As you search for land for sale in Northern Virginia, keep in mind a buyer’s agent costs you nothing.
The buyer’s agent’s commission is negotiated between the seller and the listing agent, and it is already built into the sale price of the property. If you choose not to hire a buyer’s agent, then the listing agent will take both sides of the commission.
In this scenario, you will find yourself in a “dual agency” situation. Dual agency occurs when the seller’s agent represents the seller and the buyer in the same transaction, effectively becoming an “agent of none.”
In other words, the seller’s agent gets double commission, but you get ZERO representation. Not a great position to be in, huh?
To make matters worse, there’s no avoiding the fact that the listing agent has a preexisting relationship with the seller. So, even though a dual agent is supposed to treat both parties impartially, you have no way of knowing what the agent and seller are discussing “off the record.” Dual agency notwithstanding, the existing relationship could bias the agent in favor of the seller.
In short, you have nothing to lose and everything to gain by hiring a well qualified buyer’s agent to help you with your land purchase.
3 ways a land buyer’s agent can save you money…
If you’ve downloaded the Northern Virginia Land Buyer’s Due Diligence Guide, then you already know there are a lot of questions to consider as your search for land for sale in Northern Virginia.
The first way a land buyer’s agent can save you money is by making sure you don’t by a total lemon of a property.
True story…I once met a buyer who was under contract to purchase a $765,000 parcel of land in Great Falls. His friend, who happened to be a residential real estate agent, told him it was a great deal because it was priced $100,000 below market value.
His friend did not realize the property was covered in wetlands. As a result, it was totally un-buildable.
Fortunately, the buyer was able to withdraw his offer after he came to me and we determined the property was useless. Unfortunately, he lost his $10,000 non-refundable deposit.
The worst part of this story is that this was an easily avoidable mistake. Both Fairfax County and the U.S. Fish and Wildlife Service maintain online wetlands maps. However, the buyer’s friend – the residential real estate agent – had never sold land. He did not know these maps existed, nor did he know wetlands can render a site un-buildable.
The second way a land buyer’s agent can save you money is by introducing you to the most competitively priced surveyors and soil scientists.
When you purchase land, you typically have 30-90 days to conduct your due diligence before settlement. The scope of work to be completed during the due diligence period varies, but it usually involves survey and soils work.
If your buyer’s agent regularly sells land, he will likely have preexisting relationships with surveyors and soil scientists who can help you.
And, because he brings them repeat business, your agent might be able to negotiate better pricing than if you were to obtain quotes independently.
Your agent’s preexisting relationships also work well in a time crunch. Cold prospecting contractors requires time and patience to weed out the good from the bad. If you need work done quickly, it’s always nice to be able to tap into your land agent’s network.
The third way a land buyer’s agent can save you money is by introducing you to specialty land lenders with the best rates.
Financing a land purchase is very different from financing a home purchase. In fact, most lenders don’t even offer financing on raw land.
So, with regards to financing, a land buyer’s agent potentially offers two benefits. First, he can introduce you to hard-to-find lenders who offer specialty land loan products, and second, he can point you towards the lenders with the best rates.
Of course, it’s always a good idea to shop around for competing quotes, but referrals often lead to the best lending experience.
The 3 most common reasons people struggle to buy land in Northern Virginia…
Not getting pre-approved for a loan. In today’s market, you need to talk to a lender and get pre-approved before you start writing offers. A pre-approval simply means that the lender has reviewed your credit history, verified your income, and approved you for a specific loan amount.
Underestimating closing and due diligence costs. As a rule of thumb, expect to pay 2-3% of the purchase price in closing costs. Due diligence costs are separate. The cost of survey and soils work is variable depending on lot size, location, and other factors, so be sure to seek input from your agent.
Unrealistic expectations. In my experience, most buyers end up compromising on acreage, price, or location, but few start out expecting to do so. Be forthcoming with your land agent about your expectations, and be open to receiving honest feedback.
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