Making Offer On Land

[alchemysa]

If you approach him through an intermediary it would look pretty obvious that he's working for you or another neighbour anyway wouldnt it? If I was him I might resent the deception and just say I want to know who the real purchaser is. I cant really see any advantages in trying to keep it secret. You might just wind up looking like a sneak.

Don't be too naive about this. He's not going to sell it cheap just because you are a neighbour. If its an attractive parcel of land he's possibly already been approached 50 times to sell it. Its perfectly reasonable that he wants the best price possible. Tell him you'll pay full market value but that the advantage is that by doing the transaction privately you can both save some agents fees.

Then again, if you really want the land then offer a better-than-market price so you don't lose it.

I say its best to let him know you are interested and keep him onside.

 

[MarkV]

I would do my home work before approaching the owner. Go to the court house and find out if there are any deed restrictions, easement issues, liens and what he paid when for the property. Have an appraiser do an appraisal of the property, the owner may not know what it is worth and it will help you decide on your top dollar. If the owner thinks it is worth more than the market value you have something to show him and it shows you are a serious buyer.

These are funny times when it comes to buying vacant land. I have a couple tracts of undeveloped land that I would like to sell and don't have on the market. I would be approachable but I would not sell at the current depressed values that land is selling for because I don't have to. On the other hand a few years ago land was at an all time high inflated value that I don't think we will see again. To get me interested in selling an offer would have to be in between the two somewhere.

My final thought is that the chance to buy land adjoining yours can be a once in a life time thing. If it is someplace you plan to stay a thousand an acre above current prices will look pretty cheap after 20 years of enjoyment and privacy.

MarkV

 

[DennisArrow]

+1 on what MarkV has to say. Best for you to approach, be honest, real, say why you want it and then you have done everything you can. Easy through tax records to find out what the appraisal is and what other properties in the area have recently sold for.

I have owned, for several years, 10 acres on a mountainside here in NW Ga. There was one 12 acre area above me to the top of the mountain with the county owning a gravel pit on the other side of that. For years I have fretted over who this ol guy would sell it to or if he would go ahead and die and then his heirs dump it to the highest bidder.
The owner and I over the years have had some run ins over water run off, easements, and tresspass by my son. I NEVER figured he would have anything to do with my interest in the land because when I bought this place 12 years ago and approached him to buy another joining piece of property he was totally negative and mean spirited.
Anyway, my exterminator, a local good ol boy who lives a couple of miles away and is an avid junk collector, was doing his monthly thing here at the house and mentioned that he and the owner were discussing buying it. I knew that the owner was trying to sell it; but for wayyyyyy high elevated per acre. NO WAY was I gonna accept having this guy above me going up and down my private road, which gives access to that 12 acres. Nor was I gonna put up with the land above me being destroyed and me having to deal with that............
So, one day the owner was up clearing a tree off of his section of the easement. Walked up and just talked. I have always shared with him my love for God and his direction in my life. NO, NOT BIBLE THUMPING.......Anyway, I explained to him that the forest on the 12 acres was they way God made it and I really wanted to keep it that way. Asked him if he would sell it to me, over about an hour of small talk, YOU HAVE TO TALK, NOT BUSINESS........He asked for an offer, and I knew through tax records what it was taxed at and low and behold we shook hands...........Took a few months to survey, get title insurance, and finance but NOW it is MINE and paid for.........

YES, do by all means, get it surveyed and get a real estate attorney/mortgage company involved in the closing. Costs a few hundred dollars but TOTALLY worth it. Turns out that the county had claimed a pie section of land for their chert mine that totaled about 1/2 of an acre.

Anyway, GOD takes care of ME and for that I am thankful..........Turn it over to Him and just follow His will.....not YOURS.......Dennis

 

[ultrarunner]

Property is a funny thing...

I find doing my research and offering a fair price lets me sleep at night... you have to know what the land is worth to you and have the means to pay for it... it's worked for me.

In Real Estate, there is more than one way to come to terms if both parties are on the same page.

There was a property I wanted and felt the owner wanted to sell to me... I made my offer and the seller's son-in-law became involved and I let it go.

Turn's out the Old Man was much wiser than all of us... He called me up and said to keep family peace he needed 10% more on the price... but was willing to carry a note for 10 years at very reasonable interest only... He believed his son-in-law would quickly spend any inheritance and by selling over time, he was setting up future income for his daughter.

Another Real Estate Investor in town would come in and offer a big price and then pick the deal apart after he had the property tied-up... The final price, months down the road was always much less than the original offer. Not ethical in my book to plan on being a chiseler by ordering numerous reports, bad mouthing the property intending to beat down the price... he was successful though... because his offers were above market and eliminated competition

 

[warhammer]

Two thoughts on this:
When I was looking for my farm in late 2007 after months of searching the best thing I had seen was a 37 acre tract within an hour of my house, priced less than my max budget.
Problem with it was it sat too far off the road and access and utilities would have been prohibitively expensive.
I told the realtor I really liked a similar sized parcel about 3000 feet closer to the road that had a couple of stock tanks and a barn. And while the electric was not hooked up the poles and line ran right to the barn.
I asked my realtor to approach the owner about a possible sale. Turned out both the parcels were at one time part of one farm and that the lady who owned the one I liked was fixing to list her part up the following Monday. The owner wouldn't discount much as she now had an offer before it was even listed but she did come down $1000 and that covered the survey.
If you contact the owner you might get lucky.

