Pricing water front property (for sale, real estate, broker)

[OkieTex]

My husband and I fell in love with Maine about 10 years ago and have been looking for a summer place to buy. We found the perfect spot, but ran afoul of the seller when he not only refused our initial offer, but proceeded to insult our buyers broker over the offer. How do you fairly price waterfront property? Is it by the foot of water access or by the acreage of property or what? And how in the world do you put a price tag on "historic" cabins without water, electricity, and sometimes even floors? We want to be fair to the seller(s), but don't want to get taken to the cleaners. Can you get comparables that work from one pond or lake to another? The market is way off in other parts of the country. Is Maine experiencing the same thing, or are things holding steady?

[WhoFanMe]

Wow, that's a tough one. You can even have two appraisals disagree by thousands as pricing property is an art and not a science.

It all comes down to the seller's motivation and his understanding (or lack) of the current market, along with the lending environment and appraisal headaches that we've been going through for the past year and a half. Does the seller have to sell or is he "testing the waters?" I took a client today to a FSBO and heard the dreaded, "we don't have to sell" comment, which almost certainly means he won't. Did your agent submit the comparables that he/she used to help you with your offer to the listing agent and explain how you came up with your numbers?

There's only a sale with a willing buyer and seller (and lender). If your agent is good, he/she will come up with more properties to focus on while keeping an eye on this one. Many times after weeks and months and no other serious interest, sellers will come back and ask to re-visit that "low ball" offer only to find out the buyer is happily moved in somewhere else.

[JC3]

I would think your real estate agent would have done a price comparison of other properties in the area that were sold or in the price range you are looking for. If the person's property is in the ballpark, is it possible your offer was way out of line? Still no need for the seller to be rude. I am in the "do not have to sell" category myself and to me that doesn't mean I am not open to a reasonable offer, even if lower. I told my real estate person not to bother me with any ridiculous offer that is way under the selling price. She said she has to tell me by law. But she also said, don't be upset by it, negotiating brings the "offer" close to the selling price. I am willing to sell for what the market calls for and we are not over pricing at all based on what similar houses sold for. I do realize I can't be ridiculous either and that prices have come down. But in the same token, I have no intention of giving it away either. Waterfront property will be much higher and the best thing is to find out what the going market is in that area. Then you get an idea of prices. Buyers today are trying to get what they can for a lot less and a seller who can wait knows this. Good luck on your search, if this wasn't the "one", there will be others.

[Maineac]

Some sellers simply won't give up on their "gain" in value between 1999 and 2005, even though it all evaporated 2006-2007 (and then some). Some become indignant and downright nasty when they realize how much things have backpedaled in recent years. We bought our farm in 2007 from family, thinking we were doing GREAT! It took 3 years, but now I'm fairly certain they made out like bandits and we're way behind the eight ball. But we won't sell for a long, long time, so that's life!

[WhoFanMe]

Originally Posted by JC3

I told my real estate person not to bother me with any ridiculous offer that is way under the selling price. She said she has to tell me by law.

Buyers today are trying to get what they can for a lot less and a seller who can wait knows this.

This is true, all written offers must be presented by the seller's agent to the seller.

Generally the longer the property sits on the market the less it will sell for as buyers ask "why hasn't this property sold, what's wrong with it?" This is a painful lesson that many sellers learn as they reduce their price incrementally, while other properly marketed and priced homes come on the market and sell. Months or years later, if at all, it sells for much less than it could have sold for had it been marketed and priced correctly the first time, not to mention the monthly carrying costs borne by the seller. If the property is a unique estate with no competition, that may be the exception.

[Submariner]

Keep looking

An antique historic cabin in one man's eyes might well be a code-violation ready-to-collapse shack that needs to be bull-dozed in another man's eyes.

My journey of finding the 'right' place for us was a long journey. I made five trips to Maine looking at properties, making offers, etc.

If someone wants to be offended by your offer, don't sweat it. I would just keep looking rather than submitting a second offer.

Some folks are not going to be happy, it is not your fault.

Maine is a fairly large state and it has a lot to offer.

May Divine Providence guide you.

[mommax3plus2]

the type of rustic place you are describing- if it is built in a zone that no longer allows building or within 100' of the water, it may be worth more even though it is a run down shack because of its proximity to the water or that no one else in the neighborhood can build. that being said, there would also be some serious restrictions on building bigger (30% of original, and if that has already been met, you may not be able to add on, ever) and height. also if might have to be repairs only- in other words, if you tore it down with the idea of rebuilding, you might loose your right to do so.

there is a piece not far from our house reminded me of your post. his father gave it to him, his wife hates maine. he has it for sale to appease his wife. anyone who calls on it (even at the unbelievable price he has on it) gets the run around, if they persue too hard they get mistreated until they give up.

[WhoFanMe]

Originally Posted by mommax3plus2

there is a piece not far from our house reminded me of your post. his father gave it to him, his wife hates maine. he has it for sale to appease his wife. anyone who calls on it (even at the unbelievable price he has on it) gets the run around, if they persue too hard they get mistreated until they give up.

This is not as uncommon as you'd think. There are plenty of houses on the market where the seller's motivation is questionable at best due to circumstances like you mention. What surprises me is how many real estate agents will take those listings and immediately dig into their pockets and start marketing the homes only to have the sellers pull the house off the market months later and blame the agent or the market, while houses all around them are selling.

[OkieTex]

In this situation, I think the people "have" to make a certain amount from the sale of the property and they are also very emotionally attached. It's unfortunate, because we really liked them and the property. Our broker did run comps and couldn't find anything really comparable. She also emphasized what it would cost us to bring the property up to a basic living standard [re-***** so you can't see daylight through the walls; install bathrooms; install floor; replace missing windows; build porches]. She did her job and we stand by her approach. The listing agensts couldn't come up with reasonable comps to justify the listing price. It is at an impasse.
We don't want to take advantage of any seller, but what is fair? I can understand paying really high prices for lots on the big lakes with houses that have marble in the kitchen, but aged log cabins out in the back of beyond on a small pond with very raw land attached?

[WhoFanMe]

Yes, that's a bad combination. What a seller needs and what the market bears are two different things. The seller could try to get an approval on a short sale, but that would delay the process for weeks and months with no guarantees and you'd probably find a better place in the interim and walk away from this one. This is why so few short sales are sucessful. It's difficult to do a market analysis (and an appraisal) on unique properties and it sounds like you've got a great agent who knows her stuff. You didn't say if you were financing or not, but if you are you'd also need to negotiate a second time on repairs. As your agent is probably advising you, it's time to move on.