With the institutional lenders having pulled their land and construction financing off the shelf, sales of vacant land lots and acreage have plummeted and here in Temecula and Murrieta Valleys (SW Riverside County, CA), the market I work, they have all but nearly halted. Since the market highs of 2005, land values have dropped severely, some areas upward of 50% or more, and the numbers of closed sales have dropped even further. But if your situation requires that you liquidate your asset, then offering a financing option may help facilitate a sale.
There is not doubt, Cash Buyers are King, and there are many investors out there hovering the marketplace right now looking at only the most attractive investments. They will typically only buy extremely discounted, or REO properties. However, if you are fortunate enough to own your property free and clear of any existing loans, then you may be in a position to Carry Paper or provide Owner Financing. This could in fact be a win win for you and a qualified Buyer. Typical terms of an Owner Financed transaction may be 20% to 30% down, with loan balance at or just above market interest rates; monthly payments either interest only or amortized over 20 to 30 years, with total loan balance all due and payable within 5 years with no prepayment penalty.
This could benefit you, as you will by earning monthly interest income, spreading any taxable gain over one or more years, and a buyer may be attracted due to no required appraisals to pay, no bank qualifying, and thus saving of thousands in loan points and other garbage fees. Owner Financing is fairly easy to arrange and Real Estate Brokers who specialize in land sales will usually have the experience to help you through the process. And remember, it only takes one buyer to close a sale, Best of Luck to you!
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