Demolition plot with special features - how to assess the value?

Hi everyone,

I probably have the chance to get a demolition plot in the Karlsruhe area through a non-broker "intermediary" (prefabricated house guy, as often...), which has some special features but which we still find interesting. Unfortunately, I can only very poorly assess the market situation and competition among the special features, and would like to know from you how you would proceed in such a situation.

The parameters I know are:

[*]Village in the Karlsruhe area (moderately good shopping options, only bus / no train, located on a hill (bike to the city is more difficult)
[*]~550m², of which the back ~¼ drops with ~25% slope
[*]End of a dead-end street, nice south view down the slope
[*]Built with a building ready for demolition + outbuilding
[*]2 neighboring buildings with partial edge development ("hobby barn"), other neighbor side is a hill (loosely wooded by the city)
[*]Terrain is a "historic quarry"
[*]Seller has gone down from 500k (early ~22) to 400k (04.23) to 350k (quickly after signal that I want to negotiate)
[*]Standard land value (early 22) 520€/m², "up the hill" is a flat area with 760€/m²

We find the quiet location appealing, the reduced number of neighbors due to the slope, and a bit the south view. We see a personal disadvantage in the connection, but that would approximately balance out with the "could build" bonus. The disadvantages remain of the slope on the property, the neighbor's edge development, the questionable cellar buildability (of course, soil survey comes before purchase/planning), and the nearby steep neighbor hill. Without making the slope at least partially usable (terracing), the garden area would be too small for us.

Well, and now the question is what to do. Including the demolition, we do not find 350k a particularly realistic actual value. Are there people who still pay that? Certainly — but do they want to be in the town center of a surrounding village, with the given disadvantages, and the medium size? No idea! We hear from everywhere that plots are being returned because people's financing falls through, that the market is stagnant (for existing properties), and simply fewer properties are sold/bought.
From a broker/appraiser who has already helped in the family elsewhere, I have heard without an inspection but just by phone that he assesses the location & pros/cons in such a way that the competition situation is probably not particularly large, quote "I see that such things have often been lying around longer since last year."

How can the value of such a parcel be reasonably estimated so that one can also explain it to intermediaries & sellers? Standard land value minus demolition? Very little... Standard land value minus slope? Devalue slope on garden land? Standard land value "plus a little something" but subtract the disadvantages? Or is the market for such deals still so hot that the negotiation position is weak, and I either grab it or can't count on anything.

Thanks in advance for reading, I look forward to your thoughts on this….
Cheers,
- NebuK

328 km as the crow flies to the east I am currently involved in a property purchase.

Thuringia, very beautiful landscape, spa town.

1850 sqm plot, flat and rectangular in shape. With solid house, barn and outbuilding. Partial demolition may be necessary.
Stream at the back end of the property, deep well on the site. Trees in the garden. Fully developed in a village location.

Not far from Weimar, small town with gas station, Edeka, doctors, pharmacy, schools and daycare. The largest outdoor pool in Thuringia.
Hourly bus connection to Weimar. Erfurt and Jena 45 km away.

Just as an example. Asking price without negotiation 29,000 euros!

Land value here 15 euros.

Additionally one of the best schools for the children. The world is still in order here. Jobs are available on every corner, well paid too. Maybe not as good as in Karlsruhe but you don't need that much to live.

I wouldn't take on a burden like in Karlsruhe.

Please consider my description only as a general orientation.

From the preliminary remark

The parameters I know are:

I conclude that

Seller has gone down from 500k (beginning ~22) to 400k (04.23) to 350k (quickly after signal that I want to act)

refers to an intermediary communication about the "property service" house seller, and you have no direct access to the current owner of the property.

Read generally about the way such scammy deals are made here in the threads with the search terms "Grundstücksservice", (11ant) short sale, bait-and-switch (and whatever else you find with the forum search). Regularly, the "intermediary" has legally ZERO access to the property; it mainly serves as an anchor to hook you into a supposedly easypeasy and only "pro forma" building contract referring to an example house. The company on the business card, in whose show house the trickster sits, regularly has "nothing to do" with the questionable methods of the freelance sales agent (and his lack of seriousness does not have a negating effect on your contracts with this company). That is the extent of the risks of such property deals for now.

