How to approach potential land sale?
August 10, 2022 8:02 AM Subscribe
Our neighbors our selling some land by owner. They only list a phone number as a contact (God help me). What do I ask?
What are the best practices for approaching this?
There are 60+ acres. It's been on sale for a year. We'd like to find out if they are willing to subdivide, because we would like to buy a couple of acres behind our property line.
It's undeveloped woodland, and not particularly easy to develop, nor highly sought after. We don't want to build. We just want it to increase the property boundaries. We'd even be willing to let it connect to a trail network if we figured that out. (That's highly hypothetical and we would talk to a lawyer and insurance company first.)
What to say?
What not to say?
Is this reasonable?
I'm a pretty direct person so would likely say too much and be quoted a crazy high price or something, left to my own devices, or otherwise screw the deal. I'm also a big awkward dork fumbler on the phone so I probably need a script. I suck at buying anything that doesn't come with a price tag. Took me a full year to buy a car.
What are the best practices for approaching this?
There are 60+ acres. It's been on sale for a year. We'd like to find out if they are willing to subdivide, because we would like to buy a couple of acres behind our property line.
It's undeveloped woodland, and not particularly easy to develop, nor highly sought after. We don't want to build. We just want it to increase the property boundaries. We'd even be willing to let it connect to a trail network if we figured that out. (That's highly hypothetical and we would talk to a lawyer and insurance company first.)
What to say?
What not to say?
Is this reasonable?
I'm a pretty direct person so would likely say too much and be quoted a crazy high price or something, left to my own devices, or otherwise screw the deal. I'm also a big awkward dork fumbler on the phone so I probably need a script. I suck at buying anything that doesn't come with a price tag. Took me a full year to buy a car.
We were in a similar situation here but the adjacent land was corporately owned. The real estate company grilled me for names of others who live around here in the hopes of finding a sale and I regret telling them as much as I did about myself. I fortunately did not rat out any neighbors. If I did this again, I would simply say I saw their sign and wanted to inquire if they were willing to subdivide and if they said no, I could be done with it.
In my case, they said they were not interested in subdividing at this time but that may change. The land has been for sale for like 4 years now and still is. I wish I had a little bit of it, but I imagine the corporation that owns the land doesn't really see shaving off 2% of the land is meaningful to them. The real estate company called me back after the first year to see if I suddenly wanted their million $ plus entire parcel, and I asked if they had changed their mind on subdividing and they had not. The real estate company changed after that and I did not even bother to contact the new one.
posted by cmm at 8:44 AM on August 10, 2022 [2 favorites]
In my case, they said they were not interested in subdividing at this time but that may change. The land has been for sale for like 4 years now and still is. I wish I had a little bit of it, but I imagine the corporation that owns the land doesn't really see shaving off 2% of the land is meaningful to them. The real estate company called me back after the first year to see if I suddenly wanted their million $ plus entire parcel, and I asked if they had changed their mind on subdividing and they had not. The real estate company changed after that and I did not even bother to contact the new one.
posted by cmm at 8:44 AM on August 10, 2022 [2 favorites]
I think what is really relevant is what part of their land are you seeking. Is it at the end so that their land remains the same shape just less after the sale? Is in creating a large cutout? If selling to you makes their parcel awkward or harder to sell, they obviously will not do it. If it has been for sale for a year, they are either very patient or there is no real market for the land. If there is no natural market (Developer, investor, etc.) then they also may be interested in selling part of it. Maybe it is priced to go such that you buy the whole darn thing and you subdivide it.
All of this is pure speculation until you call or someone calls on your behalf. Call the number. They are your neighbors. Ask what the story is with the land. Tell them part of it abuts your land. How much are they selling? Are they willing to sell a piece of it or subdivide it. If they say they would consider it, ask them if you can walk the land with them to show them what you are interested in purchasing. Explain it is not to build on. If they ask how much you are willing to pay, say that you have no really considered that until you knew they were willing to sell. This is the point where the negotiations begin.
