How to sell land: Complete guide for sellers in Quebec
Published on May 18, 2023
Land offers endless possibilities: a place to build a dream house, grow fresh produce or develop a big real estate project. However it requires vision—the ability to envision something that does not yet exist.
Selling land, therefore, means attracting a different type of buyer: visionaries. It can be more complicated or take longer to find the right person.
To help you sell, we have prepared a complete guide on selling a lot or land in Quebec.
Summary:
- Prepare for the sale
- Determine your price
- Put your property on the market and manage visits
- Finalize the sale
Prepare for the sale
So you’ve decided to sell your land! For optimal results, there are certain tasks you’ll need to do before you put your lot or land on the market. Some are vital, others will simply make the process faster and easier.
Have the boundaries marked
Boundary marking indicates the property line between two adjacent lots, clearly delineating who owns what. Carried out by a land surveyor who produces minutes of the boundary-marking operations and installs the markers, this operation will involve all owners of lots adjoining yours. If your property is not registered on the assessment roll yet, this is one of the crucial steps to take before the sale. It is a good idea to talk to the owners of any neighbouring lots so that the work can be done amicably, otherwise a judge will have to rule on the location of the property line.
Once the boundaries are marked, you’ll be able to give potential buyers the exact size of your land, and where it starts and ends. The person who buys your land will also be bound by the minutes of the boundary-marking operations.
Get a certificate of location
For land, as for any other type of property, the seller is responsible for providing the buyer with a certificate of location. This document of legal value is produced by a land surveyor and testifies to the current situation and conditions of a property. The land surveyor gives his or her opinion on the property’s compliance, reports irregularities if any, and gives details on easements and rights of way that the owner enjoys or must respect. The certificate will also mention if your land is located in a risk area (e.g. flood risk).
A land surveyor is the only professional authorized to issue a certificate of localisation. Consult the search tool on the Ordre des arpenteurs géomètres du Québec (OAGQ) site to find a professional in your area and check the guide of suggested rates to know how much it will cost, approximately, to obtain this document.
Know that it can take several weeks to obtain a certificate of localisation. So be sure to get this process started sooner rather than later!
If you already have a certificate of location, make sure it is still valid. Even though they are, in principle, valid for at most 10 years, Elena Maria Beja, notary at DuProprio, suggests asking the notary in charge of the transaction if a new document is required.
Understand your type of property and its zoning
Your municipality decides the zoning in your area. It divides the territory to determine where and under what conditions certain activities can be carried out.
Here are the most common types of zoning:
- Residential
- Commercial
- Industrial
- Agricultural
- Institutional (public or semi-public use)
- Mixed (commercial and residential)
It is therefore your municipality that determines whether or not it is possible to build on your lot or land, and what type of buildings are permitted. If you want the zoning changed, you will have to plead your case to your municipality.
Note: Changing the zoning is often a lengthy process, which can delay your selling project.
If your land is buildable (can have one or more new buildings), check if it is possible to connect to municipal services, such as the road system, water supply, sewer system and power lines. This is called development of a building site.
Know your soil type
The soil quality of your land also has an impact on its constructability. Does your lot have sandy soil? Clay? Is it rocky? Silty? It is in the buyer’s interest to know the composition of the soil to make sure their dream project is feasible. You can hire an inspector to perform soil bearing and percolation tests to speed up the sales process. The inspector will also be able to check if the land is contaminated.
This information will give your potential buyers a much clearer picture, and they will no doubt be happy to be able to calculate all the construction costs before deciding whether to buy.
Determine your price
Once you have all the documents in hand and the boundaries of your land are clearly marked, you can set the right asking price. It should be fair and justified. If it is too high, it will scare away potential buyers. If it is too low, you might be leaving money on the table.
Of the principles to remember when setting your asking price, be sure to leave room for negotiation and make sure your price is based on objective arguments. Also remember that the municipal assessment is not a good indicator of market value, because it remains the same for three years and therefore does not necessarily reflect the current real estate market.
Appraise your land
Generally, calculating the market value of a piece of land differs slightly from other types of properties. If you plan to conduct an analysis of comparables (comparing similar land sold in the sector), you will have to calculate the average unit rate per square foot.
Several factors affect a parcel’s value:
- Its size and dimensions
- Its orientation and shape
- Its location
- Access to various public services and roads
- The topography and type of soil
- Nearby stores and services
- And more
The price per square foot of a building lot is generally significantly higher than that of a non-building lot. Hiring an appraiser to determine the value of your lot is never a bad idea. They will be able to give you a complete, detailed and impartial report on your property.
Put your property on the market and manage visits
Have you set your asking price? You can now inform as many aspiring landowners as possible that your property is on the market!
