Qs on buying property--need help quick, please!

Discussion in 'Homesteading Questions' started by hisenthlay, Jul 6, 2006.

  1. hisenthlay

    hisenthlay a.k.a. hyzenthlay

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    So, I'm looking at this 15 acre property that goes to auction on Tuesday. I only found out about it on Sunday, so this is all very short notice and not the way I like to do things in general, but there's a chance that it'll go for far below market value, and I don't want to miss out on the opportunity. So I thought maybe you guys could help with some of my questions:

    1) There's a 50 year old little run-down brick house on the property now, and the guy who has lived on that land for the last 76 years is still using well and septic, even though city water and sewage are available. However, I don't think I'll have the opportunity to get the well or septic tested before auction day. The seller has disclosed that he's been having problems with the septic system, but I'm not sure what--maybe backing up/overflowing? Would you ever buy a property where you couldn't test those systems? I suppose if they're totally bad, I could convert it to city services. Does anyone know the typical costs associated with major septic repair, and/or the typical costs of running public services down over hilly terrain to a house that sits about 1/10 of a mile off of the road?

    2) Back in the 1960s, the guy allowed people tearing down a mall to dump the construction materials in a ravine on the property and fill it in. Now that ravine is a flat, grassy meadow between two hills that also seem to contain some building debris. The guy apparently gardened for the farmers market on that meadow for the last 40 years. At first I was worried that the meadow would get swampy in heavy rains, but now I think all of that rocky debris (which includes bits of brick, concrete, asphalt, etc. as far as I can tell) will create good drainage, and what I'm really worried about is that there may be something unwholesome (toxic, or....?) buried in there. The auctioneer said that the township did environmental checks on the dumpsite back in the 60s, and that they may still have the records on that. The township office is closed until Monday, and I'll check on it then. Other than that, do you all have any thoughts on the dumping situation? I would probably want to use that meadow for a barn and horse pasture, and maybe some gardening.

    3) The guy selling the place is too sick/old to walk the overgrown, wooded property line with us, and nobody else seems to know it offhand. I'm getting the plat map faxed to me later today--do you think there's any way I can rely on that to walk the property myself, or should I really try to get a survey done between now and Tuesday?

    4) The house is so small (about 480 sq ft living space) and run-down that I would probably want to gut it and then build a much larger "addition" onto it. In fact, in the price I'm willing to pay, I'm basically considering the property to be vacant land. We would stay in our current home until the construction was finished. Have any of you ever done anything like that before, and what did you think of it? I think this is slightly better than buying raw land, because the woods are already cleared at the building site, there's already a gravel drive and electricity running to the house, and there's an existing well and septic (for whatever they're worth).

    5) Do you all have any other general advice for me in this situation? I've never bought land before, and certainly never at auction. :shrug:

    Buying property at auction just may not be for me. I'm reluctant to get a bunch of tests/inspections done on the property and put that money out beforehand, since I could be outbid in the first 2 minutes of the auction and lose all of that cash for no reason. Any words of wisdom would be greatly appreciated.
    :help:
    Thank you.
     
  2. turtlehead

    turtlehead Well-Known Member

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    The existing house and septic may be a liability rather than an advantage. If they have to be torn down and cleared out, that will cost money and time. The gravel drive, electricity on site, and well are good features and will save you money.

    I'd try walking the property line myself. Surveys can get expensive and I'm not confident you could get one done on such short notice.

    Make up your mind what you're willing to pay for it, and don't bid any higher.
     

  3. poorboy

    poorboy Well-Known Member Supporter

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    Look it over, walk it over, h-ll you can put another septic in for about 3000 iffin that one can't be repaired. Figure out a bargain price, and a price that you would be willing to give, that is the true value of a piece of ground. 117 acres next to me sold gor 130,000 9 yr. ago. sold for 235,000 last wk.. let us know please how it turns out...:-}
     
  4. cfabe

    cfabe Well-Known Member

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    Check local regulations on the septic, you may be forced to abandon the system and connect to city sewer. And if the house is really far off of the road, this could require a lift pump which could get expensive. Personally I would not worry about the construction fill if it is a meadow now. But make sure there are no more recent problems, like a leaking heating oil tank. I looked at one 'bargian' property and in between when i found it and the realtor got the keys, the heating oil tank spilled, flooded the driveway and crawlspace with oil. Property is probably close to worthless now with that clean up required.
     
