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Purchasing Land - making an offer

Discussion in 'General Discussion' started by kckndrgn, Aug 19, 2012.

  1. kckndrgn

    kckndrgn Moderator Moderator Founding Member

    Went and looked at some land on Saturday. I will be making an offer on it tomorrow, after getting things squared away with the financing.
    We looked at the land with the realtor that has it listed. Found out that they recently, within the past week dropped the price $9k. When I spoke with the realtor about making an offer she indicated that they wouldn't want to take anything less since they just lowered the price. Since she's working for the sellers, I would expect her to get the maximum for the property.

    I looked at the TN tax assessors web site and got what the land is appraised at, which is about $2800 less than what they are asking.

    This land is IDEAL for what my wife and I want, and hey, it already has a gun range on it!

    So I was thinking of making an offer of $2k less than what they are asking. Does that seem out of line? I can find info on home sales, but nothing on land only sales in the area. The asking price as it is, is about $1750 per acre, which for the area is pretty good.

    So, should I make my offer or take it at their asking price?

    Thanks in advance.
  2. ghrit

    ghrit Ambulatory anachronism Administrator Founding Member

    NEVER make a full (asking) price offer. Thus spake me, and maybe me only. They can refuse, or counter offer. Either way, you get another bite of the apple. (They dropped the price for a reason, probably because no one else was willing to offer.) I've walked from two deals where the seller wouldn't even talk about an offer only 5% below asking.

    Also, never forget that the seller's agent is working for the seller, not you, no matter how friendly they can be. Anything they tell you is suspect, even if it's ethical. Be very aware of omissions, things may not be disclosed that you could object to if you knew of them. Some omissions are ethical, especially if minor in the eye of the seller's agent. Examine the disclosure sheets and make double sure you understand all of it.

    Your offer must be conditioned on an inspection or survey (survey locates the corners, need not be too awful detailed as to topography.) You can find suitable inspectors in the yellow pages, but it's better if your agent makes the recommendation, they know the local talent, and know that their reputation depends on giving you the best they can. Inspectors have axes to grind, and if you are paying them, then they are working for you. You like that. (Bare land may not need inspection, but if there are easements, you need to know exactly where they are and what they are for, as well as the rights that go to the easement holder.) There may be setbacks required for easements. Walk the property, corner to corner. (If the easement is a power line, it's an odds on bet your life as a ham will suffer.)

    If you are planning on building a house, make sure the land will perc. Local plumbers usually can tell you. Likewise check with a couple well guys, see where the water table is and the cost of drilling.

    Dunno how it is down there, but in all purchases I've made (4) I've had an RE agent working for me. There is a fee sharing arrangement such that the seller's agent and mine split the fee somehow. If your agent brings you to the seller's agent to make the offer, the split happens, invisible to you. (Seller pays the agents.) Since you've already opened the negotiations, I am not as sure that applies.

    Assessed valuation, well, that depends on ordinances. Some are assessed at full value, but that's seldom the case since value fluctuates with sales demand. I've owned property that was assessed at 50% of some mystical market value, and some at 75%. That is to provide a cushion for the assessor to depend on instead of taxing at "full price" which may drop.

    The existing range represents a potential liability if the EPA thinks it needs cleaned up. Likewise, if there are wetlands on it, more restrictions as to what you can do with the land.

    Be careful. Property purchases are big deals. BYKT.
  3. gmt48

    gmt48 Monkey+

    Making an offer is always appropriate. Remember, you're making an offer, not agreeing to purchase at the current price. An offer is just that, an intent to purchase based upon your perceived value of the property. Let the property owner make the decision whether or not to accept your offer or come back with a counter offer. I doubt any seller would tell someone making an offer "I don't accept your offer, now go away". The property is on the market for a reason so they have a motivation to make a deal at some agreeable price. Also, never forget the real estate agent works on a commission that is based on the sale price. They may looking after their own interests by keeping the sale price high.
    ghrit likes this.
  4. TnAndy

    TnAndy Senior Member Founding Member

    Also, tax assessment I've found bears little relationship to the actual value of the property......they usually are far lower than what a property will sell for. I sold 27ac last summer for 190k, that had a tax assessment of about 50k. My own place is assessed at less than half of what I'm sure I could get for it, even in today's time. Undeveloped land seems to be the most under accessed.

    Spend a few hours at the courthouse between the deed office and the tax office. See what local properties go for in relation to their accessed tax value BEFORE it sold ( this is all public record....you merely need the parcel numbers/sales price off the deed before you go to the tax office), and you'll see if the same is true there. If the asking price HERE was within 2800 bucks of tax value, I'd say you're well within range.

