Making an Offer on an Unimproved Lot--that is overpriced plse hel
Hi. I posted this in buying and selling simply because it is more about comps and pricing and the market, than buying a lot and building per se. I need help and advice and I"m sorry this is TOO LONG I Hope it's not TL:DR (too long didn't read)
Anyway, I have to build a small nontoxic home because of environmental sensitivities including chemicals and mold so I can't really find a house that is okay for me.
We have explored most of Georgia where we now live and I've tried to figure out the best area for me within driving distance of Atlanta.
Anyway there are two areas I settled on as liking, with relaxed covenants (per wanting to use nontoxic materials, not sticks and tyvek and fiberglass etc), one is northeast GA around Elberton two hours northeast of Atlanta and there is a lake there, and another is around High Falls Lake an hour south of Atlanta. Elberton is very clean and you can see the milky way at night but HIgh Falls is pretty nice too. Both are rural and not much there and so real estate is not recovering like it has in cities, suburbs, and baby boomer retirement communities.
So the little neighborhoodis basically on the lake and near the state park. It is a very mixed neighborhood. It has junky trailers, moderately okay mobile homes, decent 70's-80's raised ranches, and also some custom waterfront homes that mostly were built in the bubble. This neighborhood has simply not recovered in terms of pricing or building since the crash, and my feeling is with the amount of trailers in the various lake neighborhoods around here, it is not going to recover in any substantial way.
I like it, however, and i Like the mixture. Anyway, there are very few waterfront lots available in this area, in this or other neighborhoods. I wasn't looking for waterfront anyway as I'm a little nervous about building ont he water with potential flooding. So there is a 75 year old guy whose 99 year old mom died in 2012. His Dad had died many years earlier. His parents bought their house in this neighborhood in the 1970's, its a raised ranch with good bones and in severe need of a total remodel. It has two adjacent waterfront parcels, and across the street, on a raised ridge on the cul de sac, are two adjoining parcels. FOr the first year after Mom died, the owner overpriced them all as a single sale and got no offers. He had the idea that someone would be thrilled to come along and buy the house and four lots for a song.
IE he is unrealistic and remembering 2006 prices.
When that didn't happen, the listing agent convinced him to put a new septic tank on one of the waterfront lots. Reason being, his Mom was originally on well water, and only had a 300 gallon septic. When sh eneeded a bigger septic, they bought the two adjoining lots of the cul de sac just to put a garden and 1000 gallon tank on in 1996.
That's one reason he was selling them all together. Well more recently he paid to put a 1000 gallon new tank on one of her parcels, and now is he selling:
1) one waterfront parcel .3 acres for $40K
2) Her house for $179K and the adjoining parcel with it for $40K
3) The two lots of the culdesac at .4 acres for $32K. However one of the lots is a triangle that you cannot build on, it's just some extra land. That's why those two lots go together--because of setback requirements there isnothing you could build on the triangle.
I tried to do my own comps as the listing agent did not offer me comps, and so I sort of looked at junky trailers or houses on the water or inside. I felt his lot was worth about 12K but did not say so. I just said it was overpriced where was she getting her comps? She said houses were not comps so my comparisons were useless. She said her comps were her boyfriend's waterfront lot being apraised at 75K. He has a nice custom cottage and a lot with a trailer on the water. She also said someone had told her that a waterfront lot had sold for 100k.
I said where and when?
She said I don't know.
At this point I'm starting to get really annoyed with this woman thinking she's shining me on or thinks I'm an idiot (we are originally from NY, but I"m not stoopid. I've spent time talking to all the neighbors, and gotten the history of the sales in the area as well. They tell me that another NY couple came down and bought a basic "shack" on the water for $175K overpaying by 100K at least and were the laughingstock of the neighborhood. In addition, another waterfront lot, a litigator bought for 40K and they are wondering if she helped the owner in some way as he originally listed it at 140K. So prices are kinda crazy, people are trying to get whatever they can).
So I went through the county assessors records online and finally I saw a waterfront lot that sold for 105K in 2006. I wrote her about it but she did not answer.
I asked why if her boyfriend's lot was appraised at 75K (which really does not bear on who would BUY It for 75k as that's overpriced--there are good waterfront lots nearby for 60K, and one 1.25 acre waterfront lot with its own raod, for 99K), why did she price the owner's waterfront lot for 40K?
And she said, "Because there's a shack next to it. And I think I'm going to contract soon."
"Really what did they offer?"
"They haven't made an offer yet."
Is she talking double? She's driving me nuts.
Anyway, there shacks ie crappy trailers all over this neighborhood. That's just a given.
So I called another agent I know from before who I like who seems honest and good. I said maybe you can be my buyer's agent I can't figure this agent out and am afraid if I lowball she will never even submit the offer.
This woman told me that the owner is a bit stubborn, and it takes some owners time to com eto reality. She also said she'd had a client intereste din his waterfront lot but asked if he'd deduct the cost of a row of cypresses on the property to hide the view of the shack and he said yes. But then her client decided to keep looking.
So I asked her what is that lot worth? She hesitated but finally said about 18-20K.
Frankly even if it's worth 18-20K i know it will just sit there., Other lots sit there. Very little building is going on in these neighborhoods EXCEPT On waterfront which of course always appeals.
But for me this cul de sac lot has plusses (only one neighbor abutting me, because of my enviornmental sensitiviities that's good. On a raised ridge, so less likely to get moisture from the lake and possibly mold. A decent size not too big not too small. Allowed to put two homes on it, so a small home and a custom cottage for guests. Allowed to garden as much as you want, as zoned agri etc). But for most people, an inside lot would not be interesting in this neighborhood.
I would pay 18K though. Because I do like it for my own needs. Even if I thought it was worth 12K.
So what do I do now? I have no real comps from the agent. I asked her if after the 40K lot sells can we use that as a comp (in which case, hiscul de sac lot should be priced around 20K and I can offer 18K but I didn't tell her that). I should also mention I have to clearcut this lot while his waterfront lot, being visually part of his mom's yard, is already clearcut and has a few trees and a yard and needs no clearcutting and planting at all.
She hasn't said yes to that either.
I would lke advice because I haven't made an offer on a lot ever, and I feel out of my element. I'm a very smart person but I have no idea where this listing agent is really coming from and it's hard to get straight answers.
I know you might say, just make an offer and walk away from it if he doesn't counteroffer or counteroffers too high, but I do really like it, so I'd like to figure out if there's a way to get a better handle on the situation and how to make it more favorable and comprehensible to me.