Why is this home so huge but only asking $99,000?

Asked by Mark, Troy, MI Thu Dec 11, 2008

This question is about this property: http://www.trulia.com/homes/Michigan/Pontiac/sold/1583618-14…

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Tim, , 48348
Thu Dec 11, 2008
The home needs a ton of work and fair market value is now well below $99,000 for that property.

It sold two years ago for $150,000 before it was destroyed. The property has lost a ton of value since selling for $150,000. The main problem is the market for buyers is very small. It is in the Pontiac Historic Distric so it cannot be converted into a rental propety. The markter for real estate invesotry is in a freez for most of Michigan. Finally it will take 12 - 18 months to get the homd upgraded for a single family.

I was able to tour the property in the summer and the place is reck. It has been bank owned for two years.
The boiler is cracked and the heating system will need to be replaced, most of the pipes have frozen inside the walls and burst. In terms of re-sale the system needs to be converted from steam to forced air. This will require $100,000+ plus the cost to abate the asbestose that is wrapped around all the only pipes. This is a massive project in a 80 year-old 4,200 sq. ft. home.

There is sever plaster damage thouout the home due to a unlicenced pluber ripping to walls trying to fix burst water and heating pipes.

There is a rusted out swage line in the basment that is open.

The electrial has problems in the home due to the basement flooding. Plubing is very old and there will pry be areas of the systems the will need to be replaced due to water pipes bursting when they froze.

It is in Pontiac Schools which are the worse in Oakland County, which is a killer when most your buyers will a family with school agre kids.

The family room in the basement has mold damage and asbestose tile. The city will make you remove the mold and might make you abate the asbestose tile when you apply for permits.

Water appears to be leaking from several areas of the roof.

The wood floors are in bad shape and will need to be refinised maybe replaced.

The kitchen was destoryed is not useable and will have to gutted.

I think fair maket on this home is more in the $30,000 - $50,000 at auction due to all the money that it will take to make liveable. The home is going to need over $200,000 in enviromental upgrades to make it habitable for a single family. Basically go watch the movie Money Pit with Tom Hanks and will you see what you are getting into. Unless you have finacing for hundreds of thousands in repairs and 12 – 18 months for renovations before moving into the home I recommend looking to other areas. Even when the home is fixed up in the current market it will only sell for $150,000 - $200,000. You can find 3,000+ sq ft homes in better areas like Clarkston, Bloomfield, Royal Oak and Rochester with great schools for $200,000 - $250,000.
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