How much $$ to sell house on unsolicited basis?

dummy · Feb 28, 2005

The biggest glitch I've seen was the developers weren't offering a "pure cash" deal. They want to make payments. I would wait until the armored car comes to the front door.

Richard · Feb 28, 2005

Interesting comment about the armored car and a VERY good point.

Was at father in laws house for dinner last night and saw his preliminary notes scribbled on his scratchpad...

He has all 3 houses written down at $250,000 each. I'm just mystified at his thinking process.

If he WANTED to sell and listed the house, I could then understand selling it perhaps for $250,000 ,though given he has like 2 acres, commanding view on the lake, I'd think 450,000 would be a LOT more accurate. He is not factoring in a DIME into his price, the fact that they are ASKING him to leave.

He just has a historical tendency of selling things too low. In fact, he was bi***ing just last night on how he sold his PRIOR house too cheap. It was a 5,000 sq ft 4 story house also on the lake.

Seems to me if he's cranking about underselling his LAST house, he MIGHT be a bit more open to do this one properly.

sigh

Anyways, wife & I are calling an apprasier today. I"m going to pay for it out of my OWN pocket if need be. First, I think I need one for my house even if this deal does NOT pan out. Second, I'll have the guy do apprasials on the other two houses AND the farm.

My wife has the basic frame of mind of "shut up and let the them do what they want...it's their land"

My frame of mind is, "though I don't want to intrude on what is in fact YOUR business and none of mine... I WILL intrude if I think you're getting screwed because you ARE part of my family now and I DO care for you and do NOT want to see anyone walk all over YOU...(even though you DO seem to think you are a doormat, sigh)

I told the wife that what she ought to tell her dad is:

"He should tell the prospective buyers that they can hand him (example) $10,000 UP FRONT to enter negotiations. If the land is sold, it will come off the price, if not, it's not refundable"

She looked at me with big eyes..."why"???

I said, "because if he's going to do it RIGHT and get an attorney, apprasial, tax advice... it's not fair that he spend for all of that out of HIS pocket, just to have them giggle and say... "nah, we changed our mind".

I went on to say, if they are just dinkering around, it will get rid of them REAL quick, and if they DO fork it over, you know they're more than casually interested.

I got another /forums/images/graemlins/ooo.gif from her lol

/forums/images/graemlins/tongue.gif

Varmintmist · Feb 28, 2005

Your FIL is appraising YOUR property and adding it to his and coming up with a #, without your consent, with a history of not doing good land deals, to present to a developer, without a lawyer, and your wife is OK with this??? I hope you have your own deed.

I like the idea about getting 10K up front. And making the deal "net cash upon signing" no payments.

Your FIL is kind of correct in that he can sell a little at a time without tax problems. In PA its like 2 acres a year, so if it was here, he could sell out in 100 years or so.

The price is not the cost of the home. You dont need to sell. The cost of the land and homes is what the developer needs to pay. There is a huge difference in the two. A appraisal is NOT going to give you a basis for a number. That is what the EXISTING home is worth, not what the developer NEEDS it for.

Put it this way. Say if by your living in your house you would tie up 12 acres. The developer can make 600K profit on each acre on average. You price should be approx 6 mil. That is what your not moving would cost him. Even if your place is only 2 acres, it makes unusable the other 10.

Get a lawyer, ignore the FIL, make your own deal. If FIL sells, that will make your place more expensive. The early bird gets the worm, but the second mouse gets the cheese. I dislike lawyers and realtors are right there at the bottom of the food chain with them. I dont like getting stiches either, but sometimes they are nessassary.

shoppintractors · Feb 28, 2005

I dislike lawyers and realtors are right there at the bottom of the food chain with them. 

There are good and there are sleezy in EVERY profession. To make broad generalizations with one stoke of the keyboard is a bit unfair....

They're lawyers and realtors on this board that have shared their expertise, all on their own time, for everyones benefit.

Don

Hakim · Feb 28, 2005

The numbers here have nothing whatsoever to do with what your father in law originally paid for his property, or its appreciation.

Land developers are operating on the principle of "highest and best use" of the land, which can be many multiples of original land cost or current value as farm land.

Say you owned a half acre of empty land. You paid $112,000 for your lot. Along comes WalMart who wants to locate their next store there. Now what is the value of your .5 acre? Probably some millions.

I have a friend whose brother actually works for WalMart, and "represents" them in real estate purchases all over the country --- because once people learn that WM is the "buyer" they ask for the moon, and more.

In this case, as already noted, the developers are going to be building and selling many parcels and houses for more than $500,000 each. How many? Their possible revenues could be $50 million, or more.

Your relatives are simply being naive and foolish to attempt to negotiate this without representation. The developers are pros, and will easily take advantage of them if they think you can count on them to be "fair."

Proper research, and evaluation of the prior sales of properties is essential; find out the prices they have received for already developed homes X the number of acres, divided into potential lots = more of less the "value" of the farm. You have to be realistic and allow them room for profit as well. This is a straight up business deal.

Any method that calculates his price + appreciation is likely to be far less than the property is worth, or the developers are willing to pay.