Now to the property itself: demolition lots are always a high and especially poorly assessable cost risk. The description of the surrounding development sounds like at least no development plan, possibly even partially outside the development area, uncertain status whether building plot, hillside location and so on. Even if you can positively check off all the aforementioned points, you always have a risk of approvable building heights in any hillside location and especially without a development plan, starting with disputes over the definitions of the eaves height(s) on the valley side and the mountain side. On the side, I also read another risk (forest conversion).

Conclusion: I see here "concerns by the dozen" and probably many reasons why this sleeping beauty has already long lain there unkissed; garnished with special caution regarding such intermediaries. Slightly flawed properties are already a matter of their own when offered by real estate agents, and not-even-yet-agents are never less questionably serious.

Thanks in advance for reading, I’m looking forward to your thoughts on this ….

- What is your plan, to build there? Possibilities and budget?
- What are you willing to pay for a plot of land nowadays?
With the above points and the quite clear disadvantages of the plot as well as the apparent sales pressure from the seller, you can think about it. If the plot didn’t sell in good times and even with a 30% price reduction no one takes it, and such sales channels as going through the house builder are being used, I see very good chances to push the price down significantly.
Whether you can build well and be happy with the topography, you can assess better.

I would be very cautious or would only buy it at a bargain price (for example, completely deduct the unusable quarter from the valuation).

Thuringia, very beautiful landscape, spa town.
1850 sqm plot, level ground and rectangular. With solid house, barn and outbuilding. Partial demolition possibly required.
Stream at the back end of the plot, deep well on the property. Trees in the garden. Fully developed in village location.
Not far from Weimar, small town with gas station, Edeka, doctors, pharmacy, schools and daycare. The largest outdoor pool in Thuringia.
Hourly bus connection to Weimar. Erfurt and Jena 45 km away.
Just as an example. Asking price without negotiation 29,000 euros!
Reference land value here 15 euros.

That’s how it is when you can live in thriving landscapes in the middle of nowhere. Only few people want that; Thuringia is the state with the largest or second largest population decline in Germany, far-right extremist and without prospects outside the four real cities (where I would set 50,000 inhabitants as the boundary).
But yes, whoever wants to live like that has neither a land problem nor a problem affording a property. This doesn’t help the OP much with over 300 km commuting distance though.

If the property didn't sell during good times and even with a 30% price reduction no one bites, and on top of that such sales channels are used as through the house builder, I see very good chances to push the price down significantly. But whether you can build well and be happy with the topography, you can better assess. I would be very cautious or would only buy it at a bargain price (for example, completely deduct the unusable quarter from the valuation).

I see the question here, mind you, from a completely different weighting perspective than the OP. For him, it apparently concerns the question of how to find or assess a price per square meter against the background of a property that is difficult to place in a comparative framework (reference values and the like) in the unconsciousness of the typical dangers of such offers. However, we know numerous examples here that the question actually plays out in completely different dimensions than it seems to be for the OP. And by this I do not mean the weighting of the negative points or minor negatives, to which I would also count relatively harmless garden land shares in a broader sense. Even that in some locations "additional costs" is a euphemism for the budget share of development costs can pale as a negative point before others: namely before two existential questions, 2. does the plot concern at least one relevant area as a building plot at all? 1. can the broker guarantee an acquisition opportunity (or does the OP end up only with a building contract on his neck)?

I see the question here, mind you, from a completely different weighting perspective than the OP. For him, it apparently concerns the question of how to find or assess a price per square meter against the background of a plot of land that is difficult to categorize within a comparison framework (reference values and the like) in the unconsciousness of the typical dangers of such offers.

Then I should have made the two bullet points before my text clearer. Budget and actual possibilities (well-founded and not according to the statement of a house seller who then comes with various add-ons) I wanted to put to the forefront. And for this – especially regarding possibilities – you need a professional. Whether architect with a building preliminary inquiry, building ground expert, contamination investigation, or whatever. Due to the history of the sales efforts, there should definitely be enough time. Enough has been said about price finding – or it might still turn out...