Questions about buying land

Discussion in 'Homesteading Questions' started by nostalgia, Mar 22, 2004.

  1. nostalgia

    nostalgia Well-Known Member

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    We are thinking about buying a piece of property that joins our property on one side. We live in the country. This lot is empty right now. The reason we want the property is to have more room to build a garage on, and for a larger garden. So we are not concerned about water, sewer, etc. The owner has attempted to sell the property in the past but no one wanted the property because they wanted it for building a home on and it's only about 1/2 acre, mostly hillside. We are thinking that he is probely tired by now of paying taxes every year on something he probely won't be able to sell. But it is perfect for what we want it for.

    Now my question: How would you approach the owner and convince him that he should sell it and sell it cheap? When we bought our place, the house was already on it and I know it is different when it is just land and no dwellings involved, so what costs are involved when just purchasing land and who buyer/seller pays for what?
    Any information you might offer would really be appreciated. We would like to have some ideas before we approach him with an offer and hopefully the transaction will go smoothly.
     
  2. RAC

    RAC Guest

    Well, you might first go to county records and see if the parcel has already been divided off into that size. Also take a look at what the taxes are and when it was originally purchased--see if it is still being paid for or if it is owned outright. I wasn't exactly sure from what you posted. A survey would be in order here to be very clear what you are and aren't buying.

    As to who pays for what, that varies by what is customary in your area and what you can both come to an agreement on. Are you going to have to get a loan to buy the property? You could agree to pay all the closing costs if the price were cheaper. A title company person, real estate agent, or CPA could tell you what would be most advantageous for your situation.

    I don't know about getting the neighbor to sell it "cheap"--if you appear too eager, he will want more money, and that is only natural--you would also want to get the best price possible if the situation were reversed. Would the garage you plan to build be seen from the rest of his property? Are you going to be able to build it? You might buy the property and find out you're not allowed to build later--you would want to make sure that your purchase is contingent upon being able to build on it, and those particular costs will be borne by you. Good luck.
     

  3. Mike in Ohio

    Mike in Ohio Well-Known Member

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    The first thing to do is go down to the county building and find out what your neighbor paid and when he bought. How does that compare with what he wanted? How does it compare with comparable properties in the area?

    The next step is to decide what you are willing to pay for it. How does it compare with what he has into it? Is there a house on the other side where the owner might be interested? Does it provide access to a landlocked parcel behind it that he owns? There are all sorts of circumstances that might impact how he values it.

    What is the zoning? What kind of frontage does it have? Is there any chance it has potential for commercial use?

    Are you looking for him to finance it or are you providing him with a clean exit strategy? I would make it as clean and easy as possible for the seller.

    The flipside is how long you plan on staying where you are at. The longer your horizon the easier it is to justify paying a slightly higher price. In other words, how strongly do you want the property?

    Just a few thoughts.

    Mike
     
  4. fordy

    fordy Well-Known Member

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    ................I think he can sign a quit(quick) claim deed and you can file it at the court house. This is assuming he doesn't owe any back taxes or or a mortgage. I would pay a visit to the tax office and see IF his taxes are paid up before engaging him in negotations on a purchase price because if he is behind this should figure into your strategy in approaching him on a purchase. The two other cost factors that he would normally be responsible for is the Survey and a Title Policy. I'm also assuming here you don't involve a real estate agent . If he has had the property listed previously with an RE agent it is possible that he would be responsible for a commission as long as 6 months or more even if they aren't actively marketing the property. If, there is still an existing mortgage it maybe include the tract you want to buy as well his primary home. If so, you'll have to figure out a way to motivate the lender to release the property that you are interested in.......fordy... :eek: :)
     
  5. agmantoo

    agmantoo agmantoo Supporter

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    Get informed as mentioned above. If the tax value is close to what you are willing to pay for the property approach the owner and tell him you are interested in buying provided you can afford the property. Offer to buy the property from him if he will owner finance. Tell him there is no risk because if you default he will have your money and the property back. You can afford to pay him the appraised value and a decent interest rate since you will not be having a loan application at a bank to deal with. Interest rates are very low now and a CD looks sick so he may like the improved interest from you. Take an offer to purchase and contract form with you when you go, get him and yourself to sign. People back out! After you get the finances worked out have your tax preparer to inform you on imputed tax :) Realize the property being adjacent to you is more valuable to you than anyone else. Opportunities to buy neighboring property seldom surface. Good Luck.
     
