Champaign Taste and Beer Money

May 12th, 2009

For the Past Month I have had this man calling every week to ask me about prospective foreclosure properties, and at the end of every conversation I get off the phone wondering if the man heard anything I said. This person came to me with a pre approval letter from a National Lending institution last month for a loan up to $300,000.00. Here in Seattle that is the average price for a foreclosed home roughly. That home is 1300ish sqft; with 3 bedrooms and 1 bath; built between 1910 and 1930. And for your 300k you get all the great things a 80-100 year old house has to offer you. Ancient everything, asbestos, mold, knob and tube wiring, galvanized to cast iron plumbing, got to love it. So not only do you get to buy this foreclosed property, but it also will be a series of piece mill work done by previous owners. This is the average. Sometimes I get excited when I see wiring and plumbing at least updated in the fifties or sixties. I get even more excited when it was done in the eighties. And if that foreclosed home has been remodeled in the nineties or later, have no doubt you will be paying the 500’s or more for it, because resale will be in the sixes and above in some neighborhoods. Welcome to Seattle. That’s my rant.

SO back to the prospect he came to me first wanting a house with good upside for his budget, then he came to me with a need for e house with 4 bedrooms for 300k. This is a little harder but it happens, you will need to put some elbow grease into the property but they are out there in some form. I found Six in the areas he wanted to live, and lucky enough they all were livable. These properties all needed more work than he was comfortable doing. So i didn’t hear form him for a while. Mind you I explained what he was going to get for his money, I am to blunt for another interpretation to of been had.

Last Sunday I am driving back from a hike at Rattle Snake Lake, and i get a phone call from him and he is all excited. HE says he found a 7 bedroom 6 bathroom 5000sqft house that went to auction last Friday for an opening bid price of $256,000.00. Then he says a website told him the home was worth 2.2 million dollars. Could I call the lien holder and see if it sold, so he could buy it. I calmly asked him many questions and informed him that; the opening bid price is so low that the house will end up selling for close to 1.4 million. And even in some crazy long shot there was a way for you to buy such a house for that amount of money not have a time machine; how was he even going to pay the property taxes, which are about 25k a year on the property. He said “I didn’t think of that.” Then I said, if you did not think about how much the taxes were, did you think of how much it would cost just to turn the lights on in that place every month? (About 800 bucks), and you haven’t even flushed a toilet yet. I again ask him if I can send him a list of distressed home that he can afford. He said yes, and asked if we could have a showing on Tuesday. So I sent him 3 homes that meet his needs, yet all need some elbow grease because of this budget. HE asked again if there are any new homes in Seattle (in the city not the burbs) that are 4 bedroom 2 bath for 300k. Then I fired him.

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