Failed Attempts to Sell Land for 3 Years

Chicago, Illinois
Land & New Construction
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Failed Attempts to Sell Land for 3 Years

Bob S.
Member since 2018 · 35 posts · 12 votes

hello! haven't posted in a long time so please be gentle...

my wife and i purchased a piece of land 3 years ago to build on (for ourselves). instead of building, and due to the madness of "covid" times, we ended up buying a house instead.

we've been attempting to sell our land for 3 years now and have had 5 contractual offers. 2 of the buyers ducked out during attorney review for valid reasons (the land is near a landfill that's defunct), 2 because "they didn't know building was so expensive" (come on, do your research), and 1 recent offer backed out three days before closing!

i'm wondering if we're "doing something wrong" here. we have a strong RE agent and attorney team. they do everything they can; maximum exposure, covering our a**ses, etc... and deals keep falling through.

it's a very nice (subjective, i know) piece of land (1 acre) in residential chicagoland.

does anybody have any tips to get it sold? we have until spring of 2025 until our balloon loan either has to be refinanced or paid off (we got this loan because we intended to build, of course) and now i feel like it's a ticking time bomb.

we conducted "clean and satisfactory" (no issues whatsoever to build) soil and foundation tests and provided those to every buyer. it seemed (not quite sure here) like they backed out once they reviewed the tests - yet there is nothing negative in them. we will not be providing these tests moving forward (as we had to do them ourselves and feel that each buyer should do their due diligence moving forward!) and modified our listing to remove these offerings.

thoughts anybody? help! TIA :)

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Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
2y

Partner with a builder and split the final sales price based on value difference before and after the building

Lower the price enough to not lose the property when the balloon comes due?

Sell your current home and build on the land?

Build a new primary with the preferred financing and turn your old property in to a rental?

Put it on an auction site starting at your loan balance?

Option 1&2 are obviously easiest/quickest. Everything else is an attempt to lose less money. 

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  • Jennie Berger
    Lender · Chicago IL · Member since 2020 · 357 posts · 229 votes
    2y

    @Bob S. out of curiosity, would you be willing to share the location of the land you're trying to sell? I may know some people who would be interested.

    0Reply
  • Jack Schwartz
    Member since 2023 · 111 posts · 35 votes
    2y
    Quote from @Scott Mac:

    There must be comparably priced buildable lots available in the general area that are not right next to a landfill.

    Or more expensive lots that are affordable and buildable that are not right next to a landfill.

    Landfills and those enormous overhead electrical wire distribution towers both carry risks in many people's minds.

    Selling a three year old car full of rust holes is going to be a lot harder than a car from Florida with no rust even if the Florida car costs more.

    It's not something someone can fix-this worry they would have about soil contamination affecting themselves and their family and their pets.

    Is it zoned for things such as a filling station, or a strip Mall, or medical dental, or a church. Something besides primary living space for human beings?

    But even in those instances there is still this black cloud that causes potential worry in the buyer's mind. Because you said the reports are clear-so in reality-the risk seems contained at this time. So it must be worry that is jumping up and causing cold feet.

    Just my 2 cents.

    Hi Scott,
    Good point, you mentioned that Landfills and those enormous overhead electrical wire distribution towers both carry risks in many people's minds. I am about to purchase a property that has overhead electrical wires for an electrical distribution company (they have an easement), Is there an involved risk? I was planning to build 10 homes on the property, what are your thoughts? 
    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Jack Schwartz:
    Quote from @Scott Mac:

    There must be comparably priced buildable lots available in the general area that are not right next to a landfill.

    Or more expensive lots that are affordable and buildable that are not right next to a landfill.

    Landfills and those enormous overhead electrical wire distribution towers both carry risks in many people's minds.

    Selling a three year old car full of rust holes is going to be a lot harder than a car from Florida with no rust even if the Florida car costs more.

    It's not something someone can fix-this worry they would have about soil contamination affecting themselves and their family and their pets.

    Is it zoned for things such as a filling station, or a strip Mall, or medical dental, or a church. Something besides primary living space for human beings?

    But even in those instances there is still this black cloud that causes potential worry in the buyer's mind. Because you said the reports are clear-so in reality-the risk seems contained at this time. So it must be worry that is jumping up and causing cold feet.

    Just my 2 cents.

