<p>I was told today that I had a bad attitude because I wouldn’t get into a bidding war. that’s how the selling season is going in my hood. I told the broker, “When I am ready hand over $x, I don’t need anyone to tell me that I have a bad attitude.”</p>
<p>Marilyn – have you talked to realtors as well, so you know for sure you’d get more selling directly to a builder rather than marketing it through a realtor? I see houses listed here in the neighborhood we moved to as either/or (remodel or rebuild) through realtors. There are lots of tear downs here. Lots of ramblers/ranch style houses built in the 50’s are being torn down to make way for bigger houses. It’s rampant here. Unfortunately, I don’t really know much about it, though I would bet the local realtors know . . . It would seem to me, intuitively that you might want to market the property somehow, even of through tear downs.com or something similar in order to get the most exposure, best price. An individual buyer might be out there that would like to purchase the lot and choose their own builder,and would pay you a little more than a builder, you never know. But, then again, I know nothing, so best to get actual advice from elsewhere.</p>
<p>Good luck in San Diego. Beautiful place to live.</p>
<p>Marilyn, I’m not sure which part of the country you are in, but if the market has come back where you are, why not just get a good realtor and put it on the market? Who cares if it’s a builder, a flipper, a person who wants sweat equity, whatever? You just want your money. There are many cash buyers out there, and it sounds like your place won’t be financeable? If it’s just old and out of date, then banks will loan, but if there are major repairs (roof, HVAC, plumbing, major termite damage…) then a cash deal will be needed. In my area (San Diego) anything that is correctly priced (tear down or palace) is in escrow within a week, over asking, with multiple bids. I mean MULTIPLE bids. PM me for more info regarding San Diego if you wish.</p>
<p>We did have a realtor come over last fall and she said it would fetch more as a tear down and estimated what she would list at then and that there’s almost no inventory of lots in our immediate neighborhood. Of course I understand you have to take these estimates with a grain of salt but I know from my own research that she was correct about the lack of lots. We really are in a perfect location, walk to all levels of schools including the elementary school (considered the top one in town) and the very popular parochial school. We’re also an easy walk to town and the commuter train into Chicago.</p>
<p>We would have to sell “as is” because there is too much that wouldn’t pass inspection, not to mention it just isn’t the kind of house buyers here want. Although we’ve lived in it for 26 years, I can’t imagine anyone being willing to put the money in that would be needed to fix it up. It would take a complete remodel to put it on a par with new homes in the neighborhood. We also talked to a local mortgage guy and a personal loan officer who both thought a builder would make the most financial sense.</p>
<p>Of course we need as much as we can get for it, but also want to simplify the process if possible - it was our first house 26 years ago after renting in the city so we’re really not experienced. The cleaner the process, the better for us. But we don’t want to be saps!</p>
<p>I’ll have to study up on teardowns dot com but I gather there’s a commission involved if you sell through that site. I’ll read up on it.</p>
<p>Thanks, sopranomom, I’ve been on city-data so have been reading all about the hot San Diego market (not quite as bad as mstee’s area, but hot). We spent two months renting VRBO houses in early 2012 and really want to live there if only we can afford it!</p>
<p>Some people will buy tear downs and hire their own builders. </p>
<p>I think you want to get your property seen by as many potential buyers as you can.</p>
<p>I bought a place in pretty bad shape…</p>
<p>There was dog poop smell everywhere.</p>
<p>We knocked out walls. Redid the kitchen. The baths. The flooring. The heating system. A deck and more…</p>
<p>Why did we buy this place? </p>
<p>We wanted the location.</p>
<p>So don’t assume too much. There might be a buyer out there that can do
some of the work himself or just wants the location and will pay up.</p>
<p>Get your place seen by as many possible buyers as possible. Not just builders. Builders are not paying up.</p>
<p>Some people want to buy as is.</p>
<p>We did.</p>
<p>My expertise is brokering lots to developers, I have to reply your question in the next post as my butter fingers hit the “send” button on the Iphone. :)</p>
<p>Anyway, to price a lot is not easy. You may have to hire a land broker and there are not many, I believe there are less than 5000 certified in the USA.</p>
<p>To price a piece of lot, you need many factors, size, best use and zoning are the most common factors. If your lot is only to be used for single family dwelling and cannot be easily subdivided, the price buyer is willing to pay will be limited, except those really hot spots such as Palo Alto in CA.</p>