Create your listing
If you decide to sell with the help of our services, this involves posting a listing on our website and our app. Be sure to include several photos that you have taken (up to 121), indicate the characteristics of your property and give a clear and concise description. Then indicate the services available, such as easements, electricity or a septic system and include services nearby, such as schools, hospitals, grocery stores and other essential services.
DuProprio’s real estate coaches, who are experts in advertising properties, are here to advise all our clients during the selling process. They will be happy to help you optimize your listing!
In addition to the visibility you will get from listing on a real estate site, you can inform buyers of the sale of your property by sharing your listing on social media or on classified ad sites. This will increase your chances of selling quickly! To promote your lot or land to local residents and visitors, with DuProprio, you will also have access to a “À vendre” sign.
Attract real estate developers
When you put your lot on the market, whether it’s vacant or not, one type of buyer that could be interested is real estate or land developers. Always on the lookout for parcels of land, they could buy your property for their own use or put you into contact with their clients who may be interested.
Their role is to develop a project from start to finish in a particular zone or area. This includes:
- Conducting a feasibility study
- Obtaining financing
- Carrying out the project (finding a consultant and contractor)
- Handing over the building
To understand how to attract real estate developers, you need to know what information they will want before buying your property. Here are a few questions they are sure to ask:
- Is the land close to infrastructure and utilities, such as electricity, water, sewers, roads, etc.?
- How is the property zoned? Is it possible to split up the land?
- Does the municipality intend to expand toward your property?
While you don’t need to have the answer to all their questions, the information you can provide may help speed up the process, which they will surely appreciate!
Manage visits
Showing potential buyers your land is the same as giving tours of any other type of property, although you may get fewer looky-loos! To pre-screen buyers prior to visits, take the time to ask a few questions, notably if they are prequalified for a mortgage. Then, be quick to respond and flexible when it comes time to set a date and time for a visit.
Before welcoming an aspiring owner to your site, consider tidying up the property to make a good impression. This can include picking up any garbage, clearing brush and mowing the lawn if needed.
Bring the documents necessary for the sale with you, including those you prepared before you put your property on the market, and the Declaration of the Seller duly filled out to best of your knowledge. And why not print out some Offer to Purchase forms so the buyer can fill one out if they are interested?
Download the legal documents free of charge
If the potential buyer is represented by a real estate agent, make sure both parties have signed a purchase brokerage contract. Remember to listen attentively and be respectful during your discussions.
Finally, don’t hesitate to reach out to buyers who have shown interest in your property within 48 hours of their visit. This will give you the opportunity to answer any additional questions they may have, check if they would like to make an offer and schedule a second visit if needed.
Finalize the sale
When selling land without an agent, it is the owner who is responsible for receiving the offer to purchase. If you’re lucky, you might get several!
Is your land not getting the interest you had hoped? Several factors can explain a longer selling time. If you have a DuProprio package, don’t hesitate to schedule a call with one of our real estate coaches through the Appointment Centre to go over your marketing!
Manage offers to purchase
Has a buyer submitted an Offer to Purchase? That’s great news! You now have a given timeframe to respond by either accepting the offer, rejecting it or making a counteroffer. Take into account the conditions the buyer has added to their promise to purchase, if applicable.
During negotiations, be sure to show interest in the aspiring owner by asking them questions. It is also important that everyone have time to think things over.
If the offer is made by a buyer represented by an agent, be sure to look it over carefully to check the commission payment terms.
When you sell with DuProprio’s help, you could have access to telephone support from our notaries1 ! This will be very useful to you at this stage, as our notaries will be able to answer your questions about the clauses of the offer and the various other legal documents.
Understand the costs of selling
While a successful sale is a happy event, it can bring potential financial consequences. For example, if you have a mortgage and you sell before the end of its term, you will have to pay a mortgage penalty when you pay off the loan. Also, since your mortgage balance will be paid by the notary in charge of the transaction, you will have certain fees to pay the notary as the seller.
Finally, you may have to pay sales taxes or income tax on land you sell in Quebec. If your land is divided into more than two lots, the sale will be subject to GST and QST. As for income tax, if the land is sold on its own and cannot be considered part of your principal residence, then the profit made on the sale will be taxable at 50%. You will have to include the capital gain on your tax return.
No matter your situation, it is always wise to have it assessed by a professional to know what to expect.
Sign the promise to purchase
Satisfied with a buyer’s offer on your land, and understand the tax implications of the sale? It’s time to sign, go to the notary and celebrate! You did it!
Many land/lot owners have sold without an intermediary with our help since DuProprio was founded. Find out how our team and visibility tools can help you complete the transaction hassle-free… without paying a commission! Schedule a call with a customer service advisor to learn more, or watch our short webinar from the comfort of home to understand the steps involved in a sale.
