Adventures in House Hunting, Buying a House, Open House Sunday

Garage Saleing: An unorthodox approach to evaluating a neighborhood when buying a house

When you’re shopping for a home and trying to decide if a place is in a good neighborhood, many realtors will tell you to drive around the area at different times of the day (and night) to see what it looks like. They might also suggest you call the local police station and talk to the desk sergeant. But there’s another less known approach that might reveal lots of interesting inside: the local garage sales!

In some neighborhoods, garage sales have taken on a life of their own with special significance: a community will hold a communal garage sale involving dozens or hundreds of families at the same time. What a great way to meet the future potential neighbors!

The sales is typically held inside a garage, driveway, carport, front yard, porch, or occasionally, the interior of a house, giving you a sneak peak of what people have done to their personal space.

You can tell a lot about a person by the stuff they are trying to get rid of. Are the items new, like-new, or just usable? Is it last year’s Pottery Barn collection or a collection that simply is going to pot?

While this can give you a peak into the economic mix of the neighborhood, you can also learn about your potential future neighbors personalities.
Often there are people who have decided they want everything gone — She doesn’t want it back in the house, he doesn’t want to schlep it back into the house — therefore it’s priced to sell. This is a person who makes a decision and sticks to it. Get to know her!

Then there’s the guy who wants to make back every dime he ever spent on the junk. Sure that anvil vise is priced fair at $20, but for five bucks more you can buy it new at Harbor Freights. Garage Fail! This is the guy who probably won’t lend you his snow blower without a deposit and will keep score of how many times you shoveled his walk versus how many times he shovels yours.

Speaking of power tools, I’m still looking for the wife who is so pissed at her husband, she sells his band saw and drill press for a song.

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Adventures in House Hunting, Buying a House, Open House Sunday

House Hunting via the Open House Route

With winter making a belated yet fierce stand, it’s hard to remember that just a few days ago we had a warm, sunny Sunday, which my wife and I spent enjoying the great weather and realtor spins on the market. Because we are house hunting, a regular feature on Adventures in House Hunting will be our experiences viewing Open Houses (OH) or Listings viewed with an agent. I may change up some details to mask the date of the visit and/or protect the identity of the agent. On the other hand, because agents use all kind of tricks to make a house appear new on the market even though it’s been re-listed and de-listed to death, I’m going to include address, price and links to the properties. The links may disappear or the price might change so this is just a snapshot of what they were when we looked at them.

House No 1: Irving Park
4253 N St Louis Ave,
4 bd/3.1 ba $409,000.

While we’re not likely to stay in our current area, every now and again I like to look at what is on sale in our neighborhood. The first agent was a lovely lady who took me for a tour of the house. At most of the Open Houses I’ve attended the format falls into one of two buckets. Either the agent lets you wander through the place unsupervised and will answer any questions when you are finished or they follow you around without being on top of you (barely). This was a rare guided tour where she took the time to point out some features and try and explain what the builders were thinking.

Alas the house has some External and Functional Obsolescence working against it. For one thing, it was across the street from a school. This can be a minor problem if you have people visiting you during the day and they have to park a street away because you cannot park in front of a school during school hours. It can be more of a problem if your street is the side that is optimal for parents to drop their germy, projectile-barfing poopsacks off at school.

The house did not have a basement but it did have three floors of living space. The master suite on the top had a bathroom door that would prevent having a king or perhaps even a queen sized bed in the room. This can be resolved, as the agent pointed out, by re-working the door hinge so that the door swings open into the bathroom…odd that they did it this way in the first place.

The agent probably doesn’t realize that I do my homework. For instance, I know that the builders bought the house for $80K and while they deserve to make a profit on their work, they probably didn’t put $300K into this house. Yeah they might have put higher end finishes and more expensive cabinetry and the spa showers and lighting looked impressive.

Drywall costs the same whether you buy it for a house in Irving Park or Lincoln Park and with a contractors discount plus a good efficient crew; your costs should be relatively the same from house to house. The two big variables are how cheap you can acquire the initial property and how much you want to spend on items like bathroom vanities, lighting fixtures, cabinets and appliances. Also, I’m guessing most builders have more than one rehab going at a time so they might be able to get a slight bulk discount on items so that coincidentally that new construction in LP looks a lot like the rehab in Irving park.

Rehabbers tried to do the same thing to another house up the street. They also initially priced it at $409K and have been chasing the market ever since. This is a $325K house.

House No 2: OIP
3902 N Central Park Ave,
3 Bd/3.1 ba $600,000.

This is a home I would like to live in and have my grandchildren visit. In fact, when I first started looking at Real Estate Porn researching the market, this was the type of home in the exact neighborhood I wanted. Unfortunately, it is $200K over our price range.

The agent was an older lady who was trying to sell a charming old jewel of a home that is located in the worse part of Old Irving Park. She was polite and friendly enough. I still got the feeling that she could tell this wasn’t in my price point and she was going to have enough trouble unloading this house as it is, she didn’t need to waste time on dead end OH stalkers.

