There are more homes on the market, in St. Paul and Minneapolis, listed for less than 100K than there have been in a long time. People who would like to buy homes but have not been able to afford one have started looking them.
They are available and even though they have a price tag of $100,000 or less they are really much more expensive than that. It reminds me of when our son Andrew was 16 and he wanted to buy a car. (Sorry dude) He kept saying that he could find an inexpensive car that he could afford. My husband and I kept saying that there is no such thing.
He would either have to make car payments every month which at 16 he could not afford, or he would have to spend money for repairs each month which he could not afford. There are some cars that are more affordable than others but there is no such thing as a cheap car for a 16 year old.
Unfortunately it works in a similar way with a house. A 100,000 house may require thousands of dollars in repairs and upgrades, and by upgrades I mean a working stove, refrigerator, and toilet, before it can even be inhabited and then several thousand dollars after that for a furnace, roof, plumbing and electrical.
If a home is priced at 100K and the homes around it sell in the 300K range, you can bet the home needs extensive repairs. Yet first time home buyers flock to these because they really want to own a home. Often they don’t understand the difference between expensive repairs and inexpensive repairs.
I am not saying that all homes priced under 100k is St. Paul and Minneapolis are total wrecks, what I am trying to say is that in general 100K is not enough money and that people purchasing these homes need to have the financial resources to have them repaired.
Most of the first time home buyers that contact me about the low priced homes are very young. It is possible that in just a few years they will be able to afford a home that needs fewer repairs, or they will be able to buy a fixer upper and have the resources to fix it up. Like I told my son, there is no such thing as a cheap car, or a cheap house for that matter. (Cheap is his word, not mine)
The picture is of one of the bay windows on the Alexander Ramsey house.
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I’m a Realtor in Kansas City, and I have to say that I really enjoyed this post. It’s so true! But it seems that you can tell people these things until you’re blue in the face, but many people just have to learn for themselves. Everybody’s out for a “good deal”. They just don’t really understand that many times these are far from “good deals”, they are really money pits!
…Hmmm…I though this was for homes that only cost less that 100K to renovate…I wish I would have known about that before buying my last two homes: a 125 year old rowhome in PA and a 100 year old Arts and Crafts “charmer on the river” in WI.
However, both are enjoyed well with a glass of Pinot,
as long as you don’t mind the floating dust…
When I was little, I thought you could “own” a house, forever. Now I know you have to rent it from the government even after it’s paid for, by which time, you’d be so old forever will seem like tomorrow. It’s just like renting your clothes from the dry cleaner, I switched to all machine washable, and I rent so I don’t have to pay an association fee. I work for a real estate company and I always wondered why other industries offer their employees a discount (some, like the Container Store and Williams Sonoma, 40% off), but I never heard of a real estate company helping their employees buy a house. How come–why not? Aren’t they desperate for buyers?
Gynell – I don’t understand what you mean by renting it from the government. Most homes are sort of owned by the back and we pay money each month to the bank and eventually some people end up owning them outright.
Some real estate companies give employees a break on closing fees and sometimes I lending fees. From a business point of view giving employees a discount on something you make might be different than giving them a discount on something that independent contracts who work with the company sell, but I am not so sure.
A friend works for a real estate company and based on her experience, people do not entirely depend on the price alone. The most important consideration is, the house is comfortable enough and up to the buyer’s likings, more so if the price is affordable.
-Audrey