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I don't know that this would qualify as "elder abuse" but clearly this woman sold her property under market value. A big clue is that she sold it to "We Buy Ugly Houses" as those guys don't buy your house unless they can get it for a song and a dance in my experience.
This is what REALLY frustrates me with public perceptions about selling real estate. If anything, hiring the right agent is going to make your sale EASIER not harder. Plus even if you don't want to put your house on the open market, a good agent should have relationships with a number of developers and should be able to connect you with all of them so that you get the highest price possible. There are just so many homeowners who call one developer and take whatever price they're offered.
He's not making $3M here but this person DEFINITELY sold their property for less than market value. If the developer is selling for $3M after putting in $1M and paying $400K for the property then they're putting a lot of money in their pocket even after commissions, legal fees, and carrying costs. Also, if they hired an agent they shouldn't be incurring any marketing expenses. Regardless, they're making a hefty profit off of this.
When selling a developable piece of property it's not just about what is the dirt worth but also it's about what is the opportunity worth? I advised someone a number of years about in selling a 10 ft wide section of their lot to a developer. To the owner, the tiny strip of land had little value. The developer buying it allowed them to subdivide the neighboring property which they had bought. So now they could build two houses instead of one. So, they were able to get hundreds of thousands for this tiny strip of land. Why? Because to this one party this tiny bit of dirt had a lot more value than it did to anyone else.
Hi MikePRU,
Yes. Definitely agree it’s a hefty profit. It is a two-family (the seller’s sister lived on the other side but had gone into a home a few years back, leaving it to the sister to sell off). I’m really hoping it was 380k for each side as gf2020 stated. That would make a heck of a lot more sense since you can’t even get a dog house for 380k in the Boston area anymore!
It wasn't actually sold to "We Buy Ugly Houses", I think Remy11 was just implying it was that type of transaction. The buyer is a pretty well known Southern NH realtor and auctioneer.
Further, I believe it is deeded as two separate 1/2 houses. I think each side sold for $380,000.
OK. The "We Buy Ugly Houses" business model is definitely to buy homes for well less than they're worth and to take advantage of those ignorant of their property's value. I don't know this guy but hopefully he's more honest. I will say being a real estate agent gives me a look behind the curtain and I've definitely dealt with some agents that the public thinks are honest, upstanding folks and then when the client is not around or looped in on communications they show their true colors and they're actually complete scumbags.
Quote:
Originally Posted by CaseyB
No, not a lot of land. The house is in Wellesley, on the street we grew up on so a quarter acre maybe. Decent backyard and good neighborhood. It's the smallest house on the street, so it will be torn down and a McMansion built there. Just what happened to the house next to it which was a little bigger. This is what is upsetting the daughter, not even the $ issue as much. Her father is a real science type (worked on NASA projects) but oblivious when it comes to real estate and human nature.
You can pretty stop at Wellesley. If a house is small and old and not in the best shape and it's in the area I cover most (Newton, Needham, Wellesley, etc.) then you can bet it will be a teardown.
It's always sad that these houses get torn down. It reduces the affordability of the area by removing smaller homes from the market. However, there's a huge demand around here for larger homes and developers often pay more than an end user who wants to fix it up and live in it. Plus, developers don't do home inspections or have mortgage contingencies. I've seen a lot of people say they hate teardowns and then when they see how much more a developer will pay they change their mind. Your home is your largest asset and often when a person gets to retirement age or needs to move on to a senior living facility it's really important to them to maximize the value of that asset.
Saving these homes from the wrecking ball is a great thing, but it usually doesn't end up happening because people want/need the money.
Quote:
Originally Posted by Remy11
Hi MikePRU,
Yes. Definitely agree it’s a hefty profit. It is a two-family (the seller’s sister lived on the other side but had gone into a home a few years back, leaving it to the sister to sell off). I’m really hoping it was 380k for each side as gf2020 stated. That would make a heck of a lot more sense since you can’t even get a dog house for 380k in the Boston area anymore!
