Best way to sell raw land in another state?

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dixdak
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Best way to sell raw land in another state?

Post by dixdak »

In the 1980s, we bought a house in Clinton County, New York. It was in a rural sub-development on a small mountain top with awesome views of distant Lake Champlain, Green Mountains of Vermont, Whiteface Mountain of New York, and the SAC base in Plattsburgh (with a telescope). There was actually a tiny ski hill below us. A month after we moved in, we saw an agent pounding a For Sale sign into the vacant lot next to us. Not wanting a house to be built next to our deck, we took out another loan and purchased the 4 acre lot. It cost 15K. We used it as a green belt. The land also has great views, its across from a communications tower actually. There is a stone wall and a tiny creek on the lower section. It is partially wooded. Constructing a house is possible, but would be challenging as there are bedrock outcroppings, slopes, water wells go nearly 250 feet down, and septic system is required.

We moved six years later and continued to hold the land. I had a few offers, none were serious. I guess we liked hanging on to a piece of that area and it was a diversified holding that perhaps could be liquidated to pay for college costs someday. Well, somehow we have managed to clear all the college loans off for three sons and I am still paying tax on that land. We can no longer itemize the property tax. There is zero interest in ever going back to build on the property.

My question is what is the best way to list and sell the land? We have friends in the area who could put up For Sale by Owner signs but its at the end of a dead end road. The most obvious buyer would be the owner of our old home. What kind of a commission is reasonable for a realtor? Thanks so much.
Lalamimi
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Re: Best way to sell raw land in another state?

Post by Lalamimi »

Why not 1) contact the owner of your old home, see if interested, set a price and just sell to them, no realtor involved, if not interested 2) run an ad in local paper and online forums as For Sale by Owner, people can just go look at it on their own, (or ask a friend to meet them) or 3) Hire a realtor recommended by a friend who lives there and let them handle all of it. You pay taxes on it, so you know the accessed value, more or less.
daheld
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Re: Best way to sell raw land in another state?

Post by daheld »

I'd definitely start with the owner of your old home. I assume it might be attractive to them for all of the same reasons it was attractive to you.
dknightd
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Re: Best way to sell raw land in another state?

Post by dknightd »

dixdak wrote: Thu Feb 27, 2020 9:28 am I had a few offers, none were serious.
I assume by serious offer you were expecting what you paid for the land, plus taxes since 1980. You might get that.
Just list it and hope for the best.
If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds. Retired 9/19. Still working on mortgage payoff.
dknightd
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Re: Best way to sell raw land in another state?

Post by dknightd »

daheld wrote: Thu Feb 27, 2020 9:39 am I'd definitely start with the owner of your old home. I assume it might be attractive to them for all of the same reasons it was attractive to you.
yep
If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds. Retired 9/19. Still working on mortgage payoff.
dknightd
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Re: Best way to sell raw land in another state?

Post by dknightd »

Sight unseen. I would pay all closing costs for the land. And take over paying taxes. Probably not considered a serious offer ;) But it would get it out of your hair!
If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds. Retired 9/19. Still working on mortgage payoff.
Topic Author
dixdak
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Re: Best way to sell raw land in another state?

Post by dixdak »

I had a sight unseen offer a few years ago from a guy in Orange Co. Calif for a $1000. Thanks but no.

They changed the address numbering system which made finding the owners of our old home there more difficult but have succeeded. Will contact them first.
Ping Pong
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Re: Best way to sell raw land in another state?

Post by Ping Pong »

Raw land? People actually cook this stuff?
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Nestegg_User
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Re: Best way to sell raw land in another state?

Post by Nestegg_User »

Ping Pong wrote: Thu Feb 27, 2020 10:46 am Raw land? People actually cook this stuff?
It may take awhile to tenderize it :P
playtothebeat
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Re: Best way to sell raw land in another state?

Post by playtothebeat »

dixdak wrote: Thu Feb 27, 2020 10:44 am I had a sight unseen offer a few years ago from a guy in Orange Co. Calif for a $1000. Thanks but no.
Why do you dismiss that as if it’s offensive? You said the land has challenges to build a structure, so perhaps it doesn’t have a whole lot of value other than to someone who wants a green belt. Also you’re still paying property tax on it, so that $1k has since cost you more in carry costs.
If you think the value is much higher, get an appraisal. Or hire a realtor to handle this for you and sleep well at night.
psteinx
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Re: Best way to sell raw land in another state?

Post by psteinx »

A basic problem is that OP likely has very little concept of the actual going rate for stuff like this, especially since the lot in question is sort of one-off.

If OP has reason to be in/near the area in the near future, then there might be value to spending a day or two doing "boots on the ground" research. Talk to real estate/land agents in the area. Drive by OP's property and on similar isolated roads. Maybe knock on some homeowner's doors to see if they'd have interest, or know of others who might, or have bought/sold in the area recently and have input. Maybe visit the county seat and do research on sales in the area. Etc.

Adjacent home (OP's original home) probably has at least SOME interest, for reasons similar to the OP's own. But *if* they make an offer, how is OP to evaluate it? Or, conversely, if they say, "We might be interested - what do you want for it?", then how, indeed, will OP come up with a reasonable ask?

