Author Topic: Selling a piece of land....but I want to get my money back...advice needed  (Read 6616 times)

chatsc

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We bought a piece of vacant waterfront land 2 years ago, with hopes of building a cottage.  The land was a bit flawed (for our needs) but we went through with it (stupidly)....

The main flaws are that it is too cleared, so it is full sun, which is not good for us and our pale, blond kids.  It is on a private road, which is not maintained/plowed in the winter, and the waterfront isnt very good and essp not great for kids.  We tried to make it work but we couldn't.  People that visit it say it is not as horrible as we say it is, even pleasant.  It has some positive attributes but it is not for everyone.

One day, while driving home from another disastrous camping weekend at our land, we spotted a wonderful little cottage for sale.  It was exactly what we wanted to build, on a better part of the river, on a maintained road, for less than we could have built.  We jumped at it, got it for an amazing price and have not regretted it at all.  Actually, it has turned out better than I had hoped.

So, here we are with 1 house, 1 cottage, 1 piece of vacant land, 3 kids, 1 salary....and no money left over.  We don't need the money right now (we have paid off about 1/3 of it) and the profit will go into a TSFA earmarked for a new car in the next 3-4 years, when ours dies. 

We have had the land up for sale for about a year and no bites at all.  To be honest, I don't even think anyone has gone to see it.  We bought it for 53500$ +HST = 60400.  We had it listed at 69999 and just lowered it to 64900.  (We will not have to charge HST). 

I know in my head that we should lower the price a bit more and just get rid of it, but I cant bring myself to lose more money on this stupid piece of land.  Our real estate agent says that losing money is not the end of the world, because you can claim it against your taxes.  And I know that people on this forum have lost a lot more money.  I think I am reluctant because it admitting defeat.  It means we made a mistake. 

There are others for sale for about the same price.  The guy we bought from severed his land into 5 lots, and they are all for sale between 60000 to 70000.  But none of them are moving.  Actually, not much is moving in that area, but that is another story...

So, what should we do?  lower price and sell and invest money for a few years?  Keep our price and wait for it to sell......


Left

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Is it paid off? I mean if you aren't paying anything on it, you can wait to see if someone buys it and in the meantime if it is close to home, maybe use land to farm/garden on?

If it isn't paid off, it might be better to sell it cheaper and take the loss

can't tell where/how big it is, but could rent the land out? to other people to farm or camp on? but I'm just throwing out ideas since I havent done this before either

chatsc

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only 1/3rd paid off, the rest is on a line of credit.  costs us about 140$/month for interest and taxes. 

I dont think it would really be great to rent to campers.  No hydro, only a small outhouse, no dock in the water, etc. 

.22guy

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You don't want to lower the price because it will mean admitting you made a mistake, but I think it's pretty clear you made one.  It's not easy to admit, I know.

My advice is do what it takes to sell it and move on with your life.  If you lose a few bucks, consider it a life lesson.  Good luck.

Another Reader

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Price it to sell and move on.  The market for these properties is clearly limited, as the others like it never sold.  What's the point of listing it if it is not going to sell?

tooqk4u22

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It was exactly what we wanted to build, on a better part of the river, on a maintained road, for less than we could have built. 

We have had the land up for sale for about a year and no bites at all.  To be honest, I don't even think anyone has gone to see it.  We bought it for 53500$ +HST = 60400.  We had it listed at 69999 and just lowered it to 64900.  (We will not have to charge HST). 

I know in my head that we should lower the price a bit more and just get rid of it.....

Our real estate agent says that losing money is not the end of the world......

There are others for sale for about the same price.  The guy we bought from severed his land into 5 lots, and they are all for sale between 60000 to 70000.  But none of them are moving.  Actually, not much is moving in that area, but that is another story...

All of the above comments are related and the main issue.  The market is the market, and cares nothing about what you paid for it. 

On one hand you were able to buy a far superior piece of land with a cottage on it for less than you would have been able to do with your land....so why would someone else want to buy a piece of land (that appears to be overpriced) and then build a cottage (comparable to yours) at a higher price so they will have a purchased and built something that cost way above market value AND it is on an inferior lot/location.

Generally speaking if the tides aren't rising (i.e. house appreciation) then land is relatively worthless.

tomsang

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What are you doing to market it?  I think a full force marketing campaign would pay huge dividends.  You mentioned that your family/friends thought it was pleasant.  Do they all know that it is for sale and for how much?  Have you put up signs, craigslist adds, have you made it sound amazing for those that want a full sun piece of land?  Price, is usually an easy thing to drop, but if you haven't properly listed it, then dropping the price is just throwing money down the drain.  I assume that it is listed in the Mustachian Marketplace if you are actively marketing the property:)

I had a piece of land in Arizona for sale with "the local great" realtor for about a decade with no bites.  We ended up, firing him, cranking up the price and advertising on all the free sites.  Craigslist, local papers, etc. We sold it within a month for $150,000 more than we were initially selling it for and $30,000 less than our new price.  We were fortunate, as we dumped it in 2007 otherwise we would still have the lovely property.  So with real estate and the economy improving, I would be hesitant to lower the price unless it is clear that you are overpriced based on the other lots for sale.  Is your lot worse than the other lots being sold?  Sometimes, you got to take a loss, but don't assume that because you don't like a sunny lot that someone else won't want it either.  It could be a selling point for them!

