#407 in a series of true experiences in real estate
October 2002, Hills Newspapers
Offer a house for sale in our market area – pretty much any house – and it will sell. Certainly the pretty and well located house will be sought out and purchased. But, in addition, dwellings that are dark, dirty and cluttered, even strange and ugly ones, falling down ones, will likely attract buyers.
Did someone tell you that you must fix up your house before you sell it? It’s not true. Given the right price and exposure, chances are excellent that you will have a buyer even if you do no prep at all.
To be sure, most would be buyers will pass on those properties that look bad. But there are others who seem paradoxically drawn to the bad and even to the truly awful. For example, not long ago Red Oak Realty brought a house onto the market in Berkeley, a big old house priced at $425,000 as is. This house was a complete wreck.
There was a termite report in the amount of $301,000. We’d never seen a house with a $301,000 termite report, and we were impressed, just had to see it, see what was wrong.
The location was desirable: lower Berkeley hills, lovely neighborhood, bay views. So we visited the unoccupied and derelict house and found that there wasn’t much house remaining. Shockingly so, we thought.
We could walk on the floors, what was left of them, go through doorways, pass through what had once been the kitchen. But the house had been so thoroughly neglected for so very long that every part of its construction seemed to be broken or missing altogether: windows, doors and frames gone, fixtures, lighting, plumbing and heat not there, every surface with rents and rot. The plaster had crumbled and fallen, the plumbing and electricity broken. Floorboards listed; surfaces sagged.
It was kinda creepy to be inside what little remained of a once (long ago) nice house, and we wondered, of course, what the story was, who had lived there and why this house had been allowed to fall slowly apart. We also wanted to know if the house could possibly bring its asking price, almost half a million dollars, when the place was obviously uninhabitable.
Could it be the value of the land was so high? Might this building be repaired? The termite report covered only portions of the work: some foundation repair, but not all of it, shower and window replacement, and such. But these were only the beginning of what would be needed.
And so, we watched to see what would happen with this property, and although we were there only once, did not go back again with a buyer and more closely inspect it, we were still so curious that we asked the listing agent about the sale.
For it did sell. The agent held it open on a Sunday and a hoard of bargain hunters showed up. Some shook their heads, as we had, and left. But others stayed, lingered, looking over the remains, probably trying to decide if it would be best to tear the building down, and if so, should they try to buy it anyway?
Just to make things more complicated, the owner of the house had died, and the sale had to be confirmed in court. This meant that once a buyer entered into contract with the estate, the price he was willing to pay would be openly publicized. Anyone else who also wanted the house could appear in court on an appointed day and overbid the accepted offer. In other words, the initial buyer might be buying the house, but maybe not.
The number of people interested in this house was simply astounding. The listing agent gave out disclosure packages containing termite and engineering reports to more than 50 different people. She received so many phone calls about the property that she had to set up a separate voice mail box to handle them. On it she recorded a message about the status of the house, how to see the inside and get copies of the disclosures, and what had to be done to make an offer.
Most of these folks, especially after reading the reports, thought better of buying, but there were still 5 buyers who tried to make the house theirs.
The selected offer was $500,000, completely as is. The court was petitioned for a date and one was set for about 5 weeks later. Only 2 people showed up in court, the initial offeror and one other. The first guy dropped out when the price reached $525,000. The house was sold to a couple, newly in Berkeley from out of state, and first time home buyers.
First time home buyers! Wow! That’s pretty interesting. I wonder what their plan is. Will they fix it? Tear it down? Why this house?
We’ve driven by the outside many times since the sale closed in early August. There are no signs of activity yet. No bulldozers, no scaffolding, no cement trucks. I do hope that we get to hear the rest of this story.
Anyway, if your house is in bad shape and you want to sell it the way it is, you might be able to. This estate got a whole lot of money for a very broken down building.
