What do y'all think?

[Homegrown Tomatoes]

OK, here's the deal... we found the place we really would like to buy, but the folks who currently own it really want way more than it is worth.  They paid $80-90K about 3.5 years ago and want $140K for it now.  Granted, they have done some fixin' up, but most of it has been minor... they finished some interior walls and butchered the wiring (it will need to be redone because it is SCARY), and they added a jacuzzi tub  in the master bedroom (which I could care less about.)  Also, they did a little wall papering and some cheapy laminate flooring.  I don't even care for the wall-papering.  I'm sure they also have cleared a lot of brush and cleaned up around the cabin, as well as removing the screen doors (which may not have been as cute as they were useful) and replaced them with fancier doors with some cut glass designs on them.  (I'd probably put screen doors back on if we buy it because I don't like AC unless it is just sweltering hot. )  My gut says that even with all the work they've done, that the house and 20 acres most likely won't appraise at more than $120K, max.  They've made the place "cute" but I guarantee you they don't have $50K worth of "cute" in it.  So far, we've only been able to get them to come down to $135K and putting $1000 of the $1750 toward fixing the road into the place....  The place can't go FHA because of the acreage and the road (the house isn't worth enough of the value to go FHA) and in the current economy, they are unlikely to be able to find anyone else who can go conventional and still afford to pay closing costs.  Yesterday, I offered them $132K and they have to fix the entire road, plus a $1K repair cap in addition to any termite damages they'll need to repair.  Granted, we intend to live there a long long time if we get the place... but what would you do in the case of a house you think is overpriced by this much??  The land alone is worth about $40K.  I really like the land, but am ready to walk away because the folks are being completely unreasonable.  If they don't take our offer, should we walk away?  Our original offer was $115K and they fix the road.  We've come up more than $15K and they've not really moved a whole heck of a lot.  What would you do?  Oh, and FWIW, we haven't found any other places that are realistic possibilities.... though my realtor is going to go knock on the door of a house we looked at a few times and they finally took it off the market because it wasn't selling... she is going to ask them if they would sell it to us for less than they had it listed for....  if so, it would be more expensive than the other place, but closer to DH's work and twice the acreage and on better roads. 

[John_C]

HG,

A few days ago when you posted your first message about this property I thought to myself that you were "falling in love" with it too soon.  It's easier, and less stressful to negotiate from a position of relative indifference.  Fall in love with it after you own it.

In todays economy I'd try to find a property with "people problems".  Someone who really wants or needs to get rid of the property.  There are a lot of those out there right now.  Even when the real estate market was going strong there were people willing to sell way below market value if they could get out in a hurry.  My ex & I bought a house in 2003 for about 1/2 its appraised value.

If the current owner wants to stand firm on their price and wait for someone who just loves the property there isn't much you can do.  You could leave a standing offer on the table or withdraw your offer and go look at other properties.  In a month or two they may be more negotiable.  I know you want to buy & move ASAP, but that frame of mind isn't going to influence the current owner.

What they have in it is more or less irrelevant.  How badly they want to sell it is more important.  It doesn't seem like these folks are in that big of a hurry.

I know this sounds overly harsh, and I don't mean it that way, but it's how I see the situation.

[muldoon]

If the property is worth 40k in your opinion, and you are offering 132k you have made the mental calculation that the house and improvements are worth 92 thousand dollars.  That's the road, the house, the electric service, the water, the septic and any clearing they have accomplished.

Feel free to chop up that 92k however you need to, but I'll take a stab at it based if you were to start from scratch on unimproved land based on costs that I have seen locally - they may be different for you. 

road - 2k
electric service (deposit, poles, meter loop, panel, inspection, etc) - 3k
water well - 4k
septic - 6k
So 15k for the extras, and to be honest - having that all accomplished is certainly worth *something* as it could take a considerable amount of time to do it yourself if it wasn't there.  During that time you would need to continue living somewhere else.  So call it 20k in value? 

That leaves 72k for the house.  I bet you could build a hell of a house for 72k.  One with wiring you felt was safe to sleep in. 

I agree with John C on this - go look at some more dirt.  There are people who are motivated to deal, you just need to find them.  I think 115k was a more than fair offer, I would have started at 95k based on what you described. 

