When you start mailing them out, you will mostly get any of three sorts of
responses. They'll either ignore your letter completely, accept your
terms, or inform you that the property is worth much more than whatever
you said you'd give, which you may treat as an offer to negotiate.
So are we taking advantage of someone here? Not at
all.
Let's take a moment to talk about the concept of what land
is worth.
Nobody knows.
That is, there is the profession of appraising real estate and while that
may be a noble and scientific profession, when they assign a price to a
particular parcel, that does not mean that they will give the owner that
much money for the land in question, only that similar sales in the area
(if any) have suggested what the price might be.
In our exercise here, you are putting yourself in the position of a much
more authoritative appraiser because you're backing up your appraisal with
cash.
Cash has a lot of appeal to Arlene. Even though her land has value,
if she wants to sell it, she needs either to list it with a real estate
agent or make the effort to sell it herself.
The majority of real estate agents prefer spending their time promoting
larger, improved properties, which offer them several times the commission
for the same or less effort. In a not-particularly-stellar market,
Arlene's property could wait years for a buyer.
If she has the wherewithal to advertise it herself, she'll need either
computer savvy or money, both would be best, and a certain amount of time
to devote to the effort.
If you send a letter such as described to a dozen people in this
economy, at the very least one of them is going through some sort of
personal crisis and would much prefer to have some cash than a piece of
land that sits unwanted and unloved, perhaps in another state. I
will all but guarantee you that you will be doing something to help out
another person in a very real way.
I once bought a piece of land from a dear old woman who just wanted the
money to help her grand-daughter with college tuition. She told me
that the bus driver she'd talked to on her trip to the closing said, "I'll
bet your land's worth more than he's giving and she said, 'I'll take that
bet, because I've owned it for thirty years and no-one's ever offered to
give me anything for it.'"
There is no limit as to how low your offer can be, but it should be
within reason, or it's likely to be rejected out of hand. The
landowner only has to log on to the internet to compare your offer with
what brokers are selling land for, so you can't be senselessly low, but
since you're offering cash right now, most people will be willing to sell
for significantly less to have a deal right now that doesn't
include paying any commissions.
You can determine what is within reason to your own mind by simply
perusing similar property on the your state's Multi-list sites. Read
forty want-ads and visit five or six of the properties and you'll have
about as good an idea of what that sort of land is worth as anyone else.
There's something else nice to know when you're thinking about how much to
offer, many times the landowner's deed will specifically state how much he
or she paid for the property. Knowing how much they stand to make
can help you in making your decision of how much you want to pay.
You can find a copy of the deed at the County Recorder's Office. If
that doesn't state the sale price, you may find an old mortgage on record
that would give you some idea of the old price. Also, in some
jurisdictions, revenue stamps are affixed to deeds in proportion to the
sale price.
When you find a buyer who agrees to your price, you need to take charge of
closing the transaction. You don't need an attorney here, just find a title company
in the county seat. They'll
examine the title for you, distribute the costs and close the sale for
you.
Good luck.
