Yesterday I got an offer letter. I assumed it was another land dealer, but it was actually from a realtor representing a land buyer that “owns several parcels in the area”. That sounds like another land dealer to me.
Is this a strategy that dealers are using? I know dealer use realtors on the dispo side, but on the buy side?
Now I’m wondering since a realtor is involved in the buying then it’s actually worth what I have been trying to sell it for.
I have not tried a realtor to handle the listing for me. Would you sell to this buyer or find a realtor to list it for you and show them this offer letter?
For me, it comes down to a similar point we bring up to sellers, what is your time worth. If you honestly think you can get 3x with a realtor, then it might be worth considering. If not, take the offer and be happy. This buyer more than likely will be doing some sort of value add that you might not be aware of. At the end of the day, it’s about the velocity of money.
@dirtdeeds I wouldn’t assume it’s retail just because a realtor is involved. Investors use agents on the buy side all the time. “Owns several parcels in the area” actually sounds more like an investor than an end user to me.
I think the bigger issue is, you don’t actually know what the land is worth right now.
Selling for 2X your acquisition cost may feel like a win, but that doesn’t mean it’s market value. It just means you bought it cheap enough that there’s margin.
If an investor is making an offer through an agent, one of two things is probably true:
They think they can retail it even higher.
They see some upside (development, assemblage, long hold, etc.) that you may not be pricing in.
Before deciding, I’d pull actual sold comps within a mile or two from the last 6–12 months, not active listings, but real sold data. Then I’d call a couple of land-focused agents and ask them straight up, “If I listed this at $X, does it realistically sell in 90 days?”
Also, see how solid this buyer really is. Ask for proof of funds and pay attention to contingencies. If they retrade or hesitate, that tells you a lot.
If the offer is close to retail (say 90–95% of realistic market value), taking the clean, quick deal might make sense. If it’s 70–80% of retail, you’re probably leaving meaningful money on the table.
At the end of the day, the decision shouldn’t be based on “2x my cost.” It should be based on verified market value and how much speed/certainty is worth to you.
It turns out that the buyer is a developer and this realtor exclusively handles all of their acquisitions. That seems like good information regarding this area.