More Real Estate: How Do You View Land w/Non-Responsive Realtor?

[Tsuga]

We saw a property (land, residentially zoned for a single family) listed that we might actually be able to afford, in our city.*

 

We were looking for something unrelated and it popped up. It costs about 1/20th what homes surrounding it cost. Maybe even less than that.

 

It's hard to imagine why it is priced so low other than the fact that it is a corner lot on a busy street. It is hilly, so hard to develop, but so is most of the land around lakes here. It's not like you could develop lakefront property without clearing trees and a hill anywhere in the county. It feeds into a high school that is in the top non-lottery schools nationally.

 

For us, being able to buy and build in this school district for under half a million would be unimaginably lucky, and this is far below that, even if you added in a substantial cost of construction of a kit home with laying the foundation by a contractor. Developing a medium-sized eco-friendly home would raise the value by about 10 times the price of the land, four times the total cost, if not more. That is even if property prices did not rise the entire time.

 

If we can't find something really amazingly cheap around here eventually we will eventually buy something small in one of the up-and-coming areas of Seattle, but those are also quite expensive.**

 

So, yeah. It's extremely tempting to figure out whether whatever is wrong with this property, is something we can deal with.

 

Update, on what it is, in post 5. Nothing too sexy or exciting.

 

It's probably too good to be true, but there are factors that could keep the price low and the land unsold. Who knows? Google mapping it, it looks like a decent little plot that we've driven by many times in a very nice neighborhood that we are familiar with.

 

It's not like anybody else is building around there. It's all built up.

 

So, my question:

 

We contacted the selling agent, who is located in another city, about 45 minutes away. No idea why he is the realtor for that land.

 

Zero reply, though he has a great reputation online. On the one hand, this bodes well. Maybe nobody pursued it and that's why it didn't sell? On the other hand, that's odd.

 

What are the hive's thoughts? Should we pursue this through the online lister (a larger local real estate agency)? Call again? How does one buy low-priced land that nobody stands to make a ton of money off of? Do we just have to get it together and make an offer or something after an inspection? How would you arrange an inspection if they don't write or call back? Can another realtor sell it?

 

If this is land that can be developed (it is zoned for single family, improvements are in the street, adjacent to lot), it is a once-in-a-lifetime opportunity.

 

But how can we figure out what the deal is?

 

 

 

*In case you are wondering why we are looking to buy in an area that we can't really afford: Those who do not know our situation, we did not move here. We grew up here, and wealth kind of came in and is displacing people. We just grew up here, paid our own way go to state schools, got respectable jobs, or so we thought, had a rough time being fully employed during the recession, but basically stayed afloat, and now the entire flipping Bay Area is moving to our neighborhood with millions upon millions of dollars, cash, from sales of their homes to god knows who, Emiratis? Global wealth. So that is why we live here though it's hard for us to buy. I know that supposedly, we are supposed to go to some low COL state or move 3 hours out to the nearest low-COL county, but it's not like we have two grandmas within 30 minutes and jobs in Alabama to buy a cheap home. Finally, we are both divorced and if I move anywhere else it has to be where my ex-H is, because this is my home of record for the military and he can sue me to live near him except for that this is our stable home, and my partner can't move anywhere with his kids and his ex-wife has a nice job here. So to answer your question on that, no, we are not going to leave this part of the country at this time. We may have to move further out but we believe it is in our family's best interest to stay near one another and try to make this work--this place is in our school district and it's my dream to raise my kids in a stable situation and not move them all over trying to meet new friends all the time, constantly adjusting to new expectations. So if we can somehow get that, we will make it work.)

 

**How expensive are they compared to this? The cheapest lot I found in the closest thing Seattle has to a ghetto--our poorest, highest violent crime area (White Center, for those in the know, not a bad place at all but still, cheap as it gets in Seattle)--costs the same as the plot we are looking at. Same size. I would say this lot costs about 2/3 what your average foreclosure on Hilltop, Tacoma costs. It's really hard to go below Hilltop and White Center in terms of price and that's where we'd be going if we don't find a diamond in the rough here or near where we work in Seattle.

[Guest]

Taiga, I wonder if you can check the county records and find out if there has been some issue with the property in the past, or if it is high risk for mudslide/landslide.

 

Also check with the planning/zoning department to find out if there are long-term plans for infrastructure development that would affect the property. A geologist checkout might be a good idea.

