I'm preparing to make an offer on some land with a residence in the hill country. I've owned 2 homes, but both on 1/3rd acre or less, so I have no experience buying land.

The place I'm planning on making an offer on is a little over 70 acres. It has been listed for over a year, but recently added to the MLS. The seller originally listed the property for ~$9 million in late 2020, raised the price several times to as high as $15 million, and is now asking $10 million. With these large price swings, what would you offer? Obviously, I'd like to pay as little as possible, but I don't want to offend the seller so that they don't respond. I understand this is a very subjective question, but hoping to get some feedback from people who have bought or sold land that has sat for a while with multiple price changes.

I'd pay for professional help if I was going to spend $10 million. But since this is a discussion forum I'd contact the listing agent, tell them you don't have a buyers agent, ask them how motivated the seller is, throw out a few low numbers...see what kind of moans and groans they do and go from there.

Here come the real estate agents...

Not my area of expertise but do you know if there were any changes that came along with that significant price change? Like perhaps the higher price was for X acreage but the lower was excluding part of it?

I have a buyer's agent, which was recommended by a friend local to the area where the property is. My agent is a residential realtor though. When I asked her what to offer, she suggested I offer something not much below asking price. Of course, the more I pay, the more she gets paid.

When I asked a friend local to the area who has bought a fair amount of property in the area (same person who recommended current agent), he told me to offer much lower than what my realtor said. When I told him my agent's suggestion, he said she's a residential realtor, not a land broker, so she doesn't know the market for this type property.

I haven't signed anything with the current agent, but she did arrange 9 showings over a weekend for us, so I am compelled to see her make money on my transaction. 7 of the 9 were residential with less than 5 acres, so I thought a residential realtor was the way to go.

SoTheySay said:

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Not my area of expertise but do you know if there were any changes that came along with that significant price change? Like perhaps the higher price was for X acreage but the lower was excluding part of it?

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The original $9 million price was for the exact property they are marketing now at $10 million. Somewhere in the middle, it seems the seller had an option on a neighboring ~60 acres which drove the price up to $13 million then after several price raises, $15 million. The last change was revising the acreage back to the original listing and dropping the price from $15 million to $10 million.

As far as improvements since the original listing, the seller added a 2nd gated entrance and ~2,500 of asphalt drive to tie the new gated entrance into the previously existing road. That's the only improvement that I'm aware of.

No way I would spend anywhere close to that amount of money using a realtor that isn't experience with this kind of deal.

I would find an agent who lives in the country within 10-15 miles and has many years experience.

Check out Lands of Texas. There are similar properties listed for much less than $10MM.

I've watched that site for a few years and that's where I first saw the subject property in early '21.

I appreciate the advice, but I'm not really looking for help picking out a property. I'm looking for help in how low is too low of an offer to make on a rural property that's been listed for 20 months.

The listing agent is a land broker, but he is not my agent. I'm guessing he has some good advice on offer parameters, as would most experienced land brokers, but I don't have one of those. I have a residential realtor who has a decent amount of time and effort invested in finding me a property and I'm not going to leave her high and dry.

Must be very close to a city. Land in Bandera Co are appraising in the $5k / acre range. $10MM should get you a hell of a lot more than 70 acres.

Maybe the residence on it is spectacular.

Can you share any more details on the property? House size, bedrooms? Does land have water source? Amazing views or average? It's really hard to say what we would offer if we don't know enough about the property to see if the high list price is justified...

OP is spreading crumbs and asking us to figure out the recipe. Offer half and see what happens.

I'd hire Jamie from Red Pear and pay him 1% for his services

He helped me buy a little over 200 acres a couple of years ago and he is awesome

This has to be it

https://www.landsoftexas.com/property/Roger-Hanks-Parkway-Dripping-Springs-Texas-78620/12653971/

So my opinion, after looking at lands of Texas is that there are a few tracts of similar size in the general area that are asking $100k per acre or more and they don't have the awesome water

So you are at $7.5MM or so for land. In my opinion, this price derives from what a developer would pay to buy a similar tract and turn it into a subdivision.

