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What's it worth??

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wyod

03-06-2008 11:56:33




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We've owned some acreage for about 15 years now... bought it with the thoughts of running a few head of cattle and some (extremely) small scale agriculture when we retire (coming up very soon!). Land sits at the very end of 2 seperate roads... one of the reasons we liked the place... figured the location and configuration would give us some privacy. As it is, our nearest neighbor's house is about 1/2 mile from the site where we plan to build our house... just about right as far as I'm concerned. Anyways, a local realtor contacted us about 3 years ago asking if we'd consider establishing a right of way (which would cross our property on the extreme western fenceline) to an adjoining property. I told her we were not interested. A couple of weeks ago, the same realtor contacted us to "urge" us into establishing the right of way. She told us that several owners to the south of us are putting their properties together into a large parcel (approx 2,500 acres... couple of million dollar deal) which would be sold and subdivided... I'm not sure if it would be into "ranchettes" or an actual subdivision. The "genious" behind this plan has concluded that the right of way across our place would be the best access for their proposed development. I informed her we weren't really excited by the thought of cars running up and down the road at all hours of the night and day... not to mention the probability of problems with trespass, etc, but would think it over. My missus & I have been pondering all the possibilities for a while now, and have decided to at least talk to the realtor. There are three different possibilities... the realtor has offered to buy 1)the (approximately 1 acre) right of way, 2)right of way AND the 20 acres it crosses (there is a barn and shop on this side), or 3) our entire property. (property is paid for and, if sold, would result in a huge profit from what we originally paid) At one point, we decided to just sell out and leave... but with all the tractors and implements, horses, etc, it's do-able, but a major pain in the back side... AND, we're not really sure WHERE we would re-locate... then we considered selling the 20 acres (which might create a "buffer" from the new road), but realized once that property is sold, the new owner could subdivide that as well... now, we're considering selling the right of way (still don't really want to, but are concerned that if they pull the eminanant (sp?) domain trick we'll lose and get NOTHING)... now the problem is that we don't know what the right of way is worth??? Local property is selling for $2K to $3K per acre. As far as we're concerned, the right of way is as valuable as our entire place, but not sure anyone else would see it that way. We're just trying to not get "skinned"... and don't want to make a deal and then regret it 6 months later. Sorry this is so long, but would really like to hear YOUR input!

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big jt

03-06-2008 23:27:39




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
wyod

You have got plenty of advice already. If I understand your situation right I would strongly suggest the 1031 exchange idea. Played right I would think you might be able to increase the acreage and maybe even get a better set of buildings to boot.

Your first stop should be a real estate attorny. Get your own, the one the agent has is working for the agent not you.

Worth a try.

jt

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dr sportster

03-06-2008 20:01:03




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
Sounds like you might be overun by yuppies soon.Is this near a city commuting distance?The deal sounds bad [how bout go around]but if they are coming in large numbers anyway it wont be the same.Obviously someone is planning to build alot of homes.



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wyod

03-06-2008 20:53:07




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 Re: What's it worth?? in reply to dr sportster, 03-06-2008 20:01:03  
yeah, we're more than eight miles out of town... when we bought, we thought that would be sure 'nuff far enough out, but three or four years ago a parcel sold and turned into a subdivision that grew and grew... it's mebbe two miles (give or take) to the south of us, and apparently, approaching fast. If this 2500 acres sells and develops, I reckon we'll have a whole bunch of yupsters on our south fenceline... man ain't progress great???

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WantACaseLASomeday

03-06-2008 18:39:24




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 Re: What's it worth?? in reply to Heat Houser, 03-06-2008 11:56:33  
Allan made good sense. Bend them over and pull out a cool million (or more - whatever they will pay, but start the negotiations at the outrageous end of the scale) plus make them pay your fees to buy a new property and also make them pay all your relocation costs since it sounds like you have a lot of stuff to move. Save the grief and hassle of having to deal with a lawyer and/or your local gummit. Just take their money and services and run.

