very odd thing

[Aerides]

It's not the pain of moving that would discourage me, but shopping right now. If you look in where your desired next home would be, prepare for sticker shock, and/or low availability. Your ideal next home is likely not available, or far more than you expect. So then what?

You agree to some premium price, and prepare to sell, and get ready to move. A month passes, you close, and now you're ready... Guess what? That next home is now another 10% more, and the only ones available are the smaller lots with no view. So you figure you'll rent for a few months, except you have to pay a year of renting, and now move twice. And while you wait, the prices go up another 10-20%.

That's why I wouldn't sell without a plan right now. And in lieu of that I'd say, we're not moving for the near future, but if we ever do, I'll let you have first dibs.

That said, I've often thought I might buy the house next door to us if the stars aligned. We're two homes on a corner, and they back onto us. But I wouldn't rent it or want to live in it, I would just hold onto it for investment and to avoid noisy neighbors moving in.

 

[tulak]

...


The first post says "he was kind of eager to buy my house"...when the OP said no the neighbor then added, but it was for dear old Mom and Dad.


You're actually assuming it's for dear old Mom and Dad, well if that's true there should be several close neighbors he could ask instead of pestering this one.

I’m not assuming anything. It doesn’t matter what the neighbor uses the house for. As long as the neighbor is willing to pay, who cares what he uses it for?

And to touch on a point made in another post, in this market selling would be contingent on buying another house. This should be as close to zero inconvenience for OP if he decides to sell, because after all, he doesn’t need to.

 

[marko]

Similar for us.
After our next door neighbor moved out and converted her large house to 'very low income' housing (and the circus that ensued), I made her an offer: I'd assume all and any mortgages and give her $700K cash over and above.

She flatly refused, implying that I was trying to throw out 'those good people' and keep the neighborhood 'nice'. (well, yeah, that was the point!)

We moved. (actually, we closed on our old house a year ago today)

 

[MRG]

OP there's a real shortage of listings right now if you choose to sell you should look in your area to see if there are any listings you're even interested in. Right now I see several FB posts weekly asking if anyone wants to sell their house to before they list it.

 

[FIREd_2015]

Maybe not quite in the same league but Facebook CEO Mark Zuckerberg bought his four neighbors out in Palo Alto. Apparently there was a hold out and the reports are that he paid $14.5 million for a house that was valued at $3.2 million.

https://www.trulia.com/blog/mark-zuckerberg-buys-neighbors-houses/#

 

[ivinsfan]

Maybe not quite in the same league but Facebook CEO Mark Zuckerberg bought his four neighbors out in Palo Alto. Apparently there was a hold out and the reports are that he paid $14.5 million for a house that was valued at $3.2 million.

https://www.trulia.com/blog/mark-zuckerberg-buys-neighbors-houses/#

I would have charge him 20 or maybe even 40...

 

[semtex]

OP there's a real shortage of listings right now if you choose to sell you should look in your area to see if there are any listings you're even interested in. Right now I see several FB posts weekly asking if anyone wants to sell their house to before they list it.

My area has many listings,but very inflated prices. Someone bot the house in the beginning of the year @675k and puts it on sale for 200k more!

 

[Amethyst]

When we had rental properties, tenants would sometimes ask if we would be interested in selling the house to them. "Make us an offer" generally produced stammering. People don't even think that far, sometimes. They just think, "Gee, I like this place" and next thing out of their mouth is, "Would you sell?"

So, think of a number that would Make You Move, and have at him! Worse case is, you will call his bluff.

 

[pb4uski]

....My net gain is 935K. ...

$935k is before capital gains taxes. Presumably $500k would be excluded if it is your principal residence but your tax bill would still be $60k at a minimum and that's federal only.

If you're interest in moving, you might be better to have him buy your replacement house and then do a 1031 exchange as that would defer the tax bill (I think... check wi your tax advisor).

You could agree to a "price", then you go shopping for your replacement house and he buys it and then you trade (plus or minus boot to the extent the replacement house is less or more than your agreed price).

It might even be in your same neighborhood or someplace that you have been pining for. It could be a win-win since he wants his parents close.

 

[ncbill]

I missed one thing. after we said no. he explained that he was buying for his parents, both early 80s.
that made me seriously think about it.

Can he drop one of those prefab "auxiliary dwelling units" in his backyard?

 

[pb4uski]

Some friends of ours did something like that. They built small 2-bedroom 1-bath house on their daughter's large lot.... uses daughter's water and sewer, not sure about electric. It doesn't have a range but does have a large toaster oven and cooktop.

 

[jazz4cash]

I missed one thing. after we said no. he explained that he was buying for his parents, both early 80s.

that made me seriously think about it.

It was an obvious omission but that’s your prerogative. I’m sure you have your reasons, but it don’t see how his need should cause you to reconsider.

It makes me wonder why the neighbor wouldn’t be looking for a house where they could all live together.

 

[pb4uski]

... It makes me wonder why the neighbor wouldn’t be looking for a house where they could all live together.

I think just about any spouse could answer that for you.

 

[CardsFan]

I think just about any spouse could answer that for you.

