warning to out of staters moving here... (mortgage, property taxes)

[TnHilltopper]

Originally Posted by 12buttons

I posted this in another thread..bares repeating...for your own good...read on...someone asked why some apartments for rent and houses for sale are going for more money than they are worth?

I reside in TN and here is my take...it's my opinion and hope it helps...

Because clueless chuckies are coming in from out of state looking the wrong way - instead of doing their DD on their new city, they (duh) comp the price they are coming from!! No wonder the locals just shake their heads...one doughnut short of a hole as we say and the salivating realtors laughing all the way to their banks...oh do they love the new guy - especially if they come from the bubble cities or the NE -they appear to be the most desireable and most amenable to giving up the green stuff thinking they are getting a deal cuz it's cheaper than the old place. The poor things. They will pay for their folly eventually - they always do. Everybody loves the Moderator cut: changed to "new comers" So get smart out of stater, do your homework, get ruthless.Your old zip code doesn't compute here..Apples to oranges.

Do developers purchase large tracts of land at 400-600 an acre and turn around and sell them to "not from here" folks at 5-10 grand an acre, sure they do. They also spent a good bit of money developing these large tracts of land and in America, who can fault someone for making a buck as I suspect if you had the opportunity to do it, you may as well.

Now a person does not have to be from out of state to have this happen. If someone from Nashville were to come into my area, the same thing would happen, as you say, apples and oranges.

If someone were to move into a new area and buy land that would normally go for 2000 an acre and buy it for 7000 an acre, are they getting robbed? Depends, if the person purchasing the land is happy and their land fulfills their need then is it bad because they paid more than a local for it? I think not. Land or property is worth what people are willing to pay for it, simple as that. In fact, if have ever been to an estate auction, you will know that the state of Tennessee states that in an intestate situation where there is no will and the heirs cannot come to an agreement, that a public auction sale then becomes, "market value", as its worth is determined by how much someone, anyone, is willing to pay for it.

Here is a hint, land will always go up in price in time. It may go up faster due to development than if left in its natural state, to which you are free to purchase elsewhere. You can then consider yourself all the wiser. To those from out of town who paid more or were willing to pay more, so be it, if they are happy with their purchase then good for them. For those folks who live near where land prices jump from development, then they are likely to be able to sell their property if they so desire for more than they purchased it for and if they like, can then move where land is cheaper.

I really don't see hooptiedoo here.

[daniellefort]

This land buying issue seems to come up quite often in this forum. Why does it bother anyone how much someone pays for land? Obviously some who is buying land knows what they can and cannot afford so if they find the "right piece" and spend a little more than some other person would, so be it. It's great profit for the person selling it and happieness for the person who bought it. It's not like they were forced to buy it at that price. Sure they could sit and wait to see if the price comes down (or increase) but if they really want it and wait, they could risk someone else coming along and snagging it out from under them when and if the price comes down. My husband and I bought just over 8 acres and we got a deal on it because the only access to the property (which is the driveway to the property) was full of trees and solid rock 3 feet deep across the entire width in 4 spots where nobody could drive to the top. Most people wouldn't even bother looking at the land and consider the cost of clearing the driveway being a fortune, well smart buyers like us realized it wasn't that much more to clear the driveway. It was just $1500 to have it blasted and trees paved away. A bargin in our eyes if you all could see the lot we have on top of the hill looking over the mountains. Just for comparison, the lot on top of the hill next to ours had just sold for double what we paid only because they had access to it from their driveway.

[Lucky Eddy]

Originally Posted by daniellefort

This land buying issue seems to come up quite often in this forum. Why does it bother anyone how much someone pays for land?

The only reason it would bother me is because it could, and probably would, cause your neighbor's property taxes to go up due to current market sales when they reappraise. And increased market value doesn't put money in their pockets to pay the bills, unless they sell or borrow against it.

[daniellefort]

Originally Posted by Lucky Eddy

The only reason it would bother me is because it could, and probably would, cause your neighbor's property taxes to go up due to current market sales when they reappraise. And increased market value doesn't put money in their pockets to pay the bills, unless they sell or borrow against it.

well then again, they could sell for much more than what they paid for it originally and walk away with a good profit though so i don't see how that would hurt too much. Yeah the taxes may go up but does TN have a limit on tax increase? In FL, they can't increase more than 3% each year.

[Lucky Eddy]

Originally Posted by daniellefort

well then again, they could sell for much more than what they paid for it originally and walk away with a good profit though so i don't see how that would hurt too much.

You're right, but its not always about the money, at least not for me and the people I would like for neighbors. If you had a home in an area you liked, and with maybe family history involved, and friends close by, would you like to sell and move? I know when we sold our last home where we had lived for 27 years our grown son had tears in his eyes as he walked through the woods and by the fishing/swimming pond, etc. He didn't live in the area or we would have turned it over to him. Our FL home is different. The family visits but has no memories so it doesn't matter.

[FLORIDA TO NIOTA 2010]

Originally Posted by gemkeeper

This is a problem for not only the dufus from out-of-state who pays way too much for their property.

This creates a huge trickle down - or maybe up- problem for other buyers. This is part of the housing bubble catastrophe in the first place.

You get one of these big spenders who have not done their research and the next guy comes into the neighborhood to buy and when the comps are checked -Hey! It looks like these homes are going for more than we thought.

Pretty soon you have 6 or 7 of these happy sales (for the seller and RE) and the comps really do get reset. Now, everybody moving in there has to expect to pay higher unrealistic prices.

