Land purchase thoughts

[mjarrels]

Times are tough... We have lots next door priced at $200,000 for 1/4 acre lots... Yep, on the golf course fairways. Not selling. Great views... Not selling. Again, times are tough, We buy basic foods, (eat pretty good) Girl stuff and I have soap in the shower. Offer 60% less than asking offer.

mark

 

[Will_C]

That's a tough situation. If you are going to be there long term, I would not quibble over a few thousand. However, the seller knows that you are a motivated buyer, so he has leverage. Only yo can decide the premium you are willing to pay.

Will

 

[bp fick]

Leverage works both ways. A teeter toter goes up and down.

Yeah, he knows you are the motivated buyer, but what are the odds he has ANYONE else willing to pay anywhere near that price? To other buyers, the other lots are much cheaper, and yet? Gee Whiz! They sit for sale.

I can't know the momentum of your local real estate market. But nationally, real estate is still sinking, not rising. It's public knowledge and reported on the news, on the interest news, etc.

Perhaps a contract? Granting you right of first refusal? That way he gets to see if there really is anyone else willing to meet his price, (which I doubt) but hey, if he should get some kind of lucky and make a hole in one, you'd still get to top that offer.

 

[eepete]

bp is on to a great idea :thumbsup:

For $1K, you get the right of first refusal. If someone offers to buy the land, you can buy it for the same price. So he gets $1K more than the highest offer made from you if that's what you want. If you pass the other party gets to buy the land and you get your $1K back when the land is sold (this removes incentive for fraud and shenanigans by the seller via some straw-man shill).

Of course a lawyer will have to turn this into a 5 page document...

Pete

 

[CurlyDave]

I really like the idea of a strawman purchaser. Someone who can hide your identity from the seller.

Offer a fair price in today's market and if the owner comes to you tell him you can't meet the offer he has. That way he won't feel like he has you over a barrel and will probably take a reasonable offer.

 

[schmism]

You might contact a Realtor and have them contact the property owner on your behalf.

Find out what fair market price per acre is based on previous 2 years sales and have the realtor offer 10% below that hopeing that by the time you do the back and forth thing a few times, you wind up close to the fair market value you researched.

 

[AlanB]

I am buying an adjoining piece of land to me for what most folks say is an unreasonable high price for what it is (7k an acre)

I would prefer to not end up with a subdivision next to me.

The regrets I have had to date with land purchases are pretty much that I thought it was too expensive, and on reflection a couple of years later thought, dang, wish I had bought that at that price.

May be on a different end of it in a couple years, but I will still have the land

Hoping to do an owner finance on the landlocked 20 acres behind it next.

 

[Ken45101]

He's going to try to get a premium price from you. Is there someone who would act as a strawman for you to negotiate with him?

That's exactly what I was thinking. If he knows that you really want that particular piece of land, he can expect a premium. Find a relative or friend to make an offer.

Of course, a lot of people want more for what they have than it is reasonably worth in today's market. It's possible that he is willing to wait forever to get a high price....or he may be financially strapped and close to foreclosure. It would help your negotiating position if you knew which.

Ken

 

[polo1665]

Leverage works both ways. A teeter toter goes up and down.

Yeah, he knows you are the motivated buyer, but what are the odds he has ANYONE else willing to pay anywhere near that price? To other buyers, the other lots are much cheaper, and yet? Gee Whiz! They sit for sale.

bp fick has hit the nail on the head here.
This guy is asking 50% more than the lot went for before the bottom fell out, and roughly three times what the same size lot is selling for now. IF you really, really, really, absolutely have to have this piece of property I would not go over what the seller originally paid for the 2.5 acres.
It's the way the market works, nobody else (in their right mind) is going to pay him his asking price for that land. Some small premium for a choice piece of property may be acceptable, but over paying that amount would not be fiscally responsible in my book.

If I was the seller I would be having a few choice words with the contractor who is liquidating the other lots.

Mark

 

[buckeyefarmer]

As I look around at land in the shenandoah valley, it seems asking prices are still pretty high. Right now there are two 11 acres lots for sale across the road from me in MD. They have dropped the price from $280K to $200K each. Down the road someone subdivided a 1 acre lot, and is asking $200K. A few years back, 20+ acres fenced and 2 barns next to me were for sale for around $200K. At the time I thought it was high and didn't pursue, now I wish I had at least tried to buy. Neighbor on the other side outbid someone for it.