  5. agmantoo

    agmantoo agmantoo Supporter

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    I would not let the issues scare me off. Certainly you need to understand as much as possible but none of the problems are insurmountable. You do want to know if there are any outstanding property taxes or liens against the property. It is through such purchases (those with some risks) that bargains surface. Everyone that bids is taking the same risk as yourself and are probably not doing as much research. You stated that the property will likely be cheap and if you are the successful bidder you should have, after placing a downpayment, a period of time to close. During that period of time you can do do additional research. Worse case is that you may loose the downpayment if you walk. Therefore, on auction day all you have at risk is the low downpayment. At auction, observe the next to last bidder, you being the last, and get his name. If you decide to bailout he may pick up your obligation and you will have lost nothing! :)
     
  6. MorrisonCorner

    MorrisonCorner Mansfield, VT for 200 yrs

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    I'd check the condition of the oil tank before I'd worry about the construction fill.

    The plus of the house on the property (especially if you leave it up) at least in our area would be that it is "grandfathered." If zoning has changed substantially this could well work to your benefit.
     
  7. Maura

    Maura Well-Known Member Supporter

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    As long as there is an area you can put in another drainage field, I wouldn't worry about the septic. Systems that old often need a cleaning out, and perhaps that is all it needs. I would consider leaving the little house up and using it as a shed or office. You can pay someone to inspect it to find out if it is worth keeping or not. Basicly, if you buy it and decide it's not for you, you can turn around and sell it at market value.
     
  8. Michael W. Smith

    Michael W. Smith Well-Known Member

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    As has been said, check with the tax claim office to make sure all the taxes are paid and there aren't any liens on it. At the auction they may tell you if there is, or maybe not!

    With the house and questionable septic, I would assume that you should be able to gut the house, remodel and add on and still be allowed to use the old septic. Ask the guy if it has been pumped out. Perhaps it is just full and that is the whole problem.

    As for the dump site, I wouldn't worry about it. That stuff has been buried for 40 years, so if you get the property do whatever you want - pasture for horses, build a barn on it, whatever.

    As for getting test's done and survey's - forget about it. There is no time to do and even if there is, why would you pay for a survey if you are not sure you will get it? You are buying the place AS IS - there is no guarantee on anything!

    Before you go to auction, one thing you MUST figure out is the top price you are willing to bid. Bear in mind that as you said, as old as the house is, chances are you should bid only on what the land is worth - since the house and septic may or may not be salvageable. Once you know what you are willing to bid, DO NOT GO OVER IT! Alot of people when bidding get hooked on the excitement and just keep bidding.

    Good luck, and let us know the results.
     
  9. Wags

    Wags Well-Known Member Supporter

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    I'd wonder about zoning if it is sitting so close to the city that city water/sewer hook up is available. Might not be worth anything as a homestead property, despite the acerage, if it lies in the path of an expanding city.
     
  10. hisenthlay

    hisenthlay a.k.a. hyzenthlay

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    Thanks for all the good advice! cfabe and MC, I'll check the oil tank, for sure, now that you mention it. If there have been any problems with it, will it be obvious to look at? What I'm I looking for when I check it?

    poor boy--$3000 for a new septic doesn't sound too bad at all, as a worst case scenario. cfabe--I think I'll be able to keep the septic if I want it, because the guy told me he had transferrable grandfather zoning rights on the place (I know those aren't strictly transferrable, but the zoning board already approved it once on a previous sale deal that fell through, so there's a good chance they'd approve it again)--the place is zoned such that you could build a high rise or industrial park there if you wanted, even though all of the neighbors are zoned residential. About getting city services--the house sits slightly downhill from the road, and about 1/10 of a mile off the road as the crow flies. The land in between the house and the road is hilly and partially wooded. Any idea on what the cost would be to get city services in there?

    It's funny--I would never think to worry about this stuff if I was just buying a house in suburbia, but since I've gotten so much of the history of the property from the owner, I know just enough to be worried. Lord only knows, our house right now in the city is probably built on top of fill and leaky sewers, and I'd never be the wiser.

