cash offer, should I take it

[Frank Jiang]

I am selling my house and in two weeks the house will be put on market. We plan to list for 1.3 million and will most likely get over 1.4 in the current over heated market. Literally there is little inventory at this price level. (check 91011 zip code)

I received a call from a buyers agent offering $1.4 million in cash, then increased to 1.435 when I rejected the first time. There is obvious value that the investor/buyer sees. The lot is 0.7 acre and can support over 10,000 sqft size new building. The location and good school of the city can support $700-800/sqft unit price. The construction cost is $150-200/sqft, they will still make ton of money... 

The only issue here is the lot is on a hill side and there is a storm drain below the ground level running across the land. I guess if the city allows pile foundation over the storm drain, the new project will be a no-brainer. 

I guess my question is should I take the offer, or should I push for more? 

[Darrell Shepherd]

Call me crazy, but I'd definitely take the money and run.  If you plan to list it for $1.3, hoping for $1.4 and someone offers $1.435 (presuably without the 6% agent commission since its not listed yet) and you are hung up because the buyer is going to make some money by taking the time, risk and capital to tear the house down and build another one?  

Your house, but based on what you've presented to us, its a no brainer to take it. 

You could invest the time and money and do up a repurpose plan and present it to builders and investors and see how it shops, but to decide its worth more based on the market of the new house instead of what sits there now because you think that's what someone is going to do (if the city lets them) seems iffy at best.