_RaT_ · Feb 28, 2005

I was waiting for a like this. It is so true. I have family members that went through a similar process of purchasing super cheap land only to have it sky rocket when a new school adjacent to it went in. It was not just the school that added the value but the infrastructure that went with the school which included all underground utilities and roads. Their 80 acres was purchased sometime in the late 80's for pennies and sold for millions. With the money made they purchased more land that bordered their old land. They got professional help and it really payed off when the first developer defaulted on the payment. They had a second one ready to go.

kensfarm · Feb 28, 2005

"The developers are pros,"

Well said.. they already have the big $ lawyers working for them.

Some realitors will work w/ landowners to show them how to maximize your land profits.. maybe by getting the land rezoned and parceled out before selling will increase the value significantly. Plus.. to lesson the tax man's burden.. if a "like" land purchase is set up w/ the current sale.. the money is held by a third party.. no taxes are paid. Your FIL could buy a big farm/land someplace else w/ the dollars from the sale and no capitol gains taxes have to be paid.

Richard · Feb 28, 2005

( Your FIL could buy a big farm/land someplace else )

"IF" this deal goes down, (remember they've been here before), then he'll pocket the money. Seems when he bought this land 40+ years ago he bought it with the intent of it being his retirement nest egg. He did NOT anticipate TVA coming in and taking about 1,000 of his 1,250 acres as they've done. The side benefit of TVA is of course, the lake and the fact that we now border it.

The downside of TVA and the lake (and I'm going to zip my mouth after this one comment about TVA) but as far as I'm concerned, they're all in cahoots and a bunch of thieves.

In my opinion, TVA should take the land they NEED and then offer the excess land they took back to the origional land owners. Instead, what is going to happen is, TVA will give or sell the land to it's sister and I don't recall their name but it has to do with land development. And THIS entity is the one that will actually sell the land to the developer.

Anyways, TVA is a sore subject in some circles.

Pops in law will put the $$ into the bank. What I told the wife the other day is, he doesn't NEED the money at all. I said , though it might sound a bit selfish (and it probably is), his kids would probably be better off if he willed them the farm because at least, they'd get a stepped up cost basis rather than the zero basis he has.

If he needed the funds, I'd understand but he's a retired dentist and has done ok for himself cleaning/filling teeth. I don't even know why at age 84, he'd WANT to go through the hassels of moving /forums/images/graemlins/confused.gif

I'm just glad that OUR land is deeded to us/bank. I'll shut my mouth as long as I see the talks going where I think they SHOULD go. If they waver, then I'll speak up on his behalf. My stuff however..., well, I don't need to move, I don't WANT to move. So they're going to have to entice me more than "market value + a premium". That premium is going to be spelled out in capital letters.

/forums/images/graemlins/grin.gif

dmccarty · Feb 28, 2005

Richard,

I would find out the price of land across the lake. That would give you an idea of what they are making selling the lots. Hold out for the maximum price. He won't be the last buyer looking at the land. Don't sell cheap. In my area I can show you several areas where old and new houses are being bought out to enlarge parcels. Sometimes they move the house. More often than not they just bulldoze it down. A line of three or four houses less than five years old just got torn down for a larger development.

Find out the maximum price from an agent and/or look up the records in your county. Figure out what the lots are selling across from your land. Your FIL/UIL really needs a lawyer and/or the transactions needs to be simple. This is a once in a life time transaction why mess it up by not paying a few dollars to people to cover your side of the deal?

Property in my county is getting appraised this year. County wide increase of 29%. The valuation on my land went up FOUR times what it was four years ago. Yes FOUR times. My neighbor went down to contest the valuation. But I think he will loose for his land. On my land I have two soil scientist reports saying the land does not perc. No percy no housey. If I could sell the lots at the price of the valuation they would be gone! /forums/images/graemlins/grin.gif My visit with the Tax Man is Friday. /forums/images/graemlins/grin.gif If we had a sewer lines in place the land would be worth the valuation. One day they will be but not now. So we hold onto the land. I don't want to sell anyway but we won't be able to pay the taxes at some point and we will have to sell....

Later,
Dan

Varmintmist · Feb 28, 2005

( I dislike lawyers and realtors are right there at the bottom of the food chain with them. 

There are good and there are sleezy in EVERY profession. To make broad generalizations with one stoke of the keyboard is a bit unfair....)

My opinion, based on my personal experiance. 10% of realtors do their job, 50% are a waste of oxygen, and 40% have no business trying to sell a house. Most want to move you into what they want to sell, not what you want to buy. When you sell, they want to overprice to make you feel good then keep cutting the price so they can put "reduced" in their flyers. Are their better ones than the ones I have run into?? Good Lord I hope so. However I will still go into any transaction with my guard up, i's dotted, and t's crossed.

Lawyers, well for the amount they charge for what they do.... my experiance hasn't been good. They seem to cost me money and I get screwed anyway.

Like I said, they are like stitches. Only if you really need them and then leave yourself the option to tear them out. /forums/images/graemlins/smile.gif

But I'm not bitter /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif

(
They're lawyers and realtors on this board that have shared their expertise, all on their own time, for everyones benefit.

Don )

Good. Hope I can find the one of those that will actually do the work I pay them for next time I need one.