<p>From the post above, I cannot tell what are the features of your lot. In most cases, selling the house will worth more than the lot. Do not try to sell it to large builders as they will not be interested just build one house at a time, I mean Public Listed National firms like Centex or Shea.</p>
<p>In order to intelligently answer your question, you need to give lot more details than what you are describing and it will be out of the scope of this discussion. To give you advice without details is like try to sell a stock without company financial history, on that end dstark knows better than I do. </p>
<p>All in all, you should find a professional who knows your area and try to price out the lot and develop a marketing plan, if that is feasible.</p>
<p>oldfort</p>
<p>You ARE allowed a bad attitude in real estate. But some times, $x extra will bring YYYY years of pleasure in addition to enjoy a solid appreciation. Housing in NYC has been historically tight, you need to let it loose to win the trophy :)</p>
<p>A little story about NYC real estate</p>
<p>My Story</p>
<p>As a young brat, I landed in Hoboken on the top floor of a 4 story brownstone close to the Path and Steven’s Institute paying $90/mo for rent. It was a 3 bed room 1 bath apartment. I was the ONLY rent paying tenant as the entire building was vacant except the ground floor which is occupied by the building manager. To buy the whole building was only $25k. I still can remember I finished my 50 page final paper for an English class in that unheated(broken) 4th floor. Hoboken in those days was the worst place to stay in NYC Metro, rival Harlem.</p>
<p>Can’t understand the live of me, I declined a job offer from a wall street firm which I interned for a year. Bought a flashy New Car for 14K and moved suburbs to work for a high tech company which I resigned after two years. Besides, the NEW car actually broke down after less than 10K miles in middle of the highway and almost killed me. Half of the rear axle fall apart. </p>
<p>Had I used that 14K bought a building like my apartment, I would be a “6 million dollar man” today. :)</p>
<p>I don’t have answers either, but you are lucky to have a tear-down! I wish we had had one. Instead, we needed to paint, do the floors, and all sorts of other annoying things that we didn’t want to do in the house we were leaving.</p>
<p>
</p>
<p>Probably true most of the time. However, in my old neighborhood (“highly desirable location”), people buy houses for lot value, tear them down, and build new ones. People want new homes there, not an old remodeled one. Same with my Grandparents’ home in Menlo Park, CA. A family bought their little cottage and demolished it for a big home.</p>
<p>A very large Texas builder, David Weekley Homes, has a “build on your own lot” program, but they are the only one I’m aware of who does that. Most people who build on a single lot find custom builders who do that in the area.</p>
<p>Our town was notorious for teardowns in the past, so it’s as Nrdsb4 says. It’s conceivable that someone might buy the house to rehab it, but I haven’t seen that happen around here in decades. Everyone either tears down, or lives in the old house until they can afford to tear down. And our house is a pain to live in - for example, it has a flat roof that has to be shoveled in any amount of snow. People move here for the top rated schools, easy commute, and beautiful big homes. Which ours is not!</p>
<p>Some people do buy the lot themselves; we were contacted a long time ago by a woman who wants to build in our town (her brother is a realtor in the city). She finally came out to see the place a while back but wants to pay much less than we need to move.</p>
<p>Once we get a feel for what builders might pay, maybe we’ll contact a couple of local realtors. But I gather we’d have to go a certain percent higher to cover the commission. If we’re selling “as is”, are there any other additional costs that a realtor would involve vs a builder?</p>
<p>
</p>
<p>I feel similarly, remembering the restauranteur in Florence I met who tried to convince me, in 1970, to buy and bring home one of these “Cappucino” machines to open a business in America. “Questi Americani…” he sputtered, and I translate here: “These Americans, they can land a man on the moon but they can’t make a good cup of coffee. Theirs tastes like water.” I could have made a fortune and Howard Schwartz (Starbucks CEO) would have been drinking MY milkshake.</p>
<p>My realty issue in NYC is trying to gain access to study the iinventory. We’re trying to buy a townhouse, multifamily for 2, 3 or 4 units,in Upper Manhattan (including West Harlem from CUNY up to Inwood), Brooklyn (incuyding Bed-Stuy) or Western Queens (Astoria/LIC/Sunset Park). It could be any neighborhood that’s walkable to any subway that reaches Midtown Manhattan within a half hour, since our S and DIL will be tenants and they work all over Manhattan daily. H and I are ready to ditch our cars forever. </p>
<p>When I send our realtors (we have several working for us, which is the norm there) anything I notice on Streeteasy, Zillow or Trulia, they often write back: it’s off the market. I now only look at places with small histories on those websites. </p>