This is especially true in the newer developments aimed at retirees and out of staters. It is counted on that they will not do any due diligence and so up the prices go.

Boy, some mentality. I really feel sorry for you.
The funny thing I would bet if you owned a lot of property and had the chance to sell for top dollar, to those "dufus" out of staters,you would be right there with the other guy.
And as time passes, if you happen to notice, nothing cost what it used to. Everything has gone up in price. Have you bought a new car lately? That too has gone way up in price. I wonder who is to blame for that??
So who is the dufus now?

[bbkaren]

I don't really see the issue; if someone comes along and is willing to pay more than the "going rate" for a piece of property without looking around and doing their homework, it's their problem, not the seller's.

Our little acre in TN was asking $16,000 which we thought was a bargain (since we paid $215K for half of that here in NJ a few years ago). After finding out that there was only have that amount of land there, plus a question on how many bedrooms of septic would be feasible, we brought the price down and closed at $9000.

Maybe we could've gotten it cheaper. Maybe other land is indeed less expensive, but we really like this lot. Every house/piece of land is different and every person has their own priorities they'll follow. People told us they wouldn't take that lot if it were given to them. But we really like the location, and the rural area it's in, so we're sticking with it.

If there weren't issues with our lot, we would've given him the full $16000 without hesitation, and been happy doing it...even though we now know he'd have taken less.

If I were selling a lot and knew someone would give me $10,000 more for it than the typical lot, would I out of "good conscience" lower my price because it's the right thing to do, because it's not "right" to get more money for my sale?

If I were selling my car and someone offered me more than the blue book value of the car, am I going to turn him down because it's really not worth that much?

I'd like to say yes, but...no.

I find it hard to believe the rest of you folks, if it really came down to that, including the OP, would do any different.

eta: sorry if this post sounds harsh or offends anybody, but I'm just trying to keep it realistic...

and eta2: I'd say the moral of this thread is, do your homework, do the legwork to see if you're paying a fair price on whatever you're buying...NOT just land. Compare prices and check references. Isn't this a rule of thumb in the book of life to begin with?

[heathdawn]

I am really enjoying all the feedback on this post. My husband, two boys and I want to move as soon as possible to East TN. We found some lovely acreage for sale by owner. We contacted the owner who lived in Michigan and had a affordable asking price, he was in town and we met at the property. Later when we returned to FL we sent him a contract for the price we discussed. He responded to us and stated after visitng the property with us (only for his second time there) he had decided to keep it and build on it. Recently I was looking for property online and saw the acreage now for sale through a realtor for double the asking price.
I agree that out of staters should do their research. Thanks to everyone for all their information.

[JMT]

Originally Posted by FLORIDA TO NIOTA 2010

Boy, some mentality. I really feel sorry for you.
The funny thing I would bet if you owned a lot of property and had the chance to sell for top dollar, to those "dufus" out of staters,you would be right there with the other guy.
And as time passes, if you happen to notice, nothing cost what it used to. Everything has gone up in price. Have you bought a new car lately? That too has gone way up in price. I wonder who is to blame for that??
So who is the dufus now?

There is absolutely no need to call gemkeeper names. And unless you're an out-of-stater who got suckered in to buying property in Tennessee at double its value, no one is calling you names, either.

To suggest that everyone would quickly sell their family farm to make a few bucks is outrageous. Maybe in go-go South Florida that's the case. But there are plenty of people around here who refuse to sell out to the big developers. Even in high-growth areas of West Knox and even Sevier County you'll find the occasional family home defiantly standing amidst rampant commercial developments.

And to all you people who say that the price you pay for your land is no one else's business, think again. If that were the case, then the price you pay wouldn't be public record, and realtors wouldn't use it to determine how much someone else's property is worth. And my property taxes wouldn't be based on YOUR land's value, which it indirectly is.

Daniellefort, my parents lived in Citrus County, Florida. Their property taxes doubled in 8 years and their homeowners insurance premiums skyrocketed even faster. They didn't do a darn thing to their house to warrant such a ridiculous increase. The ONLY reason the property taxes went up so quickly is because of the development going up all around them. And now that Florida has a law saying property taxes can go up only 3% a year, you'd better believe they're going to stick it to you some other way.

[gemkeeper]

I am sorry for the poor choice of words and was not inferring that an individual was a "dufus", but that the mentality involved in not doing any serious research on fair prices for land in an area that you might be unfamiliar with is a "not-very-smart" move.

We should all care what somebody on the next lot is paying for their property as I indicated before and JMT reiterated. What a property is "worth" and what somebody who does not understand the value of local property is and therefore pays twice as much as its "worth", this hurts everyone.

His new higher price for one acre is going to drive up the next sale, as well. The comps in the neighborhood have been reset by the one or two latest sales. The corresponding property taxes also go up as well as everyone else's in the area. That comp has been reset also.

You ask - so what? Why should anyone care what I pay for my property? Higher land prices across the board, higher taxes now for everyone across the board. Will the local wages go up to support this increase in property value (although falsely inflated)? Absolutely not. Will local people any longer be able to afford to live in their home area? Probably not.

The land has been bought at an inflated price by someone who doesn't care how much it cost or they are paying what they would have for an equivalent parcel in another state where the cost of everything, including wages, is greater. It doesn't hurt him a lick. It devastates the local community and often the local economy.

Be wary landowners. Sell your family farm if you wish or must. But, beware any who plan on buying a parcel within that old family farm. You are probably going to pay a premium price and twist the whole dynamics of the area's economy. One simple purchase can change a lot of lives.