Here is an overview of the Kalispell Land Seller Process for those considering selling their Montana land.
Gather your documents.
It would be useful to pull out your title report and closing documents from your purchase of the land to be able to answer any questions that may come up. If you are using a skilled land listing agent (see below for more) she will obtain a report from the title company which often includes a copy of your deed, any land covenants, property report, and more. However, you should be prepared to supply whatever documents are missing and may need to be attached to the listing.
Also, if you have any questions about your own property, it’s a great idea to resolve those prior to putting your land on the market. For example, one seller had issues in the past finding a copy of the easement that provided access to his property. Further investigation identified that the reference number on his deed had two transposed numbers and the easement was then found. Clearing up issues like this before you list your property is very important. You wouldn’t want the deal to die because you could not prove there was a legal way to access the property (that’s just one example!).
Prepare for seller’s land property disclosure.
In Montana, sellers complete a property disclosure document prior to sale of land. This document is the place to indicate any adverse material fact which would be anything about the property that might affect a buyer’s decision to purchase the property. The types of adverse facts that might be included range from easements, property line issues and encroachments to any issues with flooding, drainage, septic, well, fire damage and more.
The disclosure document also includes information on the last time you visited the property. If you haven’t ever been there, you can indicate that as well.
Before you list the property is the time to think of all the issues you know about that might be associated with the property, and be prepared to disclose them.
Select a land listing agent.
While you could certainly list your property yourself on one of the for-sale-by-owner websites, hiring a land listing agent has many benefits. First, in Montana, sale prices are not disclosed publicly. Therefore, coming up with an appropriate list price is very difficult if you don’t know what land parcels similar to yours are selling for. So consulting with a skilled agent who has access to that information (and understands it) is key.
Second, a listing agent can manage showings. Even though land doesn’t require preparations for showings such as turning on lights and the like, appointments are still required. They can keep multiple parties from being on the land at the same time, and can help keep track of who is accessing the property.
In addition, a listing agent can take buyers to see the property or answer any questions that may come up from buyer agents. They can provide well logs for other homes in the area, copies of septic permits, or other legal documents that could help the property sell. They can also provide information on your net proceeds and closing costs to help you plan for your sale.
Using a listing agent also gets your listing in front of a thousand buyer agents, as well as on every major land and home sale site (including Zillow, Homes, Realtor and more).
An experienced land agent can help the process from listing to closing go much smoother, explaining documents, disclosures, offers, for example. And hopefully to ensure you have a fun (or at least stress-free) experience!
Similar to staging homes to sell, your land may need some staging. And of course this doesn’t mean you have to place a table and place settings on your property! But if you wish to get more money, you might want to add a driveway, get septic approval, drill a well, run electricity to the property or clean up any debris. Or you may wish to harvest some trees prior to sale enabling a more “parked out” parcel. To encourage future home owners to purchase the land, you also may wish to clear a site so it’s ready for a build.
Just to be clear, though, none of these actions are required in order to sell your land. They can just make it more valuable.
Understand time frames.
In the Kalispell Montana area, on average land takes approximately seven months to sell. Of course that means some parcels sell a lot faster and some could take years. Having the correct expectations up front could help your transaction go a lot smoother and be less stressful. Here is a link to the December 2020 Kalispell land market analysis which includes some additional information about timeframes.
Once the right buyer has seen your property, they will submit an offer. That offer should come with a pre-approval letter if they are obtaining a land mortgage, or with proof of funds if they are paying cash. The offer will include an offered purchase price, but that is not the only important part of the offer. You’ll also be interested in what contingencies they are asking for, how they are funding the purchase, what timeframes they have, how much earnest money they are offering and what kinds of additional investigations they may wish to do.
Upon receiving an offer, you have three options. Accept it as is, in which case you would sign the buy-sell (offer) document and be under contract. You could also counter-offer on any of the offer components. If the price is great, but you don’t wish to go through the septic approval, you can counter just on the septic contingency. Your third option is to just reject the offer. If you are able to come to terms with the buyers offer, and you sign the document, you are under contract.
From contract to closing.
From contract to closing, most of the work is done by the buyer and title company, but it’s important to know what the process is. The title company will handle the transaction deliverables, and will order a title report. When that is complete, the report will go to the buyer for their review and acceptance. At the same time, the mortgage company (if a mortgage is involved) will start the mortgage application process and will order an appraisal of the land. The appraisal will be conducted. If the appraised value is less than the agreed upon sale price, the buyer typically has a few days to decide if they want to move forward with the sale. After the appraisal process is complete, the bank can finalize the underwriting process and the title company can get the closing scheduled.
Once the deed transfer has been filed, you are officially able to move on to the next stage of your life.
All you need to do after closing is to file all your sale paperwork in case you need it again, and stay in touch with your real estate agent in case you need her again!
If you have any further questions, please feel free to contact me at 406-270-3667 or via email at firstname.lastname@example.org.