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shopping for land at auctions

 
pollinator
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I'd like to get a small piece of land in southern Iowa.
Somewhat close to a bigish city. Iowa City is to the north.
So I looked at an auction place and found this little piece.

I made an edit turning this link into a link to the actual parcel.
Guess it didn't take.
https://beacon.schneidercorp.com/Application.aspx?AppID=54&LayerID=374&PageTypeID=1&PageID=941

The Cedar river is close I don't know how flooding effects it.
It's the first one I've looked at.
What do you think?

I've always thought a place on the edge of a small town would be nice because I don't want to feel too isolated.
But this place has a couple neighbors, a church and a house so we could watch out for each other.

Here's the sales bill:
https://cdn.steffesgroup.com/website-data/Auctions/33265/Flyer/ClarkEstateRE_Salebill_11x17_042821.pdf?4/16/2021%207:09:48%20AM
about 15 acres.
7.5 acres in the forest reserve program so it's not taxed.
https://www.iowahabitats.com/iowa-forest-reserve-program/
It looks like products can still be harvested from the woods for profit as long as there are still 200 trees per acre.

Looking at the churches facebook page it mentions hickory and oak.
https://www.facebook.com/pleasantgrovecommunitychurchcjia/
I sent an email to maybe find out about flooding potential access to the property.

Haven't checked the other neighbors yet.

It's just the first place I've looked at so I probably won't jump on it because I don't know enough about buying land
and the auction is coming up pretty quick.

Looks like the taxes are paid up:
https://beacon.schneidercorp.com/Application.aspx?AppID=54&LayerID=374&PageTypeID=4&PageID=328&KeyValue=0326128000
Looks like in 2017 it dropped 11,000 in assessed value.
Now is assessed at about $15,000.
What else should I look for?
 
pollinator
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Too often people wait for the perfect dream lot, and the world goes by.
List why you want some land, then create the lists I have suggested below and then compare the lists.
You may be surprised.

Make a list of characteristics you must have;
- road access
- soil suitable for growing if required.
- ability to create a driveway if not established now.
- fencing if needed
- water supply, rainfall catchment or well or stream.
- No smells from nearby
- flood free
- No issue with chemicals
- Pests, IE rabbits etc
- South facing land
Then another with 'real nice' characteristics you can live without.
-view
- shedding or dwelling
- garden infrastructure
- farming infrastructure
- good neighbours
- access to electricity
- Bird life etc

Then browse around to establish a budget.

In the current market I would move quickly if possible.
 
pollinator
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Here's an report on Indiana ag land prices from a few years ago. I'm sure Iowa has something similar you can check for comps.
https://ag.purdue.edu/agecon/Documents/PAER/PAER_2019_August.pdf
 
craig howard
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Thanks Johns.

That was a pretty good list.
I didn't get a reply from the church email I sent.
 And the other neighbor didn't answer the phone, I don't answer calls from outside my area code either.

My list:
1. It's on a busy paved road.
Might be easy place to sell stuff.
 Can get out in the winter.
There are a bunch of trees between me and the road so it's got good privacy.
It looks like the church driveway crosses "my" land so we could maybe share the road access and driveway maintenance.

2. Good neighbors is higher on my list.
The church seems like a bunch of good folks even though I'm not religious.
The other neighbor is a little younger than me, in his 50s.

3. I want something with trees that I can use to build with
and use for fuel.
Also seems to be setup as a good windbreak from the north especially.

4. Something kinda cheap.
It's assessed at about $1000 an acre  that good.

5. Not too big.
15 acres is something I could handle and I think the laws allow a dwelling and septic on something bigger than ten.

6. On the sale bill the soil is called silty loam with a little slope.
Probably hasn't had ag chems sprayed on it for years.
That's something I can work with.

7. The taxes are cheap before I get something built on it.
And until I can sell my place and move down there.
And taxes on the neighbor's $100,000 place are about $500 a year.

8. It has a small stream on it, that's more than I could wish for.
 Upstream doesn't look too bad.
Doesn't look like any hog confinements nearby,.. yet.
I do worry about ag chemicals because of all the surrounding farm land.
Looks like irrigation nearby, I see circles.

9. Flood free is something I worry about even though the stream is small and the cedar river is a few miles away.
That's some info I was hoping to get from the neighbors.

10. There is an open field to the south so it should have access to sun.
It's not owned by an LLC. Gloria Newell has a few acres in the area.
57 to the south and 59 to the north.

