hunting property / land question

[cardplayer1]

REal estate negotiating tips? Will I normally save on land if I pay cash? Is there a way I can find out how much the seller actually paid for the land? If we are expecting inflation soon antything wrong with buying 100k in gold and putting down 50k on hunting property / farmland / possible self sufficent property with a total cost of 125k for the land.

Is there a general rule on how much to offer, say for a 130k property in the country. Should I just wait a while?

I thought this might be a way for me to diversify. Right now I only have equities, about 700k worth, and no cash or precious metals. I have like .25 emerging markets, .25 international, and .5 u.s. stocks. The land I am looking at has water, great hunting, and is also set up for building a home in the future.

Thanks

[metalman]

Re: hunting property / land question

REal estate negotiating tips? Will I normally save on land if I pay cash? Is there a way I can find out how much the seller actually paid for the land? If we are expecting inflation soon antything wrong with buying 100k in gold and putting down 50k on hunting property / farmland / possible self sufficent property with a total cost of 125k for the land.

Is there a general rule on how much to offer, say for a 130k property in the country. Should I just wait a while?

I thought this might be a way for me to diversify. Right now I only have equities, about 700k worth, and no cash or precious metals. I have like .25 emerging markets, .25 international, and .5 u.s. stocks. The land I am looking at has water, great hunting, and is also set up for building a home in the future.

Thanks

glad you asked that question... i'm thinking along the same lines.

your emerging markets will do well.

don't know about intl, if by that you mean developed asian and euro countries.

if i didn't own pms not sure i'd buy them now with so much cheap stuff out there. but land isn't cheap yet here in the nh area.

[cjppjc]

Re: hunting property / land question

REal estate negotiating tips? Will I normally save on land if I pay cash? Is there a way I can find out how much the seller actually paid for the land? If we are expecting inflation soon antything wrong with buying 100k in gold and putting down 50k on hunting property / farmland / possible self sufficent property with a total cost of 125k for the land.

Is there a general rule on how much to offer, say for a 130k property in the country. Should I just wait a while?

I thought this might be a way for me to diversify. Right now I only have equities, about 700k worth, and no cash or precious metals. I have like .25 emerging markets, .25 international, and .5 u.s. stocks. The land I am looking at has water, great hunting, and is also set up for building a home in the future.

Thanks

Why does it matter what the owner paid for the land? Cash or financed wont really matter to the seller. He gets a certified check at the closing. Is the property list at $130,000? or is it worth $130,000. Do some checking to see what comperable properties have sold for. That should give you an idea of what to pay.

[GRG55]

Re: hunting property / land question

REal estate negotiating tips? Will I normally save on land if I pay cash? Is there a way I can find out how much the seller actually paid for the land? If we are expecting inflation soon antything wrong with buying 100k in gold and putting down 50k on hunting property / farmland / possible self sufficent property with a total cost of 125k for the land.

Is there a general rule on how much to offer, say for a 130k property in the country. Should I just wait a while?

I thought this might be a way for me to diversify. Right now I only have equities, about 700k worth, and no cash or precious metals. I have like .25 emerging markets, .25 international, and .5 u.s. stocks. The land I am looking at has water, great hunting, and is also set up for building a home in the future.

Thanks

Where I am raw land transactions have ground to a complete halt. Whenever I have seen this in the past it's always been followed by those sellers who cannot hang on having to cut their price and then the whole market moves down. Unlike developed land, with a house or other improvement that can be rented out, in most cases raw land cannot generate much income and therefore some sellers cannot hang on.

In this credit constrained situation what is the trend of transactions where you are? If it's as frozen as most other places you may want to be patient...

[raja]

Re: hunting property / land question

REal estate negotiating tips? Will I normally save on land if I pay cash? Is there a way I can find out how much the seller actually paid for the land? If we are expecting inflation soon antything wrong with buying 100k in gold and putting down 50k on hunting property / farmland / possible self sufficent property with a total cost of 125k for the land.

Is there a general rule on how much to offer, say for a 130k property in the country. Should I just wait a while?

