1. 2676 Jackson Ave.
List price $44,900. This home was a real doozey. The picture looks nice right? Well what you don't see is that all that rock has been put on the house by a five year old. They also put the rock on the front porch...not around it but on the walking surface. A major ankle-rolling hazard. Inside you have two layers of tile that need removal, floors that are sagging from failed posts in the cellar, no kitchen, no furnace, and foundation issues. Plus all the windows need replacement because they were scabbed into place. No casings...ect ect ect. This home should have sold for around $32,000 with all the work required. Just shy of a teardown. What did this atrocity sell for? $45,000!
2. 865 Binford St.
This is an example of asset manager buffoonery at the banks. This property started out at a listing price of $48,105 back in September. The price reduced to $43,105 in November. My clients placed a full price offer on the property Friday of last week. When I called to confirm the receipt of the offer, they told me the asset manager "accidentally" signed a contract with an online auction company to market the property the day we submitted our offer. So, they said, we would have to wait seven days to see how the auction turned out. Wierdly, on Wednesday, the list price was reduced to $38,105. Then on Friday they placed it under contract! What!? I petitioned the listing agent for answers to this wacky situation and why our offer, which was $5,000 higher than his new list price, was overlooked. I still have not heard back from the agent.
3. 2174 Jefferson Ave.
Ok, this was also a case of buyer's gone crazy. The bank listed this 6,200 SQFT giant fourplex very competitively at $149,900. It was definitely a cash cow if you could finance the repairs which I estimated at around $30,000-$40,000. I had six of my clients inquire about the property and I represented two of them in submitting offers. So what happens? Well, the listing agent recieves six offers from various parties and one took the cake. The listing agent never disclosed the amount of the winning offer but my understanding from anonymous sources is that there is concern that the offer accepted by the bank "may not appraise". What kind of buyers are out there bidding on an INVESTMENT that won't appraise for what they are wanting to pay for it? For heaven's sake have they gone mad?
The REO market and wholesale market in general has entered an irrational exuberance phase that I can't get my head around entirely. With tighter FHA guidelines around the corner, higher interest rates knocking at our door, and an expiring Home Buyer Tax credit just months away, I think the folks buying wholesale properties at a premium are in for a rude awakening. Retail prices will not go up when these events occur and paying too much for a home on the wholesale side simply doesn't make sense. Perhaps buyers (and their agents) haven't priced these events in yet. If so, WHOOPS!
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