Teardown Post

2012 Buyer Preferences Award Winners.

First place  - new construction

Second place - total renovation of something old

Third place - partial renovation of something old

The judges

Popularity: 6% [?]

It can be argued that a minimum of 1 out of every 5 transactions in the U.S. involves a teardown or real estate whose “value is in the land” with no premium being paid for the structure that sits on the property.

The number of foreclosed homes that have deteriorated beyond repair continues to increase as foreclosures have taken longer and longer to clear the courts. Also, the fact that about 30% of deals are being done for cash further confirms that mostly lower-end homes are being purchased for investment and/or redevelopment purposes.

So, with such a great degree of transactions within this property type, why can’t buyers readily find them on the Internet?  Go ahead, check Zillow, AOL, Yahoo!, Trulia, Realtor.com, your broker’s site or any other portal that offers listing information - can you find a search function for teardowns? Real estate agents themselves, with their MLS’s, don’t even have the ability to search for this popular property type.

On the sell side, no one (outside of teardowns.com) offers sellers the simple and straight-forward value proposition they want when it’s time to sell: a hassle-free, direct to buyer, as-is, convenient, lower cost and non-disruptive sales process.

The only thing we can think of that makes any sense for this lack of giving redevelopment opportunities the search function they deserve - is ignorance or maybe something even bigger.  To many, there seems to be a let’s “sweep this type of property under the rug” mentality for the sector - even though it’s common knowledge that “buyers want them and sellers have them”.

Ask any agent and they will tell you that selling a teardown ( a survey essentially) and certainly the resulting new construction are the two easiest sales in the business.  So why hide it?

How long can the Big Portals (and brokers) hold off before they add a “teardown” search button  - or will they wait until their customers demand coverage of the niche resulting in one portal gaining competitive advantage over the rest?

Seems to be just another real estate industry mystery………however, transparency is changing the business, so it shouldn’t be long before all market participants will have the chance to see everything they are looking for and then be offered a simple straight-forward solutions for connecting.

20% of the market being omitted from search - what gives?

Popularity: 13% [?]

We hear a lot of talk about first-time home buyers and what Gen Y’ers will want, or not want in housing - but what about those seniors that are selling for the last time.  Or as important - who will want their houses? (clearly a generality - every locale is unique).

In the recent Bipartisan Policy Center study that was released last week, we found one of the most intriguing numbers to be the fact that aging seniors will be moving out of about 11 million housing units over the next 8 to 10 years, and an additional 14/15 million between 2020 and 2030.

Are brokerages developing strategies to market the sale of housing stock that has been the long-term home of our parents and/or grandparents?

Do you think the next generation will want these 20 some million homes as they sit today or will they have other plans for them?  

We have a plan to help these buyers and sellers and believe many of these homes will be candidates for redevelopment - you can sell and buy them here.

Popularity: 14% [?]

I’m superstitious, so it somewhat pains me to even bring this up……..but, over the last 10 days our office in Hinsdale, IL has listed 4 properties.  Each of these properties sold in less than an hour with multiple offers - for cash.

Now, we like business, but we prefer stable over euphoric.   Is this suburban community an aberration or has there actually been some stabilization in the market?  We hear Warren Buffet and today Bill Ackman say that if they could find a way to manage a portfolio of homes they would buy hundreds of thousands of them - now.

Anyone in the markets knows it’s really tough to pick a bottom, and I’m certainly not predicting one here - all we can offer is the facts. Having been marketing redevelopment property for over 10 years, we’ve seen the good and the bad.

Today, both professional (builders/investors) and individual buyers are entering the market (in certain communities).  They are paying cash and they are aggressive.  We are seeing professionals that we haven’t seen in years making offers and showing disappointment if they lose out on a purchase.

Only time will tell if this is an indication of a bottoming process or a false start.  But, for now, the market is allowing these redevelopment opportunities to clear the market quickly and competitively without the need for outside capital (financing).

We’ll take it (today).

Popularity: 16% [?]

Who doesn’t like a new toy or necessity item like an ipod, TV, car, shoes, game, or forks for the kitchen?

The same can be said for housing.  If given the choice don’t most prefer new or new-like (that means older houses with newer stuff inside i.e. kitchen, baths).

So, if the preference for new things, like houses, is an innate characteristic of people in general, then please let us know what do buyers like about old houses with old amenities - now let’s be fair, renovating an older home doesn’t count,  because, as you know, most of those renovations are really about creating “new” under the auspices of being “old”.

If this is agreeable to the majority, then doesn’t selling a property whose potential is in creating something new or new-like the easiest property type to sell or buy?  In turn, that would make all those homes in the middle of the market the “hard-to-sell” and low-demand housing types.

Does your home (or the one you are marketing) have potential or is it “stuck in the middle”?

Popularity: 18% [?]