how to I calculate how much to offer when I coulndt find a comparable houses. The house 3/1 bath and is 1060 finished and 900 sq ft unfinished 37,000 lot size. the house is pretty old and needs undating. he is asking 1.5 million. When I looked up at value its around 560K. Does the size of lot matters into calculating the price or the house itself?
I would think yes it would as you are buying the lot with the house correct? You must be getting a ton of land as the info on the house seems not that desirable. If you think the value is $560k, you would have to offer less for it to be a deal. I think you and the seller are way to far apart, I most likely would not make them an offer as it could insult them enough to not want to talk to you again when you simply tell them to give you a call when they can be a little more flexible.
Unless it's a water front lot, it doesn't matter a whole lot in my market. Land is not that expensive in the south and if you are getting financing, a bank will mainly focus on the improvements (house).
Forget about what the seller is asking for the property. Figure out what it is actually worth, then calculate your profit margin. There are a few different pricing techniques out there depending on if you want to keep the property or quickly sell it.
I agree with Anthony in that you should make your own determination of its value. The seller's perceived value or asking price is totally and completely irrelevant. If you do your homework and you do it well, and you come up with a value that's only $560,000 and he's asking 1.5 million, there's something odd going on.
You may even want to lay out some of that math to show that you're not just trying to lowball him.
Many people have unrealistic expectations of the value of their property, especially if they've been living in it for a long time or have put any of their own time and energy into improving the place. But I think that if you can calmly and coolly and methodically prove that the value is only $X, while he may reject your offer initially, so long as you maintain a decent relationship he will come back to you after it sits on the market for 6 or 12 months.
Unfortunately, that is a waiting game you may not be willing to play and you will be dealing with somebody who is far more emotional than logical about the whole situation.
thanks for all your recommendations. I spoke to the seller again and I think its definitely a fit for a developer or a builder since its quite a land. The house needs to be taken down and build houses possibly 4. Im new in learning about selling land. Any insights?
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