Land purchase thoughts

[QueBota]

Paying too much for an adjoining lot that you will control "forver" $1,000s to $10,000s

Owning the adjoining lot and being able to control what happens there Priceless

Unless it is going to cause undue financial hardship, I would personally offer a reasonable amount for the lot and use a third party to offer a higher amount. If you know enough about the current owner you might be able to determine the type of third party buyer he would be most likely to sell to (perhaps someone who's intentions may not be viewed favorably by you).

You can't put a dollar value on having "neighbors" that detract from your quality of life, as I said, if it isn't going to squeeze your financial situation, do whatever you feel is reasonable to purchase the property, I think you will be happy you did in the long run.

Just my opinion,
Dave

 

[beppington]

I'd make sure that this one lot is the only possible view-blocker before spending a bundle on it, i.e. if the next lot lower than this one had a two-story built on it, how bad would that be? What about other lots off to the sides? Just some thoughts.

 

[tommu56]

Thanks for all the feed back and suggestions.. I am going to get preliminary financing going (ie preapproval) and see if he bites.. I like the idea of using a proxy buyer, but a realtor friend said that some sellers really dont like selling to an non-identified buyer..

Worst case he turns down our offer.. BUT if that happens I will go out of my way to make sure the 'for sale' signs on the cheaper lots across the road are kept up and highly visible from the road.. lol

thanks

brian

Have in the sales contract say some thing like Mike Whoeveryoupick (just make sure its not a relative) or his assignees. Have a contract with Mike agreeing to do this and pay him for it.
That way he thinks Mike is buying it till you get to the settlement and Mike assign's it to you. You write a check to seller and one to mike for his assistance.

tom

 

[thatguy]

UPDATE - After a vacation, thinking it over and getting our financing in line, we will probably make him an offer this week.. I am just going to call him and hopefully he wont be too much of a pain and be reasonable to work with..

If we dont buy it, I think we will really regret it down the road..

Ill keep you posted

Brian

 

[dave1949]

UPDATE - After a vacation, thinking it over and getting our financing in line, we will probably make him an offer this week.. I am just going to call him and hopefully he wont be too much of a pain and be reasonable to work with..

If we dont buy it, I think we will really regret it down the road..

Ill keep you posted

Brian

Good Luck!
Dave.

 

[beppington]

Looking forward to hearing how it turns out! Good luck!

 

[bdeboer]

Is the area you live in zoned? We passed on an overpriced lot next to where we used to live, and ended up with a low budget doublewide next to us. The lot was mostly flood plain, they had to get a variance for the the setback from the road in order to build. The doublewide went back to the bank and went downhill quickly about the time we sold.

Can you check your county records and find out if there is a mortgage against it? In some cases lots were purchased at the peak with 120%+ mortgages. The sales pitch being that you could pay off other debt like credit cards or autos for the next 30 years. I am wondering if the 65K is what payoff is.

If the current owners financing is not an issue, I think that I would make a one time offer of what he paid plus taxes.

If I planned on moving in a few years, I would offer slightly above what the lots across the road are listed at.

 

[scoutcub]

UPDATE - After a vacation, thinking it over and getting our financing in line, we will probably make him an offer this week.. I am just going to call him and hopefully he wont be too much of a pain and be reasonable to work with..

If we dont buy it, I think we will really regret it down the road..

Ill keep you posted

Brian

3 points, which I think have been mentioned.
He knows you are very interested.....his advantage. I would state to him you are seriously considering the 2 lots across the street as an alternative...for the same price. This will reduce his advantage....

I would start the initial offer at around the 46K. Leaves you some negotiating room....you can always go up. Very typical in purchase negotiations. Mention you can get the 2 lots for this price.

As it sounds that you are already doing, have a pre-approval letter from a bank, or tell him you have all cash, or 50% cash upfront, whatever the case may be, just enticing terms. The owner financing offer would be worth mentioning, also putting more money in his pocket, but in my dealings these are few and far between as 90% of folks want the cash and wipe their hands clean.

Good luck!!!

 

[IslandTractor]

The seller is unlikely to be fooled by a bluff involving the properties across the street. If he has half a brain he knows it is the view preservation that is motivating the OP. Of course the places across the street are a nice point of leverage for the OP as anyone other than the OP would see how much they could save so that puts the seller into a weaker position.

 

[beppington]

The owner financing offer would be worth mentioning, also putting more money in his pocket, but in my dealings these are few and far between as 90% of folks want the cash and wipe their hands clean.

Good luck!!!

I've actually heard & read that most vacant land deals are done by owner financing, at least partially because banks charge a much higher interest rate on vacant land vs a lot with a house. Vacant land is more speculative I guess. Or if the bank had to foreclose & sell it, it's harder to sell. Or maybe it's because it's easier to walk away from vacant land than the house you're living in!

In February this year when I was considering buying a lot, the interest rate range for financing the land directly was 7.1% & 7.9% (15 year fixed), or I could've borrowed against my house at a rate of 4.58%-4.682% (15 year fixed). A huge difference.