Tell them you will get back to them about getting a survey. You will do research with the town and any agency that may have jurisdiction. Are there zoning rules? Minimum size lots? Who would need to give approval and how much will that cost. If you are not comfortable with the actual haggling over price, it is reasonable to hire a real estate agent or a real estate lawyer. Tell the seller that you would prefer to have your representative do the actual negotiation. No reason to give a reason. Tell them you are paying for them and it will not affect the sellers net.
60+ acres, depending in where you are, sounds like it is being sold to be developed either by subdividing and putting up multiple houses or one very large house. Is it zoned for residential only or for commercial or for both?
If they decide not to sell you the piece either because of price or because it will alter the shape of the property such that it would make it harder to sell the rest, that is ok. If they sell it to a developer, contact that developer. They may be willing to sell. It lowers their cost and mitigates their risk.
As for negotiating with them directly once they agree to consider selling you the piece you want, it is simple. You determine what your family's top price is. What can you afford? What is it worth to you? When you determine what that top price is, be firm in your mind to NOT pay one penny more. Then, hope your price and their price intersects. It is how I purchased my most recent vehicle. I went in to the dealer and asked them how much? They gave me their starting price. I said it was over my budget. Could they do better? They came down a bit. I said to them that this will take too long of back and forth and we may never agree. Here is the top price I am willing to pay. How you get to that through dealer incentives, national discounts, funky dealer accounting, is not my concern. I have an appointment in 1 hour across town so I need to leave in 30 minutes. If I leave, I ain't coming back. I will sign immediately if you agree. After 30 minutes, he was still "talking to his manager". I got up to leave gathering my belongings. Sure enough, when I got about 5 steps from the door, he came out and agreed.
A successful negotiation is not necessarily getting the lowest price or even paying "their" price, It is getting what you want under terms you set beforehand. Yes, you may have paid X and they may have been willing to sell it for X-Y, but you got what you wanted at a price with which you were comfortable.
posted by JohnnyGunn at 9:19 AM on August 10, 2022 [4 favorites]
All of this is pure speculation until you call or someone calls on your behalf. Call the number. They are your neighbors. Ask what the story is with the land. Tell them part of it abuts your land. How much are they selling? Are they willing to sell a piece of it or subdivide it. If they say they would consider it, ask them if you can walk the land with them to show them what you are interested in purchasing. Explain it is not to build on. If they ask how much you are willing to pay, say that you have no really considered that until you knew they were willing to sell. This is the point where the negotiations begin.
Tell them you will get back to them about getting a survey. You will do research with the town and any agency that may have jurisdiction. Are there zoning rules? Minimum size lots? Who would need to give approval and how much will that cost. If you are not comfortable with the actual haggling over price, it is reasonable to hire a real estate agent or a real estate lawyer. Tell the seller that you would prefer to have your representative do the actual negotiation. No reason to give a reason. Tell them you are paying for them and it will not affect the sellers net.
60+ acres, depending in where you are, sounds like it is being sold to be developed either by subdividing and putting up multiple houses or one very large house. Is it zoned for residential only or for commercial or for both?
If they decide not to sell you the piece either because of price or because it will alter the shape of the property such that it would make it harder to sell the rest, that is ok. If they sell it to a developer, contact that developer. They may be willing to sell. It lowers their cost and mitigates their risk.
As for negotiating with them directly once they agree to consider selling you the piece you want, it is simple. You determine what your family's top price is. What can you afford? What is it worth to you? When you determine what that top price is, be firm in your mind to NOT pay one penny more. Then, hope your price and their price intersects. It is how I purchased my most recent vehicle. I went in to the dealer and asked them how much? They gave me their starting price. I said it was over my budget. Could they do better? They came down a bit. I said to them that this will take too long of back and forth and we may never agree. Here is the top price I am willing to pay. How you get to that through dealer incentives, national discounts, funky dealer accounting, is not my concern. I have an appointment in 1 hour across town so I need to leave in 30 minutes. If I leave, I ain't coming back. I will sign immediately if you agree. After 30 minutes, he was still "talking to his manager". I got up to leave gathering my belongings. Sure enough, when I got about 5 steps from the door, he came out and agreed.
