A Roller Coaster Weekend

Possible Home for My Family
On Friday, my wife and I met with my RE agent to tour the two large foreclosures. While I hadn't seen the first home myself, I had seen the second from the outside before and thought it looked nice. Well, after we finished touring both houses, both my wife and I fell in love with the first home. It's 3043sf and was built in 1993. The inside is immaculate - it has plantation shutters on all the downstair windows, new carpet, new paint, new applicances, a weathered (but nice) deck outside, a big backyard (faces the gold course and a pond), and has almost everything we've been looking for in an upgrade house. The only exceptions were (1) it had very little storage space, (2) it still needed some TLC in a couple areas, and (3) it has some eyesores in the backyard (a huge electrical box, a make-shift wooden brace holding some electrical panels, and what looks to be a well of some sort [maybe for the pond?]).

We went home and discussed the property more. The asking price is $249,900, which was a reduced price from an original $269,900. I ran comps and figured the house to be worth about $235,000-$240,000 at best. My RE agent also ran comps and came with a figure of $232,000. I had originally wanted it as an investor property, and figured I could offer no more than $197,000 for it to come out with a decent profit.

On Sunday, my wife wanted to ask a few more questions about the house, so she called my RE agent. The agent said she had talked to the listing agent earlier, and told her that the "system" would not even accept offers below $200,000. She said they have already had "lowball" offers that were rejected, and the owner would be hardpressed to offer anything below $10,000 less than asking. My agent told the listing agent that the house comps at only $232,000, which is far below that price, so the house will definately be sitting. One other thing my agent told us was that the new carpet, new paint, and new appliances (~$20,000 worth of upgrades, according to the listing agent) were put in by the 'lender' to make it a quick sale. This is something I've heard almost no lender would do. What I find ironic is that the house has been sitting for almost 200 days - some quick sale.

My wife and I talked a little more about the property, and I decided to go ahead and email my agent with a starting price of $200,000. If the seller rejects it, I may offer $210,000, but with a stipulation that this is my final offer unless they are willing to drop the price more. If they are hellbent on a max of $240,000, then we'll look elsewhere. I'm not about to pay $8,000 over comp price for a foreclosure that's 10+ years old for my family.

Other Properties
I also looked at another prospect for an investor property. It's a big home (2950sf) in a neighborhood that has mainly smaller homes (generally 1600sf on average, but it has a wide range). It's a Freddie Mac foreclosure. Asking price is $136,000. Comps on the house are hard to get due to its size and location. I've gotten figures of $47/sf to $74sf. I usually average all comps and then drop the highest & lowest two and average the remainder. Whatever average is less is what I base my comp value on (among other comps). In this particular case, I only found 5 properties that are even close to this house (and all were still lower in sf). The average from all was $58/sf and dropping the 2 highest/lowest put it at $54.5/sf. So, I went with 95% of the $54.4/sf and came with a price of $153,000.

I figure resale value at about $149,900. After figuring buy, hold, and sale costs, and my profit, I could offer no more than $115,000. I'll probably submit an offer for $105,000 today.

Another property I found, but have not physically looked at yet, is a 1992, 921sf, 2/2 home. I would probably use this as a L/O or rental. It has a list price of $70,000. I figure a resale value of $68k, and estimated repairs at $5,000. If I were going to flip retail, I couldn't offer more than $44,000. I'm looking at an offer of $40,000 to start, but I need to assess repairs first. It's a HUD, and their report shows only minor trim work with a repair escrow of $550.

Daily Listing Format Change
Right when I think I can start martketing my program to convert these daily listings into a spreadsheet format, the listings change their format. Before, all the listings would be on one HTML page, complete with all the details. All I did was parse the input file and get all the parameters for each property. Now, they changed it to where they only give you 10 properties per page, and the listings only show general info (like beds/baths/SF). In order to get the details, you must click on a link located in the general list page. The problem there is that the link is a JavaScript function, and the function is located in a seperate file that is protected from snooping. BAH! Back to the drawing board. But this isn't only difficult for parsing of my program, it is also tedious just to go through normally. For instance, before I could just scroll up/down through the listings to compare, or whatever. Now, I must do a bunch of clicks. Another "feature" in the new format is if a property changes value or is new or is about to go off the market, there is a section in each listing that tells you.