How much will a home investor offer for our House?

Question

My wife and I own our home and have a small second mortgage,(15,000).

We want to sell the house and move closer to work.
But the house is over 100 years old and is in need of work.

The current fair market value is about 70,000.

We have been recently getting a number of letters of interest on the property from investors (Homevestors is one).

The catch is the house is almost completely alone on the city block, with only one other house on the other end of the block.

The urban area where we live is seeing a large amount of revitalization,Including major develpoments only a few blocks away.

The city owns most of the property surrounding our lot, meaning we could be forced out later.

However we feel that the property,not the house itself, could be very valuable to redevelopment.

What kind of offer could we expect?What would you do?

Any help is appreciated.

Answer 1

If your want to sell, then consider their offer. You might want to get an appraisal to make sure they are going to make a fair offer. You could hold on to iT, waiting to see if something big is in the works, however, if you really want to move and someone is ready to buy I'd have them make an offer. Get it in writing and have your attorney involved in either drawing up a contract, or examining any contract the buyer may provide. DO NOT SIGN ANYTHING without your attorney reviewing same. As far as the redevelopment part, well that's a crap shoot. Maybe they will, maybe they won't. It's up to you what you do.

Answer 2

Being in the business I see investors as opportunists.
True value is dictated in real estate by previous sales within an area. Not what currently is for sale but what has sold.
Value then is determined by comparables of your property to the ones that have already sold.
Here's how I look at it. When unsure especially with dollars and cents consult a professional. Have two or three real estate agents come in and give a market analysis or cma. Now they will try to "get the listing" but at this point you are not sure yet and by obtaining as much professional info as possible you lower the risk of either selling too low or marketing your property too high. Hope this helps.

Answer 3

In other words - the structure has little or no value. Investors are looking at the value of the land (to bulldoze the house and build a new home on it).

So what is the land worth? How desirable is the neighborhood (schools, shopping, access to roads, crime, etc). This is what sets the price of the land. Is it large enough to sub-divide and build two houses? What are the zoning restrictions (if any)? These are the questions you need to answer as well as looking for comparable sales in your area.

Answer 4

Most home buyers will simply try to determine what fair market value is by looking at similar homes in the area and they have sold for.

Then they will weigh in factors such as how much work the home needs, and how bad they really want the home. Also they may ask their realtor to see how much bidding is going on for your home. Some people may just want a place so much they pay whatever they feel they can afford to pay.

Answer 5

An investor would be willing to pay what he or she thinks it is worth to them, regardless if it is to keep the house, or use the land in a redevelopment.

If you think the city is going to buy it, approach them and see what there land use plans are in the area. They generally will pay a fair market value.

Remember this, if someone is going to buy it with financing, it will need to appraise above the purchase amount.

My experience would be to contact the city. I think it can be any easy process to go through. Either way, I think you should get market value.

Answer 6

You need to go down to the city planners office. See what is planned for the surrounding land. They may be planning a shopping mall, and you are sitting on a little gold mine. Something triggered all of those letters and I am willing to bet that some sort of building was recently approved in the area.

You can even call, they are usually very friendly.