Selling Your Home to a Builder – 3 Simple Tips

Selling Your Home to a Builder | @d_mccullough via UnSplash

Selling your home to a builder is not that hard. Making sure you do not get scammed while doing so.. Well, that’s a bit trickier.

Fortunately, if you follow some simple steps, you will be able to maximize the sale price of your home.

I have kept this article short. That does not mean you should try to fast track the process of selling your home or land. A good place to start your research would be’s education center. Ok, now onto my three tips.

Know Your Zoning Ordinance

Your local zoning ordinance is a collection of rules that dictate what can be built on the land in your locality. Sometimes these laws are created by your local municipality. Other times, they may come down from the county or state level.

For example, if you own a 30,000 square foot lot of land, and the max floor area ratio (FAR) is 1/3, a builder could theoretically build a home up to 10,000 square feet. Knowing this information will help you better understand what a developer may hope to build on your land, and better establish its overall value.

Here is the good news: Your local zoning ordinance is public information. There are no hidden secrets. Take the time to read through the sections in the zoning code that pertain to your home. It may take a few hours, but it will help you better understand what potential value is in your lot.

Check With an Attorney That Specializes in Real Estate

Going off of the above, you should consider enlisting the services of a licensed real estate attorney. An experienced attorney, as well as a real estate agent, will have a good pulse on the market, and will be able to advise you on what builders are looking to build.

Choose Carefully How You Will Market Your Property

Are you going to hire a real estate agent? Are you going to FSBO your home? That is your choice, but you should carefully review the pros and cons of each method.

Another option is soliciting proposals from an Ibuyer, which is an online company that offers you an instant offer for your home. Be warned though, not all of them are legitimate.

Be Ready to Sell Your Home to a Builder

We often think that builders and developers analyze a deal strictly from a numerical position. In other words, if the financials make sense on paper, they will move forward on the deal.

For all intents and purposes, this is true. So, you would expect that when a developer sees value in a property, they will cater to the seller’s terms. After all, the deal should make the builder money, so wont they will be willing to bend over backwards for the sellers demands? Wrong!

Builders often make decisions based on their emotions, just like end-users. If someone pisses them off, they will quickly walk away.

One of the easiest ways to anger a builder is to expect them to wait an unreasonable amount of time as you review their offer. Perhaps the oldest trick in the book is using one offer to drum up another proposal from a different set of buyers. In such cases, a builder’s offer may be kept on the back-burner, only used as a backup.

If you advertise your home for sale, you should be ready to accept an offer if the price and terms are right. Just last year my team worked with a builder who made a fair offer with no contingencies. The seller wanted some time to, “Think about it.” Five days later they called us ready to accept. Our builder was long gone.

Conclusion – Selling Your Home to a Builder

Any home sale can be challenging and stressful. Of course, it includes a lot of work for you, as a seller, as well. Selling your home to a builder may appear like an easy way to avoid a drawn-out sales process; just turn over the keys for straight cash.

If your home truly does have value to a builder, this may be the case. I know of many who have had success selling their home directly to an investor, builder or developer. However, builders are intelligent people. Just like when dealing with end-users, there are many scams concocted by builders.

That all being said, there can be many benefits to selling your home or land to a builder. Some give sellers the option of a flexible closing date (within reason), leaving all unwanted possessions in the house, and a contingency free offer, among other pros.

Therefore, if you do decide to sell your home to a builder, do your legwork upfront, and be ready to sign an offer if the right offer comes along. If you follow these simple steps, you will maximize the odds of selling your home for top dollar.

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