Homes for sale: $1
By Teri Cettina
January 11, 2007
Even as the formerly roaring real estate market quiets, housing prices are still up in the stratosphere in many areas of the country. Despite that, there are still unbelievable bargains waiting to be found. How about a brick Greek revival in La Grange, Mo., with a scenic view of the Mississippi River for $25,000? Or a four-bedroom home in Nashville for $84,950?
Still too rich for your blood? Maybe you'd be interested in a traditional New England farmhouse for, say, $1. Yes, you read that right: A home that costs a single George Washington, one solitary dollar.
The price might sound like a scam, but it's not, although strings the size of tow ropes are often attached. And, to be sure, it's going to take more of a search than looking in the classifieds or checking your local real estate office listings online. But such fabulous finds are out there -- all you have to do is find them.
The march of history
For example, every so often, the Town of Norfolk, Mass., sells historic homes for $1 each. The catch is that anyone interested in buying the homes must be willing to move them elsewhere. In most cases, current owners want to build new construction on the lots and will demolish the existing homes unless they can get someone to relocate them.
"In Norfolk, we have what's called a 'Demolition Delay Bylaw,'" says Bill Domineau, chairman of Norfolk's historical commission. "If a home is determined to have some historic value, we can require the owners to hold off on destroying it for at least six months." During that period, town and historic commission officials try to interest someone in moving the home to a new lot or, at the very least, dismantling historic details -- from crown moldings to pine floor boards -- for sale or use in other homes.
Most sellers in this kind of situation actually don't mind offering up the homes for $1, since they get out of paying for the demolition. Prospective homeowners or investors also get a heck of a deal in the process. And historic home aficionados such as Domineau are happy to see any part of an old home saved from the wrecking ball. "It's a win-win-win situation," he says.
Finding hidden gems
Sharon Hinson and Marjorie Ellena share Domineau's passion for saving homes -- and love watching homeowners get a bargain in the process. The two women run HistoricProperties.com, a site that currently lists about 1,001 residential homes and commercial buildings for sale throughout the United States that are 50 years old or older. Listings are updated daily and include many $1 homes and others that actually are free for the taking. Commercial sellers pay to be listed on the site, but Hinson and Ellena offer free listings to historic preservation groups, nonprofits and governmental agencies.
The houses on their site are bargains for many reasons, says Hinson. "Some homes need to be moved because local authorities are expanding public projects, such as highways, in the areas the homes are located," says Hinson. In addition to being listed on a site such as HistoricProperties.com, these real estate deals are usually advertised locally.
In August 2005, for example, the Houston Airport System put up an entire neighborhood of homes for sale at $1 each. The airport had purchased the homes from their owners in preparation for an expansion project and planned to sell the homes to the general public but later scrapped the idea after vandals destroyed the homes, making them unfit to sell, says Anissa Veal, senior project manager at W.D. Schock and Co.
Homes also come up for sale at bargain prices when cities or neighborhood redevelopment groups begin improving urban areas that have been neglected. "When these groups offer houses for sale, they're often not in horrendous shape," says Hinson. "The organization simply offers the houses at great prices as an incentive to bring in new owners."
However, many other homes are what Hinson calls "project homes." Often listed at bargain prices of $1,000 to $35,000, these structures stay on their current sites but usually need extensive renovation. Interested buyers can search specifically for these deals by selecting "project homes" as a search option on HistoricProperties.com's "Find a Home" page. Buyers can -- and should -- make their purchase of the home contingent upon the findings of an independent home inspection. "It's fine to buy a home 'as is,' but you still need to know what is," says Realtor Rick Harris of Coldwell Banker ProWest Realty in Ashland, Ore. "In other words, you should always know what kind of potential problems you're buying."
A few dollars more
In most cases, bargain and "dollar" homes will require extra cash infusions. However, you can still end up with a good deal if you shop like a savvy consumer and work with an experienced real estate agent who can help you ask the right questions about the property, advises Harris.
Some questions to consider:
How much work are you willing to do yourself? Renovating a fixer-upper can be a huge job. If you don't have the time or skills to do the work, spiffing up the house could get pricey. Be sure you have plenty of cash reserves.
Does the home have environmental problems that must be fixed? Examples include asbestos or lead paint. Get general estimates for fixing these problems before you bid on the home. They may be more costly than you think. If you decide to go ahead with the purchase, your real estate agent or lender may be able to help you obtain special financing for the repairs.
Does the home have valuable historic details? Older homes often are blessed with elements such as glass doorknobs and built-in cabinetry. Many of these items would be expensive to buy or build new and can make the bargain home worth its weight in gold -- even after you pay for rehabilitation work.
If you plan to move the home, is a lot immediately available in your price range? Depending on the situation, a seller who wants you to move a home may give you a deadline of 90 days or fewer. Be ready to move quickly. Also, remember that some prime lots might be as expensive as an entire home, so your cheapie home may quickly become more expensive than you anticipated.
How easy is the house to move? Structural moving companies can give you great advice. Depending on your area of the country, moving a basic home can cost anywhere from $10,000 to $25,000, says Christy Settle, vice president and part owner of Northwest Structural Movers. Taller homes cost more. "Houses that are more than one story will carry additional costs of up to $10,000 for wire moves," she says. "We actually have to get utility companies to move power lines and traffic lights so the house and flat-bed moving truck that's carrying it can fit down the roads."
Settle says older homes are easier to move than new construction, because historic homes were so solidly built. Expect to pay a little extra to secure brick chimneys or facing. Don't even consider relocating a brick house; it won't survive the move.
YOU TUBE CHANNEL - Follow me on my You Tube Channel at Joe Jurek Real Estate Investing Adventures
TWITTER - Follow me on Twitter at Joe Jurek CPA
Joe Jurek CPA