Land purchase thoughts

[thatguy]

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

 

[mikim]

If you plan on being there for 20+ yrs buy it all. At any price - in 20 yrs it won't matter what you paid for it.

 

[IslandTractor]

If I were in your shoes I'd pay a premium but not his asking price. Give him an opening offer and make clear what the asking price of the other lots is currently. You may be his only chance to get any sort of "premium" over what the other lots are being sold for this year. If you thought $40-45K was reasonable that would seem a good starting point.

It is worth a premium as otherwise you will be kicking yourself for years but it's necessary to see the strength in your own bargaining position too.

 

[MossRoad]

Well, seeing how our first house cost 20K and our 20 acres in the country cost 30K and our current house cost 65K, I would have to say that I, personally, would never pay that much for 2.5 acres! :laughing:

Plain and simply put, however....

If you want it, and you can afford it, and you did all appropriate consideration of spending that money now and how that will affect your future, then you should buy it or regret it later.

 

[dooleysm]

There is a 2 acre lot adjoining our 10 acre lot/house. The adjoining lot has a rundown doublewide on it that the previous owner had foreclosed. I talked to the bank before it went through the sheriff's sale and got a feel for about what they wanted. It went for $54,500 at the sale.

You can buy all the land you want around us for $6000/acre. I would love to have that lot, but not at that price.

From what I've seen of the other trailers around us, they come up for sale every few years, each time the asking price gets lower and lower. I can afford to wait, I'm not going anywhere. Land isn't that scarce around us that it would be worth it for someone to buy a lot and tear down the trailer to build something bigger. I am pretty confident that if I bide my time I will have a chance to buy the surrounding lots in the future for a more reasonable (to me) price.

Your situation is different though, as the land is bare. It's a decision you will have to make. Just think how you'll feel if someone does buy it and move in a junky trailer. It's common in our area, I'm sure it's not as common elsewhere.

 

[dmccarty]

What are the comparables? 40K? Sounds like the developer is asking for a third of what this guy is asking. Has anything else sold in the area?

We used to own a lot in our subdivision that we sold off years ago to help pay for our house. The lady bought it intending to build. She now has it on the market. They have only had one person seriously look at the lot that we have seen. The lot has been on the market for at least six months. Land is not moving in my area at all.

Unless there is something very wrong with the developers two lots, I don't see how the guy will sell the same size lot for 65K. Until the two cheaper lots sell why would someone buy his lot for 65K? Seems like you can wait.

Depending on the comparables it seems the seller would be lucky to get 40K much less 50K or 65K.

Later,
Dan

 

[eepete]

I don't know squat about real estate, but I do know about the lot next to me. We bought the 10 acres next to our 10 acres when it was in foreclosure in the mid 90's. Very good move.

I'd offer the seller the $42K that things were going for. This lets him say he got what he paid for it, not a bad claim in todays market. He'll proably say no. Anyone buying into the area will see the distressed sale price lots in the $20K range and get those. The reason for making the offer in the $42K range is (1) you might get it, what a win (2) if the seller suddenly needs the cash, he can come back to you. Basically, if he decides for any reason it's just time to get sell it, he knows you're ready.
So then the only way to get scooped is someone willing to pay more than $42K and not buy one of the other lots at half the price.

Agree with others that the $42K (if you can swing it) is a fine price when you're looking at a 20 year period of living in your current house. Also I think if it sold and had never offered anything, you'd be kicking yourself.:mur:. So offer what every you can swing and see what happens.

One other thought: We bought our current land when economic times were not too good back in 2002. We did a owner finance. So no bank loans, fees, etc. The seller gets the money in smaller chunks which works out better for their taxes. No realtor fee (may or may not apply to you). So maybee the owner would do a 5% 5 year owner finance? Net result is more money in the sellers pocket (no real estate fee, smaller tax hit, some money from the interest at a time when it's hard to get 5% on cash). This could make the lower price than they wanted something they can stomach. Just a thought...

Pete

 

[MarkV]

I agree with the idea of offering the 2000 price. He will never see the 2004 price plus that he wants. He will turn you down and tell him the offer stands if he changes his mind. If he really doesn't have to sell, well you tried. If he leaves it on the market for a year with no offers, he may look at the 2000 price more favorably. When comparable lots in the area are listed and not selling in the 20's you would be paying too much of a premium in my opinion.

MarkV

 

[Gale Hawkins]

If you plan on being there for 20+ yrs buy it all. At any price - in 20 yrs it won't matter what you paid for it.

Mike's is the only post you will remember from this thread if you DO NOT buy it is my prediction.

 

[2manyrocks]

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?

Local realtor knew our church wanted an adjoining lot for parking expansion so he priced it high at $75K maybe two years ago. He ain't sold it yet.