REASONS TO CONSIDER SELLING YOUR LAND NOW!

The market has been at its highest level . . .

 . . .after a huge appreciation of value realized from the past 3-4 years.  This same surge of value is not expected again for some time to come.  Previous to this most recent increase, the last similar occurrence was 10 years earlier.

•  The question arises whether a little more money later on will really be worth it?  Also, there is always a chance that the huge price increase will make a correction downward, similar to what other areas around the country have experienced.

• Increased property taxes are inevitable and will take a big bite out of your potential profits, while at the same time, steadily increasing your debt service to the land.

• In order to best capitalize on any investment, the sale of that investment must be made at the top of the investment curve, which by all indications is now!!

• Mortgage money, which was at a 15 year low, is starting to get tight, since the banks can loan their money more profitably in other types of loans.  In addition, the interest rates may start rising.  This increase in interest rates will likely slow down the market, which resultantly means less buyers, therefore, usually  lower prices for your real estate later on.

• Since the large increase in value has now subsided, the market has been getting tighter and buyers just aren’t coming out as much.  It appears that it will get worse before it gets better, any better time than now could be a long time waiting.

• “A bird in the hand is worth two in the bush.”  “Bread that we turn down today, we may wish for tomorrow.”

• Looking at the complex and precarious times we are now living in, this is the best time in modern history to think about being debt free, with cash and material reserves set aside for the seemingly inevitable rainy days ahead.

• Ask yourself this very important question, “If you had the amount of money that your land is currently worth safely in your bank account, would you draw it out to buy that same property now?”  If not, this is a good indication you should sell now!

• The security of your land value is setting on top of a leaning fence which is being pushed, bent, pulled, and blown by county, state and federal governments.  How so?  Massive bureaucratic red tape in the form of land use restrictions which are taking place now!  This problem is destined to get progressively worse as Pierce County is following the lead of King County, which has become a virtual nightmare for land.

• There are many areas of concern where bureaucrats may propose to restrict the use of your land significantly affecting the future value of your undeveloped land.  Please remember that you are at the “mercy” of the bureaucracy for the permit process and required approvals in order to legally build upon your land.

• The following are some areas where the approval of permits and build-ability of your land may be negatively affected.

1. Perc Approval      For on-site sewage disposal with septic and drainfield.  The requirements of the county, state, and federal government are continually getting stricter having to do with potential ground water contamination and health concerns.  Just because your property perced when you bought it, is not a guarantee it will perc now or especially, in the future.  Some properties that perced just a few years ago are now denied and will have to wait for formal municipal sewer to be brought in for the property to be made buildable.

2. Water Supply    New federal guidelines for community water supply are putting the thumb down on  water systems such as your property may be on.  Throughout the state, there are currently hundreds of acreage parcels which cannot get a building permit because the water system serving the parcel has been “red tagged” waiting for costly upgrades.

3. Geological/ Seismic Hazard Zones     This includes any property which may be affected by earthquake, erosion and general ground stability.  This is primarily targeted toward top of the hill, near the rim type parcels.  If your property is not level and well away from any valley rim, future building restrictions seem eminent.

4. Wetlands     The nightmare of the 90’s!  Wetlands are not just standing water, so called swamps, any more.  If ground water reaches anywhere near the surface, at any time of the year, for a period of merely days, the property may now be considered a form of wetlands.  Forested areas are a new “red flag” area for concern. Even properties up on a hill can have a little area which with new standards could be considered a forested wetland.  Your use of the property could be essentially shut down under many of the existing and proposed wetland parameters.

5. Road Adequacy Standards  The County may stop the issuance of building permits in certain areas because of inadequate roads that service the area.  What is approved today may not be approved tomorrow.  Even the county roads leading to the property, especially private roads, are capable of being termed inadequate to allow additional building development.

6. Schools     If the schools in a particular area become overcrowded, the county may “red tag” additional building development until new schools are built in order to handle the increased student population.

7. Fire Protection/ Emergency Services  In the opinion of the County, if the fire protection and emergency services for your area are hindered, making them inadequate in any way,  i.e. steep access, no turn arounds, no fire hydrants, the building permit  process may be “red tagged” until the county is satisfied through upgrades.

8. Zoning Restrictions     The zoning of your land can be changed at any time through rezoning.  This may negatively affect your usage of the land and thus, lower its value.  Zoning is the governmental way to essentially seize your property by restricting its use, which at the same time lowers the resale value while not paying you a nickel for it.

9.   Use Your Imagination    Government bureaucracy, by its very nature, will come up with ever increasing hoops to jump through.  With a good number of our  politicians being self-confessed environmental ists, the future looks bleak in the area of land use restrictions.  If you want first hand information, contact the County, State, or Federal Government, the Department of Ecology, the Army Corp. of Engi neers, or attend  a few public hearings in order to substantiate the above.

Again, ask  yourself  this most pertinent question, “If you had the amount of money that your land is currently worth safely in your bank account, would you draw it out to buy that same property now?”  If not, you should very seriously consider selling it!  If you are concerned about tax ramifications, we have experience in 1031 tax deferred exchanges!

The good news is that the window of opportunity is still open for you to capitalize on your investment before many of the above negatives affect your land value.

Are you primarily conservative with your money or are you a high risk taker?

If you are conservative, SELL NOW!  If you are a high risk taker, hold on for a very questionable future profit.  The choice is yours!

We at RARE EARTH, Inc. offer our professional services to the former.

For a no obligation information interview and free market analysis please contact us at:

                         1(800)505-3324, (253) 862-2222, (360) 829-3377

                                       E-mail:   property@rareearthrealestate.info

We are available by appointment only to meet you at our office located at 861 Main Street, Buckley, Washington.

Gary Payne, Broker