Can you really buy a house for . . .

I can't even put the word dollar in the title because if I do my phone will ring off the hook.  For months people have been calling because they want to buy a house for a dollar.  Some are responding to homes that are listed in the MLS for a dollar. Those homes are usually sold at auction and t4thstreethere is no set price on them but the MLS requires a price so they just list them for a dollar. The auctions are almost always minimum bid auctions and the bidding always starts off for much more than a dollar and the home is not always sold to the highest bidder, if the bids are too low it doesn't get sold at all.

Think about it.  It may be possible to buy a house for a dollar.  There is a program through the city right now,  called the fourth street preservation project, and it is a good program. The problem is that the homes cost much more than a dollar and it is plainly stated on the city web site that the homes need repairs and that the buyer must qualify for a fix up loan of between $150,000 and $190,000.  The cities advertising of the homes is a bit misleading. "A Vacant Home for $1.00 Means a New Beginning for an Historic Saint Paul Neighborhood"  For arguments sake lets say that the home is acquired for a dollar, and then $150,000 is needed to fix it up.  That means that a total of $151,000 will be spent.  Looking over the list on the city web site I only see two homes that are actually listed for $1.00, again this seems to be a bit misleading. I hope their phones are ringing as often as mine is.

The program  will work best for buyers who really care about historic preservation and who plan on living in the homes for a very long time. Buyers should make sure that the home will be worth as much money as they put into it after re-hab, in case they have to sell after a couple of years.

In the interest of transparency the city should also disclose that registered vacant properties are held to a higher standard than comparable homes in St. Paul that are of the same age and that those standards cost extra.  No other previously owned home in St. Paul has to be brought up to code before it can change hands.  Since codes change yearly they won't always be up to code.

Yes there are people out there who just see the one dollar and want to buy now.  It is hard to believe that so many people do believe that they can buy a house for a dollar. Maybe they also think they can buy a car for a nickle and that there is such a thing as a free lunch.

A home that can be lived in and has indoor plumbing, a roof and a working furnace can not be had for $1.00.   Please read the fine print, and don't be mislead by the catchy headlines. I could say that all  of my listings are available for $1.00 + anywhere between 218K and 364K depending upon the value of the home, but I wouldn't because ti would be misleading.   

To get more information about the eleven homes that the city is selling please see their web site:  Fourth Street Preservation Project.

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6 Replies to “Can you really buy a house for . . .”

  1. What is amazing is how many people really believe they can buy homes for something incredibly ridiculous. Far too much late night infomercial watching has created a monster!

  2. Patient Buyer says:

    I would want a house that I put, say, $100k of rehab to be worth at least 20% more than the sum of purchase price and rehab. Otherwise why not buy a livable house?

    (Unless the house has some unique attribute).

    Sadly there are some late-to-the-party folks who think that now that real estate has corrected, that huge flipping profits are just around the corner. It may take a year to burn through their enthusiasm (and cash) as well.

    If the finished value does not exceed the cost to refurb, the city could always give the homeowner a 10-year property tax holiday as an incentive.

    Or, like Flint Michigan, we could just consider bulldozing blocks of decrepit houses.

  3. teresa boardman says:

    PB – it is in the interest of historic preservation that we don’t tear these down. I went and looked at a bunch of them yesterday and honestly I wouldn’t want to see most of them go. Most don’t look like they would be worth what would need to be put into them to make them livable. A ten year tax holiday as you put it would help or perhaps a little creativity about make them safe healthy houses without some of the ridiculous rules the city has.

  4. Teresa,

    The 10 year tax holiday idea is a phenomenal idea! I’m going to bring this up to our downtown area meetings. We’re trying to revitalize homes similar to what’s going on in your areas.

    It is funny to see how many people go so fixed on the idea of buying a house for lets just say under 1k. It’s not reality and if it seems to be good to be true it usually is.

    Great realistic explanation I always love these types of posts

  5. Property is always a sound investment,they key is buying at the right time to maximize the return.

  6. […] Also see:  Can you really buy a house for a dollar? […]

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