Subdividing Acreage Is Not Always the Answer To Selling It
As I am going through the listings searching for listings for my clients, I have come across so many properties that are being subdivided. Some of these properties would be ideal for Buyers that want country property to enjoy their horses, farm animals as well as nature after a stressful day in the city. But because they are now small lots, it will not happen.
So why are these properties being subdivided?
Subdividing seems to be the answer when a large property does not sell within a limited amount of time. The feeling seems to be that Buyers are not searching for properties with large acreage. This is far from the truth. Those of us that specialize in selling the large acreage properties can tell you that there are Buyers in search of these properties.
I recently sold a 72 acre farm that was on the market for several years. The Sellers asked if they should subdivide. My answer was no. It was marketed as sub-dividable. If a Buyer liked the property, but wanted less acreage, then I would suggest subdividing it. The final outcome was that the farm sold. Meanwhile, the numerous lots that were originally a part of another farm, immediately surrounding this property, are still sitting on the market with no interest.
So why aren't the properties selling?
- Sometimes the properties are overpriced. I don't mean by a small amount. I mean way overpriced. I have heard comments from Sellers that if the Buyer really wants the property, they are willing to pay the price. Why would anyone overpay? Buyers are smart. They do research and have an idea of the price range the property should be. The overpriced property would be passed by while the property that is priced at market value will receive the traffic and will be sold. Think about this: If one company sells its milk for $10 per gallon while another company sells the exact same milk for $5 per gallon, which one would you buy?
- Before considering subdividing, check out the market in the area. Are large acreages selling or is there more interest in the subdivided properties? If the smaller lots are sitting on the market, that tells me that even subdividing acreage into smaller lots will not sell.
- Sellers feel that if a Buyer wants large acreage, they can buy several of the lots totaling the number of acres they want. That would not be beneficial to the Buyer. Each individual lot has it's own taxes. The taxes would be more than if it were one parcel. Plus, they would not reap the tax breaks if they were to use it for agriculture.
- Here is something to think about: if all the property owners kept subdividing, there would be no more country living. Areas would turn into suburbs and developments. This is not country living. In the country there is nature, animals, gardens, farming, etc. All that would be gone. All will be lost just for a quick sale.
- Lastly, check to see how the property is being marketed. Is it geared towards general consumer? Is it target marketed? How many consumers does the marketing reach out to? Marketing makes a big difference. I speak from experience. Sure, some properties are more of a challenge to sell, but they do sell. It's a matter if finding the right Buyer. It takes patience. Not everyone is looking for a property with large acreage.
Before taking the steps to subdivide acreage think about this: Subdividing takes a lot of money and time. More taxes will be paid on these lots. The longer it sits on the market, the more money will be spent. Is it worth it in the long run?
Brigita McKelvie is a REALTOR® (Pennsylvania License #RS297130) with Cindy Stys Equestrian & Country Properties, specializing in rural and horse properties and farms in Eastern Pennsylvania. She has an e-Pro® (Certified Internet Expert) certification and a GRI (Graduate, REALTOR® Institute) designation.
Brigita McKelvie, REALTOR
Pennsylvania License #RS297130
Rural and Horse Properties and Farms
Cindy Stys Equestrian & Country Properties, Ltd.
The Premier Equine and Country Real Estate firm serving Eastern Pennsylvania from back yard operations to world class equestrian facilities.
Use a REALTOR with "horse sense" that doesn't horse around when it comes to horse properties.