Sizing up and pricing down a nice little place in the country

I looked at an older farmhouse on 40 acres last week that has…issues.

It was built around 1890 in the boxy three-over-three style common in its area. As originally constructed, it had two stories, six rooms, front porch, short ceilings, no bathroom, no electricity, no closets to speak of, no insulation, wood siding and a standing-seam metal roof. The central heating system was a single flue pipe with six ports, three on each floor, for wood-burning stoves. The house sat on a stone foundation, such that the bottom of the floor joist was about eight inches from the surface of the ground.

Over the years, things had been done. Some properly; others might be described as fitting comfortably in the “jack-leg” school of home improvements.

A tight bath-sink-toilet bathroom had been stubbed out on the ground floor. The kitchen had a sink and few other necessities. The rooms were adequately sized, but would become smallish if closets were built in. Read more »

Buyers: Don’t be too nice

My wife, Melissa, is one of two lawyers in our county. She does a lot of dirt law–rural real estate. She’s also the part-time Commonwealth Attorney, who has been perfecting her prosecutorial technique on me for years.

She told me this morning that buyers can be too nice. This comes from a woman who introduced herself to me as someone who was “nice as pie” and “friendly as a pup.”

A couple from the city–highly educated folks–bought a place out here some years ago. The seller told them that a pond they liked was on the property. They had a survey, which had no physical features and was not marked on the ground. They didn’t walk the boundaries or have a surveyor map the property on a topographical map.

The pond turned out to be not on their property.

The buyers accepted the word of the seller and the confirming opinion of the real-estate agent. They didn’t want to appear to question the truthfulness or accuracy of either one. They wanted to be nice. They didn’t do their homework. The statute of limitations has run out.

The lesson here is: do the research necessary to confirm what you’ve been told and what you think you know.

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Curtis Seltzer is a land consultant who works with buyers and investors. He is author of How To Be a DIRT-SMART Buyer of Country Property at www.curtis-seltzer.com where his columns are posted. He is also a contributor at www.landthink.com.

Property buyers: Putting the “do” in due diligence

“Due diligence” is the process of careful investigation that buyers use to identify the values, issues and problems embedded in whatever they’re buying.

Since all property purchases are different and no Consumer Reports exists to simplify making choices, each buyer must dig out the story of a seller’s dirt.

This research is the responsibility of the buyer—not the buyer’s lawyer, not the agents involved, not the buyer’s lender or appraiser and not the buyer’s third cousin by marriage who was a real-estate agent 20 years ago.

The point of spending the time and money doing pre-offer research is to gather reliable information from which to propose a sensible price and terms.

I advise buyers to do most of their due diligence in advance of making an offer rather than propose a 90-day study contingency. Advance research gives the buyer a fact-based offering price, not an approximate stab in a hostile dark.

Deals have a better chance of getting done when the offering price is as hard as the buyer can make it. A study contingency amounts to a free look for the buyer, and sellers are often reluctant to tie up their properties this way. Read more »