Property purchase advice

[Full Throttle]

I have a 160 acre place under contract in cotton county OK. It’s on the jefferson county line, where land is typically more expensive. Further west into cotton county, is mostly ag land and the prices start going down considerably. I’m Paying $1968 which seems fair. Bordering Place just to the south on the red river sold recently for $2100. The appraisal came back at $1500. So it’s $75k more that I would be paying than appraised value.

Lender said no problem, we will lend you the money since I’m putting 40% down. Realtor said appraisers are hit or miss and basically that I should ignore it.

I just don’t know that I feel comfortable paying that much over the appraised value, even though it seems fair for the property. Owner bought the place 13 years ago for $1330. He’s not budging on price, basically saying take it or leave it. Had a lot of other interest in property supposedly. Any insight would be appreciated.


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[Antlers86]

If you like it then buy it. If you don't then find another piece. It's worth whatever your willing to pay. Appraiser is just basing off recently sold properties around the one your looking at. I didn't pay attention to the appraised value of my place. I wanted it and felt like it was worth every penny.

[BrianL]

It is a hard decision but advantage is land will normally overcome you paying too much for a given piece of property. I would look at the comps and see how new, and how close they are to this property. Are others listed for less? Banker doesn't care what you pay as long as loan is within guidelines of of his loan policy based off appraisal.

[friscopaint]

I will pay more if it's what I want. Depending on person and situation it may be worth considerably higher than appraised value to a particular individual. If you like it and are ok with the overall cost then go for it. Price per acre is all over the place by me, I value mine more because of trees but hay guys value theirs more for no trees....

[Codie]

an appraisal is 1 persons opinion put onto a piece of paper. Buy it if there are other comps that make sense for the property.

[AgHntr10]

The appraiser for my last land purchase literally had a picture of an old hot tub on the property and labeled it as water well. I don’t put much stock in em.

[Full Throttle]

Property purchase advice

I guess my concern is that if I want to sell in 5 years, I don’t want to be in a situation where I can’t get it to appraise for me as a seller. I’m coming to the table with 40% down. That’s probably a small % if buyers that would do that but I don’t know. I get $1-200 off, but $500 acre?


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[AgHntr10]

I guess my concern is that if I want to sell in 5 years, I don’t want to be in a situation where I can’t get it to appraise for me as a seller. I’m coming to the table with 40% down. That’s probably a small % if buyers that would do that but I don’t know. I get $1-200 off, but $500 acre?


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You could try to hire another appraiser and see where it comes in.

[RR 314]

I guess my concern is that if I want to sell in 5 years, I don’t want to be in a situation where I can’t get it to appraise for me as a seller. I’m coming to the table with 40% down. That’s probably a small % if buyers that would do that but I don’t know. I get $1-200 off, but $500 acre?


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A lot of transactions are 100% down. I can appreciate your concern for resale, but are you seriously considering selling in as few as 5 years? If so, and depending on your option period, get another appraisal if you like. That is a fairly significant discrepancy for unimproved land. It may be accurate or "comps" may actually not be "comps".

[RiverRat1]

I guess my concern is that if I want to sell in 5 years, I don’t want to be in a situation where I can’t get it to appraise for me as a seller. I’m coming to the table with 40% down. That’s probably a small % if buyers that would do that but I don’t know. I get $1-200 off, but $500 acre?


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You could try to hire another appraiser and see where it comes in.

Use your realtor and very calmly have him go back to the seller and say you need another appraisal.

You can act like you're having issues getting the loan since the first appraisal was so low.

Maybe after the second one you can work something out with the seller. Even if he just comes down $100 an acre you score better.

Your realtor not have advice what your options are?

[BURTONboy]

Obviously if you're looking to flip the property in short order, you should probably reconsider the purchase. But if you're looking to grow the place and hang with it for awhile, then I wouldn't let that price bother you. Land will continue to go up, and anything you do to grow the property will increase the value of it, so it will be worth more the day you sell unless you literally do nothing with it from day 1. I'm sure you did your homework on what it's worth before getting to this point, so if your findings say it's worth more, then go with that. That appraiser is simply basing their price off properties within x amount of miles that sold in the last 6 months. It's a crap shoot what they'll come back with.

[Full Throttle]

Property purchase advice

Use your realtor and very calmly have him go back to the seller and say you need another appraisal.



You can act like you're having issues getting the loan since the first appraisal was so low.



Maybe after the second one you can work something out with the seller. Even if he just comes down $100 an acre you score better.



Your realtor not have advice what your options are?

Realtor thinks appraisal is ridiculously low. Bordering property to the south is nearly 300 acres and sold for $2100. I really do not have time for a second appraisal as this is a 1031 exchange and time is running out. I’ve been under contract for about four weeks and just now getting the appraisal back.

I really feel like it’s a fair price for the property. Just wasn’t sure if it was really bad to have a place appraise for way less than what you purchase for.

I don’t think I would be selling in five years. But you never know, life changes sometimes and would like to have the option to be in a good position to sell if and when that time comes.


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[Killer]

Offer $1600 and tell him that is based off the appraisal. He can either counter or tell you no.

How bad do you want it or do you want to make a good deal? This is called horse trading 101. You have to be willing to walk as the buyer or not get it to do this. If you got to have it pay his price.

[Killer]

If you think it is fair you answered your question

[Killer]

I missed the under contract part..
LOL