# Possible farm house and 2 acres. Thoughts on value?



## John_Canada (Aug 17, 2013)

We are going to look at a 2 acre lot with 100 year old house and barn on it tomorrow. It is listed at $200K but I know the land itself is worth only $50K to $70K. How do you appraise the value of a hundred year old house? I know the cost to tear it down and build a new one and no one would buy for that but I figure we can live in it while building another in the back part of the lot. Also, there is no house around for about a kilometer so we will have the privacy without the land tax.

We just recently found out our current house is worth about $30K more than we thought because of the super booming market here and may be ready to do this move now instead of 2 or 3 years from now.

Thoughts on what we should go in at? There is no way in the world an old farm house is worth $130K.


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## HOTW (Jul 3, 2007)

We found the overpriced real estate market was staggering. Unfortunately it works to t he advantage of the seller. We knew that the Canadian RE market was grossly overvalued when we went looing and what is annoying is how much you pay and then getting th e property appraisal amount! You have to lookat what has been selling at what price locally, get the most recent appraisal and then barter- however if an area is in demand it might be hard to bargain with the sellers. Could you put up th elisting so others can take a look? or PM it?


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## John_Canada (Aug 17, 2013)

http://www.realtor.ca/propertyDetails.aspx?propert---=13714742&PidKey=-1397431074

The issue is this. Our home which is about 8 miles from there is the absolute hottest area with most houses selling in under a week privately! Thats the demand. The area the farm house is in is not really high demand as wind generators are still being raised in that general area. My wife's relatives own an almost identical farm bit farther out but they have the 25 acres surrounding as well and I cannot even picture their home being that much. It was built by their father a hundred years ago. The land yes, the house no.

The second issue is I KNOW this is a relisting as I considered it about 6 months ago to tear the house down but just cant remember the price. Maybe I printed it have to look thru files as I cannot find it online. The pics were taken last fall as well so that tells me something. Just not sure if we want to remain in this general area but this would be SOOOO much better than our 1/6 acre old house and we can use the barn for the business we want to open immediately instead of building a $10K garage here.


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## John_Canada (Aug 17, 2013)

Sorry the link didnt work I see....search mls.ca for MLSÂ®: 1306831


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## HOTW (Jul 3, 2007)

1307148 & 1305652 are 2 comparable properties and both have been renovated. The second seems to have business potential its a little south of the other one, not sure if it's where you might want to end up but it looks decent. The advantage of the one property is no neighbours! I can't wait to get to the Farm and have space....my neighbours drive me nuts here in town!

I think that the asking price is too high considering there are several other properties with 1 acre lots quite near that have been renovated and while they are abut $20,000 more you are getting the value of an updated home!


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## John_Canada (Aug 17, 2013)

Yeah I know those two properties and both are possible. We were not even looking in this area when we saw that because we thought it was my wife's aunt/uncles house and we absolutely love their old farm house. Virtually identical looking and built at the same time.

These are good comparables to negotiate. There is also one not far from it that is bit smaller property but completely updated including the septic (which is one of my concerns for the original property).

Wife called the agent this morning and it would have been in his interest to call us (would make $6K more with buyer's side of comm) but hey, we may just go to my buddy...I just dont need him for my sale as we can sell ourselves just like the 3 around us did.

Will see how it plays out. I know what you mean about the neighbours and that is our PRIMARY purpose to do this. We are so crammed in here and the one lady that sold next to us was just crazy obsessive.

Will let you know how it goes. My wife is really upset the guy did not at least call to say he was busy today or something.


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## HOTW (Jul 3, 2007)

I have found realtors don't seem to care about calling people back...we had a few that didn't so we moved on. My Brother called up a guy he knew from Military but he was in hospital so we were referred to another guy and when we moved out of that region looking at other places they sent us a few names to call up and use them as reference and we scored with a Realtor who was not only a Farmer but quite chummy. As far as I am concerned, call your buddy and go look at th eproperty! Serves the selling realtor right to lose on the full commision!


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## John_Canada (Aug 17, 2013)

Wow was that an adventure in narcissistic agent behavior! Wife called guy up again and said we called this morning and would have appreciated it if we could have a look. The guy said he was busy all day so I couldnt call back but he could meet us at 3:30. We are there on the dot and agent not there even though he said he was right down the street the whole time. Talked to old lady that is selling and was a super nice woman. House was in bad shape the worst being something that was hurting my breathing. Everything else was fixable with the right amount of cash and work. HOWEVER, the agent gets there and gives us more of a story why he was late, never asking us a thing and showing us the crawl space...opss...found the allergen. The place was flooded and sump pump was full of water and the furnace RIGHT there. Likely flooded at some point.

