In Shaw (an historically gentrified blog)

Foreclosure, probably not that great of a deal

I live next door to a foreclosed house.
The story, from what I can piece together is that long time ago, say 15-20 years ago, some Ethiopian guy bought the house as an investment property. According to a neighbor on the block, he did rent it out but left it vacant for about 7 years. Then for about a year or two he rented to some Ethiopian sisters, one of whom got married and they all moved away. Then the Ethiopian owner sold it to another Ethiopian for way too much at the top of the market. This new Ethiopian owner rented to an Ethiopian family who stayed for a few months, and then the house sat empty. And then it went into foreclosure and the bank owns it. The bank tried to sell it for close to what the guy paid for it, and it sat. Then about every 1.5 months they would decrease the price. It remains unsold.
A friendly Vietnamese couple looked at the house and were very interested. So much so that one day they brought an inspector with them. I'd like the house to sell, but I also want any future owners to be aware that there are some busted pipes in the house, as the pipes failed last winter sending water into my basement. So the couple took in that information and went around with the inspector. They spent an awful lot of time looking at the rear kitchen portion of the house, which if anything like mine, is structurally crappy. The stucco is cracked and red brick dust seeps through. The layout of the 2nd floor is, challenging. Anyway, they didn't buy it. I'm sure the numbers just didn't work out. The amount the house was selling for, plus the amount to fix the busted piping (which would mean taking up portions of the floor and possibly finding mold) just to make it suitable for human habitation, was more than likely far above it's market value. That's not even addressing the structural and mechanical issues, nor is the price of making it 'nice' as opposed to 'not condemned'.
Let me throw in some numbers. The house at the time the couple looked at it was $310,000. This is for a townhouse of about 1,000-1,200 sf. nothing fancy, aged AC unit, blown in heat, busted pipes, electrical systems a big unknown, weedy front and back yards, and appliances over 10 years old. Plumbers cost money. So say there isn't any mold under the house and you just need to fix/ replace the pipes, and it can be done from a crawlspace hatch, so there is no replacing the floor? Well that's over $3K, based on how much I've paid to have a 'simple' plumbing job done in an easy to access area. But there could be mold, and the floor might need to be taken up. And while you're doing that you might as well gut the whole thing. When I asked how much someone, doing it all themselves spent to gut and fix their own house, which is similar in size to mine, the amount was about $60K. I paid well over that, let's just say my contract had a $80K limit, we hit the limit and there was still stuff (like installing heat and AC) that needed to be done when I ran out of money. That amount doesn't include the paint, the tub, and other materials I bought myself.
The houses on the block, sans basements, are assessed for around $350K. I'm somewhat doubting that whoever buys the house is willing to put into it more than its market worth. The bank may have to knock the price down to the high to mid $200K range before anyone bites.

Labels: houses, housing, renovation

posted by Mari @ 29.11.07