    I'm glad to hear that the issues I raised didn't make everyone jump back and think I was crazy for even considering it--that's usually a good sign. :) Agmantoo and turtlehead, thanks for the price considerations and suggestions. I don't know for sure that this place will go for cheap, but I think it might because this guy is in a hurry to sell it, the auction was barely publicized at all, and the local real estate agents don't even know about it. The area has been bought up a lot by developers recently, so as long as they don't catch wind of it and show up, I think it'll be just me and the neighbors. And if it's not cheap, I'm not buying it, because I'm not going to go through all of the trouble of building on it unless it's a real deal.

    Hmm, I've got my fingers crossed, but I'm only giving myself 5% odds on getting the price I want, just so I don't get too let down if it doesn't happen. I'm nervous! :eek:
     
  11. hisenthlay

    hisenthlay a.k.a. hyzenthlay

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    Maura and Michael, thanks for the additional septic advice. I'm hoping that all it needs is some maintenance, and that the guy just hasn't been able to take the trouble or spend the cash to do it. I'm definitely planning on leaving the little house up, and just adding onto it, unless an inspection reveals serious structural faults. My concern about "just turning around and selling it at market value," (besides the trouble involved) is that I might discover some horrible environmental defect on the land after buying it that makes it worthless, despite its great location and nice setting and pretty views. But like agmantoo said, if I get the inspections done right after purchase, the worst that will happen is that I'll walk away and lose is my 10% down payment.

    Michael, I checked the county website, and it looks like they are pretty much up to date on the taxes--a couple hundred are overdue, but that should be easy enough to deal with one way or another. And in case I wasn't clear before, this is an auction by the owner, not a tax lien auction.

    Wags, it's true that the area is getting built up fast (upscale townhouses and McMansions), and that we may not be happy living there in 10 or 15 years, but that would be fine, too, because then the property value will have gone way up, and we will have basically an estate property in the middle of fancy subdivisions. I'm actually half-hoping that that does happen, because at that point we can sell and move someplace less congested. And like I said in the post immediately above, I'm not too worried about the zoning issues because of the grandfathering. There are still people in the neighborhood with cows, sheep, horses, goats, roosters, and dog breeding kennels, so I think that it will be ok for at least awhile.
     
  12. Obser

    Obser "Mobile Homesteaders"

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    Above is the key statement. Nothing else matters if one developer attends the auction. To a developer "cheap" might well be ten times what would be a rational price for individual use.

    Auctioneers often send notices to parties they think will be interested, so even if local advertisements are sparse, the developers probably know about the auction.

    Lots of luck on that not being the case.
     
  13. Spinner

    Spinner Well-Known Member

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    edited to add: After I posted I noticed a lot of other posts said a lot of the same things I did. OK, I'm old and slow, but I'm leaving it just the way I posted it cause I'm to lazy to change it. LOL

    Location, location, location... everything else can be changed, updated, disposed of, or revamped. Things I'd check on if I could are:

    1. liens, find out at the court house (PM me if you need to know how to do the court house research)
    2. ROW easements, find out at the court house
    3. water quality and quanity
    4. survey, does the current owner have a copy? when was a survey done? who did it?
    5. neighbors, will landfill or something horible be built next door? check county planners
    6. septic - maybe just needs pumped out (they are supose to pumped about every 5 years.) did current owner tell you what kind of problems he's been having? could be simple and could be new system needed, it's a gamble that might keep bids low.
    7. might find the corner markers with the plate map, but unlikely. Who are neighbors? do they know where their property meets his? Are there any fences, tree lines, or other hints to where the line might be?
    8. title search, you can do this yourself at the court house. Find out if deed is in his name only or if any other name(s) might be on it. You can find out if there is anyone else who may come up later and lay claim to the property.
    9. set my ceiling price and drop out if the bidding goes over your preset amount. people tend to make bids based on "it's only a little more than the last bid". That kind of thinking can get you in trouble.

    You can only do what you can in the short amount of time you have. Ask the auctioneer if they have any of the paperwork such as title search, old survey, or anything else that might save you some search time.

    Everyone will be reluctant to get a bunch of tests/inspections done on the property and put that money out beforehand, so that should keep the price down, might not, depending on who wants it and how bad they want it.

    Hope you get it and it turns out to be great for you!
     
  14. hisenthlay

    hisenthlay a.k.a. hyzenthlay

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    Obser--true, true. I've got my fingers crossed on that for sure. It didn't occur to me that they might specifically notify developers for some reason--but I'm still hoping not, because this auctioneer does not come off as very experienced or polished on the phone--it could be an act, or it could be for real. We'll see....

