Question about Realtors & Real Estate

I made an offer on some land that I have been watching, current owner purchased it 5 months ago and is paying $75.00 US monthly in tier for it...the reply was that they couldn't accept my offer...the land is not being used, has rental signs on it but no takers in 5 months.

Isn't that bad business sense? Don't you cut your losses at some point? Even if you have other land that is making you money, why wouldn't you want to increase your profits by lowering your monthly tier? From a financial perspective this just sounds plain silly to me.

I appreciate it if someone could help me understand that thinking. Thanks.

Any of those purchasing land are usually prepared to stay with it for the long haul.

And maybe your offer wasn't high enough to make them budge

but after 5 months? on a $75 per month tier parcel? makes no sense, you can't make that back unless you rent it out and even that has no takers....i dunno, must be me

Well Tini...I'll say this as humbly as I can....$75/mo is a drop in the bucket for me. I own a full sim, and an openspace sim. I live on the openspace sim pretty much alone, except for one friend/tenant I have on there with me. So, I'm spending $75/mo...just to live there

From a financial perspective it makes no sense.

But there's also the "oh I may pull up those signs and build a treehouse" perspective.

Lots of reasons other than financial that cause people to do what they do.

Right. There are all sorts of reasons people own land in SL. It's not clear from my reading of this thread that the land in question is actually for sale. If it's just "for rent"... it's a huge leap to conclude that the person nominally offering it for rent is doing so for the purposes of generating income.

By far the vast majority of SL land is not owned with any intention of generating positive cash flow. So, unless land is for sale, it may be prohibitively expensive to try to buy it. This is true in RL, too--especially residential real estate.

Keep in mind that once an avatar goes past the 1/2 region tier, its relatively inexpensive for the 2nd half of the tier.

125usd for 1/2 tier
195usd for full tier

And if the land is grouped, thats an extra 6000+sqm to use within the full tier. So that land could be held for far less than a 75usd tier.

the fuzzy math none-withstanding what you really have here and in most cases where this happens is an rpg realtor they want to play like they are in the land bussiness and as long as they have land for sle they can pretend they are a realtor.
if they accauly sold the land then they would have to find new land to sell and that takes work

One possibility is that the person is holding the land to use its prim-allowance on another parcel in the same sim. They may have the 'for rent' signs up in order to discourage people from bothering them, asking to buy the parcel for a lowered price. ^_~

This thread seems to be part of a barely concealed attempt to pressure someone into giving away land they obviously want to keep. It makes me RAWWWWR to see this nonsense over and over again. I''m responding here not just specifically to you but to every one of these threads I see. If this guy doesn't want to sell his land to you it is his right. Perhaps he plans to use the land in the future, perhaps he's holding out for a better price, perhaps he is using it but in ways that you can't see, perhaps he's so fantastically wealthy that he can't be bothered to waste his time talking to you over $75 a month, perhaps he doesn't like your face and doesn't want to give you his stupid land, whatever the reason is you have to deal with him directly and if he says he can't accept your offer than I suggest you change it.

Elanthius, I'm not saying you're wrong. You may very well be 100% correct.

I just wanted to say that in my first weeks here, I, too, had trouble figuring out how someone could leave a parcel of land up for rent or sale for weeks on end.

Later I realized that many who deal in land pay monthly tier for square-meters equalling 2 or 3 or more full sims. They may routinely stay a few thousand meters below the amount that's a bump-up to the next level of tier.....so a parcel that's (say) 1/64th of one sim isn't going to make any difference to the total tier they pay. Thus they don't see any reason to lower the price (or in the case of the 'for rent' parcel, don't see any reason to put it up for sale).

I'm just saying that 'intent to pressure' might not be the only reason to post a thread like this (though, no doubt, in some cases that is exactly what it's about).

well i will say they are wrong on several account one being if they really don't want to sell it why have it for sale?

having any land listed as for sale and then finding out it's maked at 15 to 20 times what the same sized lot next door just sold is silly sillier still when you act all insulted when somebody makes you an actual reasonable offer,and when i mean resonable i'm talking in the 10 L$ range when that sims average is problibly below the average selling price maybe the 3 to 3.2 range.

if you really don't want to sell don't make it for sale if anybody should be offend in these situations it's the people in the buy market becouse you are wasting our time

oh and Ponsonby Low that type of business model where say having two or 3 extra 2024-4048s sitting about because my teir can absorbe it is exactly why allot of rl business fail

one setting empty is not bad but several you have to realize that if you had scaled down 3 months ago that might be an extra 210 dollars in your pocket

to much inventory on your self or to much fuel in your tank all the time is wasted money

Regardless of what you think land is or should be worth if I set a parcel for sale for 30 or 40 or 50/sqm it's because that's the price I'd be happy to sell it for. I'm sorry that you think I'd be deliberately wasting your time but I'd say you wasted your own time by flying around the grid looking for land when there's an easy, convenient land sales search tool which you can use to filter out all the parcels you're not prepared to pay for.

