How to succeed as a land developer

It should come as no surprise that those who purchase real estate will usually end up selling their property at some point or another. Land developers are really real estate sellers but they just so happen to be in the guise of someone buying land. As successful real estate developers you need to be able to quickly and easily determine the real buyers from the uncertain buyers.

Experienced developers understand that there is more involved with a land purchase than the simple financing of that land. Often times a seller will have a significant emotional attachment to the particular piece of property they are selling. The emotional attachment of the seller can easily tarnish the deal and cloud the seller’s judgment. If you want the seller to become motivated you need to persuade them by using simple facts and logic.

Suppose you found an ideal piece of property to build an office building but the property is only zoned for residential housing on half acre lots. In order to build your office building you will need to be issued a use variance by the municipal governing body. If the municipal governing body does not issue the sought after variance then your purchase of the land will be almost totally worthless. Before you purchase the land you need to convince the seller that your purchase of their land is dependent upon approval of the variance by the municipal governing body. If the owner of the land fails to understand this then you might be dealing with someone who has an emotional attachment to their property.

In truth, it is much easier to get a “no” from a potential seller than it is to become involved in the headache of constant negotiations with the seller. A seller who changes their mind all of the time can easily become your worst nightmare and can easily cost you both time and money. Once a seller starts showing signs of hesitation or even remorse you need to be sure to stick to your contractual obligations. If you do not, the seller will likely use every breach on your part as a justification for nullifying the contract.

In extreme cases of seller’s remorse, the seller may deliberately violate their contractual obligations knowing full well that you will be forced to sue them. The seller simply becomes so desperate to get out of the contract that they are willing to do anything to cancel the sale. In such a case, you may still be able to purchase the land depending upon the language of the contract. However, the maddening frustration of the situation is often times enough to lead to even more complications.

The best advice for land developers is to approach each transaction as a team effort. Fully inform the seller of everything that you are doing and treat them as if they were a member of your very own development team. It also helps to have top notch attorneys and legal consultants as part of your team as well. Once you start spotting signs of hesitation on behalf of the seller you need to act fast, earn their trust, and establish credibility. Doing so could save you enormous time and money in the future!