    Hi Scott,
    Good point, you mentioned that Landfills and those enormous overhead electrical wire distribution towers both carry risks in many people's minds. I am about to purchase a property that has overhead electrical wires for an electrical distribution company (they have an easement), Is there an involved risk? I was planning to build 10 homes on the property, what are your thoughts? 

    I just sold 3 of my lots to a builder in Oregon there were high tension wires along all 3 lots these are the 100 foot towers major transmission lines.. they built 3  1.2 to 1.7 mil dollar homes and sold them all ..  Some folks may balk but if the lot is pretty enough and well located like mine were they will sell.
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  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    2y
    Quote from @Jack Schwartz:
    Quote from @Scott Mac:

    There must be comparably priced buildable lots available in the general area that are not right next to a landfill.

    Or more expensive lots that are affordable and buildable that are not right next to a landfill.

    Landfills and those enormous overhead electrical wire distribution towers both carry risks in many people's minds.

    Selling a three year old car full of rust holes is going to be a lot harder than a car from Florida with no rust even if the Florida car costs more.

    It's not something someone can fix-this worry they would have about soil contamination affecting themselves and their family and their pets.

    Is it zoned for things such as a filling station, or a strip Mall, or medical dental, or a church. Something besides primary living space for human beings?

    But even in those instances there is still this black cloud that causes potential worry in the buyer's mind. Because you said the reports are clear-so in reality-the risk seems contained at this time. So it must be worry that is jumping up and causing cold feet.

    Just my 2 cents.

    Hi Scott,
    Good point, you mentioned that Landfills and those enormous overhead electrical wire distribution towers both carry risks in many people's minds. I am about to purchase a property that has overhead electrical wires for an electrical distribution company (they have an easement), Is there an involved risk? I was planning to build 10 homes on the property, what are your thoughts? 

     Personally I would not buy under these large distribution points.

    It's reasonable to assume that some people will buy.

    It also seems reasonable to assume that your buyers will be a smaller set of people than if you did not put them there.

    That's about all I can say about it- there doesn't seem to be any way to predict real world sales in dollars or in time on market based on this variable.

    But people do live underneath these power cables all over the usa. So we know they are saleable. We also know it is not a wow factor, or selling point.

     Good Luck!

    0Reply
  • Jack Schwartz
    Member since 2023 · 111 posts · 35 votes
    2y

    Thanks, Scott. 
    I believe this property has great potential. Its proximity to a desirable gated development increases its attractiveness. While the transmission lines may be a slight drawback, (just thinking what kind of risk or drawback can this be to a potential home buyer) I still think it is a worthwhile investment. Partnering with a money investor could help to enhance the property's appearance and value.

    1Reply
  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    2y
    Quote from @Jack Schwartz:

    Thanks, Scott. 
    I believe this property has great potential. Its proximity to a desirable gated development increases its attractiveness. While the transmission lines may be a slight drawback, (just thinking what kind of risk or drawback can this be to a potential home buyer) I still think it is a worthwhile investment. Partnering with a money investor could help to enhance the property's appearance and value.


     Here are some links: 

    ttps://www.google.com/search?q=Power+line+cancer

    0Reply
  • Jack Schwartz
    Member since 2023 · 111 posts · 35 votes
    2y

    wow! Thanks

    1Reply
  • Joseph P Davis
    Member since 2022 · 15 posts · 5 votes
    2y

    Lower the Price

    0Reply
  • Bob S.
    OP
    Member since 2018 · 35 posts · 12 votes
    2y
    Quote from @Jennie Berger:

    @Bob S. out of curiosity, would you be willing to share the location of the land you're trying to sell? I may know some people who would be interested.


     sorry, didn't catch updates on this thread!

    here you go:

    https://www.redfin.com/IL/Bloomingdale/174-Merganser-Ln-6010...

    as you can see, it's the LOWEST priced land in this very established neighborhood!

    we can also work WITHOUT an agent!

    0Reply
  • Bob S.
    OP
    Member since 2018 · 35 posts · 12 votes
    2y
    Quote from @Joseph P Davis:

    Lower the Price


     have already done so multiple times! we are the lowest priced land in the established neighborhood!

    0Reply
  • Bob S.
    OP
    Member since 2018 · 35 posts · 12 votes
    2y
    Quote from @Jay Hinrichs:
    Quote from @Jack Schwartz:
    Quote from @Scott Mac:

    There must be comparably priced buildable lots available in the general area that are not right next to a landfill.