[Homegrown Tomatoes]

In my gut, I know y'all are both right.  Thing is I have looked at every acreage that has come up in the past 11 months in a 6-county (possibly more, but I lose count) area.  The only other one I liked as well took me more than an hour to get to because of congestion on the highway going there, even though mileage wise it was closer than the current property of interest.  The other three I've liked all sold almost immediately upon listing because they were priced right.  The only other possibility is the one that the folks finally took off the market when we didn't make an offer after looking two or three times.  My realtor is going to go knock on their door and see if they'd still consider selling it, but for a more reasonable price.  (It was my first love, but DH was a little overwhelmed with the clutter and junk around and in the house, and had a hard time seeing it for what it could be instead of the mess it was, and it was very overpriced.)  Just can't seem to find anything else I like half as well or that has half as much potential.  Our original plan was start from scratch on a parcel of land, but every pretty parcel that has come up seems to sell in nothing flat... there was a really nice 40A in a great location that was priced right just a few weeks ago, but it has since sold.  DH went through this phase of deciding that he didn't want to build with three little kids; just didn't think he could do it.  Now he's kind of wishy washy on it and considering going back to square one and having the foundation, roof, and framing contracted out and then doing the rest ourselves. 

  I know I am not for going up one penny.   I didn't want to come up to the $132 because I seriously think it is way too much.  I had the realtor put a provision in that if the house didn't appraise, the price would drop to the appraised value or we would not close on it, but then we'd still be out the inspections/well test/etc. 

The main problems with the wiring are:  there are junction boxes in the plenum and bare wiring running along the crown molding, etc.  The garage is just flat wrong... there's no other way to describe it.

[ScottA]

Don't contact them again. If they call you back fine but let them think you've given up. In the mean time i'd keep looking.

[muldoon]

The other three I've liked all sold almost immediately upon listing because they were priced right. 

and

here was a really nice 40A in a great location that was priced right just a few weeks ago, but it has since sold.

Sounds like you might benefit from being "ready" to move when the next one comes up.  Have your loan pre-approved and paperwork ready, have your earnest money ready to go, wait for the deal to come to you and sleep well knowing you will be in the best position to act when the time is right.  I realize your tunnel vision focused on the finish line, but stop and enjoy the little victories along the way.  Pray about it, get your *stuff* together and be ready.  It will just fall in your lap when the time is right.  Cant say how but I'm pretty sure about that. 

Don't be desperate for any reason, this is a buyers market.  You have the leverage here - do not give it up to anyone. 

[peternap]

The other three I've liked all sold almost immediately upon listing because they were priced right. 

and

here was a really nice 40A in a great location that was priced right just a few weeks ago, but it has since sold.

Sounds like you might benefit from being "ready" to move when the next one comes up.  Have your loan pre-approved and paperwork ready, have your earnest money ready to go, wait for the deal to come to you and sleep well knowing you will be in the best position to act when the time is right.  I realize your tunnel vision focused on the finish line, but stop and enjoy the little victories along the way.  Pray about it, get your *stuff* together and be ready.  It will just fall in your lap when the time is right.  Cant say how but I'm pretty sure about that. 

Don't be desperate for any reason, this is a buyers market.  You have the leverage here - do not give it up to anyone. 

What Muldoon said. You are in the drivers seat this time. Remember what a PITA your buyers were. Be them

[Homegrown Tomatoes]

The other three I've liked all sold almost immediately upon listing because they were priced right. 

and

here was a really nice 40A in a great location that was priced right just a few weeks ago, but it has since sold.

Sounds like you might benefit from being "ready" to move when the next one comes up.  Have your loan pre-approved and paperwork ready, have your earnest money ready to go, wait for the deal to come to you and sleep well knowing you will be in the best position to act when the time is right.  I realize your tunnel vision focused on the finish line, but stop and enjoy the little victories along the way.  Pray about it, get your *stuff* together and be ready.  It will just fall in your lap when the time is right.  Cant say how but I'm pretty sure about that. 

Don't be desperate for any reason, this is a buyers market.  You have the leverage here - do not give it up to anyone. 

What Muldoon said. You are in the drivers seat this time. Remember what a PITA your buyers were. Be them

  Thanks Peter. That made me giggle.  I don't know if I have it in me to be like that, but couldn't hurt to try....

Our lease is up next month, and I really want to get out of this house as soon as we possibly can and would like to be able to move once, not twice, if possible.  Think I'm going to go ahead and pursue the house where the listing expired and they haven't relisted it.  At least see if they still want to sell.  I loved the land there, and the house was OK to live in until we could build/modify it to fit us better.

