The Crash Coming Home To Roost
A reader wrote in with a situation many are now facing. “I have been reading the blog for a while and occasionally send a little support. In January 2008, I moved to Phoenix to start as a healthcare researcher. I intend to stay in Phoenix for a long time. I actually like it here. I have been renting a house and saving to buy one for my young family (1 year old girl and 5 year old boy).”
“Recently my landlord offered to sell me the house. I politely declined. Today I am home working on a technical report and see a strange car pull up and someone I did not recognize get out and walk into the driveway. By the time I went out to see how I could help, he had driven off. He left a notice of auction (Trustee Sale) taped to the post. The LL asked for $275,000 and the trustee sale is $163,064.00 (2043 sq ft 4 bdrm 2.5 bath). The auction is in December.”
“This is intriguing. I read about the stories on the HBB. Now I’m part of one. Should I keep sending my rent to the LL? (Does he) own the house? I have no contract with the trustee. It seems I should hold on to the rent until I have some idea of who owns the house.”
“I did not plan to buy this place, but it’s an intriguing thought (perhaps opportunity). What’s involved in bidding? Are there back taxes that the new owner has to settle?”
“There’s another part to the story. I have a registered letter notice from the USPS. I will pick it up tomorrow. It could be a note informing me that he has lost the property. It could be another offer to sell. I suspect the former. The former LL is a good guy. We have a good relationship. He is a broker/agent with five properties. He is struggling to hang on.”
“More than just commenting and snarking, I would like to propose an experiment. I am willing to go after this house on the collective wisdom of the HBB community. I will put my money where their mouths are.”
“Here are the facts behind my position. We don’t mind living in this house. The community has a HOA fee of $60/mth. The house is cookie cutter bland, but around the corner from (a) school that my teenage stepdaughter attends. It is up the street from (a school) my five-year old boy attends. While the house was not attractive at $275,000, it’s attractive at $163,054 ($78 per sq ft). I am ex-Navy and can use my VA loan. We don’t have a car payment or much other unsecured debt.”
“Our current plan is to save aggressively until 2014 and look for a place with a big lot and no HOA where I can install a grey water system, plant vegetables and raise rabbits, chickens, and ducks to my heart’s content. With this new development, I can look into what is required to get this house and plant vegetables (the HOA would probably not allow rabbits, chickens, and ducks).”
“I think the former LL will let me know if there are taxes or other charges against the house. I would love to know how to check myself. I suspect the Sale trustee would not know about other liens against the house.”
“So there you have it. I am willing to bet the trustee would be OK with a straight sale rather than risk an auction in the Xmas season. If the HBB community says go for it, I will approach my credit union and the VA about a loan.”