If the property was deeded as two units and each sold for $380K, that's definitely better. $760K for a project that requires $1M investment and grosses $3M are still really favorable numbers. Personally, I think even at $760K this homeowner got ripped off but it's nowhere near as egregious as if the sale price was $380K. They definitely missed out on $100 to $200K of additional sale price IMO.
However, there's a huge demand around here for larger homes.
There is a demand for any homes in desirable areas, and people have sadly become conditioned to accepting that this is all that is available in some of these gold plated inner suburbs (particularly in metro west). However, I don't feel it is what most people truly want in a home. Very little character, and more money to heat/cool, furnish, maintain, pay taxes on, etc. Given the choice, most would opt for homes more suited to the lot sizes. Unfortunately, that choice no longer exists in many Boston suburbs.
There is a demand for any homes in desirable areas, and people have sadly become conditioned to accepting that this is all that is available in some of these gold plated inner suburbs (particularly in metro west). However, I don't feel it is what most people truly want in a home. Very little character, and more money to heat/cool, furnish, maintain, pay taxes on, etc. Given the choice, most would opt for homes more suited to the lot sizes. Unfortunately, that choice no longer exists in many Boston suburbs.
There are plenty of smaller homes on smaller lots in Cambridge/Somerville/Medford/Arlington but you’d end up getting a shabby 1200sqft shack for the price of a 2000-3000sqft house in a town like Needham or even Newton.
Sometimes people just want to offload, regardless of money. I dealt with it with my grandmother. She sold two properties - a house right on a lake near a major highway and a residential house with a zoned for business shop on a fair bit of land across the street from a major shopping district. She sold the latter shortly before the pandemic for $250K (in Southern NH) and the developer made a few million dollars profit. She was *so* concerned about paying for additional oil and taxes (even though she had the money) that she sold to the first developer that came knocking and likely lost out on a lot of money.
The former was her home of 40 years before she moved into independent living. It was a 2 bed/2 bath with a weird layout (sunroom off of one of the bedrooms, an office the size of a closet, another room leading to the backyard that my grandfather added just for his meat slicer and 2nd fridge) but very well maintained. The kitchen was absolutely gorgeous, the views were incredible, and there was a garage with room for 2 cars and plenty of storage (including an unfinished basement). Other similar but less updated houses on the street sold for more than 400K with bidding wars but as soon as the "for sale" sign went up, she sold under listing to someone who knocked on her door. She just wanted it over with.
In both cases, her real estate agents pleaded with her to hold out. Family was involved ensuring her that waiting and potentially paying more for taxes or heat wasn't going to hurt her at all financially. Didn't matter -she was resolute. She just wanted to close those chapters and move on.
I don't know that it tips as far as elder abuse, but I've heard enough similar stories that I can't help but wonder how much of it is targeted.
I had a friend and his sister that when their Mother died in FL, they did not want to be bothered dealing with emptying and selling her house. They visited the house to take anything they wanted. They knew what homes in the areas were selling for and they contacted a local realtor. They said they want out from under the house. The agent sent them some comps and said if you really want to sell it fast set the price below the comps. It sold within a week. Could they have held out for more? Yes. Did they just want it gone? Yes. Were they happy with the deal? Yes.
There is a demand for any homes in desirable areas, and people have sadly become conditioned to accepting that this is all that is available in some of these gold plated inner suburbs (particularly in metro west). However, I don't feel it is what most people truly want in a home. Very little character, and more money to heat/cool, furnish, maintain, pay taxes on, etc. Given the choice, most would opt for homes more suited to the lot sizes. Unfortunately, that choice no longer exists in many Boston suburbs.
I have plenty of people who walk into my office asking for just that. So, I respectfully disagree that there are not plenty of people who want large homes. Personally, I'd love to live in a larger home than what i currently have. I have clients who are moving up from a 4,000 sq ft house to an 8,000 sq ft house.
Conversely, I've had clients who are really frustrated that you can't buy a brand new 3,000 sq foot house because none of the developers will build them (why build a 3,000 sq ft house when you can build a 5,000 sq ft house on the lot and make more money?). You may even consider a 3,000 sq ft home bigger than anyone needs. It's all relative.