A successful negotiation is not necessarily getting the lowest price or even paying "their" price, It is getting what you want under terms you set beforehand. Yes, you may have paid X and they may have been willing to sell it for X-Y, but you got what you wanted at a price with which you were comfortable.
posted by JohnnyGunn at 9:19 AM on August 10, 2022 [4 favorites]
I’d contact through a realtor. You would likely need one anyway, and they’re used to dealing with FSBOs. That way if something is seriously off, it never needs to come out that you were the interested party. This is the sort of thing realtors work on commission for so the initial touching base shouldn’t cost you anything.
posted by Bottlecap at 10:30 AM on August 10, 2022 [7 favorites]
posted by Bottlecap at 10:30 AM on August 10, 2022 [7 favorites]
Having negotiated with my neighbours over the years ...
My usual approach is to phone up and say that I might be interested in selling MY place if the price was right, so how much do they expect to get for theirs?
If the price is super crazy high - "would you be interested in buying MY place at that price?"
If the answer to that question is "No". "Hmmm - so why do you think you would be able to get that price?"
If the answer to that question is "Yes." "Hmmm - let me think about it."
If the price is reasonable - "have you had any offers? Can you give me the details of the buyers as I would be interested in maybe doing a boundary adjustment? If you don't have any offers, would you be interested in a boundary adjustment?"
posted by Barbara Spitzer at 7:23 PM on August 10, 2022 [1 favorite]
My usual approach is to phone up and say that I might be interested in selling MY place if the price was right, so how much do they expect to get for theirs?
If the price is super crazy high - "would you be interested in buying MY place at that price?"
If the answer to that question is "No". "Hmmm - so why do you think you would be able to get that price?"
If the answer to that question is "Yes." "Hmmm - let me think about it."
If the price is reasonable - "have you had any offers? Can you give me the details of the buyers as I would be interested in maybe doing a boundary adjustment? If you don't have any offers, would you be interested in a boundary adjustment?"
posted by Barbara Spitzer at 7:23 PM on August 10, 2022 [1 favorite]
The first thing I'd want to find out is how much they're selling the entire land for, and what percentage of that is of interest to you. Is that parcel more or less valuable than the rest (objectively speaking)?
I imagine they'd not be interested in selling 5% of the land for 5% of the total price, as that is just more hassle with no benefit. However if you're offering a higher percentage (relative to the rest) and covering all additional costs, then it would be more attractive.
posted by Gomez_in_the_South at 10:36 PM on August 10, 2022
I imagine they'd not be interested in selling 5% of the land for 5% of the total price, as that is just more hassle with no benefit. However if you're offering a higher percentage (relative to the rest) and covering all additional costs, then it would be more attractive.
posted by Gomez_in_the_South at 10:36 PM on August 10, 2022
I purchased an absentee neighbor's vacant woodlot in a privately negotiated off-market sale. We were already acquainted, and I still did a lot of research before talking price, including looking at hundreds of comparable sales.
Zoning does make a difference. Timber Preserve would have a lower market value than Residential, and 40 acre minimum would have a lower market value than 1 acre or less. Topography, access, and utilities would determine the value of land for development, while merchantable board-feet would be determinative for commercial timberland.
I would look into the public records for the property -- when it was last transferred, for how much, from and to whom. If it was sold, the scans of the vesting deed might indicate what title company was involved, and they should have information about easements, covenants, or other encumbrances on the property. If it was quitclaimed between family members and hasn't sold in however long your county has been digitizing records, there may be clouds on the title no one knows about. There may also be sentimental objections to dividing the land, or conversely to developing it.