11. I don't think there are any buildings but a shipping container is pretty cheap for storage.

12. I bet there are lots of deer following that stream. That's good and bad.

Access to electricity is something I forgot to put on the list.
That might be spendy.
Seems like a great place,.. and a big step.
Thanks for helping me write down a list.
 
craig howard
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Just noticed this on the sale bill:
There is a recorded survey of this land, dated May 1, 1997. Bidding
on the land will be by the surveyed acre. 15.08 will be the multiplier
used to determine the total bid amount.
Does that mean I'd have to bid about 1/15th of the total?
 
Posts: 54
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For flood zone info this is a good reference but it is not absolute.  https://www.fema.gov/flood-maps

A drive to the land to check it out in person is always a good thing, I could never advise anyone to buy something sight unseen.  I agree in that if you are going to buy anything decent in this market, let alone get a good deal, you are going to have to move quickly once you decide you want it.  I have seen multiple offers and 2 days on market for over a year now.  It is insane.  
 
John C Daley
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I am backing CI Robinsons comment about a visit.
Neighbours are more likely to chat to a visitor and be able to show you around.
High flood levels are often marked by debri, but if the church building is next door, I doubt uts flood prone.

I guess a few enquires on the ground about the local farming operations will give you a better understanding.
What does this comment mean?

It's not owned by an LLC. Gloria Newell has a few acres in the area.



Solar Electricity and composting toilets may be a solution.
How do you define 'Cheap", poor quality or good value for money?
 
craig howard
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To me it's not owned by an LLC means it's not a heartless corporation. Or Bill Gates.
Gloria Newell seems nice. Involved with supporting the FFA kids.
On a few boards/commitees.
Lives not far away in Columbus Junction.

Looked at a floodplain map.
Looks like it's clear of the 500 year flood.
Even though it's between the convergence of the Cedar/Iowa rivers and the mighty Mississippi.
https://ifis.iowafloodcenter.org/ifis/newmaps/risk/map/

Also found this bing map:
It shows a trailer on the site.
https://www.bing.com/maps?style=b&lvl=18&cp=41.27648831944336~-91.28548153869981&sp=polygon.41.27720061697913_-91.2845860925921_41.27708000954245_-91.28403916150953_41.277084548254265_-91.28306146733804_41.27708468139459_-91.28293990710463_41.276861996698536_-91.28293869801394_41.27625655565272_-91.28293586633235_41.27625887788861_-91.28305661419034_41.27629589067337_-91.28498203450198_41.27554402311569_-91.28500305207562_41.27560806369972_-91.28549256057948_41.27560413590024_-91.28623147270046_41.2757158093331_-91.28770089841454_41.27618550026727_-91.28769743366063_41.276171950203185_-91.28699149508043_41.27676020750651_-91.28697165184582_41.27677403688635_-91.28769214481956_41.27695164047904_-91.28769052298983_41.27695582530114_-91.28746510417318_41.27720559926855_-91.28706107820312_Parcel%20Information%200326128000____%2300ff00__3px_Single_Solid

I don't know how people shorten up that link.

If you click on "road" in the upper right corner it will allow you to see an aerial view.
Interesting, as you zoom in and out the picture changes.
The trailer might be a pile of trash off to the right now, ha.

I zoomed out and to the SE there is a line of forested area pointing toward "my" land.
Kind of runs along the possible flood area.
The area to the north is slightly terraced.
And the north of "my" parcel might be a little hilly.

Since someone lived there it might have an old well and septic,... maybe.
Cheap can be either way.
But I think this place looks like a good value for the money,..
at the assessed value.

Yeah, I'll have to go down and take a look at it.
I just got my mechanical TDI put in the MK2 golf and running good
and was thinking it would be a nice test drive.
See if I can get the 50+ MPG I'm expecting.
Maybe Sunday so I can talk to the church people.

Still wondering if my bid will be for the whole thing or per acre.
I'll call the number on the flyer before I bid.
 
John C Daley
pollinator
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OK, so any LLC or Bill Gates are heartless?

Does that mean anybody else or any other association are all good hearted?

What has an LLC got to do with buying a block of land?
I hope the visit turns out good,I think you will be better able to know what is for sale.
 
craig howard
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  To me an LLC is for the big farmers.
I'd rather have a small family farmer next door.
I see your point though.

Generalising.

Gloria probably rents her land out to an LLC anyway.
Doubt she is out on a tractor.
Her brother might work it for her, he has land in the area.

But if I asked her to spray when the wind is going the other way she might listen.
In my mind,
an LLC would just laugh, too busy making profit to care.

If I could chose my neighbor.
Ideally I would look for land next to an organic or chemical free farm LLC or not.

