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buying/looking at a property
Not sure if i should walk away from this new property i recently looked at, thought maybe i could get some other view points on it. I was pretty excited at first. 4 acres, with a house, garage 24x24, steel shed 24x24, and the best part is it has a small cabin on the property as well!!!! she is a signal mom of 3 and just bought the house 2 years ago for 80k.
she now has it listed for 120k, and honestly i was complete fine with that because the assessed value of the home is 129K. However this place is destroyed, when walking into the house the smell of dog urine almost took my breath away. All carpet along with the plywood beneath it would have to be replaced. there where exposed wires that where stapled on the living room walls that went up to the ceiling fan light in the living room, and just a ton other problems.
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i wasn't allowed in the steel shed, or cabin because she "rents" it. Not sure why she wouldn't have gotten permission for me to view those before hand but oh well. I priced the buildings all at around 10k each, and the land at another 10k (river bottom/flood plain), and the home at around 40ish. there is also a decent tractor that comes with the property as well. Anyway i threw out a number of 88k, but was told she has to much invested into the property (she put in a wood floor in the porch, but there are already boards coming up!) she also framed up a room in the basement.
I'd pay a fair price for this property, more then its worth. I know i could easily fix the cabin up and rent it out for an extra income, and in the end run make my money back (id live in the cabin while fixing up the house thought). I don't want to be rude and explain further for why i offered the number that i did, yet I'm not ready to walk away. Just seems odd to me that someone thinks they can get a 150% return on investment on a property they bought less then 2 years ago and completely trashed. given she has the right to sell her property for any amount she wants, just wish a new a way to get her to work with me on the price.
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Unless property values are really shooting up there, I can't see how it could be worth that much more in 2 years. If she is the one that trashed it, and it was in better shape when she bought it, it would be worth LESS today, not more. The only other possibility is that she bought it way under value 2 years ago. If she's serious about selling it, she's going to have to get reasonable. On the other hand, maybe she's just 'playing the lottery', hoping someone comes along that just has to have it. Tell her you'll pay her price if you can get it inspected by a third party, and she agrees to pay for all of the repairs. That should give her a dose of reality. Although it appraises at 129K, that probably doesn't reflect the current condition. A bank would severely down-rate a house in poor condition with code violations such as funky wiring, and so should you.
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As an aside- What do you mean by 'river bottom/flood plain'? Have you looked into the history of flooding there? It seems like we have 100 year floods every other week lately. As I've gotten older, I've lost my taste for living in harm's way.
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Hey Mr Iowa been wondering of you have settled in some place yet.
A little personal experience that most likely will run in your favor. It happened to us a few months ago.
We sold a piece of property this summer for z dollars. It had to finance, the appraiser came back with his appraisal to the lending institution it was worth $10,000 less than z dollars. Reason was comps or comparable properties. So we had the choice of selling for z dollars minus $10,000 or holding on to it. Point being she might be asking for the moon sure does not mean it is worth the moon nor be able to sell it for that.
Right now with the hit appraisers have taken in the real estate market they are appraising very conservative at least here and from what I have seen across the nation.
In Idaho and I of course know nothing about Iowa nor that county. Assessed value means so little this day and age where they have went nuts over taxing and attempting to over tax. We have laws here now to limit that. Just because the assessed value is X does not make it worth X nor asking value. Anymore than a wrecked 1955 Corvette is worth going against a 1955 that has been in a museum since it was new. Both are 1955 Corvettes however..............
Good Luck
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