend to assume that because we can see visual references easily, others can too. We cannot assume this with new buyers who are seeing our dirt for the first or second time. I know an ‘Ole Boy developer who always told me that he created all of his marketing materials to work for a 6th grader’s comprehension. Although this is an exaggeration and our buyers are valued and intelligent, it does pay to remember that the easier we make it for them to move to the next step in a buying decision, the better it is for all involved! Good luck!