It very much matters what condition the property is in. Timberland that was responsibly logged and replanted is much more marketable than clearcuts left to regrow dense understory and few large trees. I recently bushwhacked through a few listed properties where the cost of clearing the brush to plant a new generation of trees would rival the value of the resultant bare land.
What portion of the property you want to purchase is critical. If the property backs to yours and has access from the other side, that's different than if you're purchasing frontage. If the property has natural features like a knoll top or stream, it matters whether you're severing them from the larger acreage. (If it's on the same stream as your property and has significant head, it's worth that premium).
Woodland does not have a simple value per acre. The difference between 56 and 60 acres is much less than the difference between 1 and 5. There is also a base value for any buildable lot, so a usable 4-acre carve-out would sell for much more than one-fifteenth of a 60-acre parcel. But in this case, you might not need to go through the hassle and expense of creating a new legal parcel; this might be resolved with a lot line adjustment, or whatever those are called in your state.
If you get to that point where you have agreed on a number, you will need a survey, and it will not be the price you'd pay for a fractional-acre residential lot with clear lines of sight. What you will end up paying will be thousands more than what your neighbor receives. Part of that will be the cost of a buyer's agent or real estate attorney to handle the paperwork. I paid a fixed fee to a Realtor after agreeing a price with the seller; the Realtor is not going to work for their typical percentage on something like a $10,000 sale, especially if the precise piece of land up for sale is still to be determined.
The Realtor can handle the phone calls once you and the seller discuss what's for sale. The Realtor can't really negotiate what portion of the land you're willing to pay for or your neighbor is willing to sell; that takes intimate knowledge of the land and likely interpersonal give-and-take.
I would arm myself with all the public records first, then walk the property with a GPS receiver in hand to determine how much I really wanted to buy and maintain. I would look into comparable sales of that sort of acreage with similar characteristics as well as sales of 40- to 80-acre woodlots to assess how much the lot line adjustment would impact the market value, and I would be prepared to pay close to the former including all the expenses.
I couldn't come up with a script without knowing if the seller was a corporation or a longtime owner or a far-off heir. With a corporation, I would just offer far more per acre than they want for the whole 60, not knowing how else to get them to agree to a lot line adjustment (not subdivision) at all. With a human being, I would focus on preserving the integrity of the resultant parcel and being physically present to care for the land rather than clearing and developing it. I would not worry too much about my proximity being used to extract a higher price per acre; I would be trying to get the seller to offer the neighboring portion at any price. And I would try to get them to produce the first number -- "You're asking $N/acre, how much for just these X?" -- rather than suggesting 2N or 3N straight away. I told my neighbor I didn't want to start with a number because the land meant more to me than it would to anyone else, and he offered it to me for two thirds of what I was prepared to pay.
I would not have wanted to haggle by telephone. If the seller is human and within a few hours drive, I would invite them to walk the property and discuss terms of sale. And I would not hesitate to mention that you want to preserve that portion of the property as woodland, rather than whatever another buyer might want to do with it. That I did not wish to log the property next to me, as had happened to the companion parcel across the road, was why my neighbor agreed to a private sale rather than test the market.
It is certainly reasonable to approach the sellers. I would start by introducing myself and asking if they were interested in negotiating a boundary line adjustment as a way to get paid for part of their acreage while awaiting a buyer who could afford the remainder. And if they say no, give them your contact information and invite them to call back or email. One co-owner may be more eager to sell than another. Good luck.
posted by backwoods at 12:58 AM on August 11, 2022 [4 favorites]
Zoning does make a difference. Timber Preserve would have a lower market value than Residential, and 40 acre minimum would have a lower market value than 1 acre or less. Topography, access, and utilities would determine the value of land for development, while merchantable board-feet would be determinative for commercial timberland.
I would look into the public records for the property -- when it was last transferred, for how much, from and to whom. If it was sold, the scans of the vesting deed might indicate what title company was involved, and they should have information about easements, covenants, or other encumbrances on the property. If it was quitclaimed between family members and hasn't sold in however long your county has been digitizing records, there may be clouds on the title no one knows about. There may also be sentimental objections to dividing the land, or conversely to developing it.