Bottom line is, there are plenty of people who want houses of all shapes and sizes. Developers make the most money building the biggest house possible on the lot and there's enough demand for those that the developer feels assured that it will sell. So, until the zoning starts preventing these builds or makes building smaller, more dense housing the more profitable option or perhaps the market for large homes dries up they'll keep getting built.
Quote:
Originally Posted by charolastra00
Sometimes people just want to offload, regardless of money. I dealt with it with my grandmother. She sold two properties - a house right on a lake near a major highway and a residential house with a zoned for business shop on a fair bit of land across the street from a major shopping district. She sold the latter shortly before the pandemic for $250K (in Southern NH) and the developer made a few million dollars profit. She was *so* concerned about paying for additional oil and taxes (even though she had the money) that she sold to the first developer that came knocking and likely lost out on a lot of money.
The former was her home of 40 years before she moved into independent living. It was a 2 bed/2 bath with a weird layout (sunroom off of one of the bedrooms, an office the size of a closet, another room leading to the backyard that my grandfather added just for his meat slicer and 2nd fridge) but very well maintained. The kitchen was absolutely gorgeous, the views were incredible, and there was a garage with room for 2 cars and plenty of storage (including an unfinished basement). Other similar but less updated houses on the street sold for more than 400K with bidding wars but as soon as the "for sale" sign went up, she sold under listing to someone who knocked on her door. She just wanted it over with.
In both cases, her real estate agents pleaded with her to hold out. Family was involved ensuring her that waiting and potentially paying more for taxes or heat wasn't going to hurt her at all financially. Didn't matter -she was resolute. She just wanted to close those chapters and move on.
I don't know that it tips as far as elder abuse, but I've heard enough similar stories that I can't help but wonder how much of it is targeted.
To some people, money is not the #1 objective of a sale. I've seen a lot of that the last couple of years. Some people just want it sold. They don't care if it's for top dollar. Personally, I think that's a crazy attitude to have when you're talking about your single most valuable asset especially when you're talking about someone who's cashing out for retirement or to move to one of those uber expensive senior living facilities.
I don't know that developers/agents are specifically targeting elderly people. However, it's not uncommon to target market folks who have lived in their home an extended period of time (the longer you've lived there, the more likely it is you're about to move out). It just so happens that the folks who have lived in their homes the longest are usually of advanced age. Personally, I don't think it's "there's a senior citizen!! Let's go take advantage of them!!!!"
To some people, money is not the #1 objective of a sale. I've seen a lot of that the last couple of years. Some people just want it sold. They don't care if it's for top dollar. Personally, I think that's a crazy attitude to have when you're talking about your single most valuable asset especially when you're talking about someone who's cashing out for retirement or to move to one of those uber expensive senior living facilities.
The one avenue I think would be if it gets you out of having to drop a ton in cleaning the place up and upgrades. Not to mention the time value in hiring a contractor. I imagine the Ugly Homes types would really lowball you but maybe there's a chance it would be close when you factor in the 5% + 2-3 months of property taxes/HOA saved.
The one avenue I think would be if it gets you out of having to drop a ton in cleaning the place up and upgrades. Not to mention the time value in hiring a contractor. I imagine the Ugly Homes types would really lowball you but maybe there's a chance it would be close when you factor in the 5% + 2-3 months of property taxes/HOA saved.
I've definitely put houses on the market that are going to get torn down. None of the developers care what the inside looks like. In fact the last one I sold a few months ago, the seller was smart enough to call me early in the process. They were thinking they'd have to clean the place out and I said "don't waste your time." Not only did they not have to clean out the house before putting it on the market, but I negotiated into the offer that the developer agreed to dispose of any personal belongings left in the house after closing. So my client just cherry picked what they wanted from the house and left the rest for the developer to dispose of. It doesn't really cost the developer anything extra but you have to know to ask for these things.
Also, putting the house in MLS is not going to take any longer than selling to some "we buy ugly houses" person. The developers all make cash offers with flexible closing dates. The last teardown home I sold had received an offer about $100K lower recently compared to what I ended up selling it for. Getting an extra $100K sounds worth it to me even after paying out commissions.
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