While my two favorite real estate series, “Million Dollar Listing” & “Selling New York/LA” are taking a break, tonight I find myself watching TLC’s “Property Wars.” The show presents a high curiosity level for the viewer to see what’s behind each locked door, and the infighting between the bidders is tense enough to make for some OK TV.
Don’t worry, I’m not typing about how to get TV ratings. That said, here’s where I’m coming from while watching this show: I wouldn’t touch this method of real estate buying/selling with anyone’s ten foot pole.
I’m watching these ego filled fellas raise their bids because they’ve spotted unusual clues of value. One fella saw blue chalk on the sidewalk, and equated it to a pool table being inside. One guy bid high on a house because he saw some nice carpet remnants on the sidewalk. Another fella was the highest bidder on a property because he thought he saw a covered car in the backyard. Turns out the show slants that two of the three examples above made out just fine. I don’t care. While I see the guys are all driving luxury brand vehicles, the potential for disaster of buying a house without going inside is a recipe for financial disaster.
This style of investing in real estate, in my opinion, fails any cost/benefit analysis. It’s just too risky.
The closest I’ve come to doing this sort of practice is when someone called me about a foreclosure opportunity in King’s Grant. The house was over 4,000 square feet, and the asking price was in the high $300,000’s. When I heard of the situation at around 8:00 that night, I sprinted to King’s Grant and slid in an unlocked window. I looked around, and thought hard about who to call first. Well, the first person I called knew King’s Grant and trusted me enough to submit an offer, ‘sight unseen.’ I drove to Hampton Leas, collected a $1,000 earnest money check and zipped to Coldwell Banker around 11:00 that night. I emailed the offer, and we had secured the house.
I won’t bore you with the rest of the story, but the short of it is the middleman seller made a mistake by accepting our offer and ended up paying my buyer $25,000 to go away. Fast forward to today, that same house looks great and is now on the market again in the $600,000’s.
Getting back to the premise of “Property Wars”: While it might make for interesting TV, I have to say this isn’t for me and I hope 0 of my clients get into this style of real estate dealings.
FJ
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