Has anyone here negotiated a shared well arrangement? What is a typical range to offer for that type of arrangement?
@sanctuaryabode Are you asking how much you should offer for a property that is part of a shared well arrangement? I’m not sure if I fully understand the situation.
The existence of a shared well shouldn’t necessarily dictate what your offer amount should be for the property. It’s just one of many factors to consider when figuring out the value and usefulness of the property. I would think that other factors (like market demand and the desirability of the property itself) would be more significant when coming up with the property’s overall value.
Having to pay for a shared well is kind of like having the pay for an annual HOA fee. It’s an additional ongoing cost that the owner will have to pay… which is fine, as long as it makes the property significantly more desirable and useful.
@sanctuaryabode
sorry, let me clarify. This is a lot that has been purchased and I am actually looking at building on it. Got the lot at a great price because of a failed drilled well attempt. Trying to solve the water issue via a shared well or making another well drilling attempt. So this is not the typical flip, but considering development or value add via solving the water issue.
@sanctuaryabode to the extent of my experience, I once owned a lot that had a shared well with 4 other lots (so, 5 lots total sharing one well).
I don’t know how much the original well drilling cost, but we each had to pay $500 per year to maintain the thing. This lot was in the New Mexican desert, so finding water and maintaining access to it was apparently not an easy or cheap thing to do.
pretty formal arrangement for a pre-existing group well arrangement. Does seem pretty steep for maintenance. My situation would be to create the arrangement since it does not now exist. so trying to get a feel for what is an typical and acceptable range to offer to create a shared well and maintenance agreement.
@sanctuaryabode might want to start by figuring out the cost of drilling and then maintaining, and then approach the neighbors (if you can) to see what they’d be willing to pay. Even if you can find an existing instance of this in the area (perhaps a well drilling company might know of some), you could see how they’re handling it.
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