Help with selling lot..... - Posted by Mike(NY)

Posted by JohnBoy on May 05, 2002 at 13:51:59:

You are correct. I meant that to be the opposite. Nice save!

Reputation saved by the Star!!! :slight_smile:

Help with selling lot… - Posted by Mike(NY)

Posted by Mike(NY) on May 03, 2002 at 14:57:33:

A family friend has asked me to sit with him on talking to developer. He has double lot that has a small vacant warehouse on it. He owes 50k+ in city tax and has some liens on it.

Next to him are four single lots. Recently bought by a developer who claim they are building SFU’s. Throughout my investigations I see that they own mostly buildings.

I think they are going to build a small building on the entire piece. They bought all the other lots for 155K.

How much is vacant land worth by the square footage? Not knowing what they are planning to do it’s difficult to find our leverage. They may NEED it or could care less. It is an eyesore to them at the least. The question is how much are they willing to pay? My friend’s father (the owner)use to be pretty shrewd. He’s lost alot of confidence in his ability. We also need to take into condsideration the demolition expenses and the liens/taxes.

Any advice?

Re: Help with selling lot… - Posted by JohnBoy

Posted by JohnBoy on May 03, 2002 at 15:43:07:

The liens and taxes would be your friend’s father’s problem. The demolition of the building would be the buyers problem unless the building has been condemned and needs to be torn down. Then that would be your friend’s father’s problem also. If the building is OK and usuable then as far as I would be concerned as the seller, that would be more valuable with a building VS no building. It may be more valuable to someone else without the building, but that is their problem, not mine! :slight_smile:

As far as what the land itself is worth would depend on what land of this type is selling for in the area. Usually based on x amount per sq ft. You can check comparable sales on lots and divide their sq footage by the sales price to get a per sq ft number to go by and multiply the number of sq ft on this lot and see what it comes out to to get a total price.

But if this is a case of where a builder NEEDS this lot in a bad way, then that would drive the price up since it would be worth more for him to be able to get it.

Re: Help with selling lot… - Posted by Mike(NY)

Posted by Mike(NY) on May 03, 2002 at 20:03:11:

Thanks JB…

I’m going to try and speak to a realtor who can possibly give some other comps, with the exception of the four that were bought in a package deal next door for 155k. I’m a newbie, but that’s not a comp!

Do you think it’s exceptable to determine $ per square then DEDUCT taxes and other liens (because wouldn’t they be paid by the buyer???) I have a good feeling I’m wrong. I’m looking to give him a price that is reasonable, then take into consideration that they NEED his double lot.

Notice how I highlight NEED. I’ve been reading your posts for awhile. Doesn’t the NEED make it DIFFERENT?

Thanks again,

Re: Help with selling lot… - Posted by JohnBoy

Posted by JohnBoy on May 03, 2002 at 22:28:43:

The buyer and seller agree upon a price. A closing is set up. At the closing the buyer comes to the table with the money to close the deal. Any of the proceeds to close the deal are then used to pay off any of the seller’s underlying loans, liens, taxes, etc. that would need to be paid to get clear title to the property. Then after everything is paid for, anything left from the proceeds go to the seller.


Your friend’s father owes $10k in taxes and other liens. He agrees to sell for $30k. The buyer brings $30k to closing. The title company will take the $10k from the buyer’s $30k to pay off the $10k in taxes and liens owed. The remaining $20k will go to your friend’s father after all the smoke clears.

The SELLER is responsible for paying off any taxes, liens and loans that are owed. Those are the seller’s debts that are owed, not the buyer’s. If all the taxes, liens and loan balances exceeded the amount of what the property was worth then the seller would have to bring extra cash just to get the property sold and deliver clear title. So if all the taxes, liens and any loans owed totaled $35k where he could only get $30k for the property then the seller would need to bring $5k to cover the difference. The buyer would get the property and the seller would walk with nothing and be out $5k out of pocket since he owed more on the property than what it was worth.

As far as getting more because the buyer NEEDS that property, that will all just depend on how bad they need it and how much more they would be willing to pay to get it. Everything is negotiable and everyone has their limits. If you try to hold out for to much then you could blow the deal altogether. So it also comes down to how bad the seller wants to get rid of the property. If the seller doesn’t care whether they sold it or not then that would give the seller more leverage to hold out for more money. If the seller needs to sell then they need to be careful to where they don’t get to greedy or they face losing a buyer and getting stuck with a property they really didn’t want to hang on to any longer.

The seller will probably offer low. The buyer will offer high. And then everyone needs to come to terms somewhere in the middle. Unless one of the parties really don’t care then they can just offer x amount and say take it or leave it. That’s the best offer I’ll go and if you don’t want it for that then no deal!

If you could find out for sure what type of plans the buyer has for the property then that can give you more room to play with as far as knowing how bad they are going to want the property. Otherwise its all guessing.

Opps.JohnBoy’s reputation in danger - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on May 04, 2002 at 18:06:34:


Details, details. Watch what you say:

“The seller will probably offer low. The buyer will offer high. And then everyone needs to come to terms somewhere in the middle.”

I suspect you meant to reverse that.

Good InvestingRon Starr**********