I thought this might be a way for me to diversify. Right now I only have equities, about 700k worth, and no cash or precious metals. I have like .25 emerging markets, .25 international, and .5 u.s. stocks. The land I am looking at has water, great hunting, and is also set up for building a home in the future.

Thanks

There are the usual prices . . . then there are distressed prices. Find out what land is going for by going to an RE agent, then wait for a deal to show up, somebody for one reason or another who has to sell NOW.

[KenD]

Re: hunting property / land question

Is there a way I can find out how much the seller actually paid for the land?

Yes, this information is public, at least everywhere I am familiar with, and is recorded at the Registry of Deeds office. In many areas, this information is online and can be searched quite easily, if you know either the address or the owner's name. This varies from location to location and it has been my experience that urban areas usually are easier to deal with than very rural one.

If the information is not online, try calling the Registry of Deeds. Depending on the luck of the draw you might get someone willing to pull that information for you.

Good luck,

Ken

[cjppjc]

Re: hunting property / land question

I asked this question before:

Why does it matter what the owner paid for the land?

[KenD]

Re: hunting property / land question

I asked this question before:

Why does it matter what the owner paid for the land?

While I am not the originator of this thread, I can provide some insight as to why having this information may be helpful in factoring an offer.

In many cases the owner financed the property and the purchase price as well as the lien holder's name would conveniently be recorded on the deed. Even in the roughest of times, most people cannot afford to sell below what the outstanding loan amount is on their property. It is also useful to know if the buyer is facing financial pressure or is in imminent danger of foreclosure, as this information can help dictate how you would deal with the seller. Now, if the owner is facing foreclosure the buyer might give consideration to approaching the lien holder directly.

Having the owner's numbers may also work to the buyer's advantage if the property was purchased at an extremely low number, perhaps as in a family deal, so being armed with the information could again allow you to offer a number that would be acceptable to the seller.

If nothing else, should the seller try to tell you that they owe a higher number on the property when you know otherwise, this could be interpreted as a sign that they are not dealing with you in good faith and that you might want to discount anything else they have told you accordingly.

From my perspective, I endeavor to always enter a deal with as much solid information as I can find, knowing that the better prepared one is the more likely a deal can be made.

YMMV.

[cjppjc]

Re: hunting property / land question

Having the owner's numbers may also work to the buyer's advantage if the property was purchased at an extremely low number, perhaps as in a family deal, so being armed with the information could again allow you to offer a number that would be acceptable to the seller.


YMMV.

In my experience the seller will try to ge what he/she thinks is fair value for the property regardless of the amount paid. The only caviet to that statement involves those who just want MORE.

[KenD]

Re: hunting property / land question

In my experience the seller will try to ge what he/she thinks is fair value for the property regardless of the amount paid. The only caviet to that statement involves those who just want MORE.

Yes, my experience shows that to certainly be true in almost every case, just as it is the buyer's job to buy at the lowest possible price.

The question now becomes, what is a fair price and how can one provide evidence of what fair market value is?

We all know that tax assessment isn't a valid number, nor can comp values be counted on, unless there are a large number of identical homes, all of which sold in the very recent past. Ebay pricing, while a spot market indicator, might be a consideration but I wouldn't consider auction liquidation pricing to be the best indicator either.

That leaves us with, what did the seller thin the property was worth when they bought it (which would be the last real value assigned to the property) and has the local market gone up, down, or stayed even since that time?

[cjppjc]

Re: hunting property / land question

Yes, my experience shows that to certainly be true in almost every case, just as it is the buyer's job to buy at the lowest possible price.

The question now becomes, what is a fair price and how can one provide evidence of what fair market value is?

We all know that tax assessment isn't a valid number, nor can comp values be counted on, unless there are a large number of identical homes, all of which sold in the very recent past. Ebay pricing, while a spot market indicator, might be a consideration but I wouldn't consider auction liquidation pricing to be the best indicator either.

That leaves us with, what did the seller thin the property was worth when they bought it (which would be the last real value assigned to the property) and has the local market gone up, down, or stayed even since that time?