Spit balling, Take $7.5MM and add $1MM for the awesome water and we are at $8.5MM

That house, 7800SF, would cost you say $1.5MM to build at $200 PSF, but there are all kinds of other improvements like pool, barn, roads, fence, etc

Let's say that is where they got the $10MM.

Assuming you love this place, I'd figure out my max price I was willing to pay, I personally would offer $9MM and be prepared to go to say $9.5MM and I bet they take it

Have big balls and realize that there are not very many folks walking around to buy that kind of house

Congrats OP, I always enjoy your O&G posts.

Finally found the house

30.196460656640678, -98.12019191852225

Stan Crowch said:

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Here come the real estate agents...

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$10MM to be surrounded by a neighborhood and high school.

Place is gorgeous but easy to see why it hasn't sold. Good luck!

Beautiful property.

Just going off listing price and time on market, it were me, I'd have no issue offering 7 mil.

Ultimately it depends on sellers motivation level. More expensive the property, typically the less buyers to come along. It's obviously at least somewhat overpriced or it wouldn't still be for sale.

But keep in mind, just because you might buy something at 30% below asking doesn't automatically make it a good deal. Maybe it's only worth 60% of asking.

redaszag99 said:

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I'd hire Jamie from Red Pear and pay him 1% for his services

He helped me buy a little over 200 acres a couple of years ago and he is awesome

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TLDR: I have no input on pricing, but I do have my two cents on the process...

THIS....or see if your realtor is willing to partner with a land broker as a consultant, or at least an agent that has experience selling ranches/land...even better if they have experience in the county in which you are looking.

I WOULD NOT depend on anything the listing agent says or does. Do your own DD. All property should be treated as an investment and money is made on the buy...slacking at the purchase could hurt in the long run.

Also take into account any ag exemptions, mineral rights, all the research that goes with those (don't rely solely on the title policy) etc etc. Need to make sure the sale is done properly so you don't shoot yourself in the foot when it comes to carving out the areas for your homestead (if you want) v ag exempt. If you have kids, consider doing a trust/nested partnership right at the get-go for inheritance/protection purposes.

It seems like you could write your realtor a check to make them whole for their time spent so far. $5k check made out to them personally would probably go a long way and remove any hard feelings, but increase it if you think their time is worth more. I'd then hire an attorney that specializes in land deals in that area to help put together the deal. Mineral rights, water rights, all sorts of things that you might need to think about with a purchase that large, I wouldn't want the realtor you are currently using represent you on this. That seems like a big big mistake.

I have 900 acres in south Texas I'd take $9M for if you are interested. LOL

seriously, like others have said, ask around and find a good realtor in the area that knows that region very well to see what the real value is.

redaszag99 said:

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Have big balls and realize that there are not very many folks walking around to buy that kind of house

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And know that it cuts both ways. The higher the value (and the more specialized the outbuildings), the more illiquid it will be to ever sell if needed (just like you're seeing with current time on market). If things ever turned against you, you aren't going to be able to extract your capital back out in any quick manner without a severe haircut.

OP better be worth a lot more than $10 M right now to offer on that property.

ETA: Disregard comment about getting Realtor. I missed the post about it. Change it to 'get a farm and ranch realtor'. My apologies for missing that.

I have a little bit of experience with this so I am hoping this doesn't come off as dicky, because that is not the intent. We have looked for working cattle/Horse ranches for a while, we live on a working ranch, and we have bought and sold in the past. I also spent a fair bit of time with farm and ranch sales as a Realtor. So what....right?

What I have seen over the past few years is that a 10M dollar ranch, while expensive, is not out of reach for a lot of people. These have bought and sold over the past few years many times a year. So...why hasn't that one?

I have also had experience, both with clients and my own family selling acreages like this. Price point does not matter. The fact of the matter is that most sellers think their stuff is worth a lot more than it really is and the Realtor has no solid control over changing their mind in many cases aside from killing the deal, which most won't because that's a good commission. A lot of sellers get this idea that "My neighbors 3 acre piece sold for 100k an acre, so my 75 acre piece must be the same and the Realtor is a dummy." It doesn't work like that.

