Quasi government agencies Fannie Mae and Freddie Mac have quite a few homes for sale throughout the country, including the South Bend area.  They sell homes “as is” without guaranteeing their condition and without repairs. That has become the norm for banks and government like institutions such as Fannie Mae and Freddie Mac. Now we are seeing a new development in South Bend – homes for sale that require potential buyers to sign a waiver of liability to enter and view the property.

Here’s one example:
“DUE TO DISCOLORATION IN BASEMENT, ANYONE ENTERING THE HOME MUST SIGN A WAIVER ” and a sample waiver, this one from a Freddie Mac owned property

As you might expect these waivers are most common in properties with a relatively low price. I found three homes that required waivers for entry priced around $30,000 with just a few minutes of searching. But they are not limited to inexpensive homes.

Recently this home sold for $138,000 after being listed as high as $465,200. At the time of sale it required a signed waiver for entry.

Would you still look at a house if the price was right but you had to sign a waiver to get inside?

Recently architects have been working on plans for stylish pre-fab houses built out of things like shipping containers or that are easy to install after disasters like Hurricane Katrina. The idea is to make possible an appealing house that is less expensive, more durable, and completed more quickly with less skilled labor than traditionally built homes.

This is not a new idea. After World War II, Carl Strandlund developed a mostly metal home, the Lustron House that  was built on an assembly line, delivered on a truck, and promised to “defy weather, wear and time.”

The Lustron Corporation quickly ended in bankruptcy, but there are three Lustrons in South Bend. Here is a photo of one on Mishawaka Avenue.

5309 Larkspur in Hermitage Estates was my family’s last home. We sold it in April 2009 after 180 days on the market. In that time, we went through a series of price reductions from a hopeful $175,000 to a more realistic $160,000. We had 20+ showings with almost uniformly positive feedback. But offers didn’t come and most of the potential buyers had to sell their house first, desired a larger backyard, or didn’t see the third bedroom as true bedroom space – it had French doors and was furnished as a home office. One couple came to the house three or four times but finally decided to pursue a distressed sale in a nearby neighborhood of newly built homes.

But we prepped and cleaned for each showing, polished our online photos, put out hundreds of flyers, made periodic price cuts and decorated the third bedroom as a bedroom and in the warmer Spring market received an offer and came to terms with the buyers.

We didn’t get the price we hoped, or the price we would have commanded in 2007, but we did sell our house. Hermitage Estates has both houses and villas – which is a term used locally to define ranch homes with mandatory monthly fees for lawn care and snow removal. The villas sell more quickly than the houses in this neighborhood. This year there have been two sales in the neighborhood – our former house and one villa. There are two pending sales, both villas. There are three active listings, two houses and one villa. The houses still on the market have been listed for sale for eight and thirteen months. One is two doors down from 5309 Larkpsur.

We closed at $158,000 and we paid $3,000 towards the buyers closing costs. That’s a true purchase price of $155,000.

Of course there were expenses:

• a 3% commission to a buyer’s agent: $4,740
• closing fees at a local title company: $1,155
• tax proration for taxes accrued but not billed: $2,800
• repairs: ~$1500

By the time it was all said and done, we brought $3,435 to close. That’s right, we paid someone to take our house.

But we didn’t really. We bought the house in 2003 for $148,000 so we actually made a small profit. But we took a second mortgage a few years ago. The $21,587 balance on that loan, along with the $127,535 payoff on our first mortgage were more than covered by the purchase price. But factor in the expense to sell and the money we took out of the house as a second mortgage made it difficult to sell – it would have been impossible if we couldn’t come up with $3,435 the day of closing. And most commonly a seller would pay more – we paid just one commission and not two.

It’s a tough truth that many people are in a situation where they can’t sell their house for enough to payoff their mortgage/s and cover the costs to sell. In that case the decision to sell and bring money to close or to stay in the house when you want or need move is a personal one. No realtor can help you make that decision. But if you’d like an honest assesment of what your property might sell for in the current market, a good realtor can help you see what similar homes have sold for recently, and help you understand your options.

1 Acre Lot
2-story Foyer
Beautiful Kitchen
Wraparound Porch
Cathedral Ceilings
Finished Lower Level
Privacy Fence
Pool 

What would it take for you to spend $379,000 here?

�
click for a larger image.

There have been 102 new listings since December 1st in the South Bend Area MLS. That number isn’t perfect because properties can hit the mls as a new listing for reasons other than the fact they are new, such as changing agents or expiring for a period of time and hitting the maket again.  

Of those 102 listings, 55 are at or below $100,000. See their photos and details here:

priced low to high / priced high to low     

Want to see a different property set (for example: Granger homes with 3+ bedrooms, investment properties with a tenant in place, or condos near Notre Dame) ?  Call or e-mail. Within 24 hours, you’ll have the info and I won’t put you on a spam list.

A reader wonders

what throwing down half a million buys you in the area?

Based on sales this year between $450k and $550k this year, you could expect a newer 3,000 – 4,000 square foot home with 3 or 4 bedrooms, 3.5 bathrooms and some combination of the following:

• Brick front
  
• with a 2-story living space

  

• with a wall of windows

  

• and a balcony or catwalk that overlooks it

  

• an island kitchen

  

• a master bath with a big tub and tiled shower tucked to one side

  

• a finished lower level, often a walkout

  

• a moderately complicated roofline so your house looks great on Google Maps

  

• a 3-car garage for all your toys

  

• and prime setting – 1+ acre, a wooded lot, or on an artificial pond – so you have something to see from your wall of windows.

