So, being the impulsive sort that I am, I want to put in an offer from a distance. But I'm not scheduled to go back to Baltimore until mid-July. I'm nervous that this is the "one" and it might be gone by then.
It's already been under contract twice in two months (fell out once for financing and once for timing of the leases not lining up with an investor's rehab plans).
What's my next actionable step? Would I be crazy to put in an offer sight unseen? Or should I listen to my gut and go for it, knowing that if something crazy comes up during escrow I can always bounce?
Any hard-won advice is much appreciated! Thank you!
I smell a rat in the comps. All of his comparables are in Charles Village, in zip code 21218, across Wyman Park to the east of Hopkins University Homewood campus. Elm Street is in Hampden, in zip code 21210. Strange that he does not state the zip code on his analysis sheet--that is kinda basic information, especially for a buyer from out of state.
Because he is comparing two very different neighborhoods, what you have here is a misrepresentation of the value of the property of interest.
Hampden historically was a working-class neighborhood of small, often labyrinthine attached wood and brick houses. In the last couple of decades people have expanded and updated many of the homes and sort of schlepped the neighborhood into the middle class. But it retains its eclectic, piecemeal, down-at-the-heels charm, which is part of the fun. I'm fond of it. But Charles Village it's not.
Charles Village is full of large sturdy 3-4 story brick townhouses, many of which have been converted to small multiunits that house Hopkins students. Along Charles Street overlooking the park and Baltimore Museum of Art the housing stock is lofty and patrician, not unlike uptown 5th Avenue across from Central Park in NYC.
You see the difference? The two neighborhoods are not alike at all. It's not unusual at all to pay in the $300s for Charles Village multis, but in Hampden? For that price you get a high-quality rehab (i.e. no oil-fired boiler), central air, lead-free certification, new roof, modern kitchens and baths and nice gardens and views. Also do you know anything about the other tenants--and whether you want to live downstairs from them? Read through the comments of @Seth Sherman and commit them to memory.
BTW, I don't think it's illegal for a listing agent to represent a buyer in Maryland, as long as all parties are informed and sign a dual agency agreement. But it's almost never a good idea, for all the reasons named above, particularly by @K. Marie Poe. And frankly, I believe it would not be in your best interest to work with the agent that produced this analysis.
Yay for you that you looked before leaping, and consulted with the BP community. I wish I had done that the first time I bought a rental.
Buying a property is risky at best and is even more so sight unseen. I would suggest that you absolutely must visit the property and the surrounding neighbourhood before making any offer. I would also suggest that you visit the property at different times of the day. What an area looks like during the day or early in the morning can be totally different to what it is like in the early and late evening. Even visiting on a weekend and a week day, say Sunday and Monday or Friday and Saturday. You would be surprised how many people get great shocks when they move in that they did not know about the evening noises from neighbours, or birds, or traffic or...
A couple of miles away from where I live there are some really nice houses right alongside a row of trees that nest hundreds of small parrots. Boy do they make a racket at dusk, every single night. You can hear it for miles and miles and it goes on for at least three hours! I definitely would not want to live close to these nesting birds, but during the day all is silent. The birds are away feeding and you would never know that they nest there, unless you were a local. I hope you get my point.
Visiting a property prior to purchase is the only way to go, and as I suggested visit at different times of the day and night. You could also talk to people who live in the street and ask about any negative effects of living there.
I have bought many properties thousands of miles away from where I live, but I have visited everyone multiple times and spoken to many non biased people before making a decision to buy. By non biased I mean not a real estate agent I mean local people who can shed light on things that will matter to you, like the lifestyle amenities, civic facilities etc. Buying long distance is no different than buying local, you should still do the due diligence checks that are important.
My sister is studying for her Maryland real estate license right now and she just informed me that it's illegal in MD for a listing agent to also rep the buyer. So, that plan is out the window!
To Clear up the confusion I think, (and I have no knowledge of the laws in your state.)
The listing agent can sell you the property and not split the commission. He/she cannot represent themselves as looking out for your best interest. Their fiduciary duty is only to the seller.
Comps in Baltimore have to be in the same neighborhood because values often differ sharply, block to block. You can't do what this agent has done, and skip across a park to grab comps. If you don't have exact comparisons within the neighborhood that sold in the last 3-6 months, take houses of similar square footage and characteristics, or perhaps go a bit farther back in time, b/c you don't get a lot of appreciation in most parts of Baltimore. Location of the subject property is paramount.
But honestly, Julie, your question about drawing comps is secondary to the real point. You asked for help ("Help! I've fallen in love..."), so I'm going offer the best help I can.
Do not make any kind of financial commitment to this property, not even with an inspection contingency. This is not an appropriate strategy for a first-time buyer who lives across the country, who is unfamiliar with the local real estate market, who plans to live in the property--and worst of all, who has never clapped eyes on it!
You need to shop for a place to live from afar, okay, it's not ideal for a first-time buyer, but a lot of people have to do this. Find a trustworthy ally on the ground, like @Tyrus Shivers, @Anil Samuel, or @Christina Ramirez. All are smart, ethical realtors who are also BP members.
Above all, do not rely on the advice of an adversary who has no interest in how and where you land.
Do not buy sight unseen in Baltimore City. You are better off finding cheap airfare to BWI, hopping on the light rail, renting a zip car for a few hours and exploring. A thousand bucks upfront could save you tens of thousands in the long run, not to mention stress and time. You might even be able to write it off on your taxes if you are traveling specifically to look at investment properties, but I would talk to your CPA about that first.
I think you will really enjoy Hamden. Lots of great restaurants, cool shops, and the Jones Falls trail is great for biking or running (with a buddy, because it can get somewhat secluded).
1. Get pre-qualified for a mortgage, to ensure you qualify.
2. Contact a local agent in the area - maybe one here to assist you with running comps and making an offer.
3. If you come into agreeance, then I would make the offer subject to a home inspection, by yourself and the inspector and view the property and make the trip out there in this period of time.
Things are not always what they look at by the pics and you may have to rely heavily on the agent to make the decision if you should fly out to visit the property.
Do not make any kind of financial commitment to this property, not even with an inspection contingency. This is not an appropriate strategy for a first-time buyer who lives across the country, who is unfamiliar with the local real estate market, who plans to live in the property--and worst of all, who has never clapped eyes on it!
Thank you, Nancy! I'm taking your advice to heart! <3
I am curious what decision you made on the love-at-firstsight MF!!
Ha! Thanks for the follow-up, Srinivasa! The listing agent just delisted the property, so I'm having an agent I'm working with check in and get the scoop on it.
Meanwhile, I'm putting in an offer today on a Fannie Mae SFH in the same neighborhood. If it gets accepted, my sister (VA realtor) will head out there with the inspector and facetime me through the process.
@Julie Hassett You've gotten some really good advice so far. I would add that Ben Frederick uses very optimistic numbers in his pro formas. He tends to get top dollar for the properties he lists. That is not the way I want to buy properties.
@Julie Hassett You've gotten some really good advice so far. I would add that Ben Frederick uses very optimistic numbers in his pro formas. He tends to get top dollar for the properties he lists. That is not the way I want to buy properties.