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Our house is on an acre of land that faces a large river. There is a road in front of our house and across the road a steep bank covered with rip rap, the rip rap goes down to the water except in one corner where there is a little patch of woods and a beach. This property is a separate lot. We do not own it. Basically, the property consists of about 12' of steeply sloped boulders (plus the little beach that is about 20 x 30 feet). The waterfront property extends in front of two adjoining empty lots next to our house.
We do not have water access. The empty wooded lots next do us do not have water access, which is why they are empty. The waterfront property is shown on a plat map as three one acre building lots. Except 98% of each acre is under water and no building is permitted on that side of the road anyway. No one can build a dock there because you must own an adjacent building with a bathroom to build a dock.
Because our property is water view but not water front, our taxes are pretty low. If we were to buy the waterfront property, our taxes would go way way up. Even if we do not combine the property, it the same party owns both, it is deemed waterfront property.
The waterfront property likely has no value to anyone except us and the whomever buys the two adjoining lots.
We would like to buy the waterfront property and hold it in the name of a corporation. That way our property will not be deemed joined, and taxes will not go up. We want to buy the entire property, because it will prevent someone who buys the adjoining lots from building a big ugly dock or boathouse
It also reduces the liklihood of the adjoining lots selling, which is a benefit as we have two acres of woods next to us, rather than a house 12 feet away from our house.
The waterfront property is available. A guy who is getting it in trade wants $85,000 for it. For tax purposes it is valued at either $500 or $5000 (not clear which). However, the guy knows it has more value than that to us, and he is considering trading a very expensive boat for the property.
So here are our real estate questions. Any ideas on how to assign a value to the property? $85,000 is too high, but we have no idea what is a rational price to offer for this property.
Any ideas on how to finance the property? If we joined it to our land, it would increase the value of our home enough we could probably get a loan for it, but then taxes would wipe us out. If we do not join it now, it could be joined by a lender if we defaulted, so they would be secured, but this is a bit complicated for a lender to grasp.
We cannot buy the property from the current owner, because we tried years ago, and he got angry when we offered a small fraction of his asking price ($286,000). He then tried to build a boat dock there and the township made him stop. He thinks we called the township on him, so he hates us (we had nothing to do with it).
He is also offering to sell us just the waterfront in front of our house for $38,000. He would then sell the remaining water front parcels to the adjoining lot owners when someone buys the adjoining lots. He would have to do a lot split to do that as the waterfront is currently one lot, despite the map showing three one acre parcels. However if we buy only the one portion of the waterfront, we have limited access, the lots next to us will likely sell and we will have a big ugly dock to look at instead of swans.
The value is what you are willing to pay. and how desirable the area is to other potential buyers. So, start a negotiation and see where it goes. Once you are willing to offer 50K ask would you pay 55? 60? etc.
A better question is to ask what you think the value of your new waterfront lot would be if you were to sell it the day after you combine the pieces, and whether that would make sense to you. Plus, if you are going to pay 38K for just the part in front of your place, how much will he be asking for each of the other pieces? If it would be only 10K each then you would have born most of the cost which might not be fair. And, does he own the lots on either side of you? That would make it a different ball game since he would probably want to recombine the remaining waterfront lots with the uphill lots at the same time.
Well, if it were me, I'd pay the $85K because it would get me what I wanted. But it's your choice. How much will you regret it if you lose the land? That's what it's worth to you.
The concern is I do not want to spend twenty years paying off 85K for something that is worth 10K.
No one can make any use of the property other than us, or the two adjoining empty lots. I suppose you could go sit on the rocks and fish, but there is no parking.
However combined with having no idea what the value is we have to figure out how to finance it. He offered to finance it for 5 years at no interest, but we cannot do $1450 a month. Even approaching someone for financing, we need to have some basis for valuation. If I tell them I want to buy a property the tax assessor values at $500 or $5000 for $85,000 they will laugh me out of the room.
There is a possibility If the lots next to us sell, we could break up the property and sell them waterfront access and get some or all of the money back. That would not be ideal, but it could be necessary. If we buy the lots as a whole for $85,000 and then find out an adjoining property owner would only ever pay $10,000 for it, then we made a terrible deal. Question is how do we even find some sort of value? The second question is how do we find someone to finance this for 20 years (or 30). This is not something you can take to B of A for a loan, it does not fit the boxes on their computer program, so they cannot do it.
