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I was thinking of investing in buying a land. I found one land that is weirdly too cheap($28k). The houses built around have the value estimated around ($300k). Location Ohio, USA.

The Ad says:

HOA is not active, but building plans must be approved by seller. No fees. Seller is motivated. Listing Agent related to seller. Zoned R1B-Residential Single Family.

My question is, will the seller expect me to provide house plans for the house that will cost me around $300k, or at least the value will need to be that price? Or what is the reason for the low price?

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Tom Au
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Grasper
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2 Answers2

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There's no fixed ratio for the value of land vs the value of the house you put on it. In your situation, nothing seems wrong, a parcel of land for $33k and house for another $300k.

The listing is clear, the seller needs to approve the house plans, and to me, the implication is that time is a factor, i.e. You can't buy it to invest long term, you need near term plans to build.

But, most important, these details can only be clarified to you via the listing agent. That's what the seller is paying him/her for.

JoeTaxpayer
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Basically, when you buy the land, you will have to factor in the cost of the house that the seller will force/allow you to put on the land. So you will have to look at the two as "one," and not think in terms of the "bargain" that you would be getting on the land alone.

If the seller is halfway reasonable, there may be an opportunity to build a "qualifying" house on the land where the cost of the house and the land will come to less than the $300,000 that the package might sell for, based on "comps." But you will have to do your homework for both lot and house before you commit to buying the lot. Otherwise, you will just be wasting money on the lot.

Tom Au
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