As Land Professionals, we often encounter difficulties in finding the right way to market and sell a property. Typically, a property will sit idle on the market for one of two reasons: the price is too high or the marketing exposure is too low. A popular strategy among Land Professionals to address these issues is dividing the property into smaller, more marketable tracts.

As a landowner, while you may be hesitant to split up this property that you’ve worked hard to cultivate, it’s important to understand that dividing land to sell can work in your favor to fulfill your selling requirements. I’ve personally encountered quite a few scenarios where by dividing their property, we were able to provide sellers with a faster sale and easier overall experience.

Here are a few ways that dividing land to sell can benefit landowners!

Benefits of Dividing Land for Landowners

We recently closed on a property in Boone County, Missouri that had been previously listed by two other land companies. The seller was not motivated to reduce the price, so we knew a creative approach would be needed to sell the farm. All properties are only worth what a qualified buyer is ready and willing to pay, and to this point, the market had not shown this property was worth what the seller was asking. 

Even with all of our marketing expertise and techniques, a property that’s priced too high poses a significant challenge. So what can we do to affect the price a buyer is willing to pay? In my experience, the answer is to look at the highest and best use.

Understanding Best-Use

In its previous use, this property consisted of 113 acres of tillable land just outside Columbia, a major metropolitan area in central Missouri. The issue was nobody was willing to pay a premium for farm ground this close to town. This is where understanding the best possible use for a property becomes important. Knowing that this area had more of a market for homesites than farmland helped inform our next moves.

It soon became obvious to us that 113 acres was too big and too pricey for a rural homesite in this area. However, we knew people would pay more for a beautiful homesite than they would for tillable farm ground. So instead of reducing the price, we chose to reduce the acreage by dividing the farm into smaller tracts.

Same Amount of Money, Potentially Faster Sale

As it sat, this farm was easily divisible with road frontage running along the entire western boundary. After only a couple short weeks marketing the northern 40 +/- acres of the farm, we received a cash offer for the exact number the seller hoped to get. By dividing the property, we also expanded the pool of potential buyers since in our market there are more buyers with the purchasing power to buy a homesite on 30-40 acres rather than 113 acres of farmland.

This left us with about 73 acres remaining. We chose to use the same approach; we split the remaining acreage again and quickly negotiated two closings contingent upon both being executed on the same day. In doing so, we not only ensured the sellers got their price but made sure they were able to get all 113 acres sold in a timely manner. 

As Land Professionals, we exist to solve problems. When choosing your real estate brokerage, make sure to look beyond the marketing, beyond the drone photos, and make sure they have the end in mind. One of a Land Professional’s most important responsibilities is ensuring that you as the seller leave the closing table excited about the transaction that just took place. 

If you’d like to learn more about how dividing your land could improve the selling process, please reach out to me at Awardenburg@NationalLand.com, or contact your local Land Professional!