How To Sell Your House as a Teardown?

[Marketwatcher]

I'm delighted. My house is now technically a teardown. I bought the lowest priced house (older 50s ranch style) in my very desirable neighborhood back in 2003.

Since then, developers have been paying $300,000+ for houses like mine on half-acre lots, tearing them down, and building $1,000,000 homes.

This makes me very happy because a) I never bothered renovating any part of my house, expecting something like this would happen and b) now I don't have to bother "staging" it for sale. In fact, the less I do to it, the more desirable it will be to a prospective developer.

I plan on selling my property later in 2016. I don't see why I need a broker. What's the best way to sell this as a teardown to potential developers and skip the brokers?

I have been tracking activity through Zillow so I have a pretty good idea of what I could get, but I'm definitely going to get an appraisal and lawyer.

Thoughts?

 

[SJ1_]

What's the best way to sell this as a teardown to potential developers and skip the brokers? ...


Thoughts?

Call them up and tell them what you have. They always have their signs
on the properties they are working on. Good luck!

 

[Ronstar]

I agree with the appraisal and lawyer. Then I would just put up a "for sale by owner" sign in front of your place when you're ready to sell. This should work fairly quickly if there are still developers in your area doing teardowns. Also a newspaper ad or other advertising website.

It may help to boost your knowledge of the teardown business so that you won't be bamboozled by slick developers that may make you an offer.

1. Get a list of similar sales of teardown properties.
2. Visit local building and zoning offices to get background info for rebuilding on teardown sites, and yours specifically.
3. Review your title/ survey/ building codes to see if there are potential hurdles in rebuilding on your site.

The more knowledge the better. Good luck!

 

[38Chevy454]

Selling as-is would of course be one of the first things to make sure any buyer knows. I think just contact the developers, as SJ1 suggested. You can sell using a title company to process paperwork, or just hire real estate attorney for a few hours to review the paperwork to cover your interests. I think just title company is enough, you are only really covering to get your cash out and leave.

 

[txtig]

You might consider marketing to private buyers who are intending to build their dream house, rather than to a developer. Especially if you have a highly desirable lot. You may be able to spark a bidding war depending on many other tear downs are also available at the time.


Sent from my iPad using Early Retirement Forum

 

[ArkTinkerer]

Had to sell a house when a relative moved to assisted living. Ad was placed in the paper and a sign put out front. House was shown on certain specified days/times. Everyone that contacted was given the same instructions--Check for $5000 that would be cashed if their offer was accepted. State the amount that they were willing to pay ($5000 counted toward the offer). Terms were closing must happen within 60 days. Envelopes would be opened on xx/xx/xx day. Had 5 bidders and took the top one.

 

[eta2020]

I am also in tear down house. It sits on 5900 sqft lot and I regularly get mail from builders offering me 500k plus . That is close to 100 buck per square foot of a lot. I expect to get to that by 2020 when we retire.

This is western suburbs of Boston town where most of the houses sell for 1-2 Million.

BTW I paid 240k in 1997 so this is not great earnings.....

 

[FUEGO]

I am also in tear down house. It sits on 5900 sqft lot and I regularly get mail from builders offering me 500k plus . That is close to 100 buck per square foot of a lot. I expect to get to that by 2020 when we retire.

Wow, that's a higher per sf than my house which sits on a 1/3 acre lot. The one across the street just went on the market for $130k ($84/sf) with a 0.4 acre lot. It's tempting as a rental.

 

[photoguy]

I plan on selling my property later in 2016. I don't see why I need a broker. What's the best way to sell this as a teardown to potential developers and skip the brokers?

Is your house basically something out of hoarders? has a fatal flaw that requires a 100k of repairs? or is it just old and outdated?

I'm asking because when I sold my house in San Jose last year, I noticed significant competition between developers and regular home buyers. In multiple bid situations, the developer would have to outbid many motivated buyers so you may not want to write off using a listing agent.

I was looking at starter homes (2-3 bedroom, <1400 sq ft, 600-800k) and in this range people were definitely willing to bid on outdated homes (but not homes that required extensive repair or were totally trashed).

Obviously YMMV and bay area market is not like many others, so my experience might not be relevant.

I have been tracking activity through Zillow so I have a pretty good idea of what I could get, but I'm definitely going to get an appraisal and lawyer.

Thoughts?

If you really are a marketwatcher, I think you should skip the appraiser and follow home sales close enough that you can estimate the price yourself. This means tracking every comparable listing in a close radius for a couple months as well as seeing the interiors and perhaps even talking with agents to see how many bids are coming in, etc.

Do you know how many months of inventory you have in your area?

 

[MooreBonds]

Most larger counties these days have real estate listings on-line that you can search. If you know the address, you can find out exactly what a property sold for and to whom (and you can contact those companies to see if they would be interested in your lot). Also, the real estate tax records will also have that property's official square footage/dimensions so you can compare with your property.

But just the simple sq ft is not everything - see how their lots compare with yours: are there creeks in the back or some other undesirable? Is it a walk-out (walk-out lots are more desirable)? Is it a decent shaped lot, or some oddball shape that would be hard to fit a good house layout on?

Another important factor - bring out that survey report you got when you bought your house (you did get one, right?) and verify there aren't any easements in your property. My property is 1 acre, and a whopping 390' deep - but a sewer easement cuts through the property almost in half in the 390' dimension. So it somewhat limits where a future new-build house or other property improvement could be located.

There is a chance you could also market your house to a prospective homebuyer and not just write it off as a tear-down....but then you would most likely have to offer a commission to at least a buyer's agent, as well as getting your house ready and going through the 'get it ready for a showing even though it hasn't been updated in X years' hassle.