  

But you’ll have to wade through homes on the market that:

• are near drawbacks like power lines

  

• are listed for 30%+ more than the seller paid at the peak of the market in 2006

  

• have custom upgrades and decor from the last owner

  

• or are in areas where you will be surrounded by vacant lots and construction for years at the current pace of new home construction

  

Want to see more?
Homes that are listed for sale at 450-550k

I’m fortunate in my job that I get to work with smart people from around the country. Recently, I’ve been working with a businessman from Florida considering a purchase in South Bend. He brings an entrepreneur’s eye for value to his home search, and we’ve been discussing price per square foot as a means to screen and “pre-qualify” homes in the South Bend real estate market.

In our last conversation, we decided that any property that strayed too far from the average price per square foot for the area’s upscale homes would require a justification or we wouldn’t even look at it further. If a home is on acreage, offers unusual upgrades, a waterfront location, or some other good reason for a higher price, it could be considered, but most would be eliminated quickly, allowing us to focus on the best value propositions on the market. That sounded like a smart plan to find a nice home at a good price with the least effort spent scanning properties that would just waste time.

A casual acquaintance with South Bend’s real estate market suggested $100 / square foot as a typical price for nicer homes in the area to my client, but I checked the sales data to be sure our benchmark was accurate. A search of homes that sold in the last year with the criteria my client is seeking: sold for more than $300,000, were built in or after the year 2000, and are set on 4 acres or less, excluding townhomes sold at Irish Crossings and Wexford Place yielded 47 sales, enough to draw from for our benchmark. It’s worth noting that our mls rules mostly exclude basement square feet regardless of how well finished that level may be. Since most every home in the search results had finished or walkout lower levels, I think it’s an equal handicap for all the homes and therefore can be reasonably discarded. Looking at the sales, the average sales price per square foot was $164.82. The range is about $87/sf to $305/sq ft, with the bulk of the sales between $130 and $180/sq ft.

With some idea of what homes have recently sold for, we can apply it to the homes for sale in Granger and South Bend. Of course there will be justifiable variances, for example a waterfront all-brick ranch will cost more per square feet than a brick front 2-story on a through street. But we have a starting place for quickly evaluating homes and deciding if they justify a closer look.

If you’re looking for property in South Bend, Mishawaka or Granger, and want data driven searches from Realtors who respect your time, I’d like to talk to you:

Nick Molnar
mobile: 574-309-3758
direct to voice-mail: 574-235-4836
e-mail: nick@realst8.com

 

Price Reduced 5K!
Owner Says Sell.
Price Slashed 40K!!!

Every day I see similar claims made on MLS listing information sheets, property fliers, in newspaper ads and in Home Magazines. You may think they are indicative of good deals but it pays to look more closely.

Careful inspection of the details often reveals homes grossly overpriced to begin with, or a property that has been on and off the market for over a year or more with a series of reductions and increases to create the illusion of big price cuts. Today I came across an interesting listing for a new home in a subdivision on the Northwest side of South Bend. The marketing made it look like a deal but the property history revealed a different story, of repeated and drastic price changes. These cases make me wonder how many people bought homes at inflated prices while thinking they got a deal. These situations are particularly common with higher priced properties. Here are a few examples, along with the property histories:

From the mls remarks: “$40,000 PRICE REDUCTION!!! HURRY, PRICED TO SELL!”

The property history:

Interesting! This house started out at $658,000 and sold a year later for $550,000. That’s a pretty big reduction for a new home. Maybe someone was being greedy at the start?

Here’s another.
MLS remarks: “$25,000 BUYER INCENTIVE FROM SELLER! IN ADDITION, SELLER WILL MAKE YOUR FIRST 6 MORTGAGE PAYMENTS, UP TO $3000!”

The property history:

The list price started at $398,000, rose to $439,900 and the house eventually sold for $417,500 after a year on the market.

I wonder how the folks who paid the higher prices a year ago feel today knowing about these price cuts on neighboring homes. Do they impact the values in their neighborhoods? I think so. Obviously, this isn’t always the case, but you need to know the facts when you are buying. If your Realtor isn’t forthcoming, you should find one that is. Both of the homes in the example above were new homes marketed by a Realtor. The listing agent is working for the builder. Don’t ever mistake that fact. If you want representation you must have your own agent. We believe in negotiating fearlessly on the behalf of our clients. Make sure you have an agent that feels the same way.

There are lots of good deals available and many fair deals out there as well. Unfortunately there are also a number of dressed up bad deals waiting for unsuspecting buyers. Do your research, or find someone you trust to do it for you – it pays to be careful with any purchase as significant as that of a house.

The Midwest is often noted for its affordable housing, as in this recent ranking of metro areas highlights.

However don’t jump to the conclusion that all homes here are inexpensive. I recently needed to find what are the more expensive areas of South Bend based on sales price, not just reputation. Because there isn’t a great resource to give me that picture quickly and clearly, I had to make my own. Here is a map that shows the location of all sales over $300,000 located in the city of South Bend that closed since 7/17/05 and have data in the local MLS. There are 92. For comparison, Granger had 216 of these sales and Mishawaka had 18 in the same time period.

You’ll see the map has clusters in older neighborhoods like Sunnymede, Ridgedale and Erskine Manor, as well as newer neighborhoods like Westwood Hills, Deer Run and Pendle Woods.

It’s not a bad situation for a city to have a wide variety of housing that doesn’t skimp on the affordable end but also has a healthy population of luxury homes.

If you are looking for more on the area’s high-end subdivisions, try this Luxury Neighborhood Guide that covers South Bend, Granger and Mishawaka.