It very much matters what condition the property is in. Timberland that was responsibly logged and replanted is much more marketable than clearcuts left to regrow dense understory and few large trees. I recently bushwhacked through a few listed properties where the cost of clearing the brush to plant a new generation of trees would rival the value of the resultant bare land.
What portion of the property you want to purchase is critical. If the property backs to yours and has access from the other side, that's different than if you're purchasing frontage. If the property has natural features like a knoll top or stream, it matters whether you're severing them from the larger acreage. (If it's on the same stream as your property and has significant head, it's worth that premium).
Woodland does not have a simple value per acre. The difference between 56 and 60 acres is much less than the difference between 1 and 5. There is also a base value for any buildable lot, so a usable 4-acre carve-out would sell for much more than one-fifteenth of a 60-acre parcel. But in this case, you might not need to go through the hassle and expense of creating a new legal parcel; this might be resolved with a lot line adjustment, or whatever those are called in your state.
If you get to that point where you have agreed on a number, you will need a survey, and it will not be the price you'd pay for a fractional-acre residential lot with clear lines of sight. What you will end up paying will be thousands more than what your neighbor receives. Part of that will be the cost of a buyer's agent or real estate attorney to handle the paperwork. I paid a fixed fee to a Realtor after agreeing a price with the seller; the Realtor is not going to work for their typical percentage on something like a $10,000 sale, especially if the precise piece of land up for sale is still to be determined.
The Realtor can handle the phone calls once you and the seller discuss what's for sale. The Realtor can't really negotiate what portion of the land you're willing to pay for or your neighbor is willing to sell; that takes intimate knowledge of the land and likely interpersonal give-and-take.
I would arm myself with all the public records first, then walk the property with a GPS receiver in hand to determine how much I really wanted to buy and maintain. I would look into comparable sales of that sort of acreage with similar characteristics as well as sales of 40- to 80-acre woodlots to assess how much the lot line adjustment would impact the market value, and I would be prepared to pay close to the former including all the expenses.
I couldn't come up with a script without knowing if the seller was a corporation or a longtime owner or a far-off heir. With a corporation, I would just offer far more per acre than they want for the whole 60, not knowing how else to get them to agree to a lot line adjustment (not subdivision) at all. With a human being, I would focus on preserving the integrity of the resultant parcel and being physically present to care for the land rather than clearing and developing it. I would not worry too much about my proximity being used to extract a higher price per acre; I would be trying to get the seller to offer the neighboring portion at any price. And I would try to get them to produce the first number -- "You're asking $N/acre, how much for just these X?" -- rather than suggesting 2N or 3N straight away. I told my neighbor I didn't want to start with a number because the land meant more to me than it would to anyone else, and he offered it to me for two thirds of what I was prepared to pay.
I would not have wanted to haggle by telephone. If the seller is human and within a few hours drive, I would invite them to walk the property and discuss terms of sale. And I would not hesitate to mention that you want to preserve that portion of the property as woodland, rather than whatever another buyer might want to do with it. That I did not wish to log the property next to me, as had happened to the companion parcel across the road, was why my neighbor agreed to a private sale rather than test the market.
It is certainly reasonable to approach the sellers. I would start by introducing myself and asking if they were interested in negotiating a boundary line adjustment as a way to get paid for part of their acreage while awaiting a buyer who could afford the remainder. And if they say no, give them your contact information and invite them to call back or email. One co-owner may be more eager to sell than another. Good luck.
posted by backwoods at 12:58 AM on August 11, 2022 [4 favorites]
This thread is closed to new comments.
So I'd start it like this "Hi I'm A Terrible Llama and I live in the COLOR house at ADDRESS. I saw the right that you're selling some land. We're interested in increasing our property boundaries. Would you be willing to sell us X acres if we'd pay to get them surveyed?"
posted by jessamyn at 8:17 AM on August 10, 2022 [2 favorites]