Selling home to a business!

September 5, 2007 1:43 PM

A business down the street from me, may be comtemplating purchasing all the houses on my block.......

My neighbor told me that a few days ago this business had surveyors on our block, and were told this business was interested in expanding. My question is, Anyone have experience in this sort of thing? If they make me an offer is that all I can hope to get from them? Am I expected to counter offer? Is there any rule of thumb as to how much higher they are prepared to go? Thanks!

posted by Yer-Ol-Pal to Work & Money (8 answers total)

Actually, if you receive an offer, you're better off hiring a real estate broker to represent you. A good broker will likely be much more familiar with the pricing and bargaining applicable in a situation like this. You'll want a lawyer if you end up doing a deal, but until then a broker will be more helpful (and, unlike a lawyer, is paid only if a sale occurs).
posted by brain_drain at 2:03 PM on September 5, 2007

Step one, mortgage your house to the hilt and then some. Take out a home equity line of credit (HELOC) for whatever amount a bank will let you take it out for. Some places let you go up to 120%. Note that with a HELOC, this won't cost you a dime. You only pay interest if you actually draw on the funds. If someone does choose to buy the property from you, all they will see is that you are mortgaged to 120% of it's value, and will have to offer you that much.

More info on the benefits of HELOCs here at FatWallet
posted by AaRdVarK at 2:14 PM on September 5, 2007

Oh, and read Kelo v. New London. A 2005 Supreme Court ruling which in my opinion is one of the most insidious court decisions in American history.
posted by AaRdVarK at 2:16 PM on September 5, 2007

If someone does choose to buy the property from you, all they will see is that you are mortgaged to 120% of it's value, and will have to offer you that much.

Well, they have other options, like deciding not to make an offer at all, or making a lower offer and saying take it or leave it.

Just determine (with professional advice) what price you're willing to accept (which may be 120% of the appraised value) and don't accept a lower offer. No mortgaging necessary.
posted by winston at 2:21 PM on September 5, 2007

Only Government taking of land (eminent domain) is covered under Kelo v. New London. In your case, if the business is working alone, Kelo is irrelevant.
posted by jk252b at 2:26 PM on September 5, 2007

jk252b: if op's town feels that the business is of benefit to the community, then the lessons of Kelo v New London are very important.
posted by saffry at 2:34 PM on September 5, 2007

A most-favored nation clause is ideal for these types of situations.
posted by ajr at 3:02 PM on September 5, 2007

"My neighbor told me that a few days ago this business had surveyors on our block, and were told this business was interested in expanding. "

You know this might just be idle gossip. I can't think of any reason you'd need to get urban land surveyed before acquiring it as the city will have plans on file showing lot lines and improvements. Accurate enough for planning purposes.

Before I did anything I'd talk to the business and find out if a) it was their team, and b) if they are interested in your property. They'll probably admit the first if it is and you might find out they were just surveying to run some fiber or something totally unrelated to aquiring real estate.
posted by Mitheral at 4:33 PM on September 5, 2007