Dealing with “Want to” Sellers

At my house at Havre de Grace.

I am a poor person with an education. That means that I have the means of getting what I want and what I need. The thing that sets me aside from most other poor people is that I started figuring out as a teenager what I wanted to do and how I wanted to make money. I did not go to college just to get through college. I went to learn specific things such as real estate, wills/trusts, contact law, finance, IT, banking, and Business.

As many of you know, I just moved into a property in Havre de Grace, MD. The property is in the rich people’s section. You may ask how a poor person can move into a rich neighborhood. The answer is easy; you look for a “want to” seller.

A “want to” seller is a person that must sell because they are financially in serious trouble or they have to vacate the property quickly for other reasons.

I met with one of the partners that own Heron Harbor. He is a “want to” seller. He told me that the banks are pressuring him to lower the prices on his condos. He wanted to know if I wanted to buy a $600,000 condo for $400,000. I turned him down. He was not dispirit enough.

In my situation down the street at Seneca Pointe, I found an owner that had no choice but to sell. The poor 40 something lady was a Construction Engineer making good money. The job was so stressful that she quit and went to work in a dance studio. You can see the stress in her face making her look 50 something. Her mother looked better than she did. 

When she quit, I don’t think she realized her position in a collapsing housing market. After all, everyone has been condition to think that the price of real estate always goes up. Not only that but property on the water sales at a premium. Here is where she got a good education.

When the property was built and sold February 28, 2007, the property sold for $307,000. The original seller put the property up for sell on July 24, 2012 for $209,900. That should have been her first clue that something was wrong with the market or the property. She bought the property for $307,000 on August 9, 2012.  She thought that she could make the payments. But her health started to fail because of the pressures of the job.  She had to get out of the property and Wells Fargo, her banker, took over and made it into a “Short Sale.”

They were willing to sell the property for $199,000. Knowing that the owner and the banker were pressed for time to unload this property with no other buyers in sight, I put in a bid for $125,000. Zestimate estimated the average property price to be worth today, $217,513 with a range of $196K – $235K. 

Darnell's Kitchen

Here is why Zestimate estimate is so high. The condo has; a two car garage, beautiful granite and hardwood/bamboo floors, forced air heating and cooling, carpeted bedrooms, an open floor plan, and a fire place. You can walk to downtown shopping areas, to the Marina, and to doctor’s offices and to the hospital. It is close to Rt. I-95 and Amtrak.

The condo has 2 bedrooms and 2 bathrooms with 1,200 square feet. It sits on one acre of property. I have a swimming pool below my back balcony. My side balcony faces the bay. 

The Neighborhood

The property is nuzzled near the water in the heart of historic Havre de Grace. It is walking distance to the board walk.

The owner took the bid but the bank had to approve it. The bank came back with a price of $195,000. I came back with a price of $150,000. The bank came down to $170,000. My final bid was $165,000. We agreed on that price.     

Realty owners and developers like Heron Harbor have been selling off their assets at distress value under pressure from banks and financial institutions to repay their loans. They are not the only developers doing this.

Meanwhile, in a related financial story, the bankers said that they had no option but to push Vibor Properties to repay their loans. “We know realty developers are having a difficult time, but we have our own problems too,” said one of the bankers in the Vibor Properties consortium. “Selling the property at distress value was the best option at present; and developers should think about surviving, not about profit making.”

Sources said other banks in the consortium even pressurized their leader Siddhartha Bank to recover the loan. “In the future, the market will see more instances of selling at distress value,” said the banker.

This is how bad the real estate market has gotten. If you know the situation and you are in position to take advantage of the real estate market, you can get a large discount on some properties that were unreachable just 10 years ago.