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Nancy Howell

03-06-2008 15:28:42




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
I strongly agree that you should see an attorney knowledgeable about eminent domain. Whatever it costs, it will be worth it. Here in Tx. Jerry Jones, the owner of the Dallas Cowboys, convinced the City of Arlington to use eminent domain to condemn land so he could build a new stadium because he wanted to host the superbowl. It is a perversion of the law of eminent domain to take land for private development, but its being done and now that there are several precedents set in the courts, it will become easier. Also, you can bet that developer has some very deep pockets and some high-powered attorneys just waiting to go after your place. You might look around your property to see if you have some "endangered species" or even a soggy spot can be claimed as a wetland and the EPA can get involved. However, getting the EPA involved might turn into a double edged sword. Personally, under no circumstances would I consider an easement. Regardless of "noise reduction" measures, you will have all kinds of traffic once the subdivision is built and what about during the building process? What about all the large trucks and machinery coming and going whenever? This is not a good situation for you. SEE AN ATTORNEY!

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NE IA

03-06-2008 15:17:10




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
If you want to stall them off talk to another investor about developing all your land into a different development. It's all about playing fair, and you need some of their land to make it the perfct plan. Set a few stakes out and you can stall them for years. It might just bring up the value, and cost you nothing.



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Ultradog MN

03-06-2008 14:44:06




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
Sorry to hear this is happening to you.
It's just too bad.
One thing to think about is how that development is going to affect your property taxes.
If they put up a bunch of fancy McMansions and each one has their ranchette it is going to dramatically increase the value of your land and your tax base.
With or without selling the easement you might find that the property taxes on your dream home will make it cost prohibitive for you to stay there.
Here in MN they have a "Green Acres" law that allows land still in agricultural production to remain in a tax catagory that is Much lower than the developed land around them.
The hitch is that it has to have been in production for some years already to qualify.
I don't know how much of an emotional investment you have in that land but I'd be leaning towards selling out.
NO easements!
If they want the easement they've got to take it all. $10K per acre plus they have to call the movers to haul your stuff off the place to your new land.
You will have to consider the capital gains taxes when you sell the place but if you buy another property of equal or greater value within 2 years you wont have to pay. Best of luck on this. And keep us posted on what happens.

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Bob Huntress

03-06-2008 22:35:29




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 Re: What's it worth?? in reply to Ultradog MN, 03-06-2008 14:44:06  
Though I am not a lawyer, I agree with Ultra in that you should probably place atleast a $10k per acre, and anything else that you can think of. From what I hear, arguing that the owner of property that one seeks to usurp through "Emenite Theft" should be compelled to accept a lower amount is harder for the modern land bandits, than arguing that the rightfull owner be compelled to sell the property. By pricing the land at a point that would reduce their ill gotten gains, they are aiding in their reluctent obedience of the Tenth Commandment. "Thou shalt not covert thy neighbors..."

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Mike (WA)

03-06-2008 16:01:27




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 Re: What's it worth?? in reply to Ultradog MN, 03-06-2008 14:44:06  
Not so on buying another property within 2 years to avoid capital gains- that used to be the law, but now, the only way to avoid taxes on the gain is a 1031 exchange (unless it has been your personal residence 2 out of the last 5 years, which I understand it has not).



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Ultradog MN

03-06-2008 16:47:27




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 Re: What's it worth?? in reply to Mike (WA), 03-06-2008 16:01:27  
You may be right. I have done that before but it's been 12 years or longer since I did it.
They made a bunch of changes in the capital gains laws then and that may be one of them.
What Dan in Houston says about selling to an agent and doing a 1031 exchange is excellent advice to wyod amd all of us who are looking to do some moving and shaking as we get close to retireing. The buyers of my last house did that. It was new to me and I had to talk to my tax lady before I would sign the paper. Held up the closing for most of an hour.
I've been playing the capital gains game for 15 years or more. Buy a house, live there for a few years while I remodel it, sell it and move on.
No taxes up to $250K of gains if you live there for 2 years. A husband and wife can do double that I think.
I aint rich by the way. Haven't owned a house WORTH $250K yet.
It's the reason I can only afford Blue tractors.