So we look thru everything, barn is in decent shape and is HUGE made with old hemlock and oak. Probably $15K worth of wood alone. And finally we get down to my original question above...."Let's say the two acres is worth at the absolutely most $120K...." Wow did this guy just go nuts. If you think you could get 2 acres for $120K show me where...(told him 4 places and some being 5 acres on lake erie for $50k! and he was having nothing of the land being worth that. So I asked him after this long conversation what makes the structures worth more than teardown value (barn is actually saveable tho....) and he said someone will certainly buy it to tear down the house and build RIGHT HERE....points to spot. Said it has no southern exposure and we went on about why you need to build a house with southern exposure...(it was beyond his comprehension). So he totally skated about the whole thing as my wife just rolled her eyes and said no way is this place worth $200K by your own admission (he said a 2 acre prop with a barn would go for $150K).

My wife wanted to go in and tell the lady inside he totally wasted a potential buyer because he was such an arrogant prick....but alas I told her what I always do, "Will it make a difference in their mind?"

So we will play wait and see. I think we would do this if the thing was $150-160K and can figure out that what seems to be mold issue or something. Found out it was for sale for a long time at $229K. Very pretty house with warped floors and a 1970s upstairs but liveable. No way worth that. Time to relax with it as it is very typical what we have found with agents so far. And if we do decide to pursue (one of the twins WANTS to live there now) then I will go to my buddy and explain....screw it.

<sorry had to append this. What gets me the most is if my wife and I sat down with this woman directly and dealt with her only and told her our plans to restore the old house for now, I think we could have did a deal somehow for what I KNOW it will sell for anyway right then and there. Her father built the house, she raised 6 kids and none of them wanted to homestead but we desperately do. But some arrogant, firebird-driving, cologne smelling, shirt open wearing bling that would blind anyone has to step between what people used to settle together on a kitchen table. My mother used to say agents were nothing but used car sales people on a new level and I can tell you, this guy would have fit in perfectly down at the worst car dealer in town. Ashame our country has to think it cant deal directly with people anymore instead we need to pay someone $16K to run people off! OK got it out!>


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## HOTW (Jul 3, 2007)

Ask your buddy if a realtor is requires to present all written offers. No matter what the price. It is up to the seller to decide what offer to accept. present an offer and statw all the issues withthe property and the costs to fix. Also inthink there might be an issue under canadian real estate law about double jeopardy or somerhing like that qith a listing realtor working with both parties since it is a conflict of interest


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## John_Canada (Aug 17, 2013)

We have thought long and hard about this... matching plus and minuses together and there is just too many minuses. We both went to bed ready to make an offer today and woke up with the same thing in our heads...let it rest for a bit.

The property is beautiful and no neighbours (which is our primary goal) but the minuses are too numerous. We can basically buy 5 to 50 acres and build our house for that much and not deal with a 100 year old house and the many problems that creates. We just have to carry two properties at once while building is something we cannot handle for a few years.

We also found out that a 20' strip of the property has a legal title issue with it and no way are we going to risk losing 1/8th and acre before the deal even closes.

Never did something feel so right and wrong at the same time.

HOTW, most agents get around that because they have a "team" of realtors. I have an email into one of my realtor friends to ask them about that tho as it is done with lawyer's just never heard of it with agents. The agent, despite what a contract or law says always represents the seller as without the sale, there is no commission.


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## Evons hubby (Oct 3, 2005)

HOTW said:


> Also inthink there might be an issue under canadian real estate law about double jeopardy or somerhing like that qith a listing realtor working with both parties since it is a conflict of interest





John_Canada said:


> The agent, despite what a contract or law says always represents the seller as without the sale, there is no commission.


Ok, first let me say I have zero knowledge of Canadian real estate law, my experience with this is based here in the USA so your milage may vary. 

I was an active full time agent here in Ky for 11 years, and this issue came up regularly.... whenever we cobrokered with another agency. Our office refused to be a "buyers" broker for a couple of reasons. First of all, the conflict of interest issue. There is no realistic way one person can act in the best interests of both buyer and seller at the same time in most cases. Secondly, as John_Canada points out... the seller is the one paying the commission in most instances. In my eleven years experience I never saw a single buyer who had a written contract with "their realtor" agreeing to pay a commission for their services. Not saying it cant happen, and maybe some folks do hire an agent and pay them out of their own pockets... but I never encountered that situation, commissions were always paid by the seller unless it was property being sold at auction with a "buyers premium" tacked on to the highest bid. (another somewhat questionable practice that has gained popularity in the past couple decades) 
Our office always worked for the seller, and collected our commission from the seller. We kinda figured it was the best way to avoid the whole conflict of interest issue. I know that I might have had trouble myself, negotiating for the lowest possible price, knowing that I was going to be cutting my own paycheck by doing so. That sorta thing just runs against human nature. That being said, I was always fair and honest with my buyers. Did I do this just because I am a nice guy? Nope, not exactly, it was just good business. After closing the majority of my sellers would likely move away to faraway places and never be seen again... but my customers? They were going to be right here and just might want to sell their property again someday. If I had treated them poorly when they bought, they most likely would not come back to me to sell. Even if they never resold, they were still going to be my neighbors, and hopefully my friends. (there are rewards in the R/E game other than commissions) I can honestly say that the majority of the folks that bought their property thru me were well pleased with the deals made and we remain friends to this day.


