Below is an email that I received through my local real estate investors association (Names and contact information have obviously been crossed off for privacy reasons) :

We have a property that we would like to sell in
order to generate some cash.  Before putting it in
MLS, we wanted to offer to our investor "community"
This is a 3/2.5 in XXXXXX subdivision in Monroe.
Address is 2400 XXXXXX Drive.  
 
I believe the house will appraise for more than
$140,000 after looking at comps.  Houses within .5
mile that came up as comps in the tax system are
selling in the $160s and 170s (they are in newer
communities).  This is the Sun Valley schools area. 
Sale price to one of you: $130,000.    
 
The house has been totally redone including hardwood
floors on the entire main level and an expanded
kitchen with island and 2 year old stove and
dishwasher.  A front porch was also added and the
back yard is fenced.  Windows and sliding glass door
replaced.  
 
There is a tenant in place at $900/month on a new
one year lease. I'm pretty sure it will get at least
$1000 at the end of this lease.  We probably could
have gotten more now but had someone ready to move
in the day after the previous tenants moved out.
 
We can hold a small second or do an installment sale
but would like to get $30,000 cash.  
 
XXXXXX
704-XXX-XXXX

The sad reality here is that the seller here is a slimy real estate agent that is trying to get full retail from newbie investors for there house by not being very truthful about the actual neighborhood. 

Here is my response:

That's if you don't include its actual, immediate neighborhood which ranges from $111k to $131K (according to both Zillow and several knowledgable and honest realtors).  You cannot fairly comp it out with the higher priced neighborhoods when it is not in one.  $130k is the full retail price.  If you MLS it in this market its probably going to sell at $115 or less when you have to take a possible buying agents commission and closing costs into consideration.  This is not to say that this is a bad neighborhood or home, but in the current economy and housing situation (even in Charlotte) no buyer, especially investors should be paying anywhere near retail - now is the time to make offers at 20 to 30 percent below asking price or lower. 

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If you are a buyer and have financing already set up you are in complete control.  There is a huge glut of houses on the market and there are people that absolutely must sell their houses out there.  There are great deals everywhere and almost no competition.  I can't go 1 mile without finding 10 great deals - when I say great I'm talking about deals that each will make me more money at signing than the average American family makes in one year - and they are everywhere!  Again, there is absolutely no reason to bother paying close to retail on any house unless you are an absolute idiot! 

A quick tip which has become more and more correct as time goes on is Zillow.com.  Look up the house in question and see what it and its neighboring houses are actually worth.  Look at neighborhood borders and proximities. See the tax values and what the previous or current owners actually paid for it - this is great information and you can easily check its correctness by looking it up on Mecklenburg Polaris (if it is in Mecklenburg county).  Call a few realtors and ask their opinion.  If you buy right you can truly become a millionaire or more easily in just a few years, but not by paying retail.

D.M.

The moral of the story?  Great deals are out there to be had, but this is definitely not one of those.  You can't believe everything you here even if it comes from your local real estate investors association (be careful at these meetings as many scam artists lurk at these meetings to prey on unsuspecting new members and attendees - and don't think that they don't - its worse than a car wholesalers meeting or convention).  Do your due diligence by checking into the supposedely great deal and never, NEVER believe anything without first checking it out!  Also, it never hurts to have someone else check out the deal for you like a real estate investor, accountant or a good real estate attorney.  A good tip is tell anyone trying to sell you real estate that your attorney must look over everything first - watch how many of them literally flee away!



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