    That said, it never hurts to make an offer.....as long as you can stand rejection. :)
  5. BTPost

    BTPost Old Fart Snow Monkey Moderator

    Up here where I live, land is usually 2-2.5 times the Assessed Value.... and that is RAW Alaskan Bush, with No Roads or Utilities within 10's of Miles. If you can find a Komiefornia Transplant, "with more MONEY, than Brains", it can be as much as 3 times Assessed Value.... YMMV....
  6. JABECmfg

    JABECmfg multi-useless Site Supporter

    I would think that dealing directly with the seller's agent will have its benefits. Of course he/she is paid on commission, so higher sale price equals higher commission check - but if that agent doesn't have to split their profit with an agent of your own, then they can sell lower and still walk away with more money than they would have if they had to share with another agent. Being able to keep the entire commission is a motivator that should work in your favor... Maybe I'm missing something here? [dunno]
  7. TheEconomist

    TheEconomist Creighton Bluejay Site Supporter+

    You are going to want to have a TITLE SEARCH done. This will ensure everything is good on the property.
  8. TnAndy

    TnAndy Senior Member Founding Member

    Title searches are good.....they'll tell you what's been RECORDED as concerning the property.

    They aren't worth a flip for UN-recorded problems ( Ex: The guy that sold it to the guy you bought it from didn't include cousin Minnie in the split of the sale, which was an inheritance, and Minnie had a portion coming, for example.....and now Minnie's son figured it out ).....that's WHY you buy Title insurance....a policy of your own, not the one for the bank.
  9. Tracy

    Tracy Insatiably Curious Moderator Founding Member

    Be careful! Maybe they lowered the price because it has a shooting range (outdoor?) on it and they've realized that the lead has contaminated the land and that EPA is requiring a clean up pretty soon - check with your local EPA rules/regs on that one.

    Tread lightly. Be attentive. Congratulations and Good luck!! :D
    mysterymet and Sapper John like this.
  10. VisuTrac

    VisuTrac Ваша мать носит военные ботинки Site Supporter+++

    make sure that you walk the entire property. way back into the hollers.
    checkout bing maps to see if there are any aerial photography of the area.
    You want to see if sometime there might have been a 'Dump' or barrel storage on the property in the past.
    A lot of old junk cars,truck and farm tanks and tractors may have leaked fluids and could contaminate the GW.

    look for areas where the grass doesn't grow or looks turned over and still nothing is growing.

    Other than that, only pay for what you feel the property is worth to you that way no buyers remorse.
    Tracy likes this.
  11. TXKajun

    TXKajun Monkey++

    Definitely walk the property, preferably with who ever is doing surveying for you. And for DAMN sure, check out any possible problems with lead contamination on the land from the shooting range! That could cost you MEGA $$ to clean up at best, at worst, it could lead to that area being declared a Superfund site...and what a nightmare THAT would be.

  12. VHestin

    VHestin Farm Chick

    Title insurance I think is mandatory if you take out a real estate loan. And definitely do a full workup on the place. We only bought our property we're living on now because it was the first one we found available in our price range when we sold our old place. Our hastiness got us a POS house. I found some land out of state that I'm very interested in, but even though it's just undeveloped land, I still wanna check it out first. I plan to live in RV there, so just need to make sure that's legal, and so is putting in well/septic for it. I've come to the conclusion that most city building codes are just to make money off the permits and really have very little to do with 'safety'.
  13. kckndrgn

    kckndrgn Moderator Moderator Founding Member

    Thanks all for the tips and advice.
    This is bare land, very rural. Since in TN it is very legal (unless you are within city limits) to shoot on your property I'm not too worried about the gun range. I really don't even know where to start on doing any digging about it.

    Yes, I planned on Tittle insurance.

    Thanks again.
  14. -06

    -06 Monkey+++

    Considering today's economy--it is a buyer's market. People are wanting to sell, having to sell, and needing to sell. Would certainly make a counter offer. Be polite but decisive--hint that you are looking at other properties that your wife likes better (or you). My DIL is a realtor and makes a nice commission--that agent does the same and will try to get as much out of it as possible. It is up to you to negotiate for a lower price. Remember, you will be paying interest on that loan for many years so shop that also.
  15. kckndrgn

    kckndrgn Moderator Moderator Founding Member

    Well, we did a walk through of the property, as much as we could anyway. Much of the densely wooded area was just too thick to get through.

    We did find th pear tree. It was LOADED with fruit. There are several areas with black berry bushes. Lots of deer sign.

    We put in an offer, so we'll see what happens this week.
  16. ghrit

    ghrit Ambulatory anachronism Administrator Founding Member

    Fingers crossed for ya.
  17. BTPost

    BTPost Old Fart Snow Monkey Moderator

    sounds like a great place.... Hoping for you, as well....
  18. kckndrgn

    kckndrgn Moderator Moderator Founding Member

    See the attached image for a picture of the pear tree. This tree is huge and as not been maintained for years.
  19. BTPost

    BTPost Old Fart Snow Monkey Moderator

    If you don't pick the fruit, the birds will get drunk off the fruit when the feed on it, after the winds blow it off the tree, in the fall. Had one of similar size, when I lived in the FlatLands... watching the birds, was a seasonal attraction.....
  20. kckndrgn

    kckndrgn Moderator Moderator Founding Member

    hmm, wonder if we'll get some drunk deer then? So many dee trails, tracks and signs around doubt the birds get too many of the dropped/low lying fruit. I will say, those pears are sweet! My wife says they are "canning" or baking pears because they are so firm, but they still tasted good to me.
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