Sell the land or no?

strickland8052 · February 2014

Hey MMs! First of all, let me apologize for the massive paragraph this will be. Something is wrong with my discussion feature, and I can't create new paragraphs. Anyway, I need your advice! We live in a large city where most houses sit on tiny lots. Our house, however, has a massive lot that is twice the size of our neighboring houses. Recently, a realtor knocked on the door and offered us $20,000 for half of our lot (in our back yard). This would make the lot that our house sits on "normal" in comparison to the other houses, and he would build another house behind ours. We are going to get our real estate agent's opinion on if the $20k is a good deal or not and if selling some of our land would hurt our resale value. BUT I wanted to get your ideas on if it is even worth it. We are currently doing NOTHING with that piece of land, and it is actually a bit of a safety hazard since it is really dark back there. However, we did have ideas of possibly building an in-law suite back there someday in the very distant future. We don't have the money to do anything like that anytime soon, and we aren't even sure if this is our forever home so that is a big maybe. The money would be nice, but we are not in desperate need for it. We have no debt other than our mortgage, a 10 month emergency fund, and a decent amount in retirement for our ages. We were planning on saving $20k over the next two years for a baby fund, so it would be nice to go ahead and check that off. On the other hand, land is a very scarce resource in our neighborhood and I wonder if we may need to hold on to it...just because it is hard to come by. The good news is that land/homes in our neighborhood are rising in price, so I don't think we need to be in any rush to make a decision. I'm just really confused about this!

CuriousKiddosMama · February 2014

I wouldn't do it. I would love to have a large lot- not a normal size city lot. I think $20k is too low if you do live in a big city. We live way out on the fringe of the suburbs in a LCOL area, and our lot is worth 17k- if you live in the city it seems doubtful to me that 20k is reasonable. Plus if you have a kid, you may want that land for a play area or something.

Sisugal · February 2014

20K sounds like a low ball offer to me.
How do you feel about having neighbors that close to you.
I live in a small town (20K people) in the midwest with MCOL--- lots in the city limits run 50K an up. Lots on the outskirts of town run 20K and up.

blondie42107 · February 2014

I'm definitely not an expert but I think you'd definitely lose property value - beyond the obvious less land you would have. I would pay more for extra land. Dh and I are actually casually searching for our next house and the more land the better. It can be a smaller house - as long as there's room, we can add on!

daisy662 · February 2014

So would it be a flag lot? If so, I would not do it. Also, I don't know where you live, but where I live which is not a hcol area, small lots in nice neighborhoods go for 70-80k minimum.

hoffse · February 2014

I wouldn't do it. Piddly lots in Birmingham will almost always go for $100K+ if they're in the right neighborhoods with good proximity to downtown. Birmingham is a decent-sized city, but it's not a particularly HCOL city like our northern neighbors. These lots are almost universally less than 0.25 acres and most are in a flood plane so the insurance is ridiculous if you build. But they get snatched up.

I've recently seen a couple lots with old houses being sold as tear downs that are going for over $200K because of location. These are also in a flood plane.

Obviously I have no idea about your neighborhood, but if it's an urban area where the houses are all on top of each other, it sounds like an extremely low-ball offer to me.

Mom987 · February 2014

I'd keep the land for sure. If not, sell it for way more, like $100,000.

Xstatic3333 · February 2014

I'd keep it too. The only thing I might look into down the line is selling it as two separate lots if and when you decide to move.

maple2 · February 2014

Like everyone else, I would keep the land. As you said, land is a scarce resource, and it is something I personally value so there is no way I would sell it under the conditions you describe. I would not be thrilled about the loss of privacy, and I would be excited about the possibilities of things that could be done with the extra space--in-law home, garden, outdoor entertaining.

sillygoosegirl · February 2014

Where I live, even tiny lots near town go for $100K+. And I don't live in an expensive part of the country. Double lots are awesome. I wish I had one. I would definitely have paid more for a double lot when I was house hunting, and I think a lot of people would. Even if you aren't actively using the land, you get a lot more privacy for not having a neighbor RIGHT THERE. $20K seems way too low, especially if it would be a flag lot situation.

Can you pull records on redfin.com or something and see if this is even a remotely reasonable offer?

Sell the land or no?

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