Land purchase thoughts

[brin]

Just imagine if someone else buys it and then for whatever reason they turn it into a rental house and it becomes an eyesore...that will change your view real quick...However you buy it , if I were you I would buy it ..whether you use someone else like a real estate broiker...who you can advise not to disclose your identity to the seller and the broker will not be able to reveal your name.. You will probably be real sorry if you pass it up and someday when you want or need to sell it may reduce your chances of selling or selling price..My 2 cents...

 

[jinman]

They are asking $65k for the lot beside us now.. Would you pay a premium to buy that lot so that you keep your views? What would you think would be a 'fair' price, knowing he probably wont sell for less than he paid for it..

If you really want the property now, I'd offer him what he paid for it plus what he has paid in taxes for the property so that he comes out even. If he won't take that, I'd try to negotiate a "first refusal" contract as BP Fick suggested. Or, you might even suggest that you would buy the lots across the road if he refuses your offer. That way he will think that your offer may not be repeated at a later time. Put your offer in writing and be ready to move on it. Nothing irritates a seller like someone offering a price verbally and then trying to renegotiate when the contract is written.

 

[dmccarty]

This is a wacky idea.

After getting comps on the land and verify that the seller of the 65K lot will not sell for 40-50K......

The developer wants out. He is selling two lots for 46K.

The lot next to you is on the market for 65K but the guy paid 50Kish. He wants his money out. The question is how badly does he need the money? Can he and will he wait to get the price?

You want the lot but don't want to pay 65K when lots are going for 20-25K.

*** IF *** the neighbor will not sell for 40-50K how about working out a contract between you, the neighbor and the developer. You pay for 46Kish for the neighbors land which is 20K less than he wants. But he then buys the developers two lots for 46Kish or maybe a bit less from the developer.

The neighbor would get twice the land for what he paid for a few years ago and might make a huge profit when the market goes up in a few years. If he is willing to wait a few years to get 65K for the land he might be willing to wait a few years to sell the two lots for 65K EACH.

This gives him a carrot to sell the land to you for what you are willing to pay. He also has a sale now compared to waiting for the other two lots to sell for a third of his price. Unless there is something really wrong with the other two lots compared to the lot you want, he will be waiting for the cheaper lots to sell before his will.

If he can get the other two lots for 46Kish and sell them for 40K each he makes more money off selling one lot for 65K. It is going to take a long time for his one current lot to sell for 65K. Not so long to get the price up to 45K.

Win Win for everyone.

Later,
Dan

 

[om21braz]

Good Luck whatever negotiation procedure you choose. I can't offer much advice, as I've been a too-stubborn buyer attempting to deal with a like minded seller.

 

[two_bit_score]

I am looking for your thoughts on how much of a premium you would pay for a piece land that you really wanted

We own 7.3 acres and built a very nice house on it.. We have excellent views of the mountains (peaks of otter) which we really dont want blocked..The 2.5 acre lot beside our house that just went up for sale.. IF someone was to build a house near the front of the lot they would really block our views..


The lot for sale originally sold for about $42k around 2000ish.. it was then resold for $50k in around 2004ish.. The current owner had planned on building but I dont think he could sell his lake house. he 'said' they bought another house instead of building on the lot, but the county website shows he still owns his lake house and has not bought another home. In a casual conversation the owner said he doesnt need to sell the lot, but would have some negotiation room on price..

As a reference - There are two 2.5 acre lots across the road from us are also for sale.. Originally these lots were listed at around $42k each (and most of the other lots have since sold for nearly that price - it appears that $40kish is about right for a 2 to 3 acre lot) - That developer has dropped the price to $20k for one and $26k for the other trying to move them - he is/was cash strapped it seems..

They are asking $65k for the lot beside us now.. Would you pay a premium to buy that lot so that you keep your views? What would you think would be a 'fair' price, knowing he probably wont sell for less than he paid for it..


Just curious on your thoughts.. I hate to pay a premium, BUT it may be a small price to pay if our scenery is ruined. it would also give us a 200' buffer on that side.. Otherwise its only 75' from our garage to the lot line..

Brian

If you let a few thousand stop you from buying it, you will regret it forever.

 

[2manyrocks]

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

Mark

Some of the developers around here don't have buyers except at half of what they used to get for a lot.

the idea of buying the other lots and doing a swap is very creative. :thumbsup:

 

[Ken45101]

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.

Asking price is often a fantasy that the seller hopes someone will pay for it. Do more digging at your county office and find out what property actually sold for.

Ken

 

[thatguy]

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

 

[alchemysa]

Having lost some of our view on 2 previous occasions (at 2 separate houses) I can tell you its infuriating and somewhat heartbreaking. Your stomach will churn a little bit each time you look out and remember 'what was'. I know people who have been so upset about losing their view that they had to sell up and move. Its something they could never come to terms with.

So, somehow you need to put a price on your view. Somehow you need to work out its value to your happiness. And also you perhaps need to consider the resale 'devaluation' of your property if the view is diminished.

It ain't an easy equation. Good luck with it.

While trying to make your mind up, consider this.... Any house that's built 'down there' will look TO YOU about twice as big as it really is.

 

[Mike Costello]

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

Another consideration--financing raw land is tough to do even in good times. Lenders don't like to do land deals alone as there is no upside in it for them.
Also, I don't think that lot is going anywhere soon. Your clue is across the street--that developer is trying to dump those 2 lots and recover some cash, so you are hearing what he thinks about the building picture in your area. Make a fair offer on the lot you want and wait it out. Let the seller know you are ready, willing, and able to follow through on the purchase. I'll bet he will come around as soon as he gets the "Pie in the sky" attitude out of the way. Qualified buyers are worth their weight in gold these days. Mike.

 

[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.