Thursday, May 24, 2012

Day 5: The Hunt Continues


I lost my first 'official' offer. It took the bank exactly a week to decide. I was outbid due to being a bit conservative on my price (I think) and the fact investors can afford more overhead in the purchase price. As my friend R. likes to say, "You haven't found your house yet..."

So, I moved on and went to view a couple of more. The first one is really cute and still has the original wood doors and moulding. It also appears to still have it's copper, but I'm not 100% certain. The negative: both houses are boarded up on either side and the neighborhood is quite run down. I felt uneasy there for some reason (and this is odd for me). Ironically, it is not on the West End, but more south-central (near the house I lost the bid on).

The second house is a little shotgun next to railroad tracks. It sits on a big lot and someone even built a functional chicken coop in the back yard. Vandals (more than likely bitter X-owners or kids) have broken in and painted graffiti in one room (very easy fix), busted the stone fireplace, overturned a toilet and busted out plaster and lath walls. Still, it has some potential.

And this is where the story takes a discouraging turn...

While at this property, the agent helping me starts to hint that there is little commission to be made on these and that a lot of agents would just say, "Oh, we can't get into that one." Now, to be fair, I have looked at probably a dozen houses on my own time and have only asked for an inside view (which requires an agent) three times. I'm pretty good at narrowing down what I need. In fact, I had sent her an email saying I was willing to place the offer without a view (I'd peeked into the windows) and the amount. She ignored this email and set up a viewing.

This particular house is priced way over the other ones I had looked at ($12,000), yet it is in a degrading neighborhood, is much smaller, and needs just as much or more work. I chose a number I feel is fair based on the cost of repairs I will need to do and the comp values of the neighborhood ($7400). She replied she would put it in if I really wanted her to, but that the bank would only go 5% less. What? That means the lowest they will go is $11,400. The house needs at least 10K in repairs and the average selling price of homes in the neighborhood is $23,000 (all of the higher selling ones being in far better condition and in a bit better areas). And, as we realists all know, houses are still Depreciating. Paying 12K for this house is just not an option.

So, I told her I would get back to her...

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