[John_C]

I don't subscribe to the be a PITA theory.  It's too stressful.  Find properties with motivated sellers. Then you are solving their problem while solving your own.

It's hard to find a realtor that will show distressed properties.  They want to show nice higher dollar properties. Most buyers are put off by the very things that make a house a bargain and move on quickly to other properties.  If you can socialize with a few realtors they will tell you (when sufficiently lubricated), that in most cases the houses that people buy, regardless of what they say they are looking for, is one that the wife falls in love with.  So they get in the habit of trying to read peoples desires through what they say and show the properties they think the wifey will like.

I went through realtor after realtor who showed me everything except what I was looking for. When I finally found one who took it seriously there were a lot of houses that could be bought for way below appraisal.  In Key Largo, Fl when lots were going 15k - 25k I bought a lot for my house for $7,000 because there was no water line.  A water meter cost $3,000 at that time and my cistern cost me $4,500, and I never had a water bill. 

When I bought the two 1-1/2 acre lots in GA that my current house sits on the seller was asking $7,500 each.  I offered $7,000 for both with $700 down and he would take a mtg on the balance.  I told the realtor that I knew it was way low but that was all I could afford and still have cash to build the house so he could take it or leave it, but there wouldn't be any negotiation. He took it.  Turned out he had gotten the lots to cover a gambling debt and he just wanted out. Twenty+ years later we are still friends.

I don't know if you are familiar with Clark Howard  http://clarkhoward.com/
He is a consumer advocated and has a syndicated radio show.  He does quite a few shows about buying real estate.  He talks about his penchant for buying properties that smell bad.  It seem that is one of the things that quickly drives prospective buyers away.  New carpet and paint almost always fix the pet and smoking odors and he has bought several properties way below market value that only needed paint and carpet.

In today's economy I would think a buyer with ca$h money would have a lot of bargaining power.

[StinkerBell]

I agree with the other posters on this HT. I know you have fallen in love with the property but (maybe this will help) the property has cheated on you, it tells other properties he is just using you for money. The property really does think you look fat in your dark denim jeans and laughs behind your back. I hope that helps you fall out of love. Oh yes, the property is gay.

[John_C]

 

[Homegrown Tomatoes]

    Good one, Stink.  I'll keep that in mind.

[MountainDon]

If one has to justify the price for something by telling yourself you will own it for a long time, thus amortizing the excess cost over that period, then I don't think it is a practical move. What happens if something changes?

I have owned a number of things that I knew I was going to keep forever. I don't have many of them any more.

[wildbil]

I talked myself into buying a lot of stuff. be careful because once it is your it Owns you.

[Homegrown Tomatoes]

Stink, I think your comment pushed me over the edge.  I'm over the house now.  I saw an acreage that is in a better location yesterday (it apparently just listed between Christmas and New Year's) that is a slightly larger acreage with a big barn, well, septic, and a finished out workshop.  The workshop also has a 700 sq. ft. 1-bed/1 bath apartment.  (Yes, also has a kitchen.)  It's half the price, closer to DH's work, and in a better location all-around.  Only about 15 miles from my grandma, so we could check  in on her more often, too.  Called our realtor last night and told her not to contact them again about the other place, that we were walking away from it.  Also gave her a list of four more places I hope to see this afternoon after I go to the doctor with my mom.  Land in the area where this new listing is typically goes for $4K/acre and up.  Unfortunately, in my kids' minds, the only place they want is the one with the cabin and the creek... on the way to violin lessons with my oldest yesterday, I asked her what she thought about a couple of other places, and she teared up and almost started crying.  Then last night, my middle daughter wouldn't go to sleep, so I asked her what it was that was keeping her awake, and she whimpered, "I'm afraid we won't get to move to the Chandler house."  I told her not to worry that we'd find some place to live soon, and she stuck out her lip and said, "But will it have woods and a creek and a looooonnnnnngg driveway?"     Oh, and DH was mad by the time he got off work yesterday too, thinking about the fact that the folks who own this place are being so pig-headed, so he had waxed hot again on building his own place, or at least finishing it out after contracting the roof, framing, and foundation. 

[fishing_guy]

Homegrown,

I have been reading your trials and tribulations on selling your home in Wi, and trying to buy a new one. 

I feel for you in a few different ways.

1.  I am one to stay put.  We currently live in the house my wife grew up in.  It's been in her family for the last 40 years.  It is a nice (older) ranch house, which we remodeled the basement.  It now has 5 bedrooms, 3 baths and a good sized family room in the basement.  None of the rooms are huge, but it fits our family like a glove.