    Spinner, I'll pm you. Thanks.
     
  15. cfabe

    cfabe Well-Known Member

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    Well with what you mentioned about the grandfathered zoning, if this thing really is able to be developed I'm sure someone will be there to outbid you. Not trying to rain on your parade, just being realistic.

    Check with the county health department, they usually determine septic system stuff.

    On the oil, look for the storage tank, see if any visible signs of leaking, strong odors of oil, shiney spots on the ground. Of course on an as-is sale you take what is there, so unless there is an obvious major spill or leak, don'r worry about it.
     
  16. Shepherd

    Shepherd Well-Known Member

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    Why not plan on taking a 4WD vehicle or ATM (or rent one) with the seller out on the property to show you the property lines; that will help you get an idea of the land. We have a few areas we can't get across with our 4WD vehicles, but ATM's can and I know they make 2 seaters types. Maybe you can rent one for a few hours. Even if you can't get to all the borders, you can get a good idea. If you can't arrange for that, introduce yourself to a couple of neighbors who own the land that borders what you're thinking of buying. Maybe they'd gladly show you their borders and can point out to you where your land would be. They may even offer helpful 'info' - rural people tend to have a lot of knowledge and gossip under their sleeves.

    It's a good thing you realize developers may take advantage of this situation. And it's good you know that you're buying "as is". You are wise to get as many of the important questions answered as possible before the auction. The auction house should have the information available as to whether there's any lien's on the property (and other questions) but anything you can check out on your own is to your benefit.

    Have you checked the foundation on the house? How's the mortar look between the bricks? Find out from the seller how deep the well is, what the water quality is, if he ever has trouble getting enough water from it, and question him about the so-called septic problems. Frankly I'd prefer to stay on the well water and septic if at all possible (keeping the bills down, and another form of self-suffiency). It's still a great advantage to having water out at the road if you ever decide to hook up to it. That's a great selling point to potential buyers should you decide to resell later.

    Good luck and keep us informed.
     
  17. rambler

    rambler Well-Known Member Supporter

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    Sounds like great advise & I agree with the general flow so far.

    Septic & well are _not_ grandfathered in around here, & can easily run $10,000 each or more. Sounds like you have that covered tho.

    Building on top of a landfill can be very tricky. I would be careful on assuming you can. The ground often is not stable. You may not be allowed to build on that location; if no codes the ground may continue to shift & wreck your building; determined folk can put a small fortune into deep pilings to make a foundation that won't wreck, but that likely isn't for you. Or, it might not be an issue at all - all settled in & stable.

    But something I'd consider, in case your heart is _set_ on building on top of the landfill.

    As others say, bid reasonably, & nothing there to scare you away from what you describe.

    --->Paul
     
  18. hisenthlay

    hisenthlay a.k.a. hyzenthlay

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    Well, just thought I'd post my update on this thread. The auction was today, and the property didn't sell! As the bidding was going on, people were staying pretty low on price (in my range!), and the auctioneer was pushing, and the seller finally revealed his rock bottom acceptable price, which was significantly more than I (or anyone else there) was willing to go. So, it ended with a "let's all think it over and stay in touch," and that was it. :shrug: After the auction, I told him what I thought I could go up to (which was more than the final auction price), and how much we liked it, but that we just can't do more than that, and that he should call us if he wanted to talk.

    The one biggest twist is that developers DID show up, but said that they were only interested in buying his property if their deal went through on the larger acreage next door, in which case they would want his property for easier access to the development. They said they'd pay above his minimum price in cash if they wanted it. But here's the thing--I talked to the county development office, and the woman there said that there's been a lot of trouble developing there because it's so steep and prone to landslides, and they're having trouble even putting city water and sewage in. So if that doesn't go through, the seller will be back to the prices that individuals are willing to pay, and maybe we'll have a shot again! You never know.... :shrug:

    Thanks for all your help--you were all so informative and I really do appreciate it. At the very least, this has been a great learning experience for me, and I'm all the more ready to jump next time!
     
  19. fin29

    fin29 Well-Known Member

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    It's usually best to not buy at your first auction--especially real estate--so I think you've gained more with this experience than you would have had you actually won the bidding. Congratulations on your self-control. :)