By Matt Sumsion | Licensed Utah Real Estate Broker | Sumsion Real Estate (March 25, 2026)
You own land in Utah. You know what it's worth. And when buyers start pushing you to drop your price, don't do anything until you've heard of seller subordination.
What Is Seller Subordination?
Seller subordination is a financing arrangement where you, the land seller, temporarily agree to take a secondary lien position on your property. This allows a builder to secure a primary construction or development loan from a bank and in return, you receive your full asking price instead of negotiating down.
Most builders can't get a traditional construction loan on raw land without the seller's cooperation on lien position. Banks see undeveloped land as higher risk, which gives builders a reason to pressure sellers on price. Seller subordination removes that excuse entirely.
How It Works — Simply Put
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A builder makes an offer at your full asking price
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You agree to carry a portion of the purchase as a seller note in second lien position
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The builder's bank takes first lien position and funds the construction loan
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You receive a portion at closing, with the balance, plus interest, paid off as the builder's project progresses
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You never dropped your price. You were simply flexible on the structure
Where This Is Working Right Now in Utah
Seller subordination is particularly well-suited to high-demand, high-value land markets, exactly the areas where sellers have the most to lose by dropping their price. We're currently working on active seller subordination deals. We've also structured these deals successfully across Utah County, Salt Lake County, Wasatch County, and Summit County.
In every case, the seller held their price. The structure did the work.
Is This Right for You?
You're likely a strong candidate if you own your land outright with full equity, you're not willing to accept a discounted offer, and your land is in a high-demand area with clear development potential. The trade-off is simple: you receive your full price in exchange for being flexible on the timing and structure of how that payment comes to you.
Contact Us to See Our List of Preferred Builders
We work with a vetted network of builders who understand seller subordination and are ready to move on quality Utah land. Reach out to Matt Sumsion directly to receive our preferred builder list and find out if your land is a fit, no pressure, just a straight conversation.
sumsionrealestate.com
Matt Sumsion is a licensed real estate broker in Utah and founder of Sumsion Real Estate, a Utah County-based firm specializing in tailored real estate experiences across Utah.
