As I wrote in some of my previous posts, when you go look at a house there will be certain things about it that you know are major selling points, and so you take note of those while you’re looking at the house. Some of the things that I noticed right away about this house well first let me say that I had been watching the home for about two months at Trulia.com and since it was a Freddie Mac First Look home it was under their First Look program which means they give…. I want to say it’s 14 or 20 days I can’t remember but when they list the house they give people the opportunity to first bid on it that are going to live in the home and not renovate it and sell it. So homeowners get to make offers first and then investor/dealers second. And that first look date ended I think it was April and I’m pretty sure I remember seeing the house at like 37,000. I crunched some numbers and I knew that I could not afford to pay 37,000 for it and make the profit that I wanted to make on it so I waited it out. As much as I wanted the home, it has to be about making money or losing money. And let’s face it, nobody wants to lose money no matter how bad you want a home….crunch your numbers. So after the first look stage with Freddie Mac, the home was dropping a little bit here and there in price so you kind of have to make a decision about when you think you’re going to make your offer because if you wait you could lose it if you go too soon you over bid. The area that the home is in is a really nice location. The property had 1/4 of an acre which was predominantly flat and that indicated to me that my market would include families with children. The home would also be suitable to an elderly couple because the terrain was flat, the crime rate was very low, and yes I ran the pedophile check and there were no pedophiles with an X amount of miles of the home. Keep in mind I had done all of those things already before I ever went to see the home. Next, the home has a four car garage which is probably the only home in the area with a four car garage, garage had electric, the driveway was paved and in good shape, had a huge turnaround, potential for a fourth bedroom, and most of the repairs were cosmetic except for the two small bathrooms that are total guts.
But if I could only choose four reasons why I had to have this home they would be the four car garage, the quarter of an acre flat yard, close proximity to the school, and potential for the extra bedroom which left the 10 x 9 bedroom homeowner option to enlarge bathroom upstairs or make that a first floor laundry room. When I made the decision that it was time to place my offer after I saw the house, the listing price was 31,900 and the day I decided to make the offer another one had come in. So since I knew it had been on the market since March, 2019, Mr. Mac would be eager to dump it because they are non performing. I also knew that these foreclosures generally won’t come more than 10% off their list price and the price was listed at 31,900 so 10% of that is 3190 and the bank always comes back with a counter offer. My original intentions when I decided to make the offer, when I knew I was the only one offering at that time, was to come in at $26,000 knowing the bank would go down the 3190 and come back in about 28900 and I would be OK with that. I also knew there was a general contractor in the area who had completed three or four homes and had successfully sold all except for one that he did an outstanding job on but he couldn’t sell it because it was smack dab up against a loud structure and had absolutely no yard whatsoever so a bulk of his money was tied up in that home that he wasn’t able to sell . I was pretty confident he was the other person bidding, that he had a house tied up that he could not sell, I was almost positive he will probably come in real low at about 24,000. And then in the evening before I made my offer, insomnia set in and I started to convince myself that it wasn’t him it was just another buyer and I knew if it was another buyer they would offer list because they would be eager not to lose it so in the morning I made an offer with Megan at the list price of 31,900 and about 11 PM that evening I texted her and I said Megan raise my offer up $525 because if I lost it I didn’t want to just lose it over $500. I didn’t mind losing it for 600 or 700 or 2000, but not for 500 . And I had reason for adding the 25.00 and that being that if it were an owner and not investor they would have bid in 500 increments therefore I added the 25.00. So she made the offer 48 hours later the bank let her know that I was the successful bidder. I wouldn’t recommend that anyone go above the bank’s listing price unless they are sure of other facts of the situation like I was.
In reference to the offer that I decided to make, I also know from my research that 250 yards away from the home another home was listed at $125,000 and that home wasn’t anywhere near as nice as mine is going to be in six weeks . This yard had 2 acres of property but virtually 90% of it was not usable on a hillside behind it, it did not have a garage, and it needed extensive updates on the inside. So if they are asking $125,000 and they get a pending offer of say $110,000 that puts my home’s value at about that price. So a lot of things went into my offer that I had done the research on prior. Will that home 250 yards away from my home sell for $125,000; I doubt it. My guess it would sell more like $95,000. So I’ve been watching that home on the website to see if they get any offers because it will give me an idea if I want to do something a little crazy at the end for a couple thousand dollars as I’ll have a little leeway as far as the appraisal. I also had the luxury of knowing I just sold a home there for $84,000 which didn’t have near the exterior layout this one had nor did they have a four car garage or a quarter of an acre. I recall talking to the appraiser the day he came out to the house I sold and I asked him about my daughter’s home across the street. He told me the home I sold was two bedrooms and hers was three bedrooms and if somebody went over to her home and did to the inside what I did to the home over there that her home would appraise somewhere right about $90,000. I also learned from that appraiser, and each appraiser has their own thing they do, that he gave me credit in his appraisal for the unique things inside the home that I had done like the sliding barn doors, the kitchen island, the painted brick, the restoration hardware hacks, and the unique wood flooring in the upstairs that I had made. So now I know for this home I need to put a lot of really cool stuff inside it from Cyntrest!!! So one of the reasons I made the offer on this house was the indicators that you just can’t ignore that gave me the ability to ascertain possibly what it might appraise at!! The furnace is good in this home, the hot water tank is good and the roof still has life left in it so they will factor in that those are not all new and I’m not going to replace what isn’t broken with the hopes of getting a higher appraisal because it doesn’t always work that way . Is there a possibility that when we turn the utilities on at the furnace doesn’t work the hot water tank doesn’t work …absolutely… and that’s what steers people away from these kinds of homes. It’s nothing but the fear of the unknown and I know that I have Matt Who is very handy and can fix pretty much anything so I’m not too afraid of that . Do I want to have to add a furnace for $2000 absolutely not that cuts into my bottom line on the other hand I know for a fact central air works in the Home because the bank has the electric on and the CA is running .
Oops Did It Again 