Perhaps engage a land agent, with typical (i.e. high-ish) land agent commission structure, but a carve-out discount if the property is sold to the adjacent land owner. So, 10% commission in general, but only 5-6% if sold to the named party. Land agent is still motivated to engage with that land owner, if there's interest, because it would likely be a quick flip and the agent would get a (smaller) commission quickly and easily. But land agent wouldn't likely be inclined to market the land for peanuts, because if agent can sell it on the open market at full-ish price, there's a much better commission.
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dixdak
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Re: Best way to sell raw land in another state?

Post by dixdak »

Correct assessment that I am not sure yet what I would ask the neighbor for. The view from my lot is fantastic and the last one standing, due to the elevation and the lack of obstructions. I place a premium on waking up in morning, sitting up, and seeing the Green Mountains, the Adirondacks, and Lake Champlain. A new structure next to our old house would block a lot of the view since its desirable to be at the highest point. That alone is worth much more than a grand. The movers came on a day with a magnificent display of Fall color. They accused me of being quite crazy to leave. Houses have tripled in price. The area was hit hard by the Air Force Base closure and Wyeth-Ayerst being closed by Pfizer. We paid !5% of the value of our house for that 4 acres. Currently that would be around $45000. The land assessment for taxes is listed at $29200. First guess, I would ask them for $40K before going to an agent and asking for $47500 or so.
Jack FFR1846
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Re: Best way to sell raw land in another state?

Post by Jack FFR1846 »

Find a good land real estate agent or an agency who can market the land. Typical land commission is 10%.

Besides the state references, your land sounds a lot like 81 acres I used to own. It was near the top of a mountain with views of Springfield, MA and beyond this land and the property across the street was an unmaintained road that required at least a high clearance 4x4 to successfully get to the other end. I decided to go back to college and left my dad in charge of selling it. He had previously run real estate through his office along with insurance and tax prep but because residential is so time consuming and low paying, he concentrated only on business and land. He was able to sell the property for a good gain. I don't actually remember what we sold for, but it was in the $1000 per acre range. This land was commuting distance to Springfield. I didn't have the granite like you speak of. It was woodlands without really big enough trees to log. The buyer built a single house on the property.
Bogle: Smart Beta is stupid
BillyK
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Re: Best way to sell raw land in another state?

Post by BillyK »

Raw land is often a hard sale. Financing is tough unless you have a cash buyer or are willing to offer owner financing. I would list it with a local a Realtor familiar with the area. Commission is typically higher on land sales such as 10%. It is often a harder sale that takes longer. If it were me, I would price it real competitive to help make a sale happen. So often with raw land unless it is in a hot market area, it can sit for a long time and bounce from one Realtor listing to the next over time. Then ultimately, it ends up selling for less than if priced competitively from the start.
Topic Author
dixdak
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Re: Best way to sell raw land in another state?

Post by dixdak »

Thanks for the suggestions. Looking at the Google Earth photos brought back some fond memories of living on top of Rand Hill:
The day a B52 and C5A flew in tandem over the house at such a low altitude, most of the sky was blocked out.
Watching New Years Eve fireworks across Lake Champlain in Burlington, VT.
Rain at the bottom of the hill and glare ice on top.
The Thunderbirds practicing over us for the July 4 airshow about when Top Gun premiered.
Cross country skiing on the logging road past the dead end.
Fall color.
Hearing what I thought was a sonic boom from an FB111 but was actually an earthquake.
The last week we lived there, with newborn son, in-laws and a dry well. That was pressure.
The week it was below -30F and the well line to house froze, all 50 feet. It was plastic and under wooden deck. The plumber said it may take days or weeks to thaw.. I did it in 45 min.
The black flies.
Ok not all are fond ones.
Topic Author
dixdak
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Re: Best way to sell raw land in another state?

Post by dixdak »

Finally mailed some For Sale signs for my friend to put up on the 4.3 acre plot. I currently live 900 miles away. Given the current events, I was quite surprised to get 4 inquiries within hours. Actually I was not ready with an asking price. An adjacent neighbor has a serious interest. He has had an appraiser look at the land and he talked with the bank about financing. In a day or so, he will be making an offer. I asked an agency that specializes in rural properties to tell me what they think the market value is. I see the current value of the house is 3 times what it was back then, so I used that multiplier on what we bought the land for in 1986. Puts it at $45k. I checked other rural subdivisions with larger building lots. They don't have the same quality view. The average price adjusting for amount of acres is $44.6k. I found a nearby subdivision with excellent view of lake and mountains. A 1.5 acre lot was going for $23k. How to figure what that property would be worth if it were same as mine, 4.3 acres? Extrapolating would have it at $66k. Perhaps the added land is valued less due to restrictions on housing density. In that case, I tried assigning a value of $10k per acre (2/3rds of original lot) for the land needed to get to 4.3 acres. That gives a value of $51k. That gives me a range of $45-51k. The neighbor will likely give me an offer in high 30s or low 40s. My question is what should I tell the 4 callers the asking price is? The neighbor has asked for the right to match any other bid.
Golf maniac
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Re: Best way to sell raw land in another state?

Post by Golf maniac »

Start at your $51k for your callers, first one to get at a price you are comfortable with, then sold! If nothing from the phone calls then you still have your neighbors offer hopefully in a reasonable range.
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dixdak
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Re: Best way to sell raw land in another state?

Post by dixdak »

An agent told me he thought the property was worth $25-30k due to the great view. He would list in low 30s. The neighbor had his own appraisal done and arranged bank financing. His first offer is $42k. It’s about what I hoped for. Should I ask for a bit more? Or should I accept his initial offer?
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