You’re sipping your morning coffee when you retrieve the mail and a letter pops out demanding to buy your rural acreage. You’re puzzled how the writer got your address and wonder if an aggressive prospector has been spying from the bushes with night vision goggles. The truth is that these offers are usually benign, mining public records and often coming from companies who buy land at auctions and then resell it for profit. This is known as land wholesaling.
If you’re in the market to purchase a piece of land, it pays to have an experienced real estate lawyer by your side. Not only will he or she be able to advise you on price, terms and closing costs, but also on issues that may impact your plans for the land such as title problems, deed restrictions, zoning limitations and more. You’ll want to take a good look at the land and if possible visit it several times before making an offer. Ask questions of the seller’s agent, town officials and neighbors, walk the property with experts, do a due diligence checklist and work out a preliminary budget for your land development project.
Once you’ve done the homework, if you’re interested in an offer, it’s a good idea to make an earnest money deposit also known as a down payment of at least 10 percent of the contract price with the buyer. This will give you the leverage you need to void the contract if you discover that the land won’t be suitable for the purpose you have in mind or if the seller fails to disclose a material defect.
You should also consider how the seller plans to close on the sale and whether you’re comfortable with this method. Typically, land sales are closed with cashier’s checks or wire transfers. If the seller is using a bank account with a different name than yours, be especially cautious.
For some I got an offer in the mail to buy my land, a quick and easy sale with little or no hassle is attractive. This is particularly true if you’ve attempted to sell your land through traditional methods without success after many months. Or if your land is located in an area where preparations like surveys, site clean-up and staging are too time consuming or costly to do yourself.
For these sellers, cautious consideration of reputable mail offers can provide an exit strategy alternative that’s fast, convenient and affordable. However, it’s important to understand that selling your land to a wholesaler is a business decision and not a charitable act. Wholesalers are people who want to earn a living by buying properties at auctions and then reselling them for a higher price. Some of them have a genuine interest in buying, but others are simply looking for ways to turn a quick profit with little or no risk. The latter are the ones that send these letters to unsuspecting land owners. They’ve likely found your address in public records or have gleaned it from online listings and ads.