Gutted House

[Mark K]

In my market, a gutted house is basically going to be the value of the lot and utilities.

In addition to the site/utilities, often the existing foundation, drive, etc. adds value. In this area, if you use part of the existing foundation, you can save a lot of $$ by just getting a remodel permit vs. the cost of a permit for new const.

Well/septic for new home is about $30K in this area due to the nazis at the health dept. in this county. If the existing are usable, they have significant value.

Even existing connections to the municipal water/sewers can save a lot of $$ due to the cost of various fees charged for connection, $3,000 for water, $6,000 for sewer, just for the fees, not including the physical work.

...they subtract twice the sum of their estimated costs to repair the property and marketing costs (realtor commissions, closing, etc.). Doubling their estimated costs provides what we would usually term entrepreneurial profit, plus some provision for risk.

This is similar to the process I've used for years also.

 

[Terrel L. Shields]

Wow... I paid for 2 connections when they installed rural water - so they could have money enough to do it as we had neighbors who wanted it. I use well water and if it failed would simply drill a well. I ain't paying these city bozos for water. And frankly, all it has done is encourage builders to build greenfield subdivisions on karst topography insuring the septic systems pollute the groundwater. I honestly think the cities want the groundwater polluted so they can force the rest of us onto rural water. Our permits are generally quite cheap and a septic system is usually about $5-6,000, maybe $8 depending on size. On some wet prairies we have some mound systems that cost in the $20k range.

Just checking through Zillow a while ago and land prices went from $5-8k per acre to $20-40k. Insanely priced - one 40 was 10 million. And they are not selling. We have some Realtor-builder types who are building McMansions and asking in the million dollar range. I cannot imagine where they will find a buyer with 7% interest. Talked to a agent in OK and she is scouring the lenders and she is smart for doing so. Sold a MH on a 6% loan a few weeks ago. Said the lenders wanted from that to 8% to lend on an MH. Sees just below 7% as the most common loan on a house if you have really good credit score.