I also know that people who are generally in the position to buy such a piece of property do not typically make poor financial decisions very often.

With all of that above in mind....what this sometimes means, and I feel is the case here, is that you have an overzealous seller and a lot of buyers that just aren't going to pay that much for a property that most likely isn't going to appraise anywhere close to that anyway.

With all that said, you need a Realtor in the worst possible way right now. This is what they do and where they earn their keep. No one without experience is going to buy a piece of property like that without the aid of an experienced group of people on their side. It's too risky. I highly recommend you find a Realtor for this purpose and let them help you make a good decision.

Just keep one thing in mind....there is a good and probably simple reason that property has sat on the market in Hays county for as long as it has and it has absolutely nothing to do with "not being able to find a buyer that can afford it.". We can see examples of this all over western counties.

The only person that can really help with a fair offer is an experienced Realtor. The only person that can use or dispose of that information is you...and maybe the bank.

Good luck, it's a nice piece and I hope it all works out how you want it to.

Quote:

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When I asked her what to offer, she suggested I offer something not much below asking price. Of course, the more I pay, the more she gets paid.

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ETA: In regard to this comment, this is like any other sales job. Just like roofing, in real estate, yes, the more you pay, the more I make, however, if I encourage you to make an offer thats selfish, then you will lose the deal and I will get nothing, including referrals. My job as a Realtor when I did it was purely to make sure you made a competitive offer that WON you the property. If you're low, you lose. If you're high, you lose. It's in my interest as a salesman to get it right.

To answer your question, Try offering the 9M they had originally asked for. You can always come up. Or maybe 8.5 and see if they counter before going up to 9. Offering to close a deal that size this year could be huge to the seller as everyone is afraid capital gains taxes could go way up next year. And as previously stated, get a great real estate attorney involved when making a purchase that size to write the purchase contract and review the title commitment for starters.

A family member purchased a home/ acreage that size in Nevada that they thought was their dream home. Turned out keeping up with the maintenance/ mowing/ upkeep was just too much. Even though money was no object and they did little of the work themselves, they were overwhelmed with all the upkeep and contractors. They sold it for a profit and then bought back their old home.

He has a realtor. Just not one that specializes in rural property. He originally selected a residential realtor since that was what he was looking for but came across this place.

An I agree there is a reason it has not sold. I suspect crazy seller but who knows

OK. I missed/forgot that. It has been a few days since i read it and pondered whether I should or shouldnt respond. Thanks for the info!

I work for Texas Ranch Sales and we specialize in land, and ranches. We are located in Boerne and we sell a lot and have a few listing in the hill country. We do have comps that will support the offer you decide to make or to help come up with a great offer to get a conversation started!

Feel free to reach out to me anytime. Would love to help, we been in business selling ranches for over 20 years

Becca Vizza | Associate at Texas Ranch Sales | rvizza@texasranchsalesllc.com | 210-995-0129 & 432-201-9546

There is a big difference in brokerage of single family residential homes and farm and ranch land because the latter is a lot more complicated and there is a lot more room for a lot more to go wrong if you don't know what you're doing. I've helped several folks on this board buy rural properties under my other company, Red Pear Ranches, and we still split our commissions with farm and ranch folks. I can also connect you with a recent client who ended up not buying a very nice ranch because of a fairly big legal ramification that I identified early on. Definitely wish you the best in your search! My contact info is in my profile if you'd like to discuss.

Fun fact, I'm selling some land right now where the buyer isn't obtaining a survey, and since their agent is just fine with that, I am too.

Thanks for the help everyone. My realtor was able to get some nearby comps from land brokers that helped me come up with an offer. I also have a real estate attorney working on the potential transaction as well.

Did you win the lottery?

What do you do for a living? Cause I wanna do what you do…

Offer 10 and ask them to owner finance with $500k down and close the deal without a realtor.

You pay them 10 up front they pay realtor fees and taxes, looking at a lot less than 10 in their pocket.

I know the listing agent. He actually sent me a text yesterday about a listing I have. Want me to find out what the sellers bottom dollar is?