“A Tale of Two Homes”

This is an accurate Tale of two nearly identical homes on a St. Louis street called Country Ridge Dr. As fate has it four years ago these two competing homes were for sale at the same time. 

 

One was occupied, in above average condition, had a motivated seller, and was for sale for $219,900.  These highly motivated owners had only 1 house showing in the 2 weeks prior to WHAT HAPPENED NEXT.

 

Next, the home directly across the street came on the market.  It was the same floor plan, same age, same builder, was in a below average condition, and it was a FORECLOSURE.  The sign went in the yard on a Wednesday with “no showings until Saturday”.  The Bank advertised a price at $199,900 because the home needed extensive repairs and it had a shaky Title situation.

 

That Foreclosure house had 14 showings on Saturday and there were 9 offers the first day…including one from my customer.  By 5:00pm Monday those 9 customers had competed with each other, like wolves over a hunt, with the winning contract being a whopping $216,500.

 

A month later the occupied house, right across the street, in above average condition sold for $207,500.  A full $9,000 below the piece of junk foreclosure sale.

 

REALLY folks?  Is this what we have come to?  Can we be that myopic to compete with each other over an inferior product, overpay for junk, and just to win the trophy over others?   Does there have to be COMPETITION to get our attention?  A former start-up called E-Bay learned years ago, the premise that if we compete for junk, and win, somehow we are satisfied.

 

In 2012 Real-Estate, nearly half of home shoppers will be so focused on the foreclosure and bank-owned junk that the good homes with motivated sellers will be invisible to them.  Hey, I know it’s tempting to find a foreclosure, make a low offer, and try to steal something.  We can even tell our parents and friends what we did and perhaps demonstrate our shrewdness as a person to be taken seriously. Right?

 

If you’re not mindful of your motivations you could get swept away by an investor mentality of buying a foreclosure piece of junk for a very low PRICE.  Sadly, in the long term you may realize your completed Cost was so high that your Trophy gets tarnished beyond recognition. 

 

Hey all, I see this all the time. Even if the buyer gets a healthy 10%-25% discount on a foreclosure.  It is seldom worth it.   That up front PRICE advantage disappears into an escalated COST, expensive cash repairs, a 3-month root canal of unexpected charges, and often a home that is difficult to resell.

 

My advice to the Savvy real-estate buyer of 2012 is ….KEEP AT LEAST ONE EYE on the traditional homes with many updates, stable foundations, healthy Title’s, and motivated sellers.  You may find your best matches there.