Land value versus evaluations...

Started by Adam Roby, October 27, 2018, 06:44:12 AM

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Adam Roby

I have a 7.5 acre lot of land in northern NY state bordering Canada.  The lot is pretty square so it very usable in the sense of area (rather than the typical thin wide and deep that we see in the area).  Problem with it is access, there is an access "road" / dirt path that needs a 4x4 to get access, my lot is about 1500' in from the main road.  It makes it difficult to get access for me, now that my Jeep died and I am driving my wife's old Corolla.

Recently a new lot came up for grabs.  They are pretty rare in this area.  There is a small cabin on it, looks pretty bad from far so is being sold as "inhabitable".  I took the day off work yesterday and went up with a buddy to take a better look.  The fascia and soffits we done with presswood, and have completely rotted and animals got into the place.  It seems to have been abandoned for 20-30 years, but is surprisingly still very solid.  There is feces everywhere, all the furniture in the place has been shredded apart, so anyone not handy looking for a home will be completely put off, but a few guys with some masks and garbage bags can clean it up pretty easily.  The floor plywood would likely need to be all replaced from all the urine smell, but that would be fine since it would give access for better inspection of the joists.  It appears to be sitting on blocks, some have slightly sunk but overall everything is solid, no rot that I could find in the structural elements.  Its basically just really ugly and dirty.  Roof would need re-done, it has 2 layers of really old shingles but surprisingly no evidence of leaking yet. 

So here is my dilema.  This new lot/cabin sits on a 5 acre lot neighboring my best friend's father's 5 acre lot, and he has a 12 acre lot next to that.  In all I would have full access to 22 acres of land and we could all share the cabin and land, tools, tractors, bulldozers...  problem is the money.  The agent told me someone is interested in my land, but has not made any offers.  He is asking me how much I want for my land, and how much I am willing to offer for this new land.
Until I know (rough estimate) how much I can potentially get for my land, its hard for me to make an offer on this land.
I am asking the agent, since he knows the area, what does bare land normally sell for, does it match evaluation, does it typically go over, under evaluation.  He just keeps telling me "make an offer", "tell me how much you want".

Maybe it works differently in the US, but in Canada, if I call an agent they will ask me where I am, the size of the lot, age of the house, and be able to give me a ballpark value based on evaulation and condition of the house.  Since my land is bare, has no structures, I'd think he would tell me "ask eval you should be ok", or "typically its 10% over" or "20% under" or whatever.

So the question is:  How do you know the true market value of your plot of land?  Do I scour listings and compare asking versus evaluation?  Even that won't tell me the final selling price. 

I know this place looks rough, and will be a lot of work, but I really like it for some reason.  Very easy access year round, flat land, mature apple trees everywhere.  A few thousand in materials to seal up the holes, restructure a bit next summer, redo the roof...  this would make an excellent summer cabin.

(Most of you will probably think this is garbage - I can't explain it, I only see potential)



As you can see the electrical is there but no meter on the house - I would not want electrical, opting for lanterns, maybe panels and batteries.  There is also no water I can see, and no septic.  I would opt to bring drinking water, collect rain water for dishes or bring with, and use a portable toilet.  We are talking occasional weekend trips, mostly alone, sometimes with a friend or my daughter, and only summer.  As it is I get up there once, maybe twice per year.  With a cabin I would hope to go maybe a dozen times in a year.


Portico

Typically here the broker should give you an estimate based on their market knowledge and that's part of their service, though you have final say on what you list it for. However if they represent an interested party, their priorities lie in getting the best price for their buyer, so they're being coy to see if your price is lower than what they know the buyer is willing to pay. In theory you should get another broker to represent you on the sale of your current land. In practice, brokers make very little on raw land deals so it'll probably be hard, and also the talks you've had with this broker may preclude bringing another one in due to broker protection laws. (One broker could sue the other for poaching... not sure applies in this case but have seen it happen in others.)

Since you're not super attached to the current land and want to free up funds I wouldn't quibble too much but would look at Zillow for your immediate area/surrounding towns for similar access/acreage plots for sale to come up with your own valuation. Keep in mind this time of year a lot of people slash prices to try and get things sold before winter.

From what you've said though the new (old) cabin sounds great for your needs and if you have the vision, go for it!


Adam Roby

Thanks for the reply Portico.  That is an interesting point of view, and perhaps would explain why he's not willing to give me his opinion on selling price.
I only emailed him for his advice because I bought the original land from him (his customer) a few years back and he is representing this new land also.  I think he is too involved in both sides making it difficult to be objective.

It makes it difficult to know what to offer on the new lot.  My wife already thinks we're over extended.  I might have to sell off some equipment to secure the purchase.

NathanS

I would just throw out there that restoring that cabin will probably not cost any less (maybe more) or be less work than framing up something new. Main point being there is no foundation. You will either need to burn a lot of old (maybe toxic) material, haul it out, or order a garbage bin. Have a close look at the wiring and plumbing too.

You will basically have to tear it down to the framing, then look for and fix what's rotted, and probably fix old framing errors. Framing lumber is cheap.


Definitely a doable project, but in my opinion don't go into it thinking you will save money fixing the place.

