I believe that the seller screwed up the selling process and the agreed price is probably $150k to $250k below market.
We have a few days to back out and if not need to negotiate based upon what we found in the inspection report. That won’t give use tons off leeway as it is in pretty good shape.
If a real property is unique, it is really hard to value it using the usual tools. The value is then in the eyes of the buyer. One example- our property backs to a public park in an unusual way… there are no such comps in the nearby market, so that gives pause to bank and county appraisers. It looks like you hit what you think is fair price, and the property sounds like something you can enjoy. Good work. 
How long was the home on the market?
At least a year being sold with
Good question. How can you figure out the land value separate from the house?
I will look into this.
Same suburb/exurb. We currently live in an “in-town” area where houses are near each other and are more modest, though every house sale because a tear-down these days. Hot neighborhood. But, we can walk to a town center though often we drive or bike. New location is at the end of a street with lots of houses. New ones are big and go for $2 MM or $2.2 MM, without water view. We are currently on 5/8 acre, but the new lot is 1.8 acre at the end of a cul-de-sac surrounded by conservation or agricultrally zoned land. It is 1.4 miles to a town center – drive or bike.
Neither of us is planning to retire. $150K of the renovation is to convert the garage into a studio with big painting walls and a wall of glass facing the river.
For the studio portion can you take some kind of tax deduction as a business expense? Not sure what is even allowed these days with the new tax code.
If the house was on the market for at least a year, it’s hard to imagine that the seller underpriced it and sold it well below “market value”. Even though the housing market is inefficient compared to other markets, I don’t think it is that inefficient.
It might be fun to build a house or do major renovations later in life, when more financial cushion and perhaps less concerns about resale than in younger / budget minded days. It’s not something that DH and I want to do (we intend to stay in our town but not certain). However I do see the general appeal for other situations.
Are there similar recently sold lots that were vacant or where the buyers tore down the existing house to build a completely new one?
People have more time to spend on construction, too, planning and supervising. If you are looking for things to do in retirement, it will keep you busy for a coupe of years.
I think we can deduct. We did so in the past and I don’t think that has changed. The big painting walls will hep as ShawWife has a museum show with some really large pieces. Not clear who will buy them (maybe companies for their lobbies). Her other work sells to collectors and individuals. She met today with a museum director (other museum) who had purchased an earlier piece for the collection who was incredibly excited by the new work.
The house was on the market for over a year with a 10 acre farm as one property. Limited number of buyers for both. Not a good test of whether the price of the house separately is at market or not. Then they overpriced using an unknown RE agent, took it off the market. Then put back on the market with big price cut. But, they didn’t stage well.
@ucbalumnus, there isn’t anything like it in this town, anyway. The river runs right next to the house. You could never build where the house is. There is conservation land in all directions. But, it is on a street with lots of houses and is 1.4 miles from a town center.
@shawbridge where we live, our evaluation done periodically has the value of our land, and the value of the house. This is a matter of public record and should be available in your tax assessors office or town hall (or wherever these records are kept). Check there.
This was important data fo us to have for insurance purposes. If our house burned down or whatever, it would not have affected the value of the land…only the house was insured.
Definitely check your county tax records! Our county splits out the values of land and improvements (they are taxed at different rate per $ of valuation).
Same. And all are available online.
Around here, insurance companies commonly estimate the rebuild cost of the house based on local costs per square foot (taking into account characteristics of the house that can affect rebuild costs) and use that as the basis for writing house insurance. Due to Proposition 13, assessed values in California are not reliable for guessing market value of the property, or the breakdown between land and improvements.
Of course, the rebuild cost of a house is the cost to put a new house on the land, which may not be the same as the market value that a used house adds to the land.
Thanks. I will take a look.
What, no retirement questions/comments these days?
Just figured I’d bump this up and see if there’s any retirement news in late 2019…
Well, the stock market performance must be getting folks closer to their retirement goals.
@1214mom , IRS has increased 2020 401(k) and catch-up contributions by $500 each.
@SilverGrass - yep, and I’m all set to auto max.
@doschicos, my fear is I’m going to retire, THEN the market will drop. Really, I’m invested pretty conservatively, but it is something to worry about.
But I’m leaning more towards calling it each day.