Has anyone here ever sold vacant land as a possibility of a house sell as well? You know where you might advertise it for say $100k an acre but $80k if they have you build their home…
We own a tract of land (a few acres) that we are considering spiltting and selling as buildable lots. Anyone have any experience doing this and care to share their thoughts?
Thanks
Mike
Look closely at these common locations for hazardous materials in older homes.
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Replies
i haven't done it,but it is very common around here to buy a lot with the convanents stating "only joe scmoe is allowed to build". i have heard that if you want to walk in and pay the builder 10-12% and realestate fee of 6% for the est. cost to build to your plans they will sign off. 400k house,write a check for 65k and have whoever build it. larry
hand me the chainsaw, i need to trim the casing just a hair.
problem we have is, if you subdivide, the orignal owner before he can sell, must put in paved road, storm sewer, curb and gutter, sidewalks, underground ulilty. gas, electric, cable. and it better meet highway spec. before they let you sub
Have you looked into your states subdivision laws? It gets very complicated and expensive.
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Piffin,
Yeah, we're up on them and ours are just like brownbagg said, we'd have to do the road and such (read that, $$$) Your are right...complicated and expensive...unless we cut it into just three lots as each would face the main road.
We did make it through the rezoning process however so we're willing to do it...
Just wondering the best way to advertise it and setup any parcel splits that a customer may want to do. I'd like to sell and build but would just sell the land as long as we could make a little money on it.
I just don't want to do all the road and drainage and stuff to have a vacant street sitting there with money invested and no takers.
Mike
Mike,
Consider the currant market before you spend any money..
Here in Minnesota in the 7 county metro area there are 250,000 unsold listings.. last year total home sales were 14,700
That's less than 6% sold. Other communities are in similar position..
Frenchy,
Yeah, it seems to be bad all over. Thats why I think we want to just list is as vacant land and go from there. Doesn't take any money out of our pockets that way...
Thanks
Mike
a plan of subdivision is a very expensive thing to get involved with i have found
the engineering , surveying road building including drainage to the nearest adaquete main drain will kill you
i started in 83 with 38 lots plus 6 otherts adjacent & am now down to 13 plus i have 32 acres across the road that is 1/3 zoned for residential currently
at the beginning taxes were $28 per lot they now are $375 and i have to maintain the roads until i have a specified # of homes built at which time i have to pave the road
if at all possible it looks to be more profitable to just sell lots on existing road
the problems you go through to subdivide here are enough to kill you & if you spec build you have to carry the home till it sells which can be a while ( been there done that)
selling the lot to get the house building job is the risky way i found as you have to guaranty the home for years , it just sounds like big dollars
if i just sell the lot i walk away with my money at the start with no risk and dont gobble it up by not making enough on the house BTDT
its a long process but when your up to your neck in alagators who gives a sh#t that someone forgot to drain the swamp (http://www.foxfireridge.com)
doing nothing also gets you nothing
Mike,
If you speak to realitors you will find them eager to get the listing but chances of sales are slim. There is something called a stale listing.. that's listings that don't sell right away. They tend to get put to the back of the book and ignored. What's more when there is activety the buyers ask how long a given property has been on the market and based on that make assumptions about how despirate the seller must be.. They then price their bid accordingly. (another words dramatically lower than otherwise)
A more clever approach would be a for sale by owner sign..(with your phone # listed). That way you can remain in the drivers seat. There is no record of how long it's been on the market and every realitor around will know the land is for sale but that you intend to give the listing only to the person bringing you a customer.. Kind of like dangeling bait in front of a fish.
Normally a for sale by owner sign is bound to cost you money.. however in this market it's your only real chance.
To add to what Frenchy said.. during the For sale By Owner... if you make it known to realtors that you'll pay some portion of a fee to them they might be interested in showing it. When we sold my wife's house it was FSBO but made notes on the free paperwork found at the sign that a realtor would be protected. In the end we paid half the percentage normally paid to a realtor, 3%.
That's less than 6% sold. Other communities are in similar position..
Worst RE "market" in town is in-fill lots (they get "dumped" on the rookie agents).
Not for lack of demand, but for over-inflation of the price. In-fill city lot in the 0.3-0.4 acre size was $17K five years ago; now closer to $22K (except they are not selling at that price). Infills under 0.3 acres are a bit more reasonable, except they are tending towards 0.15 & barely 0.20 acres (and still $15-16K).
This makes it sore difficult to get a $150K-200K house on these postage stamps to get bank financing (and also meet codes, setbacks, etc.). The builders who can afford self-financing can get into cheaper subdivision property, so they aren't working the infill market.
I'll have to remember to phone photo the infill on my street--it's only going in because a builder's super lives next door and had the seperable piece of property grandfathered into his house buy.Occupational hazard of my occupation not being around (sorry Bubba)
Consider
As promised, the new infill house on my block.
View Image
For perspective, County tax page calls it 7500 sf lot valuated at $12,830.
By eyeball, that lot is maybe 50 x 150, and that house is all 30' wide the 10' side setbacks allow. That white expanse in front is the driveway, and al lthe garage this site will ever have (it's hard up agaisnt the 30' front set back). It's another 40' some-odd deep, for around 1500 sf of house.
I'm still at sea on the economics of this. Since the numbers don;t make sense, around here that likely means the owner sold the lot to himself and will rent the property.Occupational hazard of my occupation not being around (sorry Bubba)
I've purchased a couple of pieces of land, one dividable into two lots, with the intention of using them for retirement projects. The idea has been to design and build to suit my family and the market, live in each home for a few years and then sell, taking advantage of the capital gains credit. This has been my plan for many years and during that time I've been encouraged by the success of others in the trades who have followed that route. One friend retired from other work quite early in life, after only one such transaction, and builds one new place every two-three years. He and his wife are able to pursue other life goals without any concerns about earning money from those endeavors.
The only risk I've taken has been to leave the sub-dividing process until I'm ready to build. Of course I didn't want to pay additional property taxes for two lots but I've risked being restricted by tighter zoning or other possible limiting regulations which may be passed. After seeing towns in my county go from very informal building policies to highly structured and expensive processes, I wonder if I've made the right move.
I like the idea of building to suit, using only the buyer's money but that doesn't give me the tax free advantage offered by our excellent capital gains credit on the sale of primary residences.
I ownland and subdivided it so i now have 4 building lots, 3 houses. what i thought was easy turned out to be a lot of work and made me look at the people doing this in more regard, I never could imagine the hoops they put me through while the good ole boys had no proplems, It was worth it in the end and i learned but i spent many days from one gov office to another. Not for the faint of heart or anyone with a temper. Kind of like being in school and being sent to the office for being a bad boy, something i knew only to well