The location of a property plays a significant role in its value. A home may be aesthetically pleasing, with all the fixtures and fittings that a buyer wants, but if it is in an unsafe or inconvenient location, the property will be challenging to sell. In contrast, a home that needs a few upgrades but is in a better location could make it much easier for a realtor to close the deal.
Achieving success in the real estate industry demands a thorough understanding of the economic characteristics of land and how these characteristics alter the asking price of a property. Comprehension of these concepts will allow you to pass your real estate exam with flying colors and will enable you to establish trust with qualified leads.
The clients that you desire are right around the corner. First, let’s get started with the importance of the economic characteristics of land and learn how you can use this knowledge to drive sales.
What Are the Economic Characteristics of the Land?
Scarcity
The term scarcity implies that there is a limited quantity of something. In the real estate industry, “scarcity” refers to the fact that land is not an endless resource. Currently, 29% of the Earth’s surface is land. Once a property is developed for commercial or residential use, it cannot be replaced — only resold or redeveloped. As a result, the availability of land in a particular area affects the perceived value of a property. For instance, land has a higher value in highly populated metropolitan areas than in rural areas, because there is limited room to create new properties.
Improvements
Sometimes referred to as “modification,” the economic characteristic of improvements states that the value of a price of land varies based on the qualities that people change. For instance, altering a parcel of land by incorporating beautiful landscaping will increase the value of a property. However, if cluttered up with junk and refuse, the land’s asking price will decrease.
Permanence of Investment
The concept of “permanence of investment” is directly related to the physical characteristics of immobility and indestructibility. Since land is incapable of moving, a buyer’s investment in the property is fixed. If the local market drastically declines, land cannot be transported to a better location. In addition, real estate transactions require large amounts of capital for an investment to occur, which makes real estate a long-term investment for most buyers.
Area Preference
Out of all the economic characteristics of land, area preference has the most significant impact on the value of land. The concept of area preference is more complex than the other economic characteristics because it is based on many factors. Area preference is impacted by the property’s convenience, history, and reputation. Consider a property that is in an area near top-rated schools, entertainment, and has a low crime rate. Compared to a property in an area with a high crime rate or inconvenient location, the property with a better reputation will sell for a higher asking price.
Why Should Real Estate Agents Know the Economic Characteristics of Land?
Any aspiring real estate agent must develop an understanding of the economic characteristics of land, even before you start interacting with clients. Remember that knowledge of the economic characteristics of land can help you pass a real estate exam.
These characteristics then come back into play once you start building your portfolio. The land on which a home exists plays a considerable role in your ability to close a deal, and many clients will lose interest entirely if the land that surrounds a property is unsuitable for them.
For instance, if you sell a property in a highly populated city, the scarcity of land and space will significantly impact which properties are most attractive to clients. Homebuyers will feel more pressure to buy quickly, and clients with children and pets may place the utmost importance on being near schools or having as much outdoor space as possible. In contrast, buyers who are only interested in purchasing an investment property to rent out may not be as hurried, and won’t be as particular about location or having a large parcel attached.
In-depth knowledge of the relationship between the economic characteristics of land and a buyer’s needs will help you show the right properties to the right leads, increasing the number of deals you close successfully.
How to Use the Economic Characteristics of Land as Selling Points
Once you’ve established yourself as a real estate agent and connected with qualified leads through lead-generating partnerships, it’s time to leverage your knowledge.
Ensure that you consider which characteristics of land are likely to pique the interest of a qualified lead. Perform in-depth research about the parcel of land on which a property is located and the surrounding area. Buyers will inquire about the accessibility of property, which may include a road with private access or a shared road with neighbors. Ask the buyer if they have any plans for the land itself, such as installing a pool, building a guest house, or gardening.
Draw attention to any attractive features of the land. For instance, a stunning view may pique the interest of qualified leads, while other potential buyers will find proximity to amenities enticing. Clearly state the most endearing qualities of land within your marketing plan. Before potential buyers visit a property in person, they want to know specific details that they can’t find online. Real estate agents who can provide the most information will save time throughout the sales process when it comes to selling a property. Study the economic characteristics of land for each property closely, and you can then use this information to streamline your process.
Call Motivated Sellers
The location and economic characteristics of the land significantly impact a realtor’s ability to sell a property. For success in the real estate industry, realtors must pay close attention to vital selling points that affect a property’s value.
Don’t let a prime parcel languish while you waste your precious time on exhausting lead generation. Keeping your viewing schedule packed with Call Motivated Sellers, putting you in touch with more qualified leads than ever before.
Call Motivated Sellers can raise your sales to unprecedented heights during both the busy and slow months. We are an American-based real estate cold calling service, complete with a highly skilled sales staff. Leave the hard work of vetting your leads to us so that you can focus on the details of your portfolio, using your knowledge to close deals and increase profits.
By partnering with Call Motivated Sellers, you can augment your other marketing efforts and expand your reach without losing that human touch. Ready to uncover new leads for your real estate business? Contact our team today!
Marketing by Joseph Studios