Understanding Parcel-tying in Real Estate Development

Parcel-tying is a practice used in the real estate industry where a developer or owner of a property divides a large parcel of land into smaller parcels, called "phases" or "sections," and sells each phase separately. This allows the developer to sell the properties at different price points and to attract buyers who may not be able to afford the entire property.

For example, a developer might divide a 100-acre property into 10 phases of 10 acres each, and then sell each phase separately to different buyers. The buyers would then have ownership of their individual phase, but not the entire property.

Parcel-tying can be beneficial for both the developer and the buyers, as it allows the developer to sell more properties and attract a wider range of buyers, while also giving buyers the opportunity to purchase a smaller piece of land at a lower price point. However, it is important for buyers to carefully research the development and understand the implications of owning a portion of a larger property before making a purchase.