This is another house that has External and Functional Obsolescence working against it. Externally, it’s barely on the Geographic Edge of Old Irving Park. The room configuration has two bedrooms and bathrooms upstairs with the third bedroom in the basement. Not a great family configuration unless you only have one child.
In spite of the large lot, it’s really a $475 – $500K house.

House No 3: Logan Square
2557 N Washtenaw Ave,
3 bd/2.5 ba $450,000.

The last house was in Logan Square. This house was a two flat that was converted into a SFH. It is a nice looking home in the good part of LS, just off Logan Blvd. It would be a short walk to the California Blue Line Station. The yard is nice and the alley is relatively clean, which is usually a good sign. If I’m going to live with a mile of my mom’s house, this is the part of Logan Square I would choose.

It is a good property at a fair price for the neighborhood. At this time, I cannot find anything else for $450K in that part of LS in that good of condition. That said, the house still needs some work.

The bathrooms need upgrading though they are functional so that could wait. Since my current pipe dream is to have some sort of spa like bathroom, the upstairs bathroom here is an excellent candidate for installing a better shower and radiant heated floors, though this house’s infrastructure might not support that.

The carpeting would need to be replaced and apparently there is not hardwood floor underneath them, so that’s a concern.

The basement is small and really wouldn’t be worth finishing off. Maybe just storage and a functional laundry room, workout room and perhaps a shop.

IMHO it needs a new, better designed deck. Which is ironic because the realtor told us that the owner just sunk $5K into the back porch/deck to bring it up to code, which loosely translates into he spent money he doesn’t’ really have to do the minimum necessary.

The agent also told us that his client cannot really come down from his $450K price tag. He paid $525k for it and apparently doesn’t have much room to move, even with the realtor kicking in some money via dual representation.

To buy this house, I’d want some concessions, which the seller apparently isn’t in a position to provide. That the realtor didn’t take my contact information tells me that there isn’t any wiggle room. He told us the place was under contract but fell out because of the buyer’s financing, which again means the owner has no wiggle room and will not or cannot bring money to the table.

This is one of those situations where you’re better off not having realtors involved but unfortunately the real estate industry has pretty much rigged the system to function better if you work with an agent. The seller would have to de-list his home, wait an appropriate amount of time and then do a FSBO and find a buyer who doesn’t have an agent to maximize the amount he could drop his price.

As much as I wanted to want this house, I just cannot get past the price tag and having to buy it as-is. Someone looking to spend $500K or more in Logan Square will see this as a deal and scope it up.

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Adventures in House Hunting, Buying a House, Open House Sunday

Stupid Seller Tricks and Chasing the Market

When you’re shopping around for a house, you tend to see a lot of homes. Some of them you tend to see over and over again. You might create a search on a Realty Website or if you’re working with an agent at that point, they might email you listings.  Sometimes if really feels like the same house that “just listed” has been on the market forever.

Because it has.

The other day I got an automatic email from Redfin telling me about a price reduction in one of the houses I’ve been following. It dropped from $444000K to $443,300K, not much of a price reduction. I decided to take a closer look.

The house is listed as MLS 08107033 (note: you may need to create a Redfin account to see all the history). Notice that it says (as of this posting) this property has been on the market for 113 days.

We saw it on June 24 when it had already been on the market for 86 days. And yeah for those doing the math in your head, it has been more than 27 days since June 24. We saw it when it was MLS 08031319 and it originally listed for $485K and has been chasing the market.

Realtors and Sellers use a couple of tricks, usually in concert, to make a stale property appear new.

  • Lower the price by a slim amount, and
  • Delist and then Relist the property

Lowering the price of a property by say $100-1000 causes it to appear fresh on some realty websites and also to reappear in someone’s saved searches.  This is true no matter how much you lower, or raise the price.

Delisting and then relists a property gets a fresh MLS number so it might not have all the previous history for the house attached. It’s a perfectly legal move though it is somewhat pointless in the Internet Age because a savvy buyer will find the history.

About the house:  A rehabber bought the place for $172K in January 2012. I’m not sure if he actually put in $300K of work into the place nor am I begrudging him making a profit. That’s his line of work and he’s entitled to make as much money as possible.

At first glance, this is an awesome-looking old house, pretty much the type I’d like to live in. I could even get over living on a busy street which this part of Ridgeland Avenue in Oak Park is. However, the bedrooms are small and we would probably have to sacrifice one to reconfigure a Master Bedroom/Master Bath setup, though that might allow for an upstairs laundry room.

Also, the front porch is noticeably slanted so that a=and the lack of master bedroom and separate bath leaves this property undesirable at this price point. The agent wasn’t the listing agent but she was nice enough to chat with us for a long time as no one else came by while we were there. She gave us some insight into Oak Park and I told her that if the builder is willing to come down closer to $400K, give us a call. No one has reached out to us of course.

In the case of owners trying to sell their homes, I’ve noticed a trend where it seems like the seller isn’t so much trying to make the insane profit of the boom years so much as they are trying to be able to walk away with their transaction costs covered AND a down payment for the next home.

In the case of the builders, I can only speculate that either the costs are higher than I realize, or they encountered some unforeseen circumstances that ate up their profits, or they are trying to cash in on naive or frustrated buyers who just want new and ready to move-in homes.



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