Are you thinking about selling your vacant land in Florida? If so then you might be wondering : who pays when selling land in Florida? In this article, I’ll reveal the surprising answer.
When people think of selling raw, unimproved land, they think of handing over the deed and accepting a check for the property. Sometimes it’s indeed that simple, but the vast majority of the time it isn’t. In most transactions, at first you might think that the buyer pays the seller. But that’s often not how it works, and you might be surprised at who pays when selling land in Florida…
If you’re the seller, I hate to break the news to you, but you’ll have to pay first! In order to ensure your property can be properly marketed and that you’ll generate enough interest to find a buyer in a timely fashion, you’ll have some prep work to do. It’s important to lay the groundwork for your future buyer by paying for a survey or a site analysis, or for an environmental consultant to look at your property. If there’s tax or title issues, liens or judgements on the property, or one or all the owners are deceased, these issues will also need to be resolved before going to market.
All of these things are necessary steps ensure there’s no red flags like boundary encroachments, wetlands, endangered species, or the tax/title issues mentioned previously. You could take the risk and skip a few of these things, but most buyers (and/or the title company managing the transaction) will uncover these issues during their due diligence, leaving you holding an unsold property with documented problems. Naturally, you’ll want to do everything you can to avoid this scenario.
Assuming no issues are uncovered from your prep work, then you’ll hire a (preferably land-specialized) real estate agent to try and sell the property. There will probably be additional expenses that you’ll have to cover while the agent tries to find a buyer. Land may be cheap and relatively low maintenance, but one thing’s for sure, it’s not free! For example, you’ll have to pay any mortgage, maintenance bills like lawn and clearing services, property taxes, and perhaps liability insurance on the property in the months that the agent is looking for a buyer.
When an agent finds a buyer, then you may need to work with a real estate attorney, a title company, and potentially others as well to complete the paperwork. Yes, YOU are paying for all of this the entire time.
Once the paperwork is complete, you will get the money for the property – after any debt or overdue taxes are paid off and any liens are taken care of. That money might either come from the buyer themselves (if they’re paying cash) or it might come from the buyer’s bank or credit union (if the buyer was able to get financing to buy the land).
But your paying is unfortunately not over yet! Once it’s all said and done, you’ll also have to pay the agent’s commission… and that typically comes out of your sales proceeds.
So, to answer the question, “who pays when selling land in Florida,” the answer is that you’ll pay multiple times in multiple ways, and the buyer or their bank will pay you once.
A lot of Florida landowners come to the realization that this simply isn’t the best way to sell, especially if you don’t have the cash in hand to cover those numerous and sometimes expensive up-front costs. Sure, it’s nice to roll the dice and gamble on the possibility of getting a higher selling price (although you might not get what you’re asking for depending on the trajectory of the market.) It’s no wonder why so many sellers are looking for a faster (and much easier) way to sell their raw land – by getting a straightforward offer with prep costs taken care of by your buyer and no commission or closing costs involved.