I'm not sure it's the buyers job to buy at the lowest possible price. Real estate does not have to be adversarial. That was the reason I asked why it's necessary to know what the seller paid. In an adversarial relationship, this kind of information can sometimes lead to incorrect assumptions regarding the sellers motivation.

[KenD]

Re: hunting property / land question

I'm not sure it's the buyers job to buy at the lowest possible price. Real estate does not have to be adversarial. That was the reason I asked why it's necessary to know what the seller paid. In an adversarial relationship, this kind of information can sometimes lead to incorrect assumptions regarding the sellers motivation.

Point taken.

[cardplayer1]

Re: hunting property / land question

I'm not sure it's the buyers job to buy at the lowest possible price. Real estate does not have to be adversarial. That was the reason I asked why it's necessary to know what the seller paid. In an adversarial relationship, this kind of information can sometimes lead to incorrect assumptions regarding the sellers motivation.

I thought it might be worthwile to know how much they paid for and when they bought it. If for no other reason I'd like to know how much money they are making on this deal, and if they got a great deal, maybe I'd be better off leaving out the middle man?

If there's a way for this process to run smoother and not be adversarial, I'd like suggestions. Because I'm under the assumption that their job is to get the most money possible for the property and my job is to pay them the least amount of money for the property.

If I can figure what it's worth, what does that matter if I can pay less to somebody else? I am intersted in bargain hunting. I have plenty of time to wait it out for the best deal.

I am def. not an expert at this but have had family members sell "land" before and they always had to sell it themselves, because the banks wouldn't give out loans for the raw land, at least that was my understanding. They would have to have the person send them payments directly, but they also sold the land directly and did not use a r.e. agent.

[Sharky]

Re: hunting property / land question

A few hints for you:

-- Do your homework on comps.
-- Carefully look at pricing trends in your area.
-- Look at trends for the number of similar properties on the market, taking seasonality into account. In general, the more that are on the market, the harder they will be to move.
-- Find out about REOs and foreclosures in the area. If there have been a lot of them, they can depress values for a long time and make property harder to move.
-- Find out how long the property has been on the market, and whether there have been any price reductions already.
-- Sellers will be more inclined to accept a lower price if the property has been on the market a while at the same price. Offering 10% below asking after 3 months isn't unreasonable.
-- Your offer should be no more than about 15% below asking price. Anything less and the seller will probably just relist at a lower price rather than accept, so you're just wasting everyone's time.
-- What the other person paid is immaterial. How much they're going to make on the deal has no bearing on what it's worth, and if you bring it up in a negotiation you're just going to insult them.
-- Paying all cash doesn't help you. What does help is if you can present an unconditional offer that can close quickly.

[cjppjc]

Re: hunting property / land question

I thought it might be worthwile to know how much they paid for and when they bought it. If for no other reason I'd like to know how much money they are making on this deal, and if they got a great deal, maybe I'd be better off leaving out the middle man?

If there's a way for this process to run smoother and not be adversarial, I'd like suggestions. Because I'm under the assumption that their job is to get the most money possible for the property and my job is to pay them the least amount of money for the property.

If I can figure what it's worth, what does that matter if I can pay less to somebody else? I am intersted in bargain hunting. I have plenty of time to wait it out for the best deal.

I am def. not an expert at this but have had family members sell "land" before and they always had to sell it themselves, because the banks wouldn't give out loans for the raw land, at least that was my understanding. They would have to have the person send them payments directly, but they also sold the land directly and did not use a r.e. agent.

For raw land with no improvements, comparable sales is your best best. You can be sure the seller at one time was told the comps. How much money they are making is immatrial. The ones (Men over 55) with the biggest gains are the hardest negotiaters. You would be better off with someone who has a little gain. (And not a man over 55)

Certainly it always better to pay less, just as it is to sell for more. The only point I was making is the previous sales price means very little. Once you have deceided what the range of fair value is, then you can proceed.

As far as financing, Your bank would be the best place to start. Terms are no longer very good. Cash or owner financing may be your best chance.

I'm not sure what you mean by "leaving out the middle man."