by Darrin DeRoches, July 17 - 23, 2014
I have clients who are looking to spend $400,000 dollars for a property in the west end and we are unable to find a suitable property. Ideally we would like an investment property and if not they would spend a little less and buy a single family. The inventory is so low and we have looked at everything that has hit the market, so we started to re–look at what is out there and it amazed me how out of whack some properties are priced.
This week an investment property dropped their price again to $399,000 so my clients got excited and figured it was a deal since it was originally priced around $490,000 months ago. We booked a viewing and were ready to make an offer before anyone else noticed the drop in price. Once we viewed the first unit we realized the property was in need of major repairs. On paper the property hit all the right boxes and it should have an income on $2400 a month and would work at the $399,000 price. Once we viewed the second unit it would take over $50,000 to update the property but its layout would still be an issue and it would be hard to rent the property at full value.
We moved on to another property that was listed last week and it was over our budget but we figured we could get the bank to go higher if the property was move-in ready. The listing did not mention anything about “as is” or “renovation” so again we were hopeful. Once we walked into the open house the agent immediately explained that the house needs about $50,000 in renovations. New furnace, kitchen, bath and the list went on. I was again amazed at how they could list a property that seems to be a little overpriced for the market but since inventory is low maybe they could get it. Now it needs over fifty grand which brings the house to at least $70,000 dollars higher than what we can afford, but in reality at least fifty thousand over what the market will pay.
I noticed that there were a lot of real estate cards on the mantle and asked the agent how the showing was going and he mentioned that there was an offer but that it was “low ball”. I had to bite my tongue since the amount of agents through the property tells me that they also believed the house was move in ready and the low ball offer was probably on the money.
This time of year the market slows down and what is left up for sale tends to be a project or overpriced. My clients are eager to buy and they will move fast to get a deal done but you have to step back and wait until the market starts to move again and enjoy the summer. A few good properties have come up and have sold quickly. We will keep on the ball and wait until the right one hits the market. I am pretty sure that the ones that are sitting on the market will still be there. V