I've been wondering if there is a way to find out where the organic farms are.
 
Cl Robinson
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One might be surprised at the number of small enterprises that choose an LLC as a form of incorporation.  To me that is the equivalent of saying all non-profits are great, or all corporations are evil, or all of ______ is bad (fill in the blank).  Preconceived notions really limit us as a species.  And public school teaches squat about business, not much in colleges at the local level. I think there is good and bad in most things and in people.  I try not to exclude or dismiss something or someone until I have some facts or experience with the situation.  I might be missing an excellent opportunity to make a contact and infect a mind with a little permie stuff...maybe take a pre-order for lamb.  Maybe learn something I did not know from them.  Might turn out to suck balls.  If so, exit...stage left.  Who knows???  I choose to see possibilities rather than limitations.
 
John C Daley
pollinator
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Who is Gloria Newell please?
 
Posts: 92
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Craig,

"4. Something kinda cheap.
It's assessed at about $1000 an acre  that good."

That might not mean anything.  Sometimes assessed values are at a much lower rate than actual market value.  It might be worth your time to ask the auction company or a local appraiser what ball park figures smaller parcels of land are selling for in that area.  A lot of times smaller parcels mean much higher per acre prices.  Good luck!
 
John C Daley
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Zillow value

Is $48,000
Looking at the satellite image, I wonder how the church can drive over your land to access the church?
Where is your legal access from, the highway or East Rd?
 
craig howard
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John,
Gloria owns the farm land to the south.
57 acres?
I mentioned her in point 10 of my second post list,
which kicked off the LLCs as good neighbors discussion.

I'm trying to edit my first post to show the parcel in Beacon.
https://beacon.schneidercorp.com/Application.aspx?AppID=54&LayerID=374&PageTypeID=1&PageID=941&KeyValue=0326128000
Instead of the whole county.

Beacon is what alot of county recorders use.
It's not 100% accurate but it's close.
You can click on any property and see who owns it.

I didn't drive down today.
It was a really nice day to work on outside projects.
Save the driving for nasty days.

Thanks Bryan,
I was thinking property is assessed higher than the value,... so they could tax it for more.
The local assessor here in our county is full of information about the local property values.
Great guy is nice to talk to and one of my neighbor's friends.
I'll try to get ahold of the Louisa county assessor.

I know interest rates are low now so people are buying. That will drive land values up.
Maybe the incredible increase in building supply costs might discourage people from planning to buy bare property for building new homes.
 
craig howard
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Hey John,
Looks like we were posting at the same time.
I don't think that's the same property.
It shows buildings on it.
You mention the church,.. but the picture on zillow doesn't show it.
I've been looking at the plot info. Didn't check the address.
Yeah, it's about a mile and a half down the road to the east.
Close to highway O.

 I've never tried zillow.
It seems to mess with my old computer.
I click close or X to see the map below it but nothing happens.

Zillow might be for properties that are listed with realitors.
Being an auction might mean zillow won't have it listed.
Maybe. I'm still not sure how zillow works.

The sale bill mentions the church has an easement.
Until it burns down or closes.
 
craig howard
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Checked with Steffs auctions and the bidding is per acre.
And the bidding starts at $1000 per acre.
 
pollinator
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craig howard wrote:   To me an LLC is for the big farmers.
I'd rather have a small family farmer next door.
I see your point though.

Generalising.




An LLC is the smallest form of corporation in the US. It allows a one-person operation to claim the same kind of legal protections as the bigger companies. There is no minimum size for an LLC. The company's entire inventory, including all equipment and assets, could fit in a shoebox, and it would still qualify.

(I have an LLC. It has made no income whatsoever, but I find it easier to be taken seriously in the business world with it.)
 
John Wolfram
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craig howard wrote:
Thanks Bryan,
I was thinking property is assessed higher than the value,... so they could tax it for more.
The local assessor here in our county is full of information about the local property values.
Great guy is nice to talk to and one of my neighbor's friends.
I'll try to get ahold of the Louisa county assessor.


At least here in Indiana ag land is assessed as a by multiplying a productivity factor by a base rate set by the state. The result is that 10 acres of ag near Indianapolis gets assessed the same as 10 acres in the middle of nowhere when one of those properties is worth a whole lot more. The farmers tend to have a lot of political clout, so the assessed value of farmland is almost always say under market value.
 
craig howard
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 Thanks for the LLC info.
Maybe I'll form one some day.

I talked to the county assessor.
Not much info.
She said there has been a 15% increase on real estate prices.
Over the assessed value.
Can't remember what word she used but that was for property mostly in town, with a house.
She said farm land was going down.
No idea about property that was in between like this one is.

