How do land sales work? A case study of a historical home on 8.5ac of land in Littleton.
Selling land is hands down the most complex transaction I’ve done to date. The longest, most trying, but also… the most impactful and gratifying.
Selling land is unlike selling a residential home where there are established sales to provide a sense of market demand and pricing. Where, in the Boston market, a property that’s listed at the right price takes 30 days to close.
Selling land is about figuring out
The best use case for the land;
projecting where the market is headed;
knowing the bureaucracies involved;
understanding the economics of development and time value, AND
finding the most qualified buyer for it.
Selling land takes an average of 173 days to complete, according to a 12-month data set of land sales in Middlesex County. Approximately 6 months.
I’ve had much to learn and share from the sale of 95 Taylor St in Littleton which concluded in August 2024. This had been a property that comprised of a historical 1800s single-family home on 8.5 acres of land; a process that took me about 2 years from start to finish.
Here’s a high-level summary of the considerations and steps to take when selling land:
Can that land be developed?
If no – ask neighbors if they’d like to purchase to expand
When can the land be developed?
What is the best use case for the land?
Check the town’s zoning bylaws
Check the town’s subsidized housing inventory
Craft a compelling sales pitch
Numbers
Visuals
Pre-market to qualified buyers
Work with a land-sales expert attorney to pick the winning offer
Understand that there are things that you can’t control that will influence the viability of the land, e.g. perc test (for septic), discovering protected species, etc.
Here’s how land sales work.
Step 1: Understand if that land can be developed
Land is generally worth its development potential.
Not all land in town is equal. If you’ve got 10 acres of land that is entirely wetlands – of which wetland laws prohibit development – it suffices to say that 10 acres of wetlands isn’t worth the same as 10 acres of dry land that could support housing.
Check the environmental factors of the land to see if there are limiting factors – wetlands, vernal pools, records of endangered species etc.
Check the size of the lot against the town’s bylaws.
Here’s an example of land that can’t be developed; annotated by wetlands (green areas) and rare species (purple lined areas).
If you’ve derived at “no, my land can’t be developed”, the most practical course of action is to reach out to adjacent neighbors. Perhaps a neighbor might wish to acquire additional land to expand their yard.
If your conclusion is “yes, it looks like my land can be developed”, the next question that you have to answer is “when”.
Step 2: When can the land be developed?
“When” is important because timing has an impact on cost, as it does on risk. Time plays a role in pricing.
Is the land vacant where a builder could get Zoning and Planning Board approvals for development, or are there extra approvals and wait times needed before one could embark on the above process?
Extra approvals could involve various town boards, e.g. Planning Board, Zoning Board, Conservation Commission, Historical Commission…
In the case of 95 Taylor St, the property had an 1800s house that the owner was seeking to demolish in order to proceed with a subdivision project. Homes older than 50 years old require consent from the historical commission as to whether demolition could take place without delay, or would require a 12-month delay. To get to a verdict, I’ve had to represent 95 Taylor St in 3 hearings over the course of 7 months.
Step 3: What is the best use case for the land?
Land sales are a rare case of financial alignment between the Seller and Buyer – both parties typically wish for a denser development that could yield the highest market sales, because that translates to more proceeds for everyone.
Always consider if that land could support a Chapter 40B project, because that allows for a higher development density for a builder.
If the town’s subsidized housing inventory is below MA’s mandatory requirement of 10%, you’ve got yourself a good argument to pursue that route.
Look up zoning bylaws, understand minimum acreage and setbacks required to support the type and number of housing to be expected.
Step 4: Craft a compelling sales pitch – present numbers and visuals
Know your audience. Know what kind of attention span they have, and what kind of information they need.
Present numbers supported by factual sales; visuals to showcase knowledge of bylaws and an illustration of the end product.
Here’s an example of what I did:
Step 5: Pre-market to qualified buyers before the listing is public
Spreading word about an upcoming land sale to qualified buyers ahead of when the listing actually goes “live” on the market helps assign time and energy to the people who could actually make the purchase.
For the fact that builders are not desk-bound and surfing the MLS all day, you’d need to be innovative to get in touch with them- beyond looking up their emails/mobiles and dropping a cold outreach, try leveraging relationships that they trust – prior attorneys whom they’ve closed with, or agents who most frequently represent them.
Get to the right builders ahead of time, and you’ll have yourself potential buyers with adequate time to conduct diligence with their teams of engineers, architects, attorneys, and agents.
Expect lots of “noise” once the listing is public to the market. There would be enquiries from wholesalers looking to assign contracts to buyers with no development experience, enquiries from inexperienced agents, and most definitely inquiries from the general public wondering if they could finally build a compound to live in close proximity to friends. Know who to engage.
Case in point: 95 Taylor St received 4 offers – 3 were from buyers I’d conscientiously approached at the pre-market phase.
Step 6: Work with a land-sales expert real estate attorney to pick the winning offer
There are real estate attorneys, and then there are in-town land-sales expert real estate attorneys.
The latter deal primarily with land laws and subdivisions. This MVP contact would have a pulse on where the town’s development is headed, to know which buyer has the experience and financial muscle to pull off a development.
In Littleton, that is undoubtedly Sherril Gould of Gould Law.
Step 7: Understand that there are things that you can’t control that will influence the viability of the land
You could plan and conceptualize, and run numbers all day, but the reality is that until engineering studies are made, no one knows if the land would be viable for development.
You could discover that the land is full of ledge and does not percolate well enough to support a septic system.
Or discover that there are endangered animals on the land, with protection laws in play.
Know what your options are to proceed with the transaction or exit from it.
Acknowledgements
I was not on this journey alone. Thank you, Jon Maren and Attorney Sherry Gould, for being a mentor, soundboard and tailwind to my sail. Your kindness is forever etched in my memory.