A lot of counties in NYS have searchable real property data.

http://www.sdgnys.com/project/image-mate-online/

When we were looking for land I think I was able to pull every property in the area that sold in the last 10 or so years, and then I went through everything comparable to what we were looking for to see what we should pay. There was a pretty big disconnect between what people paid, and what they were asking from what I remember.

A rectangular property with good access is not common. Could be worth the puchase alone, especially sharing borders with friends.

Adam Roby

That's just it, other than the eves that were rotten (bad design maybe), the framing is completely solid.
It is a rough cabin, no plumbing, and the walls are all open inside, ceiling is open.  I can see all the framing.  The outer shell is that presswood stuff, but other than being discolored is not rotten.  I am actually quite shocked at how little rot there is.  I was able to climb under a few feet on all sides and poke all the floor joists, nothing was soft everything solid.  The floors inside are plywood, they are still solid, but soaked with urine and feces so I would want to replace that just for the grossness and health reasons.  I can see all the rafters, 90 percent of them are perfect.  One area, where they added an extension is done very strange, like they purposely put a strange check in the roof line. I would have to investigate that a bit.  From inside I can see all the plywood on the roof, poked around all of that and could not find any rot.  Where the front door is there is some rot, but just a 3' section, really not bad at all.  I frankly can't figure out why its in such good shape all things considered.
There is only minimal electrical, and it is mostly all that metal encased stuff, probably to avoid mouse damage.  But I can see it all... so it's easy to assess.  Still, I don't want electrical in a cabin, for me that defeats the purpose... I want a wood stove which it has (cook top type), and oil lanterns or battery/panels...
If I were starting new I would be thinking about a foundation... but if this has been standing for 30+ years (tax map shows the extension was done in 1986), not being used, and its still in this good shape, then I don't see why I would not just leave it as is (add support where needed) and go with the flow.  The outer sheathing is solid, can just be wrapped and sided.  I might even just consider a really good coat of paint.  It will serve as a place to go and sit to have a sandwich and coffee while working on the land or playing with the tractor, it will not be a residence or have any running water and TV's and stuff.  The finished cabin will be plywood, no fancy flooring or anything like that... imagine a really big man cave shed.  Its really a place for me to get away when the city is driving me crazy.

What I need is a place to start.  I am completely alone to do any work.  Its impossible to build something new when you have 3 or 4 weekend per year.
I think this could be gem, if I get it...  but if I do and its a disaster I won't be ashamed to come back and admit as much.


NathanS

Sounds better than I was assuming... hope I didn't come off as too much of a naysayer.

I can understand your thought process. Also  I do agree, not every hunting camp or vacation spot needs to be a full blown code approved structure.

Part of what prompted my first response was that, multiple times, I have seen what people go through trying to rehab beat up places. And it seemed worse than framing something up to me.  :)

Adam Roby

Not at all, I appreciate the feedback.  Its easy to underestimate both cost and time to repair stuff.  I usually have a number in my head, double it, and still wind up being way off.  Part of this is probably trying to convince myself.  :)

DaveOrr

Adam, you said you purchased your current property a few years ago.
How long ago?
Have you done any improvements?
It shouldn't be worth less than you purchased it for.
Dave's Arctic Cabin: www.anglersparadise.ca

Dave Sparks

Quote from: DaveOrr on October 27, 2018, 08:55:18 PM
Adam, you said you purchased your current property a few years ago.
How long ago?
Have you done any improvements?
It shouldn't be worth less than you purchased it for.

Property does not always go up. It is often driven down by a surplus of property. Offgrid property is really sensitive. There is a house near me on 80 acres that is selling for less than the land cost 10 years ago. The house was at least 250K. Ouch!
"we go where the power lines don't"


Adam Roby

The person that was interested in my land backed out last minute, making my offer for the new lot/cabin obsolete because it was conditional on my sale.
After quite a bit of conversation with my wife, I decided to go ahead and bridge the two, making an offer on the new lot without a contingency. 
They just accepted my offer.  I still have no clue how much I can get for my land...  and I will be tapping our credit line to the max with this purchase, but it almost seems like a no brainer, something I can't pass up.  The price is less that the cost of wood to build what's there now, and I get a beautiful 5 acre lot with mature trees, a slew of apple trees, super easy access... 

Wish me luck. Absolute worse case I make the interest payments only while I try to sell off my lot.  Best case scenario I get an offer at evaluation value and I am laughing.

I'll post some pictures once its all said and done.

Adam Roby

Quote from: DaveOrr on October 27, 2018, 08:55:18 PM
Adam, you said you purchased your current property a few years ago.
How long ago?
Have you done any improvements?
It shouldn't be worth less than you purchased it for.

Sorry I did not reply earlier.  I bought about 3 years ago.  It was part of a larger lot, I took the best part of it that had a stream running through it and got I think an awesome deal at the time.  3 months after purchasing an agent told me someone wanted it for 50% more than I paid.  I refused at the time because it was new.  The evaluation went up almost 60% over what I paid for it.  If I can sell it for what its evaluated at, I would be very happy.  No real improvements, I make a homemade driveway by just clearing stumps and brush, but its grows back in so fast it can barely be seen now.