Talked to the sales manager,...
maybe for the auction house.
Russ, the name on the auction flyer.
He was pretty helpful, I think.
Is it a good idea to believe what the salesman is telling me?

He lived nearby and seemed familiar with the history of the land.
Although he didn't know there was a mobile home on it at one time.
He thinks the land will go for just under $45,000 dollars.
The bid is per acre. So under $3000 per acre.
3 times the assessed value. Yikes.

Side note: He also said farmland prices have been going up unlike what the
assessor said. With the price of grains going up.

More interesting points.
He said the church land was given to the church.
  If it disbands or whatever churches do,
not only will their driveway easement end but the property will be returned to the owner of this parcel.
 They can never sell it.

The driveway entrance to the paved road is at the top of a hill.
It's on high ground.
 
John C Daley
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So how does that fit into the budget
 
craig howard
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That's over the budget.
Maybe 22,500 for bare land.
Even if it's smaller.
This is the first land auction I've followed.
It'll be interesting to see what it goes for.
 
master pollinator
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I am not familiar with auctions... Back years ago, when looking for our forever home, we put in a bid $15,000 below the asking price, with a week or so for them to accept or reject the bid. The realtor complimented us on our strategy. Huh? It was just giving them time to consider the offer: what we could actually afford. Not market price. They accepted the offer, but some minorish thing came up in the inspection that we decided to pass on it. I'm so glad. It was a city lot. We later found an acre in our budget, yay!

My point, if a place fits a lot of boxes, go ahead and bid, within your budget. Maybe nobody else likes the place.
 
pollinator
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I agree. If you've got your ducks in a row, might as well pull the trigger at the price you can manage. The worst that will happen is that they will say no.

I find that there's a wide gap to be found between different types of appraisal. An insurance or tax appraisal might be higher so you pay more, but also so that there's adequate coverage in the case of insurance. An appraisal done from the perspective of determining collateral value will be much lower.

As to whether or not you should trust the seller, I would consider taking into account the sellers' aims when they cite trends that contradict the realtor's assessment. I would probably see if I could speak to a few realtors about where farmland is going pricewise. You could probably look at the commodities, too, to see what grain is likely to do. My guess would be that the seller knows less than nothing unless they're in real estate themselves. Even then, their perspective is likely clouded by what they want what they think they know to mean, that we're a year into a global pandemic and that everything is still messed up, and obviously all food prices are going up, right?

Salt isn't just for seasoning and preservation. Take a grain when you are listening to someone who wants to sell you something.

But keep us posted, and good luck.

-CK
 
craig howard
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 I was talking to my local landowner buddy today.
He mentioned that if that was in our county I couldn't build anything on it.
Because you can't build a house within a 1/2 mile of an existing house.

Not sure how wide spread that code is,..
I'll have to check Louisa county codes.
 
master steward
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you can't build a house within a 1/2 mile of an existing house



Did your county make that code because the county wants to be mainly agriculture?

It is hard to believe that houses have to be 2640 feet from each other.

I find your thread especially interesting because I want to find out the ending of the story.  When is the auction?
 
craig howard
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 I think the one house per half mile was an attempt to stop development of agricultural land.

I did check with the Louisa county zoning guy.
He said there was no such zoning in effect in his county.
In Louisa county you can build a house on as little as 2 acres instead of requiring 10 acres like Cerro Gordo county,..
the county I currently live in.

Here's a link to the auction:
https://steffesgroup.com/Auction/AuctionDetails?Name=louisa-county-ia-land-auction---1508-surveyed-33265

The auction started on the 21st and goes until the 28th.
As you can see there are 23 bids between 2 bidders.
The auction is already at $3,350 per acre.
The salesman was pretty close with his guess even a little low.

It's interesting to watch the bidding.
19411's initial bid was 2,500.
101257 bid 14 times the first day until he passed him at $2500.
19411 jumped the bidding up to $3000 and was instantly out bid and went to bed.
19411 started trying again this morning at 11:09am bidding $3100 but no joy for 19411.
He took a break and tried again around 8:00 tonight, took it up past $3,300
Today on the second day of bidding 10257 is somewhere over $3,350 and 19411 is stalled.
 
John C Daley
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How is the bidding now?
 
craig howard
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After 89 bids it went for $5500 per acre.
https://steffesgroup.com/Auction/AuctionDetails?Name=louisa-county-ia-land-auction---1508-surveyed-33265

82,940 bucks
Over the $15,000 assessed value by quite a bit.
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