Should You Buy This Land?

Our writer becomes a salesperson, then a buyer, as she tries to unearth the answer. Hint: The Brooklyn Bridge isn't such a bad buy.

MR. AND MRS. JONES ARE sitting around their dinner table listening to a land development company salesman.

The salesman has told them about the fine company he represents, and about the wonderful development his company has in the sunny Southwest. He wants to sell them a lot out there, a lot that will be worth—well, who knows just how high land values are going to go? His hand swoops up to emphasize that point.

The Joneses are not certain they are interested.

So the salesman draws them a map. In one corner he indicates a major city. And near it, some miles away, he draws his company's development.

"Now," he says, "how can you go wrong if the population of this city is going to grow by 600,000 people?" He draws in a dollar sign on the company's development.

"Or if the city's growth is restricted because of the mountains here, and the reservations here, and the river here?" He draws in another dollar sign.

"Or if there's a beautiful apartment complex here," Another dollar sign.

"And a country club." Another dollar sign.

"And a swimming pool." Another dollar sign.

"And hundreds of houses."

The dollar signs keep going in until the map is about to fill up.

"How many dollar signs am I going to have to draw here before I can convince you this is a worthwhile investment?" he asks.

Sounds persuasive, eh? Well, this is only a sample of what Texans all over the state are hearing these days. Before you sign on the dotted line, though, we suggest you read what happened to our writer when she took a look at one of the biggest land development companies around, both as a salesperson and as a customer.

"We appeal to the greed in people," a land salesman told me confidentially one day. "That's how we sell land."

We were sitting in his rather plush office in one of the mirror-glassed office towers that seem to have sprung up all over Dallas. He was about to appeal to the greed in me, too.

"How would you like to make $20,000 a year?" he asked me. It was his version of a job offer. "$20,000 is a lot of money, isn't it?" But, he implied, $20,000 was just a beginning. He, of course, made a lot more than that. "Why, $20,000 wouldn't keep me in gasoline for a year" he said.

I don't know how much of that guy's speech was a con job, but good land salesmen do make a lot of money. Each year, land salesmen persuade Americans to agree to part with about $5 billion. The land they buy is going to be some fantastic new recreational facility or a great place to retire or maybe it's just going to remain raw acreage for awhile. But chances are, no matter what the plans for that land, the buyer has been told that someday the land is going to make him a lot of money.

That's the greed angle, the desire to strike it rich, to make the quick buck, to get something for nothing. And so each week, all over Texas, people are practically inundated with appeals to their greed.

Sometimes the desire to make money gets so strong it causes land companies to be less than honest in their dealings. So many of them apparently succumb to such temptation that the Council of Better Business Bureaus, Inc., ranks land sales abuses near the top of its list of the most prevalent deceptive commercial practices.

One land development company expert divides land companies into three categories. One category has both integrity and money to do what it claims it will. The second type has integrity but is not as well financed: if sales go well, the development will be okay; but then again, it could go bankrupt. The third group is the plain old fly-by-nighters.

The problem with much of land sales these days is that a lot of land is good investment. Also, many people buying land buy it more for recreation than for profit. Some recreational land developers are spending several thousand dollars per acre adding water and sewage systems, streets, yacht and country clubs, marinas, riding stables, swimming pools and tennis courts. One developer near Austin claims to have spent $12 million on improvements to 2000 acres before they sold their first lot. Such land is often pitched to the customer as a place to have fun, which it may indeed be.

The problem is that it's hard to tell the good guys from the bad. Both of them tend to use the same kinds of sales techniques and both share a persistent problem: misrepresentation by salesmen fired up to sell land.

The American Land Developers Association, a trade group, estimates there are more than 10,000 firms belonging to what is known as the interstate, or installment, land industry. From time to time, I've run into a handful of those 10,000: an occasional dinner, a sales presentation in my living room, an ad on TV. However, off and on for almost a year now, I've had extensive contact with one of the larger in the field, the Horizon Corporation.

The advertisement appeared in a Sunday issue of The Dallas Morning News in the spring of 1972. The ad, which took up three-quarters of a page, was mostly type and white space. The headline read: "The land you buy is only as good as the company you buy it from."

"Ten years ago a typical Horizon buyer paid a total cash price of just $395 for a lot. Today this same buyer would pay $1,100 for a comparable piece of Horizon land..."

Horizon's ad looked very sedate, very conservative, very institutional, and very expensive. There were no offers of steak dinners at some nearby hotel or restaurant, as Baca Grande had made. They didn't seem to want to pay me $15 to listen to their pitch as Rayburn Country had. Nor did they

Tags: THE CULTURE

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