LAST UPDATED MAY 1, 2008
Q: What is the discounted full cash purchase price?
A: Just $22,500 cash buys this property immediately. This is what I paid. I made a fantastic deal on my new residence, and for this and other reasons I honestly don't care about the fact that I will not make a profit on this. When I bought it, it was dirty in spots, it needed some minor fix-ups, and there was a lot of junk on the property. All three of these issues have been resolved. I have cleaned it up, fixed it up to make sure there can be no dispute that it is livable, and most of the junk that was lying around has been removed.
The County estimated market value is $26,000, so at a price of $22,500, you have a $3,500 discount off of that that you could use to make it nicer and/or more updated on the inside of the house, and/or to improve the grounds.
Q: This seems too cheap. Is this a scam?
A: It is not a scam, just a bargain due mostly to the following:
1. This area has always had low cost real estate.
2. This area is lightly populated.
3. This property has not had any extensive and expensive full scale room updates in the last 25-30 years. For example, it does not have a recently updated, fully modern kitchen.
Q: Is the current cash price of $22,500 the absolute minimum price right now?
A: Yes, I will not accept anything less than this right now. The price has been set so that the property should sell quickly. Since the price is so low compared with most other areas of the country and since I am in a relative hurry to sell it, I decided to not bother with trying to squeeze out a few hundred extra dollars by having a spread between the stated price and the actual price I would accept. In other words, I am selling this as if it was a used car, with a firm price on it in the want ads.
Q: Is the current cash price of $22,500 going to be reduced if the property does not sell in a certain number of months?
A: The amount I will accept will go up $1,000 to $23,500 as of July 1 if the property has not sold by then, because a realtor will have to become involved. The realtor, incidentally, thinks the property should be listed at $27,500 and sold for about $25,000. If the property does not sell by the end of September 2008, the amount I will accept will begin to come down at a slow, steady rate. The amount I will accept will come back down to $22,500 no later than July 2009. If the property does not sell by July 31, 2009, the amount I will accept will start dropping at a somewhat faster rate.
Having said all that, I would like to inform anyone who thinks that this property can be purchased for far below the County market value of $26,000 for any reason or set of reasons that he or she is not going to be able to do that. I appreciate the interest in the property, but I simply am not able to in effect throw money out the window by accepting a price far below what this property is expected to sell for, simply because it is in a rural area or simply because the overall national market is tough.
True, the rural spot this property is in makes it relatively hard to sell by definition, but I am working hard to offset and overcome that problem. And although the overall housing market is obviously in bad shape, the area where this property is never experienced rapid and wild price increases in real estate, so prices will not be coming down around here anywhere near as much as they will be coming down in many major metropolitan areas. The person who buys this property will NOT have to worry about the value of this property dropping rapidly after his or her purchase due to the national real estate slump, because that slump is going to have at the most a very small impact in the area where this property is. Buying in this area shelters the buyer from rapid, additional declines in the price of his purchased property that he or she would face in many other markets.
To sum it up, although I have already thrown in the towel on getting what the County thinks it is worth, which is $26,000, I know for a fact that those who think they might be able to buy it for less than about 77% of that amount or $20,000 are mistaken. In other words, the absolute worst case scenario for me is that I will have to sell it for about $20,000, but I will not feel I am forced to do that for very many months.
Furthermore, I already as I write this have payment plan and rent to own offers on this house, a few of which appear to be rock solid, so before I would sell the place at a massive discount, I would probably be forced to accept one of those payment plans. I say "forced to," because my objective is to make a clean break with this property by selling it outright and immediately, and not to have to be worrying about payments over several ensuing years.
Q: Is the deed free and clear?
A: Yes
Q: Is there a deed warranty available?
A: I have title insurance and the new owner will get it as well. It's probably required under Kansas law, and the title company most likely requires it if they are to close the property.
New Questions and Answers as of April 30
Q: What is the total of taxes per year?
A: The only tax is the property tax. The property tax is $380 per year, or about $1 per day.
Q: What is the assessed value of this property?
A: The assessed value, which is the best estimate possible of the market value, is $26,000. That value was determined in 2007 by an evaluation of at least half a dozen recent sales of properties similar to this one in the same part of the county that this property is in, namely, western Pawnee County. Not one but two assessments were done recently, one in 2006 and one in 2007, with the latter one confirming the accuracy of the prior one.