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Mike (WA)

03-07-2008 08:33:36




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 Re: What's it worth?? in reply to Ultradog MN, 03-06-2008 16:47:27  
Its just about the ideal way to be a self-employed carpenter- but really only works for single guys (or maybe married, but no kids, and wife helps with the rehab)- Too much moving otherwise, and you have to get too much of the house livable before moving in if you have kids. Nice way to legally avoid the taxman, though. Wonder if the loophole will survive the next Administration?



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Dan in Houston

03-06-2008 14:40:18




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
If you are thinking of selling, consider a 1031 exchange to avoid paying capital gains. Basically you find something you want to buy, sell your property through a 1031 agent that holds the funds in escrow, then use the funds to purchase the new property. If you reinvest all the money into like property (raw land for raw land, etc) within 6 months or so, then you don't pay any capital gains. If for some reason you can't find something to buy, you just pay the capital gains that you would have paid anyway plus a few thousand. Not commonly done, but I recently did one with little trouble and a big tax savings. Find an accountant / lawyer / real estate agent that has actually done one and get the details.

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Mike (WA)

03-06-2008 14:32:10




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
You should be able to avoid eminent domain- the way the guvment gets around it in the cases back east is to form an industrial park or port district, where the government owns the property and either leases or later re-sells to the final buyer. I can't think of any way they could do it for an access road for a private developement, unless the proposed road is the only access (ie, their property is landlocked). If is is landlocked, at least in Washington, even a private citizen can do a private condemnation of an access route- judge decides if the route chosen is the least intrusive, and also the price.

If it goes that way, you're basically toast- they'll get it for the prevailing per-acre value. However, it sounds as if this is merely a preferable route, in which case, since this is a big time developement, they probably wouldn't blink an eye at 50 grand or so. My advice would be to do a little sluething, and find out why the route through you is preferable- then charge them a good percentage of the cost differential, so you're still a better deal, but they only get part of the benefit and you get the rest.

My personal preference, if I were you, would be to tell them to go jump. It's going to be a terrific PITA with that many cars going through, vandalism, etc. Either that, or sell them the whole outfit, and go "deeper into the forest." Perhaps over toward Allan's direction- from what he says, its not the end of the world, but you can see it from there.

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Kajun

03-06-2008 14:31:32




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
Wyod:

Hire a lawyer who specializes in eminent domain in your state. It will cost $500 or less for initial consultation . It will be the best money you ever spent.

When you are fully informed about your rights ,you will be better able to make the wisest, most strategic and most profitable decision.



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kyplowboy

03-06-2008 17:56:34




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 Re: What's it worth?? in reply to Kajun, 03-06-2008 14:31:32  
What Kajun said, take a copy of your deed and some satalite photos of the place show'n where they are wanting to go. Would be money well spent. A realtor wanting a path across you place is not who you want telling you what you can and can't do.

You could also do what I know some others have done, drive some stakes and put out some flags, get some one you know to start the rumor you are putting up poultry or hog houses. Developers will scater like a covey of quail!!!!
Dave

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JT

03-06-2008 14:29:52




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
If it were mine, I would give them this counter offer. They are getting $75,000.00-$100,000.00 an acre round here for building sites in a subdivision. at keast 25K or more for a 1/4 acre bare lot. They can buy the easement for say $75K an acre, then they would built a noise buffer between your property and the road they want to put in, do all the things to keep water drainage the same way it is now, then they could also build a noise buffer between the new subdivision and you. This might sound like a crazy idea, but it might get them off your back, still allow you to have your quiet life, and have a nest egg for retirement or a new house. that 2500 acre deal at 3K an acre would be 7.5 million, not a couple, I think they could afford to buy at your price and conditions if they really want it that bad. do you think the lots they are going to sell for houses are going to sell for 2-3K per acre??? Probably not. A counter offer that is what you and I think is a rediculous counter offer will keep you from loosing your shirt, and at least you will know where they are at in their minds of what it is worth.
Jim

