A BIG lesson learned.
I have been looking at this one HUD property now for a few months. It’s located out-of-state in an area I used to live and still have relatives who live there. It originally came on the market at $43,000. What I like about this particular area is that the HUD inspection reports always include a lot of pictures of the property, so I can get a good view of the place from afar. In my area, the HUD reports have just ONE picture - usually the front. Anyway, it seemed this particular property was probably listed a little high for it’s condition and area. It’s not like it had a lot of things wrong with it, but did require some work to get it in rentable/saleable shape. The description itself said:
- DETERIORATED LEAD-BASED PAINT/ PROPERTY LOCATED IN FLOOD PLAIN / FLOOD INSURANCE MAYBE REQUIRED / PROPERTY LISTED WITH INCREASED SALES COMMISSION OF UP TO 8 PERCENT / REPAIR SUMP PUMP/ PRIVATE SEPTIC SYSTEM.
Again, some work, but not impossible and certainly not a fortune to fix. Over the past couple of months the price dropped from $43,000 to $35,000 to $30,000 to $28,000 and finally to $25,000 with still no takers.
Here is where my thinking went all wrong …
First, I assumed too much about the property. My major flawed assumption was thinking what HUD does to properties in my area as far as list vs. purchase prices isn’t always the same for ALL properties in ALL areas. Therefore, I thought even at $25,000, HUD wouldn’t accept anything lower than say $20,000. WRONG! My other failure (which coincides with the failed assumption) was sitting on the sidelines just watching the price drop and drop and not do anything about it. Don’t call any local agents to inquire on their opinion of it’s overall condition; don’t get a relative that lives close by to go out and see it; don’t do anything but procrastinate.
Well, today I decided to check out the listing again. It had been a little over a week since I last checked the listing, and I wanted to see if they dropped the price further. But it wasn’t listed. Interestingly, the HUD processor’s web site has a link to view details about properties recently won. Sure enough, the property was taken by someone.
No, that has to be a typo, I thought. So, I clicked on the detail link, and much to my shagrin, it was NOT a typo. The person bid $3,000, and their offer was accepted. HUD netted $2,800.