This from my Arizona Republic real estate column (permanent link):
“You won’t believe the deal my buddy got on his house. He paid thirty cents on the dollar!”
“You’re right. I don’t believe that.”
“I’m not fooling with you. The house was worth $300,000, and he picked it up for a hundred grand.”
“It was worth $300,000 when?”
“Huh?”
“He got it for $100,000 in what condition?”
“Huh?”
“The house might have been worth $300,000 four years ago. And it might have been in great condition back then, too. What was the list price when your friend put the house under contract?”
“It was listed at $97,500. But the original listing was for $300,000!”
“I don’t doubt it. A lot of homes have been on the market for years. What kind of shape was it in when your friend saw it for the first time?”
“It was great! I mean, there were some holes in the walls, and some of the doors were missing. But it just needed some touch-ups on the paint. And the carpets were hardly stained at all!”
“What was the kitchen like?”
“Cherry! All it needed was a range, an oven, a dishwasher, a microwave and a fridge.”
“In other words everythng but the kitchen sink.”
“No, that was gone, too. But the counters and cabinets were in great shape, just missing a few knobs.”
“So some nice folks bought more home than they could afford during the housing boom. They couldn’t make their payments, so they put the home on the market for more than it was really worth, even back then. It sat on the market for four years, through a normal listing or two, through a short-sale listing, and then it finally sold to your friend as a lender-owned home. Is that about right?”
“You bet! He got a smokin’ deal!”
“Except he didn’t pay thirty cents on the dollar, he paid $2,500 over list.”
“Oh, whatever. Did I tell you about the trout I caught last week at Lake Pleasant? I swear, it was bigger than my arm!”
“Now that I believe.”
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