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Walt davies

03-06-2008 13:00:04




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
Only the federal government can do eminent domain so I wouldn't worry about that but you can give them a very small right of way just big enough for a one lane road and then stick it to them for as much as you can get. Don't sell off more than they need.
Walt



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dhermesc

03-06-2008 13:56:02




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 Re: What's it worth?? in reply to Walt davies, 03-06-2008 13:00:04  
"Only the federal government can do eminent domain"

Hardly. In Kansas any city government, county government or state agency can enact eminent domain for "almost" any reason. Watch the City of Manhattan use eminent domain to take property that was a populat fishing spot when the new owner decided that private was private and fenced it off.



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Billy NY

03-06-2008 13:45:25




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 Re: What's it worth?? in reply to Walt davies, 03-06-2008 13:00:04  
That can be a broad subject, but right here at our place the state recently pulled the eminent domain thing when they rehabilitated the state road, they even condemned and demolished few places, one was a local watering hole, nothing great but close. They also did the same with our frontage on the state road, took just a small section of land, their offer was nothing less than an insult too.

In '00, '01 township near where I lived in NJ, maybe north or east brunswick, condemned a several generation family farm, which was surrounded by development over the years, condemned it for their use, and I believe under eminent domain procedure obtained the property.

You do have to wonder what a developer could do as far as motivating a particular municipality to pursue those kind of proceedings for the purpose of obtaining land and what state and local laws are already in place favoring eminent domain, that place in NJ appeared like the township literally steamrolled the owner. Not to be paranoid, but I always thought that was a state and federal thing too, that is until I saw a local municipality do it as well.

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thurlow

03-06-2008 13:33:38




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 Re: What's it worth?? in reply to Walt davies, 03-06-2008 13:00:04  
Hey Walt..... ...I think (notice I said THINK, not KNOW) any government entity can do eminent domain. It's been much abused lately, as cited below. Many states have passed (recent) legislation addressing the issue...



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bradley martin

03-06-2008 12:55:37




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
It looks to me like you are in the driver's seat at this time. If they do develop 2500 acres adjoining yours, I dare say that might seriously hanper your enjoyment of your property. If you hold out too long and they develop another access it could be a long time before you have another opportunity. You have a lot of things to consider. With the current housing market it is a wonder that they are pushing right now to get this up and going. I would tend to go along w/ Allan on this one but of course we don't know all the particulars and emotions involved.

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wyod

03-06-2008 13:20:38




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 Re: What's it worth?? in reply to bradley martin, 03-06-2008 12:55:37  
yeah, well... as far as the housing market goes... wyoming is about 180 degrees out of sync with the rest of the country... we're currently in the middle of a huge BOOM in the mineral extraction industry and housing is at a real premium all over the state... they've been building them as fast as they can get 'em done, and still can't keep up... I'm definitely on board with Allan's (and other's) comments... we're well aware that this right of way could be just the tip of the ice berg... but we're trying to figure our best options and make this work for us the best we can... we're definitely considering letting 'em have the whole she-bang (for a couple 'o dollars of course) but don't want half the proceeds to go to the feds!

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paul sebek

03-06-2008 12:43:03




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
I doubt eminent domain applies to private operations. Allan is right though, they'll eat everything around you eventually. Who cares if it's convenient for them. Do you really want to sell? I doubt there's too many places you can go where them "urbans" won't follow or haven't already screwed things up. If you do sell, stick it to them good.



