Anatomy of a Bargain: 22 W 2450 N. Layton

Today's post will illustrate how I helped one of my clients find equity (read: money) in property in the current marketplace.

For most folks, making money in the real estate market is easy to understand. The rule is to buy any property when the market is real hot and then just let it appreciate. Sounds easy when you put it that way. So then, how do you know that you aren't buying at the top of the market? Hmmmm? I beg an answer from the easy money crowd. (I have dubbed this type of investment model the Pay-And-Pray Model - pay full price and pray for appreciation.)

The point I am trying to make is that yes you can make money when the market goes up but you can also make money when the market is flat or down even.

Here is our case study:

I have a client who needed to get into a home. They had been living at home with their folks while they transitioned from a move from Las Vegas. They were eager to get into another place of their own but were skeptical of the marketplace due to their experience with the Las Vegas housing market. They wanted to make sure they didn't get in over their heads with the home here.

After visiting at my office I convinced them that we could find a home that would meet their needs and in fact find a great bargain. So the search began....

22 W 2450 N was our first offer. It was a short sale listed at $220K. At 3000 SQFT that was a great value. However, since it was a short sale and listed at such a low price, we expected several offers to be in play. I suggested we offer $225K just to be competitive. Sure enough, when confirming the receipt of our offer, the listing agent told me that there were 6 other offers on this same property.

This news was discouraging so we went shopping for other property. We placed additional offers but couldn't come to terms with the other sellers. Then, about three weeks after our initial offer, the listing agent for 22 W 2450 N calls me and says the bank has approved the sale but at $240K. That was quite a bit higher than our original $225K offer. However, due to the higher approval price, all 6 other offers had jumped ship. My clients decided to counteroffer back at $230K. 10 minutes later we got a call back saying, since there were no other contenders, the bank would accept our offer.

Here is the first page of a 3 page CMA for this home.


As you can see, my clients are now the proud owners of a $280K home that they purchased for $230K. The home needed $10K in carpet and paint. Not a bad deal at all!

If you are in the market for a bargain, give me a call.