You spot a piece of land and think, “Maybe I could own that– I wonder how much it is?” Eventually, you find out who owns that land and it’s time to negotiate a deal. The seller wants to feel like they’re getting a good deal, as does the buyer, right? So, how should a land deal be negotiated so both parties “win?”
When both parties– the buyer and the seller– see eye-to-eye and agree on terms of a deal, then negotiations are successful. For a deal to be successful, there are some things to consider…
Try to Remove Emotion
First, when negotiating a land deal, take emotion out of it if possible. Think logically and clinically. For instance, what are the actual reasons you’d want to own a piece of land? What would you use that land for, and what do you want to achieve with the purchase? There are things you want, and things you need. For land deals, concentrate more on what you need than what you want.
The Negotiation Process
Next, think about this: an asking price isn’t necessarily the agreed-upon purchase price. When looking at land, review the current title, look at the deed and assess the appraisal. You may end up negotiating a lower price after reviewing these details.
Also, if possible, get a copy of covenants and restrictions. Find out how the land you’re interested in is zoned, which ultimately determines how you’d be allowed to use the property.
What about a cost analysis? You have in mind what you’d like to do with a property. So add up all the costs (acquiring the land, construction, marketing, needed loans, etc.) to help figure out if you’ll make a good return on your investment. Have a number in mind– the most you’re willing to pay a seller– based on the outcome of your cost analysis. malfunction
Fair Offer to Both Parties
Finally, make a fair offer based on research. Rather than playing games with a seller, or questioning their integrity, go into negotiations with an idea of what you’d like to pay and settle on a price that’s acceptable to both parties. As stated before, do your best to take emotion out of the deal.
If you need help negotiating a land deal in South Carolina, learn how Metcalf Land Company can help.