Home Selling in Northbrook>Question Details

Ppg, Both Buyer and Seller in Northbrook, IL

How much less will a house sell if it backs on the tollway?

Asked by Ppg, Northbrook, IL Tue Jan 11, 2011

I am thinking of buying a foreclosure for $240,000 with the intention of fixing it up and selling it. It is in a neighborhood of $400-450,000 homes. It will cost around $40,000 to bring it to perfect condition. If all the similar houses around it sell upwards of $350,000, how much should I realistically expect to sell it for? Thanks!

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The best thing to do would be to enlist the help of a Realtor® to give you a FREE Comparative Market Analysis. There is no good way for any one of us to 'guess' what the differentiation of price might be without knowing your exact address and what has been sold and is on the market in your neighborhood. I would be happy to help you if you need further assistance with this. Just click on my name and then the 'contact' button. Good Luck!
1 vote Thank Flag Link Wed Jan 12, 2011
Hello,

This is a good time to invest in a foreclosure--lots of properties to choose from and low interest rates. You'll probably also be able to find good prices on building materials in this economy. However, close proximity to a major highway--or even a very busy street eliminates a large pool of buyers from the beginning of their search. I had a listing in the Williamsburg subdivision in east Northbrook a few years ago. It's an interesting area near Northbrook Court. The houses are mainly 4-5 bedrooms with good floor plans; some have been more updated than others. However, because part of this subdivision is bordered by the expressway, location within the complex seriously impacts the desirability of the homes. The listing I had was in one of the quietest parts of the complex far from the highway--it was nicely updated and sold with multiple offers for full price (hotter market, of course), but owners of homes near the highway were prepared to sell for substantially less.

Therefore, given the large inventory of homes, I'd advise you to find a foreclosure in a better location and eliminate one major selling obstacle off the bat. Remember, buyers today can afford to be very picky since the inverntory levels are still very high. Do a consistently high quality job of renovating throughout the house and you'll set yourself up for success. Let me know if you'd like some tips regarding the renovation that would attract buyers.

Good luck!

Best regards,

Dayle Lively
Baird & Warner
847-507-8832
0 votes Thank Flag Link Wed Jan 12, 2011
Well it depends what kind of fixtures and materials you are going to use, but my rule of thumb is $25 per square foot wholesale. If you don't have to pay any labor than your costs will be lower but $40k? I was in that house over the summer and it was in really bad shape. You are correct, if you live in the house until you close then you don't have carrying costs, you have living costs.

50 year old ranch full of mold, sounds like pure profit to me!

Anyway, to answer your original question of what it will sell for fixed up, the only way I could give you a meaningful answer would be to build a regression model for you, that's what I do for my other investor clients.
0 votes Thank Flag Link Wed Jan 12, 2011
Thanks to all for your input!

Evan, why do you think it will take more than 40k to fix? Do you know something about the condition of the house that I don't? I am doing all the work myself so I don't have to hire contractors, I've done it before. The only thing I can't do is roofing and siding (if it's needed).
Also, I intend to live in it until it's done.

What better investments? Been looking for 6 months, and all I see are 50+ year old ranches, most of them full of mold.

Thanks!
0 votes Thank Flag Link Wed Jan 12, 2011
I know the house you are talking about and regardless my advice would be to not by this house as an investment. First, it is going to cost more than $40K to make this house worth living on top of the tollway. Second, even at a discounted price it is going to take longer to sell this house given the location; for a home owner this extra time is absorbed as living costs, as an investor this time will cost you in carrying costs. There are much better investments out there.
Web Reference: http://www.realtyfreak.com
0 votes Thank Flag Link Wed Jan 12, 2011
Professional code of ethics would prevent us answer this question we can predict home sells same as an attorney can't predict an outcome of legal matters.

At times what appears to be a GREAT deal however backs up to busy street with road noise could prevent buyers wanting to purchase.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Wed Jan 12, 2011
The location may make it more difficult to resell, but pricing aggresively compared to the comps will attract those interested in buying in that neighborhood and while location is usually key, for some a good value will be hard to pass up.
0 votes Thank Flag Link Wed Jan 12, 2011
Ppg, thank you for this great question. Location is, obviously, one of the most important factors in assessing the value of a property, so this is a genuine concern if the property you are considering has this type of location. Generally speaking, locations of this type will eliminate many buyers before they even see a home, so there is substantially less demand for home with location issues and thus, lower pricing as a result. We often see reductions ranging from 10-25% of the potential market value as compared to another home in a more favorable location of similar size, style and condition within the same area. Appraisers will determine what part of that range (10-25%) a given home falls into based upon just how adverse that location may be. For example, is the tollway at the back of a large, deep yard and sheltered from it by a stand of fir trees and sound barrier wall or does it have much closer proximity and a regular fence or does it have closer proximity and a chain link fence? Seeing the location would help in the assessment of how it would actually affect the potential future value after your renovations. - Allyson
0 votes Thank Flag Link Wed Jan 12, 2011
You are correct in anticipating that the white noise and pollution coming from an expressway will affect the home's value. If you are near an interchange that is a positive, otherwise, Northbrook buyers in that price range, will concentrate on the negative. Based on my 20 years experience and unless the home is unbelievably different from others, expect 10 to 12% less than a similar one in a the heart of the community.
0 votes Thank Flag Link Wed Jan 12, 2011
Hi Ppg,

Without seeing the home and location, it is hard to put a dollar amount to being close to the tollway versus the location of the other homes in the $400-450,000 range. One of the main words in real estate is Location, Location, Location!

My advice is to take the worst case situation, what are you paying for the house including all closing costs, how much will you need to spend to bring it to the shape of the $400-450,000 homes, what will it cost to sell it (including taxes, real estate commission...etc). Take into account a good margin for the location and what other homes are available for sale and if the numbers work, go for it.

Regards,

Joe Finnerty
484-241-1641
joe.finnerty@longandfoster.com
Long & Foster Real Estate, Inc
Lehigh Valley, PA
610-865-7776
0 votes Thank Flag Link Wed Jan 12, 2011
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