On the other hand:
I have bought and sold two lots over the last 7-8 years one industrial and one residential. Both ended up selling to adjacent landowners and both had been on the market for awhile before sale. I had held on to both for about 5 years and listed them at 60% more than what I had paid which was about in line with other local properties. I have no doubt that both bought and paid a little more than someone new to the area because they were adjacent owners.

Warhammer

There is a five acre lot directly behind my property that I am interested in purchasing. The lot is undeveloped and is not listed for sale. I have the owner's address through the county real estate department.

This is my question. With the goal of negotiating the lowest price for the property (if he is interested in selling) should I contact this person directly or through an intermediary? If I contact him directly he will know I own the property adjacent to his property and may ask for a higher price. If I do go through an intermediary he will eventually know who I am anyway but hopefully after a price is agreed on.

Any thoughts on this?

Thanks,

Dennis

 

[JJT]

Do you know a local real estate agent? If so, ask them to work up a CMA, (comparable market analysis). They pull recent sales, listings and expired listings, (getting you a range of prices). Even if you have to pay it's less than $100.

 

[drgill]

Thanks to everyone for the suggestions. I will write the owner a letter explaining my interest in the property and asking him if he wishes to sell.

There is one piece of land adjacent to the property I am interested in that is being offered at a what I consider an insane price. It has been on the market for three years and I expect at that price it will be on the market for a while. Hopefully the owner of the property that I am interested in will not try to use that a 'comp'.

I will post the results of the owner's response when I get it.

Cheers,

Dennis

 

[dmccarty]

Do you know how much the land is worth in this market?

If not do what JJT suggested. You have to have a realistic price in mind.

The land to our west has undergone some interesting ownership changes. Eventually it was subdivided and a road ran down the middle. Before this happened an agent sent us a very nice presentation offering the land for sale. The land had been clear cut in the mid/late 90s so timber value was 0. The land value might have been $1,500 an acre. Its been a few year since he sent this to us but I think the asking price was around 10,000 acre.

We laughed at that price. Best I can tell they have sold one lot over there and they have paid quite a bit of money on survey's and road construction.

Before we bought our land the man who used to own the land to the west tried to run a road from the subdivision in our front to this land. He wanted to access his land from the subdivision by buying up a lot. The HOA fought him and one. His land has access to a road but it runs past a pretty run down trailer park. They offered us land at 10K per acre with access to a trailer park. And the land was only worth 1.5K.

Point being know the value of the land. Don't over bid but if you low ball you likely ain't getting it either. Be realistic.

Let an agent run the CMA so you have a valid value.

Later,
Dan

 

[rox]

Yours is an interesting post and coincidently we are int he exact same situation. The western boarder of our property has 2 neighbors, one is the city and the other is a group of 3 senior brothers and sister. The land is about an acre perhaps a tad more but not much. The city owned land is reserved for use in the distant distant future for an expansion of the cemetary which is about 1/4 mile to 1/2 mile down the back road.

The one acre parcel the seniors own has a huge high tension power line running down the middle of it and thus it is a non buildable lot. There is no city water available. So basiclaly the lot has zero value to anybody but us. There are about 28 olive trees but no tractor access so we would have to knock down part of a stone wall and build a ramp as it is uphill from us. The negotiations have been going on since last October. We offered 4,000 Euros and they came back and said that they discovered that there are not 2 owners but 3 owners and they did their research and want 10,000 Euros. We let that die and simply said it was way too much money at 10,000. Around May I called the sister back and said we would go 5,000 but that was it. Sister said the brother was insistant that it was worth 10,000 so I told her to tell her brother to buy the 2 other owners out and see if he would pay 10,000. She had not thought of that but liked the idea! Never heard back. Now it is September and I called back again adn repeated the $,000. She called back and said how about 6,000 and talked to my hsusband on Saturday. hH told her that he only wanted to offer 4,000 and it was only me who went to 5,000 so he would not go to 6,000 but would talk to me and we would call back Tuesday. So here is my plan for tomorrow.

I'm going to call back and stick with the 5,000 but also offer each brother and sister 10 liters of olive oil I bet we get it, I have my fingers crossed. This would make our entire western border neighbors, the city which I am very happy to have as a neighbor.

Some of you may have read my oher threads where I got a lawyer to foreclose against a person who stopped paying us a mortgage payment and paid with olive oil, got my washing machine repair bill paid half in cash and half in olive oil. Had and electrician work on our electrical box for olive oil, hey why not buy a small parcel of land and grease the transaction with a bit of olive oil?

 

[dmccarty]

Rox,

It will be interesting to see how you land offer turns out.

Land to our south is held by a family. If we ever play and win the lottery we might be able to buy some of the land to our west and south!

Getting everyone to agree to sell much less agree on a price can be problematic. A friend of mine, who at the time was a banker and helped us buy our land, inherited land that he would like to sell. Unfortunately others in the family either do not want to sell or think the land is worth much more than reality. He just wants them to buy out his share so he can move along!

Later,
Dan