Perhaps one thing that you and OP don't realise is that land does sell for these prices occasionally and if you're prepared to wait it out and take the risk it can be a viable way to make money.

protected water front land yes!
some of the ice covered Sims to the right buyer yes!
a double prim land or one that has a bigger Terra-form window,yes!
next door to a big draw area that WILL be there for ever,especially if you would be next door but not on that Sim defiantly yes!

a Podunk class 4 Sim with a traffic of 4 for the entire Sim not even close,and that is where most of the super ridiculous land prices are

Again, owning "land" in SL is not all about money. If land is up for sale for some ridiculous price, we certainly can't conclude that the owner is much interested in selling it. I mean, I have land that I really don't want to sell, but I suppose if somebody came along and wanted to pay me L$100/m2, I'd find somewhere else. Granted, the infinitesimal likelihood of that happening is not much increased by my setting it for sale at that price, so I don't, but this is the extreme case. Somebody ever so slightly more willing to consider an offer just might put an outrageous price on it and set it all for sale. That doesn't mean they're so interested in selling it that they'll entertain lesser offers--and the outrageous price is a good hint that they aren't, and won't.

I suppose the real problem is that, very rarely, this works. Then the partial reinforcement extinction effect kicks in, and the buyer becomes obsessed with flying around the grid, trying to make it happen again.

(And probably, if it ever does work again, that buyer will "realize" they were wearing lucky shoes.)

As obsessions go.........it could be worse.

Thank you all for your replies. To settle some information that may not have been clear...the land is most definitely set for sale. It also has "for sale" and "for rent" signs on it The owner is in the business of real estate as advertised in their profile and the description of the land in question.

At the time I made my offer, the individual said that this parcel was 'just a drop in the bucket' of all the land they own across the grid. The land is not being used for anything but to advertise it as available for sale or rent. The one caveat is that there is an emotional attachment to the parcel by the realtor as they had stated it was their first parcel of land in SL.

Even if someone pays the asking price at this time, there is already the $75 tier per month just has been paid out and cannot be recovered. I could understand if the individual was, in fact, using the land, even if just to look at it from time to time. I am online a fairly lengthy part of each day and there is very little, if any, traffic on this piece of land nor is the owner around to enjoy or make use of it.

Whether $75 monthly is a mere pittance or not, from a business perspective, the individual is diluting their profits from their other parcels, if those are making any money at all. I pay a fair amount of money for my tier each month but I am not in the business of real estate and I use/enjoy my land for entertainment purposes.

This is not the first time I have heard of someone continuing to pay tier on a parcel they are not using and that is up for sale and claim to be in the business of real estate.

My original post was to try to understand if this is a common practice with 'realtors' in SL as it just made no sense to me from a business perspective.

Thanks again for all your replies, they do provide insight as to the varying thoughts that make individuals do what they do. I suppose the suggestion of RP as a Realtor could be valid in this case cause I can't think of why any true businessperson would just fritter away the monthly tier as an expense against their other, possibly profitable, parcels.

/me shakes her head and walks away - I do hope the person who owns the land in question is not in business in RL, at least, not using the same strategy for their business

P.S. oh and Elanthius, this is no veiled attempt to pressure anyone into selling anything...i have no clue whether the individual in question reads these forums or not...as for others who felt there was some ulterior motive to my asking...i suppose there is no way for a person to ask something here without someone being rubbed the wrong way by it. You do seem to be rubbed the wrong way. Too bad as that is what hinders understanding - that someone should not post a question such as I did to clarify something I couldn't understand.

Last bit of info, the land is an oddly shaped 13,312m sq - not a small parcel of 2024, etc. It's not a parcel I have any direct requirement for so I have no desire to increase my offer as it will increase my tier to the next level. If I was helping the individual offset their losses on it, that would be my motive, I suppose, as I would make use of the land and enjoy it for what I pay additional in tier.

Like the 2 residents who've had separate 16 sq metre plots for sale at L$5000 each near my home for 18 months!

If their lists of Owned Land are long enough, they might not have noticed those little bits. The '16' at the end of the line wouldn't make them jump out at the viewer (the owner).

On the other hand, a parcel of 13,312m (as described by the OP) would tend to stand out on a list. So 'being overlooked on a list' is not a likely explanation in that situation.

I know it took me a long time to put my own first parcel up for sale. One does become attached.

Of course, that was only a 512m, not 13,312m. Yikes!

But that does engender an additional thought: if that person's very first purchase WAS of that magnitude, then this must be a person with no money worries in RL.

So, as speculated earlier, the $75/month may genuinely be a drop-in-the-bucket to that person.

I don't know why the OP didn't post the information in his third post in this thread in the first one. That coupled with his criticism of the landowner's business accumen makes the whole thing seem like nothing more than a transparent attack on the landowner's decisions simply because it didn't comport with his desires. The bottom line is the landowner can do whatever they want with the land in terms of pricing it. If you don't like it don't buy it. There's no need to post here as you apparently already had all the answers you needed in your last post.

Dagmar, How does a question asked to better one's understanding of a situation equate to "a transparent attack on the landowner's decisions..."? I have no idea whether the landowner/realtor reads this column or not and, since I cannot name names in such a situation, how is that an attack on anyone???

I am not a realtor in SL, nor do I play one on TV, I was truly wondering whether there was some business related strategy that I did not understand. Geesh, have a cuppa coffee or something and chill.

If the realtor sells you the land and they own over half a sim of mainland after that plot would be sold, selling that plot will not reduce their tier costs, they will still be paying that amount of tier. After half a sim tier costs increase in half a sim levels. Therefore they can let it sit there unsold until their asking price is met.

Whether they should be looking to use that land to increase income to meet those tier costs is a different point.

It's their $75 so it's not really anyone's business what they do with it. Maybe they consider the $75 to be money well spent on advertising, since it seems to draw attention to them, and get them posted about in the forums.

Besides which, maybe they consider their business to be successful as long as it covers their tier. Not everyone who does "business" in SL actually cashes out.