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## John_Canada (Aug 17, 2013)

Very good info, YH! I talked to my friend here and they said it is possible to do but they rarely do because of something that can come back on them.

Update: We looked at the other property that is closer to us and both wife and I fell in love with it. It is being severed from the original farm on the sale of the property, will have a new septic system in place on sale, has a barn that will outlast the apocalypse and can certainly run a business out of, house is in really good shape, new roof, new furnace newer windows...needs a bit more work but NO way near what the other needed. It has a bit less property 1.3 acres total but I can see becoming self-sustained off the income from the barn and the 1/2 acre empty farm land next to it should be PLENTY to grow whatever we need. There is an empty house across the street which is an unknown owned by a farmer that owns about 2000 acres around there. Status unknown.

There was an offer on the house a week ago with conditions and we since found out it will likely fall thru unless a miracle happens so we may have the only valid offer giving us some huge negotiation room. The house is empty. The agent was super pleasant. It was where he was born actually but his family later sold it. He gave us the whole history of the place and told us things to consider. Compared to that leisure suite larry guy...wow.

So we are talking to the bank and getting this house ready to sell in case. We found out even more about the value of this house that it is likely even MORE than we thought so we may actually come out a bit ahead which can help pay for the few updates it does need.

We may be the owners of our first homestead soon. Getting kind of excited and tired at the same time.


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## John_Canada (Aug 17, 2013)

More recent update. The other deal likely went thru so we are at square one. I had a friend appraise the first 2 acre place we were looking at and it is WAY WAY more than we would have offered so we are going to wait and see on that one. Search continues.


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## Evons hubby (Oct 3, 2005)

You have no idea the number of times I have watched peoples dreams crumble while insisting the asking price was way too high, wasnt worth that much, they will never get that kinda price.... only to see it sold the next day. If I learned nothing else during my years in real estate it is that value is determined by one thing and one thing only.... how much a seller is willing to accept, and how much the buyer is willing to pay, on a given day. When the two meet.... you have a sale. Up until then you have a property on the market and buyers looking, nothing more. When buyer and seller do come together and the property is sold, all bets are off once again as to its value. It may resell the next day for twice as much as it did today. I know this because I have done it several times!  My very first listing (which proved to be my very first sale) was priced (according to all the pros) about double what it should have been "worth". Within a couple months I sold it for asking price, minus the cost of a used kitchen range coz the handle on the old one kept coming off. My point here is this, if you find a property you like, and it will serve your needs, make what you think is a reasonable offer and see if the seller will take it. Playing the wait em out game will cost you the chance to buy it about 99 percent of the time.


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## John_Canada (Aug 17, 2013)

YH, i try to tell people that all the time! You hit the nail on the head. People make decisions off emotion and then justify with logic (probably more than they realize) and this certainly applies to real estate. A house I had a few years ago I bought for $165K in a really busy real estate market and suddenly the market just jumped and I had no idea it was worth $295K. Yet it took 100 showings exactly to sell it. But the woman wanted it and paid 5K under asking no problem so I can see how people waiting others out, doesnt always work. Our current neighbours house even sold for an insane amount of money so I can see this taking place.

I probably should have said, we want to see what else comes on the market over next few months as there was no way we were that emotionally attached to that property to pay that price. It would have been nice but there was just too many unknowns with it.

We have since seen a 10 acre property come up for $135K we can build our house on for $100K or we are looking at another 2 acre with renoed house for $175K, way more in line with what else is out there. Tons coming up on the market and likely more in spring.

Ummm if someone else reads this later, the bank actually recommended to us to NOT use the same agent to put an offer in but it was only a recommendation.


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## John_Canada (Aug 17, 2013)

Just an update on this. We are now running into places being gone in literally hours of them hitting the MLS. WAY too over-priced and way too competitive right now to get a deal. We are looking one last time on the weekend and a previous one that apparently has an offer in but the agent says the owner will still listen to anything reasonable. Could be a lie but will see. Very discouraged and may just leave it alone till the spring when more comes on the market and we can jump as fast as we need to or simply wait the three years, buy our property and build then.


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## Grumpy old man (Aug 6, 2013)

Look in the alternative advertising areas like criagslist ,local papers, if your willing to do some rehab thats were you will find the deals not from any agent with a commission based paycheck. Search for sale by owner in the area your looking at you may be surprised because many agents just want to sell/show homes that will sell fast and get paid . I just bought 5 acres with a stream on a paved road with services 12 miles from a nice clean small town for $14,500.00 cash . There are still deals in America .


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## John_Canada (Aug 17, 2013)

Thanks, Grumpy. We have been looking SOOOOO long that we may begin to look in the US! I just want my shop and we may end up just building one on our current property just to get going. That land you describe would be about $200K cash around here minimum without house....about $400K with small house. Just so ridiculous the prices.

We have the number of a farmer that may be interesting in selling us two acres so lets see how that goes. Problem is he tore down all the out buildings to farm the land so we would have to build shop as well there. Will see.


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