  6. Jena

    Jena Well-Known Member

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    All you can do is make an offer of what you want to pay. You can't really convince him to sell it cheap.

    We bought our last farm on contract. We worked out the details with the seller, then turned it over to the attorney's. After six months of them going back and forth over stupid stuff, we met at a coffee shop, changed what we wanted to change and signed the stupid thing. Done deal.

    Costs were the attorney's fees (we each paid our own), title insurance (he paid) and an escrow account was set up to handle payments (we split the cost). We didn't feel a survey was necessary, nor any inspections. If we had wanted any type of inspection, we would have paid for what we wanted.

    In our case, the guy wanted to sell on contract to avoid the tax consequences of selling it outright. Our contract states that we can't pay any more than 1/5 of the cost, plus interest per year. We have to wait five years to get a mortgage and buy it outright. That was our agreement, which was fine with us.

    If you plan on getting a loan for the land, get all that in place, as much as you can ahead of time. Get pre-qualified or whatever before approaching him.

    Jena
     
  7. Hoop

    Hoop Well-Known Member

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    You are assuming FAR too much. The adjoining landowner may indeed be tired of paying taxes, but I doubt they are going to jump on a lowball offer. They no doubt received a few of them when the property was listed.
    Your attitude suggests you're doing the person a favor by relieving them of the property tax burden.

    You have to balance what this property is worth.....versus the possibility that Jed Clampett (or someone worse) will buy the property.....move in a grubby $1000 trailer..... 6 kids...... 14 nonstop barking dogs.....and 16 junk cars.

    I owned a 10 vacant acre parcel that butted up next to a ritzy house in the country. The owners of the ritzy house were extremely wealthy. They offered to buy my property at 30% of what it was worth.
    The property now belongs to a tribal member of the Mole Lake Sokoagan Chippewa community, who paid me 4 times the insulting offer.
     
  8. fordy

    fordy Well-Known Member

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    ..............I'm going to remember your Post Hoop when I put my property up for sale alittle later this Year. Thanks for the lesson , fordy... :) :yeeha:
     
  9. Mike in Ohio

    Mike in Ohio Well-Known Member

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    I'm going to have to agree with Hoop. Offer a reasonable price.

    As some might remember, I recently bought out what I considered to be a bad neighbor. I gave him his price and only required that they vacate in 30 days from the signing of the contract.

    Why screw around on a large purchase over a relatively small amount. If the price works for you, do it and be done. You are buying for the land, only you know what it is worth to you.


    Mike
     
  10. nostalgia

    nostalgia Well-Known Member

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  11. fin29

    fin29 Well-Known Member

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    Cash. The best way to convince him to sell low is to show up (after calling) with an envelope of $100 bills. I've always been amazed at how the reflections of Benjamin Franklin on a man's wide eyes makes him so darn willing to negotiate.
     
  12. Offering to cover the all of legal fees could help. Do anything possible to eliminate paperwork and effort on the seller's part. The more hassle that the seller has to go through, the more he's going to want for his trouble.

    I remember one time when somebody rear-ended my pickup truck. He destroyed my step bumper, but it was pretty rusted to begin with so I told him that I forgave him for it and he could just drive away and not worry about it. His wife still insisted that we swap license info 'just in case.' The following Monday, I get a phone call from his insurance company asking for a description of the incident and trying to schedule an inspection of the damage. So I told them that they could just give me a hundred bucks and that would be plenty. But they insisted on doing things by the book and scheduled a time for an adjuster to come look at the truck.

    When the inspector came by, I told him that he could just give me $200 and not worry about it. But he had all kinds of forms and things and wanted to do a full estimate. We went back and forth after that and finally settled on around $600.

    The moral of the story is that the bigger a pain in the butt that something becomes, the less charitable people get. I didn't want the $600 for my bumper, I wanted it for having to deal with a lot of wasted time, phone calls and paper work.