2.  A couple of years ago, we had a bit of money.  3 options to use it.  Replace our 12 year old boat with a slightly larger new one.  Put a down payment on a lake property.  Or buy some land in the country for cash.
We searched several areas in our state, and after a summer of trips across our state, we finally found some land that fit the bill.

3.  The realators put the last minute squeeze on us on the land we bought.  I asked my wife what she thought.  She said either the offer we made or option 1(the new boat).  I told that to the realator verbatum.  The owners accepted our original offer and we got the land.  Remaining emotionally detatched allowed us to make the right decision, although we really did like the property.

Just remember...if it isn't exactly what you want house or outbuilding wise, it can always be added onto later.  Don't talk yourself into it (and especially not the kids), until you're sure it is what you want(right location, price, upgradable). 

Good luck, and I'm sure it'll work out in the end.

[StinkerBell]

I am so glad you found another place, with what sounds like an apartment area for me when I come for a visit.

[Mike 870]

I think you've recieved some sound advice here.  Never fall in love with a property.  Even if you do like it a lot be sure to hide your feelings from even your own buyers agent. Supposedly your agent works for you, but what they really want is for you to buy something and they want you to spend the max amount you are approved for.  I've grown a severe distrust of realtors over the years (sorry if we have any realtors on here).  I have yet to meet even a buyers agent that I feel has truly been an advocate for me and my interests.

[akemt]

One other suggestion I'd give is to take a look at run-down or undeveloped properties in an area you like that AREN'T obviously for sale.  I've found some good deals this way...There were some lots on the road of the house we just sold that I was interested in.  I just called the planning department and they willingly gave me the name and mailing address of the owner.  I sent a letter just stating that we were curious if they'd consider selling and that we might be interested depending on price, etc.  It took a few months (guy who owns it is in a nursing home out-of-state, son was taking care of everything, so it went through a couple of hands in different states first), but eventually we got a response.  They'd owned the property forever, owned it outright, were willing to carry the loan, and were making a very decent asking price.  Now, if I could only find the email address now that we've FINALLY sold our place...  Guess I'll have to go through the whole thing again to try and get ahold of them!

Anyway, before we bought our last house we went land-looking doing the same thing and found some more land that way.  It's worth a shot.  Owner financing can be a good option and you might find land you love at a price you're happy about.

Best of luck!

[Jens]

I have found it best not to take the kids when looking at real estate, if that is possible.  We already have enough trouble trying not to fall in love with a place that we don't own yet, we don't need help from them!  We have the same problem of falling in love with a house that maybe isn't the best buy, getting impatient, and missing great deals a little later.  I would like this not to be the case, but we can be quite impulsive at times.

What I am trying to say here is, don't be impatient, but don't lock your heart away either.  If the sellers are making it difficult, then it may not be meant to be (not that they ever make it too easy).  Just remember too, that what fits for you isn't the same thing that fits for everybody else, and although it is sound business to make a good investment with real estate, if you are looking at staying there for a while, it shouldn't be your primary concern. 

Buy a home, for you and your family, don't purchase a house.

[considerations]

"AREN'T obviously for sale."  That is how I found the last property in Oregon.  There was a real estate sign face down in the woods next to the road.  After getting nothing from them, I went to the county and looked up the owners and wrote them a letter.  After about 6 months they responded and we ended up making a deal.  They carried the contract for 3 years. I'd forgotten all about that until I saw this post. It can work.

[Homegrown Tomatoes]

Guess what... another place came up that I am going to try to go look at tomorrow or Saturday.  It is the same acreage, in a different location, only 40 miles from DH's work as opposed to nearly 50.  On better roads, and nicer place all-round.  A LOT better price.  Will post more after looking.  Talked to our realtor again this morning and the other realtor says he can't talk the people down on the other place.  Compare the list price/sq. ft. and the one we made the offer on is about $105 (no WAY is it worth that) compared to the one we just discovered ($60/sq. ft.) and it is a much nicer house made with better quality materials, from what I can tell from the photos. 

[StinkerBell]

See, there are much better fish in the sea. You were settling on a bottom feeder, when you deserve a blue tuna.

[Homegrown Tomatoes]

Stink,  I told our realtor that the other house didn't love me and that it was telling everyone else that it only is using me for the money, and that it said my jeans make me look fat.  She thinks that I'm certifiably insane now.   The look on her face was pretty priceless. 

[StinkerBell]