My question involves real estate located in the State of: California
I am looking for advice as to how I can determine the value of my property. The home we own is on a very wide lot, and our next door neighbors would like to buy a portion of it to widen their very narrow lot (approximately 3,500 sq ft).
We bought this house almost 3 years ago, and when we went into escrow on the property, these neighbors immediately approached our agent about the transaction. They mentioned they were interested in .18 acres, which is the maximum we would be able to sell within keeping of the zoning requirements of our neighborhood. The price they mentioned at the time was $50K. Now, we have finally gotten around to dealing with this and since we are not going to be selling them the full amount, we are not sure how to value the amount we have agreed upon. Some key points:
- The neighbors are already planting on our land, and have been since before we bought it. They do not have any legal right to do this, but we have not had a problem with it so far as it is not disrupting our use of the space.
- We understand that after 3 years of encroachment, the property can legally become theirs, which is why we have approached them about resolving it now.
- They have been very eager to legally take ownership and have paid a surveyor to start the process; we are also friendly with them and do not want to seem like we are taking advantage of the situation, but we want to make sure that we don't sell them the property for a price so low as to not compensate for any future loss of value due to the smaller lot size.
- There are 2 easements on the land they want to buy, one from the utility company and one from the neighbors who live behind both our houses. They arranged the easement for drainage purposes with the previous owner of our home. It is my understanding that it would benefit us to no longer have any easements attached to our property...
We do have a mortgage, so I am concerned that the lender will need to somehow be involved or approve of the valuation but I am not sure how this works. Our property tax bill shows the land value at a price per sq ft that would come to quite a bit more than the $50K they initially mentioned, but is this the correct way to figure the value?
Can anyone help?