Buying Real Estate, Sight Unseen

Who would do such a thing... buy a house without seeing it?  Well, I have three stories for you about people who did exactly that.

A few years ago, one of my Crofton MD seller-clients was retiring and investing her nest egg in a home thousands of miles away in Canada - without seeing it, unless the magazine ad counts.  That was before the Internet, and she relied on phone conversations with and photos from the seller.  I thought she was very naive, and her family thought she must have lost her marbles, but that's what she did.  I never heard if her dreams were fulfilled or it turned out poorly.

More recently, a Crofton MD attorney contacted me to list a property for one of his clients in nearby Prince George's County.  He was very adamant that a quick sale would be much more important to his client than top dollar, so I recommended pricing the property $100,000 lower than others in the area.  That was a significant difference, making the property about 30-35% below others in the area.  (No, that photo is not the actual house!  It wasn't quite that bad.)

But the condition was horrible, cosmetically and structurally, with a homeless man occupying the storage shed.  It was unlikely a homebuyer would purchase this property with all its problems at any price, in spite of the fact it was a sellers' market at the time.  I felt we had to appeal to investors, with a property like this.

The strategy worked, because we had a full-price cash non-contingent contract in hand from a real estate broker and experienced investor within an hour of the property going in the MLS.  I presented the contract to the attorney and seller immediately, and it was ratified within hours before a lockbox even went on the property.  I do know the ending in this case:  it was a win-win situation for the seller, whose problem was quickly solved, and the buyer who flipped the property at top dollar a few months later, after it was completely renovated.

Then there is the recent story about a fellow in New Jersey who bought a home for $2.6 million without first seeing it.  Apparently he lived next door to this property, and bought it at a foreclosure sale without bothering to take a look inside.  It turns out that his neighbors were not very good housekeepers, and they had a lot of animals.  While the buyer was on vacation, authorities entered the property on a tip from a delivery truck driver who noticed a strange smell at the house.  They found 23 dead animals, other starving animals, and...  Well, you can use your imagination or read the story in its entirety. 

The buyer must have paid cash, because I doubt he could have gotten a loan if anyone had appraised the property.  I'm guessing this fifteen minutes of fame is not something the buyer expected when he made this real estate investment!  What do you think?

There could be a lot of good blog material in this last story, so you might want to bookmark it for future reference: 

1. Why you should always hire a home inspector,
2. An appraiser can protect you from making a big mistake,
3. There's a buyer for every property,
4. You may not know the neighbors as well as you think you do,
5. Don't overpay for a home 

Have a good weekend, and sell a house!  (But be sure to show it to the buyers first.)  'Hope you enjoyed these stories.

Copyright 2007.  Margaret Woda.  All rights reserved.