Good luck with your property!

daverobev

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Do you have a link to the land? Might be people interested...

chatsc

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Haha, after I said it was disastrous! 

Maybe I will put it in the market place.  It is a nice piece of land on a lovely river, just not for us.

Norman Johnson

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We had some land just like that too, only more of it. (It's sooooo great, except, except, except...) We held on to it for three years planning to build and even getting some guys out to see about clearing a yard site. In the end, we bit off more than we could chew and didn't do anything with it. Finally, we put it on the market, thinking we would never sell it, never get our money back. We sold it to the first guy to make an offer. I know he lowballed us, but we didn't care. It felt sooooo good to not have to think about it anymore!

Just get rid of it; you made a mistake, learned a good lesson (like exactly what you wanted, and therefore bought a better place!), and now it's time to sell it. You can claim your loss on your taxes like your agent said. (I bet you weren't told if you sell and make money, you have to claime capitol gains on half the profit!) It's not even something you need to hire an accountant for.

Just get rid of it and don't look back!!! Good money after bad and all that...

arebelspy

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It doesn't matter what you paid for it.  It matters what it's worth now.

I know in my head that we should lower the price a bit more and just get rid of it, but I cant bring myself to lose more money on this stupid piece of land.

Sunk Cost.

I think I am reluctant because it admitting defeat.  It means we made a mistake. 

"A man should never be ashamed to own he has been in the wrong, which is but saying, in other words, that he is wiser today than he was yesterday." -Alexander Pope
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with two kids.
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lhamo

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Wacky idea #368:  Are there any organic farms in the area that might be interested in more space?  Given that it has full sunlight and water access, maybe you could find one that is interested in leasing or a lease-to-own option.  I mention it because I know that in the area I am from (western Washington state) good arable land comes at a premium.  Even if it is rocky, a growing organic business might find it worthwhile to amend the soil and/or put in raised beds to expand their famrable acreage.

But personally, I'd probably cut my losses and sell it.  Sounds like your budget is stretched and some money back in pocket would be better than none.

jamccain

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You're worried about losing money on a property that currently eats $140 a month and has 1/3 of your capital tied up...you're losing money by the day on this thing right now.

tryan

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You're loosing money every day in property taxes and opportunity costs ... price it at the low end of the other lots and let this thing go.

totoro

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you may not be able to claim the loss on the sale for your taxes.  i gather you are in canada?  you need to demonstrate that you had a reasonable expectation of profit to claim the loss.

i own a piece of land outright that i really should sell - i might lose on it right now and i'm not willing to do this so i can relate.

chatsc

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you may not be able to claim the loss on the sale for your taxes.  i gather you are in canada?  you need to demonstrate that you had a reasonable expectation of profit to claim the loss.

i own a piece of land outright that i really should sell - i might lose on it right now and i'm not willing to do this so i can relate.

You are right.  I did some research on CRA website and I think i was a bit mislead by our real estate agent.  You can claim it against capital gains, but not just plain writing it off, like she implied (or I understood). 

My husb wants to keep it at the price it is at (we just lowered it 5K in early spring) until fall and then decide what to do. 

Oh vacant land, what a pain in the butt you are....

this is def a life lesson for me....


totoro

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Yes, but it happens and there are much more expensive onces out there :) 

calmloki

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Oh yeah. Don't be feeling like the lone ranger.  We were in a rush and loaned a relatively small amount on a little postage stamp of a coast property.  Borrower never made a payment.  We blustered and he said " feel free to spend the money on a lawyer to foreclose.  Or pay me and I'll sign a deed in lieu of foreclosure".  Really wanted to foreclose on him, but it would have been substantially more expensive than paying the SOB for not paying his loan as agreed.  So great - gritted my teeth and rewarded him for non-performance.  We now own a fenced property that is zoned for storage lot use, has water and power, but is too small for a septic system. 

I've read that people are wired to hate a $1 loss more than they love to win $1.

We win enough that we can afford to let that place sit until we can sell and pretend we won.  Delusional?  Yes, but they are our delusions and we embrace them.

tryan

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Calmloki

There are pressurized filtered septic systems which can be dropped into the 10 foot cube.  Maintenance on them is high (changing filters and running a compressor 24-7) but it could make the lot buildable.