Bank-Owned Lakefront House on Bodine Lake Just Listed for $144,900

I know the post title sounds like a dime-a-dozen real estate pitch, rather than the lead-in to one of my usual posts. But I just saw this listing come through the MLS and had to post it up. It's for a 3 bedroom, 2 bath lakefront ranch house on 1 acre on Bodine Lake near Yulan, a bank-owned foreclosure with an asking price of $144,900. This is the first lakefront foreclosure I've seen come on the market here, which makes it notable, even though the house and lakefront are far from perfect.

I showed this property a few times over the last couple of years when it was listed, and before you get all hot and bothered about picking up that perfect lakefront getaway for under $150,000, there are a few drawbacks. It's on the Eldred Yulan Road, the main road between, well, Eldred and Yulan, so does get some traffic. It's not on the more private other side of Bodine Lake. The house also has a quirky layout. The lake frontage itself, though, is actually kind of nice.(Bodine is a small non-motorboat lake.) If you want lakefront, and can put up with the house and the road, this is a great deal.

Be aware, though, that bank-owned foreclosures aren't for the faint of heart. You have much less opportunity for a full inspection, as bank-owned houses have been drained and winterized, and the bank generally won't turn on the systems for you to test them. They sell these houses "as is". That makes them very difficult to finance (because, for a conventional loan, the appraiser has to verify that the systems are in working order.) Even if systems could be turned on, banks impose strict time limits from contract to closing, which would also make financing difficult. So this probably has to go as an all cash sale.

If this is something you're interested in taking a look at, give me a call at 845-468-5710 or drop me an email at davidk@beechwoods.net. I expect this one will go very quickly.

Comments

[rod]

David - in the end, my guess is that this listing will end up being a teachable moment - that, regardless of price, there are negative property attributes (in this case the road) that cannot be overcome in this market.

[Brad]

Am curious why banks don't keep utilities on when trying to sell a foreclosure. I realize there is a cost, but it would seem small in comparison to the likely increase in the size of an eventual bid for the property. Never made much sense to me. Thanks for any feedback.

[David Knudsen]

It doesn't make sense to me, either. A bank's main priority when they take over a property is to stabilize it to prevent any further damage. In a cold winter area, that means having the house winterized, e.g. pipes and heating system drained. They just don't want the liability for broken pipes and resulting water damage. The electricity itself, however, may be left on.

The bank itself doesn't actually 'manage' the property once it's on their books. They turn that over to third party 'asset managers'. The asset manager essentially is responsible for the house, both stabilizing it and ensuring there is no further damage. They have limited access to funds from the lender to maintain the property, so even getting snow plowed is hit or miss.

Nobody in the system is really incentivised to get the highest price for it. The marching orders down the line are to move a property quick and don't let it burn down or freeze up. In my opinion, the system is very screwed up. Not only do the ultimate holders of the paper (the investors in the mortgage backed securities) get less back on their investments, buyers who aren't all-cash or don't have a high risk tolerance (buying as-is) can't buy them.

[Bix]

The listing says there is freeze damage to the plumbing and heating system, and that can be tidy sum to repair. I assume that translates to "burst pipes." Also perhaps there's additional damage, stemming from that, that is not disclosed.

[Pat O'Reilly in Yulan]

Boy, it's a got a ... a.... a.... ROAD in from of this property!

You guys would think that's the kiss of death.

Gimme a $@*&!%$ break - it's lakefront with "a quirky layout" for under 150k - especially when it fetched over 250k a few years ago.

"Put up with the house and road"...smacks a bit elitist eh waht?

O'Reilly

[mike]

This house sold for $334,000 in 2004. $334,000!

Prior transaction was then in 2001 when it went for $120,000.

You've just gone back a decade.

You'll see more foreclosures and short sales this year in Sullivan. Second home baby. Doesn't help either that the Fed siad that unemployment will remain elevated for the next two years.

Think. Repeat.

Second homes...second homes...second homes.

mike

[Ned Furlough]

Good morning Dave,
Interesting report about Sullivan County's health in today's paper:

At:

http://www.recordonline.com/apps/pbcs.dll/article?AID=/20100218/NEWS/100219660

Ned Furlough

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Health report card ranks Sullivan County near last in New York

Sullivan County ranked lower than any other New York county in early deaths and scored in the bottom fifth of all 62 counties in other health measures compiled in a report released Wednesday...{article continues by clicking link above}

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[Jamie Dimon]

taxes are $6600!

who would want that garbage and pay 6600 in taxes every year?

[David Knudsen]

Jamie, it's very doubtful that a buyer of that house under $150K would continue paying $6600 in taxes. Those taxes are based on an assessment of $243,000. As Highland's Equalization Rate is 75% (they assess at 75% of market value), the assessor has set a market value for that property of $324,000. So there's a really good case to be made for a tax grievance, and I would expect at the end of the day the taxes on that house will drop to somewhere in the $3000 range.

[D]

David, does this one have a deal on it yet? Thanks.

[David Knudsen]

D, yes, I believe there is. When I contacted the listing agent last weekend, there were multiple offers and they were calling for 'best and finals' by the end of the day on Monday, Feb. 22nd. So it looks like this one went in about a week.

[D]

Thanks, David. Will be interesting to see what it goes for. Sounds like it may be above ask.