The most common feature that I have been finding in my frequent visits to and showings of Columbus, OH foreclosures is not something that can be seen in pictures, or even in video. It is something that only the "nose knows": the unmistakable evidence that the previous residents' dogs had used the carpet in the home as their own personal toilet.
All agents know all too well that pet smell can most often be a deal breaker for your clients. I often tell my listing clients the story of past clients of mine that I was helping with their search for a home in Central Ohio. They had narrowed it down to 2 or 3 homes, and they ultimately passed on a larger house, with 1 more full bath, that was $18,000 less expensive, just because the slight dog odor (the odor would fall in the "normal" range). $18,000 can buy some pretty great carpet, especially in a 1600 square foot house!
Those of us that frequently show and preview foreclosed houses are exposed to an entirely different "stratosphere" of pet odors. This is a world that those agents that specialize in "pretty" houses don't get to experience. Personally, I have gotten accustomed to that smell, even in homes where the smell almost literally slaps you in the face when you open the front door.
The picture above is the living room of one of those "face slapping" homes. I previewed it two days ago for an out of town client. The listing agents' office had double-booked the appointment, so I was expecting to meet another agent with their clients while I was there. They were nowhere to be found. If I had to guess, they opened the door, and turned around and walked out. The property preservation company had already removed all the carpet. And still this was one of the smelliest houses that I have ever experienced. I can always envision the hidden potential in these homes, how an ugly, stinky house will look when a rehabber gets in there and works their magic, and makes this house SHINE. In this case, the underlying hardwood floors were SO stained, that it might take multiple passes with the drum sander to get down to good wood.
The most unusual sight in this home was the one spot where the thick hardwood had been eaten through (above). I am guessing that there was possibly a pet cage there for a long time, and the concentrated urine had deteriorated the wood underneath.
Now, to the title of my post. Here is how the conversation might go:
Rehabber 1: "What is that awful smell?" (NOTE: it could be urine, feces, mold, dead animals, or any combination of those)
Rehabber 2: "Mmmm, smells like MONEY!"
No, rehabber 2 was not talking about all the money that he will have to spend to fix the house up. In this case, money means that 90% of your competition for this house is removed: Regular homeowners? No way. Landlords? Probably not, looks like too much work. Weekend handyman homeowners? I highly doubt it. That just leaves the die hard, roll up the sleeves rehabbers that love the major projects that everybody else walks away from. And if nobody else wants it, that means the price will be significantly reduced. Let me paint it in hard numbers:
This house would probably be worth over $100,000 in very good condition. In "normal REO" condition, where it needs paint, carpet and some light cosmetics, its probably worth $70-75k. As it stands, its been on the market at $60k for a while, with no bites. It just got reduced to $50k this morning. It probably will sell in the mid-40's. I can't determine with certainty how much money it will take to get it from its current condition to a "normal REO" condition, where it would be worth $70k -- I would guess less than $5k. So, if my number is right, then the rehabber who takes on this house will be able to realize an extra $15-20k in equity at the back end.
And on anybody's balance sheet, an extra $15,000 does "smell like money".
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