The City of St. Paul Can't sell Real Estate

Christopher Snowbeck wrote an excellent article about the City of St. Paul "Fourth Street Preservation Project" in this Sunday's Pioneer Press. 

The link to the article won't be good for very long.  In a nut shell the City is trying to sell a bunch of homes on the East side that need work. They have put a program in place where qualified buyers can purchase the homes for as little as a dollar and then use rehab funds to fix them up.

I took them to task last summer for advertising "houses for a dollar" when they really only had two listed for a dollar and a buyer would have to qualify for a loan of at least $160,000 to fix them up.  Sadly buyers would have to plow more money into these places than the market value of the homes once they are finished. 

The city had open houses and a lot of people came out to look at these homes.  People like to look at homes, but so far it looks like they only have one purchase agreement that might work out.

I think these houses could probably be sold and rehabbed but there are a couple of problems. One being the kind of repair requirements the city puts on the homes makes them just to expensive to rehab. The category two and three registered vacant homes are held to a much higher standard than homes like the one I live in. If I had to bring my home up to the same standards I doubt if I could afford it.

The city didn't do a very good job marketing the homes either. The hype about "homes for a dollar" attracts a certain type of buyer and in my experience it isn't the type of buyer who can  afford or who even wants to get a home loan for $160,000 to $200,000.  Considering that the median home value in the metro area is now at around 170K that is a lot of money.

The homes were are not listed on the MLS either.  We sell thousands of homes through the MLS each month. The reason are not on our MLS is because the purchase is a bit complicated. It is possible to put information in the MLS through attachments that will cover most any situation.  When it comes to selling real estate trust me the MLS is the place to list it.  Homes listed in the MLS get found by Realtors and by consumers. It is a good system. 

The City of St. Paul recently made some changes to the city web site, which is the only place on the internet where there is information about the program and the houses.   As a result it is impossible to find the fourth street preservation project.  The old links to it no longer work.  I tried searching the web site and I worked on it for about half an hour and I could not find the houses yet I think they are still for sale. I have to say that after the changes to the web site I can't find anything. 

The city has a theory as to why the homes are not selling:

    "Potential buyers have been daunted by the scope of rehab work needed on the houses, said Ellen Biales, aide to City Council President Kathy Lantry. Another concern: Many of the properties lack off-street parking.

"People want garages," said Pemberton-Hoiby." [From the Pioneer Press Article]

My response to that is that I have sold houses that need a lot of work and that lack off street parking and so have my peers.  We do it every day. Last summer I sold one that was a $47K foreclosure and it needed work, is on the East side and doesn't have off street parking.  A young woman purchased it.  She lives there now and is very happy with her purchase.

As a Realtor I can tell you that about 80% of those who are looking for a home or for a Realtor start their search on the internet.  As a Realtor I spend most of the day on the internet. That is where I get information about homes for sale. There is no information about the Fourth Street project.  

Some people and organizations can sell homes without using a Realtor, but I don't think the City of St. Paul can.  I would advise them to restructure this program so that it makes sense and to let one of us market it so that people know about it and the homes. I am sure that if someone from the city were to call Patrick Ruble at the St. Paul Area Association of Realtors we could come up with a plan to make the Fourth Street Preservation Project Work. Our board is very involved in the community and we actually care about St. Paul and her derelict houses.We don't charge anything for a consultation, and this time of year most of us have a little extra time for volunteer work.