Land flipping is an incredible way to get into the world of land investment and make quick returns if you know what you’re doing. At first, land flipping can be quite tricky, especially negotiating with sellers to get their property. Once you’ve figured out what to do, approaching sellers becomes a lot easier, and getting a great deal can be relatively simple. There are some land flipping negotiation tips that will help your deals run smoothly.
Understand The Three Common Types of Land Sellers
When you’re targeting sellers to flip land, there are generally three types of responses that you’ll get, this is not true 100% of the time, but it’s common enough that you need to know these basic seller types.
Wants To Sell Land Now
These are the ones where you’ve made an offer to buy their land, they’re looking to sell and they’re happy with the offer. This comes up quite frequently and it’s always great when your offer has been accepted. There can be multiple reasons why someone immediately jumps at your offer and you should be mindful of what those reasons might be.
Wants To Sell But For a Higher Price
This is probably the most common seller type you will see and the ‘higher price’ can vary widely in scope from seller to seller. This can be for a number of reasons, like not wanting to make a loss, or simply them throwing a dream number out there. Understanding the motivation for why they want a higher price can help you massively in your land flipping negotiations.
Does Not Want To Sell
These are unfortunately going to come up, these are generally people that definitely do not want to sell their land and they may even possibly be offended by you asking. This may be because the land is valuable to them in some way, such as using it for farming. Always leave your number if they’ll take it as they may change their mind.
Tips for The Land Flipping Negotiation Process
Once you’ve got a good understanding of the types of sellers and some of the base motivations behind their actions, you can start looking at the finer points of the negotiation process when land flipping. The last thing you want to do is start making the wrong strategic choices, which could potentially lead to you losing out on good deals, or making losses on deals you’ve agreed to.
Remember What Makes a Good Deal For You
Sometimes when you’re negotiating, it can be easy to agree to things that aren’t best for you, or even be too stubborn yourself. When you’re negotiating, understanding where you can be flexible and still make a profit will allow you to strike a much higher volume of quality deals. Try to offer some form of win if you find yourself needing to negotiate, like a coming up very marginally on your price if it is still very profitable.
Build a Relationship and Get a Feel For The Seller
One of the best ways to run a negotiation is to get a feel for your seller and build a relationship with them, with trust. By understanding them more, you will be able to tell if they are bluffing on not taking your initial offer, for example, if they’re actually desperate to liquidate the land, they will likely still accept the offer eventually. Furthermore, the seller may be more open to giving you a good deal if they like you personally.
Know When To Stand Your Ground Or Pull Out
As previously mentioned, there are times to stand your ground and you can make a significantly increased profit by knowing when to stand firm on your pricing. You should never come up on price if you don’t have to. Also, there are some deals that are not going to be worth your time and money, even if they do turn a profit, learning to turn these down will save you time and help you focus on more profitable ventures.
Don’t Get Too Excited at a Good Buyer Response
This is something that can kill an unexpected number of deals. When you’re being told that the seller has accepted your offer, you can’t be jumping for joy- this will let them know that they could probably get more for their land and they’ll pull out of the deal. Always try to remain very neutral when an offer is accepted to avoid this becoming a problem.
Don’t Make Assumptions If You Don’t Know The Area
This is a big one, especially if you’re confident in your abilities. If you’re not familiar with the area, don’t assume that you’ve definitely priced it correctly. When you get responses and counteroffers that are seemingly off the mark, you should be checking the pricing of the area to say if you are pricing fairly and competitively.
Don’t Be Antagonistic
Of course, you’re going to go into the process expecting to get a win, that’s understandable and should be applauded, but if you’re looking at the seller like an opponent then they’ll probably notice and it can jeopardize your negotiations. You should always be respectful and give the impression that you’re both looking to help each other out.
Don’t Assume That Everyone Wants To Make a Profit
Of course, nobody really wants to make a loss on investment- but there are some people who don’t have much of a choice. If someone has bought land for an inflated price in the past, but they never use or maintain it, they may be happy for you to take it off their hands with minimal hassle at a loss. Always see what you can walk away with.
All Legalities Need to be Clear In Negotiations
When you’re negotiating about buying land, there are some other things that you will have to consider if you want to make sure your deal goes smoothly.
Will and Probate
The will and probate process with land effectively governs the estate of a deceased person and who inherits that estate, which includes land. Sometimes, people don’t want to keep or maintain that land themselves and look to sell. Probate is not completed immediately upon death and you should be aware that you should wait until the proposed seller has correctly inherited the land. These deals can take longer but they can be very much worth the time.
Easements and Land Rights
When you’re looking to buy land, you should always be aware of any easements and other third-party rights attached to the land. It could be that a third party has rights to extract mineral resources from your land, or the public may be able to walk across it and enjoy other rights. Knowing about these legal aspects will help to ensure a smooth deal post-transaction.
Tax and Legal Fees
Depending on the complexity of the deal, you may need support from legal and tax specialists to ensure you’re making the right choices. Consider the potential costs of getting this support when you’re factoring in the profit margins for a potential land flipping deal. This will help you to avoid making an accidental loss.
Conclusion
Now that you have a better understanding of how to conduct yourself during the negotiation process for land flipping, you will be able to more comfortably generate profit from buying and then selling land. If after this article, you’re still not entirely sure how to get the most out of your negotiations, you can do specific land flipping courses which will equip you with all of the tools that you need to be successful.