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bill mart

03-06-2008 14:25:07




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 Re: What's it worth?? in reply to paul sebek, 03-06-2008 12:43:03  
if it increases a towns tax base they will use eminent domain on behave of a private operation



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Mike M

03-06-2008 12:39:33




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
Choice # 4 could you have the realtor exchange some other property for yours ? and would this avoid capital gains ?



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Allan In NE

03-06-2008 12:08:25




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
You haven't built yet; sell 'em your land for a cool mil and be done with the pushy urbanites.

Don't kid yourself, if they are developing 2500 acres, that driveway is a drop in the bucket.

Allan



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Hotflashjr

03-06-2008 12:03:13




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
I would spend the money and get an appraisal done, or force the realtor to provide an appraisal for the right of way. This will give you a valid value for the property and a price to go for. If they really want the right of way, try to squeeze a bit more out of'em. If this is not a Municipality seeking a right of way, then they usually can not take it by imminent domain. Be careful if you sell the whole piece, if you are under 65 the capital gains will quite large, and you will lose a substantial part of the value you would get from the sale.

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NBAllen

03-06-2008 12:35:42




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 Re: What's it worth?? in reply to Hotflashjr, 03-06-2008 12:03:13  
Definitely agree on getting YOUR appraisal - you want the appraiser "working for you". Of course, depending on how bad they want it, you can ask an appropriate price :-)

Hotflash, correct me if I am wrong, but the way I read the capital gains section:

a) if the property in question is held longer than 12 months, it is a "long-term capital gain" - therefore subject to 15% tax on the profit., not the "prevailing rate" of regular income.

b) If the property in question is a primary residence, the gain may be tax free. It is definitely treated differently from capital gains.

Caveat - I am not an accountant and do not pretend expertise in finance, taxes, or tax accounting; but I do figure my own taxes.

Nathaniel

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JMS/.MN

03-06-2008 12:02:40




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 Re: What's it worth?? in reply to wyod, 03-06-2008 11:56:33  
In your state, is it possible for a private developer to use eminent domain to acquire privately-owned land? Usually done by a government entity.



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dhermesc

03-06-2008 13:58:01




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 Re: What's it worth?? in reply to JMS/.MN, 03-06-2008 12:02:40  
"Usually done by a government entity."

Usually the developer is in good with the city and the city will seize the property and sell it to the developer.



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wyod

03-06-2008 12:55:24




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 Re: What's it worth?? in reply to JMS/.MN, 03-06-2008 12:02:40  
dunno... was thinking about the development on the east coast where they forced folks out of their homes that had owned them for decades... most of 'em didn't want to sell at any price. Seems that a developer wanted to build beach-front condo's that would bring in 100x more property tax than the private residences that occupied the land... last I knew, the city was fully behind the deal and it was in the process of being implemented...

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Johnny N

03-06-2008 12:41:03




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 Re: What's it worth?? in reply to JMS/.MN, 03-06-2008 12:02:40  
It,s not what the land is selling for in your area, it's about what the valve is worth to the realtor. I would least ask for 3 or 4 times the land valve. Down here in N.C. neighbor land was next to a project that needed a acre so they could build on three more. Man got 50,000 for the acre



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KEH

03-06-2008 15:24:39




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 Re: What's it worth?? in reply to Johnny N, 03-06-2008 12:41:03  

I wouldn't sell them a right of way and split your property under any circumstances. If anything, I would sell out for big bucks. Allan's valuation sounds good to me.
The realtor hasn't threatned eminent domain, has he? He is a private induvidual and has no eminent domain power and I doubt if any local government has a way to apply ED from what you say.

KEH



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wyod

03-06-2008 16:19:38




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 Re: What's it worth?? in reply to KEH, 03-06-2008 15:24:39  
no, it won't split the property if I sell them the easement they want... the one a half mile to the east would split the major piece of the prpoerty just about down the middle... definitely DON'T want that to happen! As far as E.D. ...I learned long ago to "never say never" seems everytime a "little guy" gets in the way of the "big guys" the ones with the deepest pockets win...



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