IMO, odds are, if your house is as old and outdated as you say it is, you'd probably not get that much more by selling it to another homeowner and would have a lot less hassle and much shorter timeline to simply sell it as a tear-down, by-owner, to a developer or individual looking for a lot.

 

[Marketwatcher]

Is your house basically something out of hoarders? has a fatal flaw that requires a 100k of repairs? or is it just old and outdated?

Definitely not something out of hoarders! Definitely old and outdated. A developer bought a perfectly nice house next to me and tore it down and rebuilt. I heard one of the construction workers ask, "Why are we tearing this down? It's a perfectly good house." It's just that large intown lots are hard to find and there are some outdated houses around (like mine) that are easy pickings. People want three or four car garages, pools, larger square footage and less yard.

The inventory is turning over pretty fast here, and I've been using Zillow to keep track of what's being sold and redeveloped.

I should have a better handle on the market this spring.

Thanks, everyone, for your suggestions!

 

[Marketwatcher]

Most larger counties these days have real estate listings on-line that you can search. If you know the address, you can find out exactly what a property sold for and to whom (and you can contact those companies to see if they would be interested in your lot). Also, the real estate tax records will also have that property's official square footage/dimensions so you can compare with your property.

But just the simple sq ft is not everything - see how their lots compare with yours: are there creeks in the back or some other undesirable? Is it a walk-out (walk-out lots are more desirable)? Is it a decent shaped lot, or some oddball shape that would be hard to fit a good house layout on?

Another important factor - bring out that survey report you got when you bought your house (you did get one, right?) and verify there aren't any easements in your property. My property is 1 acre, and a whopping 390' deep - but a sewer easement cuts through the property almost in half in the 390' dimension. So it somewhat limits where a future new-build house or other property improvement could be located.

Yes, I have the survey from when I bought it. No strange easements. Most of the lots around here have hills or creeks. The developer next door bought the house because he loved the ditch running through front yard! (He's new, so I don't think he's seen it in a torrential downpour like I have!). All of the lots around here have "issues" (slopes, creeks, etc.) but people seem to like the character it gives them. The builders work with the topographical features for the most part.

 

[ExFlyBoy5]

I'm delighted. My house is now technically a teardown. I bought the lowest priced house (older 50s ranch style) in my very desirable neighborhood back in 2003.

Since then, developers have been paying $300,000+ for houses like mine on half-acre lots, tearing them down, and building $1,000,000 homes.

This makes me very happy because a) I never bothered renovating any part of my house, expecting something like this would happen and b) now I don't have to bother "staging" it for sale. In fact, the less I do to it, the more desirable it will be to a prospective developer.

I plan on selling my property later in 2016. I don't see why I need a broker. What's the best way to sell this as a teardown to potential developers and skip the brokers?

I have been tracking activity through Zillow so I have a pretty good idea of what I could get, but I'm definitely going to get an appraisal and lawyer.

Thoughts?

I see you are in Georgia. Any chance you're in the East Cobb area? These developers are scooping up our larger lots with older houses as fast as they can. The appetite for the ugly McMansion is absolutely insatiable here.

Sent from my mobile device so please excuse grammatical errors.

 

[tryan]

The 2 times I was approached for a tear-down land sale was for a commercial developer. Mine is 2 properties from a major city intersection. They want it for set-back or parking.

It's nice when THEY approach YOU ... the offer was above market. Neither closed as the corp board killed the expansion. My only contact was a commercial realtor - aka cheerleader - who kept telling all of us "it's a done deal".... until it wasn't.

FYI ,Zillow in my experiance is a tad high in both rent and value estimates. Pay for a pro to estimate the value.

 

[Clone]

If there is truly high demand, then it should be possible to conduct an auction through a lawyer. I know of farm land that has been sold like that. The lawyer fees are much less than a realtor, and they handle the paperwork. But the key is that you have enough buyers willing to bid.

 

[yakers]

$20M+tear downs on the West Side of LA:

(hope this link works)

A $35-million tear-down: L.A.&apos;s unreal estate has plenty of buyers - LA Times

 

[jblmfl]

We own a 3BR/2BA SFH (built 1960) inside the 495 beltway which surrounds DC. There have been a few tear downs with McMansion rebuilds which are beautiful. Several owners have expanded their homes with large additions.
We do not want to invest money in the house.
Does anyone know if there are brokers with buyers interested in tear downs? A lot of what we've read seems to suggest that developers are more inclined to buy a house like ours ($525,000 last sale for upgraded house) and sell the rebuild for over a million.

Is this just talk or does anyone really know of a property which was sold to tear down and sellers made an acceptable profit?

 

[kcowan]

I sold my brother's house as a tear-down. The realtors said it would be worth $529k. So I listed for $529k but invited showings on Saturday and bids on Tuesday. The highest bidder got it for $555k. Used a local realtor.

The in-fill new house sold for $1.2 mil.

 

[FUEGO]

Is this just talk or does anyone really know of a property which was sold to tear down and sellers made an acceptable profit?

Here in Raleigh it's pretty common in a very limited geographic area. $300-400k tear downs bought by builders. They'll throw up a new mini McMansion on the small lot and sell it for $800k-$1MM. How much profit is in there? Can't be more than $100-200k if they manage the construction costs carefully. Could be a loss if they aren't careful.

 

[NW-Bound]

$20M+tear downs on the West Side of LA:

(hope this link works)

A $35-million tear-down: L.A.&apos;s unreal estate has plenty of buyers - LA Times

I watched the video. The realtor/developer shows the site where he is going to build 6 mansions going for $100M each. The RE tax on each is $1.25M/year. It's impressive.

Buffett or Bill Gates can easily afford something like this which is small change to them, but they do not want to be in Beverly Hills to be among the glamorous people. I would not either.