    Or more expensive lots that are affordable and buildable that are not right next to a landfill.

    Landfills and those enormous overhead electrical wire distribution towers both carry risks in many people's minds.

    Selling a three year old car full of rust holes is going to be a lot harder than a car from Florida with no rust even if the Florida car costs more.

    It's not something someone can fix-this worry they would have about soil contamination affecting themselves and their family and their pets.

    Is it zoned for things such as a filling station, or a strip Mall, or medical dental, or a church. Something besides primary living space for human beings?

    But even in those instances there is still this black cloud that causes potential worry in the buyer's mind. Because you said the reports are clear-so in reality-the risk seems contained at this time. So it must be worry that is jumping up and causing cold feet.

    Just my 2 cents.

    Hi Scott,
    Good point, you mentioned that Landfills and those enormous overhead electrical wire distribution towers both carry risks in many people's minds. I am about to purchase a property that has overhead electrical wires for an electrical distribution company (they have an easement), Is there an involved risk? I was planning to build 10 homes on the property, what are your thoughts? 

    I just sold 3 of my lots to a builder in Oregon there were high tension wires along all 3 lots these are the 100 foot towers major transmission lines.. they built 3  1.2 to 1.7 mil dollar homes and sold them all ..  Some folks may balk but if the lot is pretty enough and well located like mine were they will sell.

     our property in question does not have any power lines nearby... or anything else suspect. the only factor is the [former] landfill which was closed in 1999. the landfill is approximately 2500 feet away from the property, depending on how you look at it...

    0Reply
  • Bob S.
    OP
    Member since 2018 · 35 posts · 12 votes
    2y
    Quote from @Jay Hinrichs:
    Quote from @Chris Seveney:
    Quote from @Bob S.:
    Quote from @Chris Seveney:
    Quote from @Bob S.:

    @Russell Brazil - what can he do to screen the buyers better? Buyers have been presenting cash offers with proof of assets etc.

    What else would you screen to prevent this from happening?


     Something seems off then and maybe what is in that report you may think is not a big deal but everyone else does. What was in the report that had people shying away?


     no idea, that's what puzzles me. either way, i'm inclined to keep the posting as-is and not offer the tests.


     have you called the company that did the report and asked what are concerns that someone may have? 


    Chris I think your on the right track I bet there is something in those reports that is causing this issue .. It may not be a big deal to the current owner but it seems that it is to another buyer. And of course price usually is the issue if its priced right things sell  priced to high they sit at least for single family parcel.  then you have market conditions were in much of the US you can buy existing homes for less than you can build new ones for and I know this is true in many parts of Chicago land.

     our renewed listing will NOT provide any reports, regardless of what any potential buyer thinks is awry. they need to do their own due diligence, even though we were going to build our own PERSONAL home on this property (again, COVID supply chains and prices destroyed our dream of doing so, and now we are forced to sell...).

    0Reply
  • Bob S.
    OP
    Member since 2018 · 35 posts · 12 votes
    2y
    Quote from @John Warren:

    @Bob S. you probably don't want to hear this, but this is most likely a pricing issue. Me and my team sell a lot of houses in the Chicago area, particularly in the western suburbs. Housing is relatively expensive, but not to the point where it makes sense for most folks to build unless you are in a primo neighborhood. We see a lot of building in areas like Western Springs or Hinsdale, but not so much in towns that are the next rung down. 

    I would think long and hard about the holding costs here and also about the mental fatigue. Maybe a price reduction gets it done. 


     we have been the lowest priced lot in the neighborhood for some time. we are currently the lowest priced by over 5k...

    and regardless of "opinion," it is the "best" lot by desirable factors: highest, cleared, relatively flat, good drainage, interior location...

    0Reply
  • Bob S.
    OP
    Member since 2018 · 35 posts · 12 votes
    2y
    Quote from @Joseph P Davis:

    Lower the Price


     we have multiple times.... unfortunately, no traction....

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y

    What is the cost to biuld in that area? It seems like one lot has sold in last several years and prices are starting to soften in many areas. It sold for $170k  but with other lots available clearly their is no demand. Thus I question what the cost to build is as homes start at around $700k for larger homes which if its $200/sf to build then they are underwater as the cost to build is too expensive. It does not matter in some places if the land is free, the cost to build is too much.

    Why did the other lot sell for $170k and not yours would be another question I would ask

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