Also, this property is on the border between Pawnee County and Hodgeman County. A Hodgeman County realtor did his own evaluation of what the market value of this property is, and his determination was exactly in agreement with that of the County; he too concluded that the market value of this property is about $26,000.
Thursday, May 15, 2008
Why the Price is Not Too Low
Some people who have emailed have suggested that they think the price is missing a "0", so that the real price is $233,000 instead of $23,300. Or else they think the house must be unlivable, and/or the outbuildings are junk. Or else they think the whole thing is some kind of a scam. I am here to inform everyone that none of those hypothetical catches are accurate, and that this is a real opportunity to buy a big chunk of real estate for a small chunk of money.
By far the most important reason why the price is not too low is that real estate is very inexpensive in this area and always has been. In other words, this property is located in real, true bargain country. This has always been a lightly populated, rural area. It's been an overlooked, best kept secret kind of location relative to the United States as a whole.
And this area is not part of the real estate crisis, where the value of real estate is dropping because it was run up too high. The buyer of this property will not have to worry about the value of this property dropping more than a trivial amount due to the real estate crisis that is found elsewhere.
Another reason why the price is so low is that the property being sold has not had any extensive and expensive full scale room updates in the last 25-30 years. For example, it does not have a recently updated, fully modern 2008 kitchen. Rather, it has a 1980 style kitchen. Speaking hypothetically, had the inside of the house been updated recently, the selling price would be as high as $32,500, depending on what was updated and how recently it was updated. If aside from this the grounds were spruced up, the roofs of the barn and of the work shed were fixed, and new house windows were installed, the market price would creep closer and closer to $40,000.
The house did have within the last 30 years a nice new metal roof installed, new aluminum siding, new bathroom fixtures, a few new windows, and a few other relatively minor upgrades, but for the most part, on the inside the house looks and functions similar to the way it did 25-30 years ago.
So the list price of $23,300 is not missing a zero at all. It is a true bargain in a bargain location so to speak.
Another way to think of this is to note that if this same exact property were almost anywhere else, the price of it would be much higher. For example, if this property were 25 miles from Denver, the price would be 5-8 times what it is, between $115,000 and $185,000. If this property were 25 miles from Wichita, it would be about 2-4 times what it is, between $50,000 and $90,000. If this property were in Wyoming in mountain country, it would be even more than what it would be 25 miles from Denver, because there is great interest among higher income and wealthier people to live in Wyoming as opposed to Kansas.
By far the most important reason why the price is not too low is that real estate is very inexpensive in this area and always has been. In other words, this property is located in real, true bargain country. This has always been a lightly populated, rural area. It's been an overlooked, best kept secret kind of location relative to the United States as a whole.
And this area is not part of the real estate crisis, where the value of real estate is dropping because it was run up too high. The buyer of this property will not have to worry about the value of this property dropping more than a trivial amount due to the real estate crisis that is found elsewhere.
Another reason why the price is so low is that the property being sold has not had any extensive and expensive full scale room updates in the last 25-30 years. For example, it does not have a recently updated, fully modern 2008 kitchen. Rather, it has a 1980 style kitchen. Speaking hypothetically, had the inside of the house been updated recently, the selling price would be as high as $32,500, depending on what was updated and how recently it was updated. If aside from this the grounds were spruced up, the roofs of the barn and of the work shed were fixed, and new house windows were installed, the market price would creep closer and closer to $40,000.
The house did have within the last 30 years a nice new metal roof installed, new aluminum siding, new bathroom fixtures, a few new windows, and a few other relatively minor upgrades, but for the most part, on the inside the house looks and functions similar to the way it did 25-30 years ago.
So the list price of $23,300 is not missing a zero at all. It is a true bargain in a bargain location so to speak.
Another way to think of this is to note that if this same exact property were almost anywhere else, the price of it would be much higher. For example, if this property were 25 miles from Denver, the price would be 5-8 times what it is, between $115,000 and $185,000. If this property were 25 miles from Wichita, it would be about 2-4 times what it is, between $50,000 and $90,000. If this property were in Wyoming in mountain country, it would be even more than what it would be 25 miles from Denver, because there is great interest among higher income and wealthier people to live in Wyoming as opposed to Kansas.
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