<p>I believe when they ALL tell me “inventory is low” but I can’t believe “Inventory is no.” What can they see that I cannot? I’d do all the research on my behalf, if only I could know what they’re looking at. As I type this, I’m going in for 10 days just to see if I can stimulate some more attention to our search.</p>
<p>p3t</p>
<p>lol, if we all have 20/20 visions into the future, we all will be multi-millionaires.</p>
<p>the agents are looking at the real time listings (MLS) and it is NOT free like zillow etc. You might be a few days behind on those free listing information sites and in a hot market, it makes a sea of difference.</p>
<p>M and N4</p>
<p>I did not say selling tear downs at land value is not possible. Of course in the Bay Area it is very possible. Nevertheless, it is NOT the same as an unimproved land. Tear downs, no matter how bad the house is, has its added values from raw land. First of all, there is a structure, approved by the city, even if you are going to tear it down, the permit you apply is vastly different from build from grounds up. Secondly, all the utilities are in place, in the lot, so to save a LOT of money to re-used those hookups. Thirdly, you don’t have to go through the planning commission or some times city councils to get entitlements.</p>
<p>What I am thinking is that lot M described can be used in other formats, such as sub-divide, build condos or commercial building and such. Those require higher level brokers than just a local realtor. Since there is not enough info, so I have to rest my case.</p>
<p>Thanks art - it’s only zoned for single family homes, one per lot, in the middle of a neighborhood. So unfortunately no other uses! I just took a call from a local builder who actually has a section on his web site for people wanting to sell their property. Four out of five builders who have responded seem interested. It would be nice to have a bidding war but I’m not holding my breath!</p>
<p>Doesn’t sound like cc’ers have much experience in selling their homes as tear downs or directly to a builder. :(</p>
<p>Marilyn, we did buy a house in our neighborhood while we built our home on another street. We sold it to a builder for a nice little profit, then rented it back from him until our house was finished.</p>
<p>We knew this builder because our kids went to the same school. We agreed on a price based on comps in the area (lots of tear downs, so pretty easy to ascertain the value). If we hadn’t known him, we would have called some of the many other builders in the neighborhood who were tearing down homes and building specs. We didn’t need to use a realtor because my DH has a broker’s license, so no commission issues.</p>
<p>You might want to try redfin.com out. I’ve found them to be useful one some properties that were very slow to update on the other typical sites (trulia, zillow, estately, etc).</p>
<p>My W is an agent, she has done a few tear-down transactions with builders.</p>
<p>Around here, the builders seem to work backwards from how expensive a house they think they can sell, and then a certain percentage of that price is allocated to the lot.</p>
<p>If they can’t get the tear-down for that amount or less, they won’t buy it because then they can’t make enough money.</p>
<p>I don’t recall what percentage they use, but I think it is around 30%.</p>
<p>NRE had pointed out the “rule of thumb” for a developer to evaluate a project. however, every builder/developer has his own way to calculate the “residual value” which is the land value. Seller will have a hard time to project what the residual value is because you do not know buyer’s plan is. So, while the cost basis calculation is a way to price out the land, it is not very accurate and it is not the only way.</p>
<p>A better way to figure out the value is still using comparable method. That is to find out selling price of similar property in one or two miles radius from the property. If the property is only single family, it should be easy enough to find some comparables in the area.</p>
<p>Marilyn- in our area tear downs are usually listed with a broker. Sometimes the house is bought by a spec builder and other times by a homeowner who wants to be in the neighborhood. I have seen some tear it down right away and other times they have lived in it while they go through the design and permit process which in our area can take over a year.
My H used to be a spec builder. He bought all his lots through brokers. He built relationships with several brokers who would often bring him a lot or teardown before it was on the MLS. With a builder the price of the lot needs to be in a range that when adding in the construction cost leaves room for the builder to make a profit on selling. It looks like the process is different in different areas of the country.
When we outgrew our original home we listed it with a broker. Our house was considered a teardown since it was small and outdated for the neighborhood. While looking for a replacement home we ended up coming to the conclusion that we loved our lot and our neighborhood and ended up tearing it down ourselves and rebuilding a house that fit our family. The people who wanted to buy our house and rebuild ended up buying the fairly new house next door and now are our neighbors.</p>