Sale of Fixed-Up Lake View Foreclosure Is a Win-Win
List Price: $1.175 million
Sale Price: $1 million
The Property: Situated on a great block in Lake View, this four-bedroom house was foreclosed in May 2010 and then got a thorough cleanup, including a new kitchen. As a result, the house sold swiftly— and at a price that was both more than the bank could have gotten if the house had been left in its foreclosed condition and less than its appraised market value. In other words, there was a payoff for both buyer and seller.
The 11-year-old house was uninhabitable when Wells Fargo got the property back in May, says Mike Olszewski, the Area Wide Realty agent who represented the bank in selling it. “Fixtures were missing, pipes were busted, the hardwood and the carpeting were all ruined,” he says. “It was in horrendous condition.” But rather than sell it as-is, where it would most likely have gone to an investor who would fix it up and reap the financial advantage when reselling it, Olszewski urged the bank to fund the fix-up. “The [number] of owner-occupants who are willing to do all that work in that neighborhood and price is limited,” he says.
The 3,500-square-foot brick and limestone house has three-plus bathrooms, four decks, and an attached alley garage. In all, Olszewski says, the bank spent more than $100,000 and less than $150,000 on the improvements before putting the house on the market in early November. Five weeks later, the house was under contract, and the sale closed December 23rd.
The buyers, who are not yet identified in public records, “had been looking for a year,” says their agent, Emily Santos of @Properties. “Their budget was $1 million, no more.” Of the home’s new kitchen, she says, “It’s not that great of a kitchen for a million-dollar home, but it’s livable.”
Price Points: Olszewski, a foreclosure sales specialist, believes that the home would have sold in the $700,000s prior to the fix-up. “My client would have been leaving too much money on the table,” he says. But after spending approximately $100,000, Wells Fargo was able to sell for $1 million, collecting about $200,000 more on the sale. (The $1 million sale price was 64 percent of the $1.55 million that the foreclosed owners had paid for the house in 2005, and 95 percent of the home’s prior purchase price, in 2001, when it was new.) Santos notes that her clients made out well, too: After repairs, the property was appraised at $1.75 million, she says. On top of that, Olszewski suggests that the neighborhood benefits as well. “There’s a sale in that marketplace at $1 million instead of, say, $700,000,” he says. “That’s good for everybody’s property values in the neighborhood.”
Listing Agent: Mike Olszewski of Area Wide Realty; 708-656-3333.