 

I totally understand your wanting to stay home. Still, it's a good idea to be jumpy about something so out of the ordinary.

 

You might get a real estate agent of your own who can help you navigate this.

 

Best wishes.

[WinsomeCreek]

I don't like being discouraging, but with the many, many solvent and experienced investors in the Seattle area, if there's a lot being publicly advertised underpriced then there is probably something quite major to deal with. Now, having said that, we bought our dream house at a reasonable price because a family built and grew up in the house and told us they wanted the large property to be loved by a family. A developer was our competition. And saying that, we ended up with a huge problem at the house (a level 3 SO moving in next door).

You should aggressively contact anyone associated with the property, but look very, very closely if it seems too good to be true.

[Reefgazer]

Go to the town offices and pull the tax records for the property (you have a right to see them, and the town where we own land in upstate NY has a book sitting right on the desk where you can see tax records).  Often, these records are even online.  You will be able to locate the owner's name and address, and then just contact the owner directly.  In fact, the town will have records on easements, liens, and any other unsavory stuff about the property.  FEMA maps will give you historical flood data for the address (not sure where you are, but we're coastal and that's a major consideration around here).  Another alternative after looking over the records is to call the real estate office (not the actual realtor, since he isn't responding) and explain that you have an interest in property they have listed and the realtor hasn't called you back.

 

OTOH, if it looks too good to be true, it probably is.

[Tsuga]

Thank you!

 

I didn't think about court records! Great advice.

 

My neighbors and I agree that it is nothing short of unbelievable that a good property could be on the market for so long, but it is also extremely unusual that it's listed by a Tacoma seller. So who knows what is going on. Maybe there is a ginormous rock underneath it and you can't build without investing $200k in removing the rock. Frankly I think that's more likely than landslide risk--this is deep in the city's suburban housing developments, so not flat but certainly not out in the middle of nowhere.

 

It's not a landslide area. There are pretty houses surrounding it and below it on all sides. We have driven by there many times. There is nothing out of the ordinary noticeable on those properties. I am hoping that there is only a little bit of build able square footage, and people moving here want big houses?

 

 

 

You might get a real estate agent of your own who can help you navigate this.

 

I have thought about that. We might have to.

 

Update... okay, so I took my neighbor's advice and called tonight. I didn't get through to the original seller but did get through to another agent.

 

Mystery solved, but it still seems do-able, except. :)

 

Basically, a stream runs through several low-priced lots. You can't build on land around the stream. You have to get an exception. That costs time and money. You need cash and time. Most people have cash OR time. We have time, but could not buy cash.

 

Soooo.... they were very forthright about it and it was a very helpful discussion and I'm glad my neighbor said to call.

 

That said, I'm still tempted. I've lived on stream property before. It's easy to build a culvert. I am a patient person. My only problem is cash, lol... we have a good down payment but that's it.

[LucyStoner]

A couple of things.

 

-it's hard to get construction financing for a smaller floor plan or anything the bank thinks they couldn't move easily in the event of s foreclosure. I have had two friends in this area who have had to build a much larger home than they wanted in order to get financing. So if you will need a construction loan, think carefully about your plans for a non-large or a smaller eco-friendly house kit. Another ended up borrowing from their retirement to build because they wanted to build only a small house.

 

-there are a lot of lots for sale on hillsides here that are of dubious condition to build in. Slides must be considered carefully. What is holding up the hill? you need to pay for your own reports on the actual feasibility to build. That can't be done on the cheap.

 

Good luck. I know buying around here ain't easy.

[Tsuga]

Thank you Katie. That is good to know.

 

We could probably afford to build ourselves, bit by bit. One thing we have, is time. We are patient and we are already here. We can rent, we can figure that out. Or borrow from our retirement.

 

However, even finding land is practically impossible, mainly due to the landslide risk. Actually, that's a greater argument for building on non-permitted land in our city. At least it's safe geologically. It's slightly less safe legally, but if I understand correctly... the city would have to reimburse us if they did not give us the possibility of building. All that would take years.

 

OTOH... we can't buy or build for years at a conventional price, either. That's the thing. The prices around here, we could literally save for a lifetime, even on an above median salary for the county, and we would never, ever be able to both eat, and live in the county, and save for a house. You absolutely must have had property in the Bay Area or Microsoft stock early on or something like that to buy in this area. I mean you know how it goes.