+1

But not just spouse. Would anyone who could afford to casually buy a $800k+ house really want their parents living with them? Just saying.

 

[tulak]

+1



But not just spouse. Would anyone who could afford to casually buy a $800k+ house really want their parents living with them? Just saying.

Could also be the parent’s money and not all parents want to live with their kids either.

 

[jollystomper]

Hopefully the neighbor is not "connected" and does not end up "making an offer you can't refuse"...

 

[ivinsfan]

+1

But not just spouse. Would anyone who could afford to casually buy a $800k+ house really want their parents living with them? Just saying.

Well it's easier to say it's for my parents, then to say I want for myself or I think the neighborhood is going to explode in value and I want it for an investment property.

 

[rk911]

My neighbor came over and offered to buy our house. I told him that we had no plan to move. He said he would like to pay some premium above the current market price.
I heard some rumor that my neighbor made some significant money last year.
My house market value is about 850K. the fee (realtor/gov/insurance) is around 55k. To have a slight better house in my neighborhood, in this hot market, it needs at least 10% premium, 85K. so the total is 990K.
Is this reasonable? The 990K could give him a shock. This 55K fee eats lot of meat. My net gain is 935K. Below this, I doubt we could have a better house.
We are neighbors about ten years. We get along well. Maybe I should just say no, but he was kind of eager to have my house.

if you don't want to sell then say so, definitively. anything else just strings the neighbor along.

 

[kgtest]

I think that the fact that your neighbor finds your house so appealing is a good indication you have a great house and should not move.

I always joked that you know when you have something someone wants, when they are willing to knock on your door to get it from you.

Jehovah witnesses, equity hounds, pest control experts come to mind.

Good to know you have something other people want, but in the end its about what you want. You get one life, make it the best life!

 

[ivinsfan]

I always joked that you know when you have something someone wants, when they are willing to knock on your door to get it from you.

Jehovah witnesses, equity hounds, pest control experts come to mind.

Good to know you have something other people want, but in the end its about what you want. You get one life, make it the best life!

Those 3 you mentioned all want your money...

 

[latexman]

Those 3 you mentioned all want your money...

It seems EVERYBODY wants your money.

 

[ivinsfan]

It seems EVERYBODY wants your money.

I don't know about my money but I'll take your money..

 

[NC 57]

I know of two instances where a spouse decided she wanted a particular house in a neighborhood. In both instances the husband approached the owners and paid through the nose to buy the house. In the first instance the husband paid twice the then current market value and then spent $300,000 on renovations. In the second instance the purchase price was the price the owner paid for a replacement home plus $200,000 cash which the owner used to buy a rental property. Neither seller wanted to sell so they made sure they got paid for the inconvenience.

I would look at this as a pure business transaction. Assuming I liked my current home/location, and didn't really want to move, I would determine what would make the move worthwhile to me (i.e. pay me for the time and aggravation a move would entail plus fully cover the cost of my replacement property. Once I determined my willing to vacate price, I'd ask the buyer to give me an offer. If the offer was insufficient, I would tell the buyer he didn't meet my price. If the buyer asked me wham my number is, I'd tell him to make another offer and this time it needs to be his final offer because he will either be successful or I will end the negotiation as I really don't want to move. This tactic should elicit his best offer. When the offer came in close to my number I would then decide if I wanted to take it or wanted more. If I wanted more and was really willing to settle, I'd counter with a price.

In this negotiation you are in the power position. The buyer wants the property and can afford to pay a certain number for the property which you don't know. You own the property he wants and you have your number to sell which the buyer doesn't know. Plus you don't have to sell. Your leverage is the ownership, the knowledge of the price at which you are willing to sell, and the fact you don't have to sell. Never reveal your price in a negotiation until you are ready to execute the transaction.

In any negotiation it is critical to remain objective and unemotional. You owe the potential buyer nothing except living up to the terms of the contract should you sign one. The fact the potential buyer is your neighbor, or the reason he wants to buy your property, is irrelevant. The day you close, the buyer can do whatever he wishes with the property regardless of what he has told you.

Your job is to make the most you can on the transaction. After all, you will endure the aggravation and stress associate with moving, finding a new house, negotiating a new house sale, moving and acclimating to a new neighborhood and possibly renovation costs. You also bear the risk of discovering you don't like the new house and location as much as you like your existing house.

In this market I wouldn't sell my house if my neighbor (or anyone else offered me 2-3 times its market value. At this point in my life I have better things to do than giving up 6 months of my life to find a new house, negotiate a deal, move, and make the new property meet my needs. At 10 times the current market value I would give the proposition serious consideration. After all everyone has a price.

 

[shafer9]

Seems silly. I assume you r happy where you are. If you’re going to get 1.5 mill, sure, move. Otherwise, moving sucks. Not worth it unless it’s a stupidly high profit.

 

[frances]

I'm with some of the other posters here.
Unless your house is a one story I don't buy the "it's for my parents" thing for one second. Most parents in their 80's are looking to downsize, get out of a place with stairs, and most of the time get into a retirement-type community.
Don't let them try to affect you with a soft-pitch about parents, and unless you want a headache finding another place and moving in this real estate market tell them flatly no.