A few months ago, one of the houses in the neighborhood I wanted was foreclosed. The bank was selling it at $310,000. The general house value in the area was $430,000 to $460,000. I thought about buying it, but I was told to stay away from foreclosures because of the paperwork hassles and such. So I didn't pursue it.
Later, it was sold to a realtor at $326,000 as an investment property. The realtor renovated the house to include brand new appliances, new flooring, new carpet, new baths, new kitchen, and all the touch-ups. Then it was put on the market for $499,000.
I have been going back and forth with the realtor on this. The bottom line is, I think it was over-priced and I think $475,000 would have been fair (and still the highest in the neighborhood). But eventually someone made a higher offer and the realtor took it.
I have to say that I am fairly disappointed. I have looked at many houses in the area and this one is special because it has many more windows than the others. The new appliances, new flooring, new baths and new kitchen were nice but not the main point, because I could have renovated my own house if I were willing to spend the money. But I can't cut holes in the wall and put more windows in. So the windows are really what's making the big difference about this house.
I also don't think the realtor thought it through. I don't have an agent so they wouldn't have to pay the buyer's agent 3% commission (that's $15,000 for a $499,000 house). Plus, the price may not hold because they still have to get an appraisal and I really think the price will come down. The realtor could have ended up with a higher net amount with me.
In any case, I have to stop thinking about it because I lost the bid anyway.