What about hiring a reputable and experienced real estate appraiser and ask his/her opinion of the "market value" of the land?
I say "opinion" because any appraisal is just an opinion...however, if it is a reputable and experienced appraiser it should be a ballpark figure for market value.
It could be worth quite a bit less in market value than it is to you personally. If that is truly the case, then the seller may be looking to pick your pocket.
That is what I am concerned about. I am also concerned that if we join it to our property the taxes will double or triple. Since we already pay about 8K a year, that would be devastating to us. We are trying to get na appraiser to give us some information.
What I want to do is buy the property through a corporation That way our property does nto become waterfront and taxes do not go through the roof. If we buy it in our name, I am told the tax assessor will deem the properties joined. However we would have to find a lender who would make a loan secured by both properties with the properties joined if we default, then the lender would be well secured. Tha t is an unusual deal. It will not fit into the computer form at B of A.
The waterfront property is available. A guy who is getting it in trade wants $85,000 for it. For tax purposes it is valued at either $500 or $5000 (not clear which). However, the guy knows it has more value than that to us, and he is considering trading a very expensive boat for the property.
I don't understand why its tax-assessed value is not clear. Grosse Ile Township has their assessing records online, so it should be very easy to determine.
It sounds like he may be only interested in acquiring the property if he can strike a lucrative deal with you. If that is the case, I'd probably just back off from showing too much interest in the property. If it's unbuildable (except for a potential dock) and most of the platted property is actually under water, I would be hard pressed to attribute too much value to the property. Since the Township Assessor agrees, I think you would be best off playing hard ball in any negotiations. You need to be wiling to walk...and he might not even acquire the property, allowing you to buy it from the present owner(s).
It seems that the only value that you see in the property is the ability to prevent a dock from being constructed. I suppose that value could equate into what someone else would value it in order TO construct such a dock. And, of course, it might add value to the vacant lots, if they were to be combined. I think any appraiser would have a hard time determining value, too, so it really boils down to how much is it worth to you?
If you do happen to acquire them, though, I think you should consider simply donating them to the Grosse Ile Nature & Land Conservancy. That way, you'd be assured that your property taxes wouldn't increase (and the parcels would become tax exempt); you could claim a tax deduction for your donation (if it's valued at more than $5,000, you'd need an appraisal to substantiate the tax deductible amount--which, of course, you likely already know since you're an attorney); and the land would remain open and free from obstructive docks.
How much do you think it would cost to buy the vacant lots next door? If you're going to pay top dollar, you might be further ahead by buying the lots instead of the small riverfront parcels.
Good luck.
As a footnote, I'm not sure how accurate Wayne County's GIS mapping is in terms of parcel boundaries, but you may want to check out what is available online: http://wayne.maps.arcgis.com/apps/Vi...cf115e97a3c7c0
(You can put in your address--or parcel numbers.)
What I want to do is buy the property through a corporation That way our property does nto become waterfront and taxes do not go through the roof. If we buy it in our name, I am told the tax assessor will deem the properties joined. However we would have to find a lender who would make a loan secured by both properties with the properties joined if we default, then the lender would be well secured. Tha t is an unusual deal. It will not fit into the computer form at B of A.
A lender who is going to give a loan to a corporation with the security being property not "owned" by that corporation? Maybe I am being naive; but it sounds like that is something that would NEVER happen.
If you do happen to acquire them, though, I think you should consider simply donating them to the Grosse Ile Nature & Land Conservancy. That way, you'd be assured that your property taxes wouldn't increase (and the parcels would become tax exempt); you could claim a tax deduction for your donation (if it's valued at more than $5,000, you'd need an appraisal to substantiate the tax deductible amount--which, of course, you likely already know since you're an attorney); and the land would remain open and free from obstructive docks.
An alternative would be to make a cash contribution towards the direct purchase of the lots by GINLC. That way, you wouldn't need to pay for an appraisal as cash contributions are much easier to substantiate. (And don't consider this to be legal advice.)
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