Uh Oh, a NEWBIE may be getting stung

[Frank Adams]

A week or two ago a place popped up on our MLS for $50K that should go retail in the $70-80K range, so I thought I would take a look when I got around to it. On Sunday a friend (also an investor) called me to ask if I had seen the place, she had looked last week and said it had a badly cracked slab, but knew that didn't scare me so I might want to look.

I called my Realtor friend to go look and she said "there's a lowball contract offer being negotiated" but let's go look anyway. Turns out the cracked slab is ALMOST VISIBLE FROM THE STREET. Has a fair amount of sheetrock, plumbing and other stuff needed, yard is shot, trees growing into the fascia, some bad siding, central A/C doesn't work, etc, etc.

I estimated about 12 piers for the slab ($6K) a fair amount of sheetrock repairs ($2.5K including interior paint), exterior work and paint ($600), probably have to replace the central A/C ($2500-$3K including ductwork), termite treatment another $1,000 or so. Throw in maybe a couple thousand for miscellaneous and I figure it'll take about $13K - $15K to put it in marketable condition.

Anyway I told my agent to tell the listing agent (in same office) that she's got an ALL CASH, back up offer in her pocket if the original deal goes south. Since she knows me she asked if I was thinking more than or less than $35K. I told her in that ballpark.

My agent calls me last night and says; "guess what, the listing agent says the deal is going to finalize at $48K. Buyer is using a HML to do the deal." I'm not sure how anyone thought any offer that ended up within FOUR PERCENT of list price was LOW BALL, but who am I to judge.

I hope this buyer doesn't get stung too bad, but it sure looks like a rookie mistake unfolding here.

Newbies, a few points from some of us "gray hairs".

The numbers are the numbers. Massaging them won't make them change.
Don't fall victim to "gottadoadealitis". I have, and it's painful.

all cash