 

So the idea of waiting two years and spending $10k on permits seems to me a tiny amount to have property. Otherwise we will be paying in 10 years of saving and $.5 million to get an even smaller, less desirable piece of land.

[Jean in Newcastle]

Have you looked at foreclosures or quick sales?  The only reason we got our house here is because it was a quick sale made to avoid a foreclosure.  We saw the price, literally grabbed our baby and threw him in the car (ok we didn't literally throw him in the car, we safely put him in his carseat ), saw the house and said we'd take it - full price.  They accepted.  Which was really good because ten minutes later there were other people trying to make offers.  It helped that we know houses.  And we had looked a lot in this area so we knew what was available.  We were also desperate to get out of White Center!  A quick sale means that usually you are buying it "as is".  We knew that there were some issues but they were ones we were willing to fix ourselves.  

[mellifera33]

My brother and sil spent a lot of time checking out what sounds like a similar property--it was a wetland property--and the final verdict was that they would have to buy the property, do a bunch of environmental and feasibility studies, and the results of those studies could add tens of thousands of dollars to their building costs, or mean building a very strangely-shaped house. They ended up moving to Gig Harbor and commuting. The last I heard, the property was still on the market. Maybe it's the same one they passed up. :p

[Tsuga]

Thank you Jean. :)

 

We don't have enough money to buy a foreclosure in King County. We sold our homes, which were very small and cheap, during the recession to avoid foreclosure / bankruptcy (before it came near that but still) and during divorce. Our savings are gone with months of un- and under-employment, graduate school, etc. My mom would help us buy something if it were a great deal.

 

Foreclosures in White Center cost about 2x what this land will cost outright. As-is, warts and all. It is a very cheap parcel of land.

 

ETA: Mellifera, that is possible. This one is not wetland property, unless the rest of a housing development is also on wetland. It is just hilly enough that it's not likely to be wetland. But it sounds very similar.

 

However, $50k in feasibility would be chump change in this area. To add on $100k in bureaucratic and legal costs would still leave this at 1/10th the price of even the most modest nearby home.

 

I am realizing this is the exact type of thing my mother would buy and make work. I am turning into my mother.

[Carol in Cal.]

Something similar happened to a relative of mine.  He ended up getting another lot instead, because he found out that there was an easement to build a railroad line right down the middle of the lot he wanted.  His realtor had not disclosed this--he found out about it more or less by accident.  It was really bizarre.

 

FYI, at least around here, sometimes if you're right on a river like that it means that you have no possibility for a largeish house because the septic is an actual closed tank with no provision for overflow, so for a 1 bedroom house with a low flow toilet and with sinks, showers, dishwasher and washing machine all hooked up to a separate gray water system you would still end up having to pay someone to pump out the septic twice a year.

[Tsuga]

mboaitneit, yes, all those are included in the $50k permit process estimates. Looking at the city's stuff, if we take their timeline, and their straightforward costs, and double that, it is two years and $20k in processing fees and deposits. (Should take about 1 year and $10k.) Add on to that about $15k in feasibility, even if we double that it's still $50k total.

 

I think this price is low due to the risk. There is no usable land on the property due to the setback. The purchaser will have to purchase, cash because no bank would loan, then pay for all the studies, again, cash, and then actually get the permit. The minimum just to get to the decision point for the city will probably be about 1/10th the minimum value of a built up property on this site.

 

Then if they say "no, no exemption", you may get reimbursed for the land, but NOT for the process. So you lose about $50k. Which would suck royally.

 

However, if you do get your permit, you have land that is easily worth five times what you spent, without even building it up; building it up, it would be worth around 10 - 15x the cost. 

 

At this point, I am just happy to know what is going on. I feel like if we walk away, it is informed. I also think that someone is going to get mightily rewarded for having the cash and time to develop that land because they are not going to let that sit. The city will eventually grant the permits, because of where it is: it's not untouched and it can't be turned into a park or added to a green belt. It's surrounded by lots. Somebody will figure it out.

 

Unfortunately we do not have that kind of cash and with a bank loan out of the question most likely (though it doesn't hurt to ask!) that would mean asking a parent to help out. It's a big risk to take with retirement funds. :P

 

At least we know.

[Carol in Cal.]

And then, might not be able to build anyway.