Buying That Fixer-Upper

Once you have found a fixer-upper that you like, there are generally four paths forward, depending on circumstances.

Number one is a private sale, which is a sale between two private parties (current owner and you).  These can range in complexity.  On the simple end, a with-it property owner (rare bird) agrees with you on a price and then transfers the deed of the property to you, perhaps through a quitclaim deed filing, which is the most basic way to transfer real estate.  On the other end of the spectrum, you have the Rhode Island St house A. and I were interested in, where there was not only a property owner, but a loan servicer (bank), foreclosure law firm, City Hall demolitions office and lawyers for both us and the property owner.  That kind of complexity might mean things drag on for six months before falling apart after the title search, as it did in our case.  It takes all kinds.

Another type of sale is a purchase of a City-owned property, as in the case of the Green Monster.  The relevant page of the City’s web site is: Purchase of a City Property.  An in-depth look at this process will be in a later post, so for now I’ll just mention that the bylaws of the City require that the City seek fair market value for any properties they sell.  This rule is a big part of the reason why we have been plodding through the purchase process of the Green Monster for over half a year.  Not because of the price, per se, but because of the process in place for establishing fair market value and making the sale.  There are many steps and each takes weeks.

There are two ways to get around the fair market value rule, and one of them is the Homestead program.  The gist is this: you buy a fixer-upper from the city for $1 plus closing costs, but you must agree to live in the house for at least three years and have the house up to code in 18 months.  This program was designed to promote home ownership in hard-hit neighborhoods and get people living in vacant houses.  And that’s the catch; to be eligible for Homestead a house must be in a Homestead district.  Here’s the map.  Outside of those districts, you cannot Homestead a house, you have to go through the regular purchase process.  The Green Monster is approximately 100 yards outside of a Homestead district.  Ouch.  Side note: the Homestead program also applies to City-owned vacant lots right next to (as in touching) a house that you own and live in.

The fourth way to buy a fixer-upper in the city (and the second way to do it cheaply) is to go to the Inrem Auction.  I am not exactly sure what Inrem means here (in remediation?), but that’s what they call it.  Every October the City stirs the pot by offering up for auction any properties that are behind on taxes.  In Buffalo, that happens to be a number of them.  Property owners have up to a certain date to pay, and if they do not they their property is put on the block.  There are deals to be had (a number of folks we know have gotten houses this way), but it can be a bit of a crapshoot.  For one, the City does not allow buyers to walk through the houses before the auction.  Legally, you can view the houses from the sidewalk, but beyond that you are trespassing.  Also, properties that get paid off before the auction get taken off the list, so you can never be exactly sure what will be auctioned off and what will not.  If you go this route, do your research beforehand and make notes about which properties you like and how much they might be worth to you.  Always better to be prepared than to start bidding on properties based on address alone.  You can find information about current City foreclosures here.  The Convention Center downtown is the venue for the auction.

The importance of going down to City Hall and talking to people

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So I have an alternate take on City Hall.  I grew up in a big city and took a school tour of our City Hall: it seemed so grand, and like a place you only go on school tours.  A place for grownups with important business, a place I’d probably never go again.  And while I’ve never been back to Atlanta’s seat of local government, in Buffalo it’s a different story.  The things buying a derelict house will do for you…

When we started looking at vacant house #1, we were fortunate to have the guidance of a good friend who’d bought a few vacant properties in Buffalo before.  She and I met for breakfast at her house and biked down to City Hall that morning.  Lesson #1: Go to City Hall in the morning.  Often the people you want to talk to won’t be there in the afternoon.

Lesson #2: Don’t go to just one office while you’re there.  You’ve already made the trip! If you’re initiating the process, you’ll need to talk to a bunch of people and it really helps if that conversation happens face to face.  This usually happens fairly organically in my experience: talk to whomever’s at the desk, who either can help you, gets someone who can or tells you where else you should go.  Lesson #3: if you’re not there with someone who already knows which offices to visit or where they are, the people working security desk on the main floor are super knowledgeable.  The big directory boards are tricky to read.  Lesson #4: some elevators go to some floors, some go to others.  All are super fancy.  Lesson #5: Buffalo’s City Hall is architecturally very cool.

We started at the Demolitions office.  Contrary to what I’d expected, it’s not difficult to have demolition on a particular house delayed while you try to buy the property.  Buffalo has a huge backlog of demo projects, and as long as your particular house hasn’t been bid out for demo already you should buy yourself, and the house, some time.  You’re saving the city the cost of demo and offering to pay taxes on the property, right?

That house was privately owned and in the middle of foreclosure limbo, which ultimately meant we couldn’t get our hands on it (the apathy of huge banks’ holding companies is an awe-inspiring thing.)  But in the attempt, we also visited Strategic Planning, Records and the Common Council member for that district’s office, where we picked up a lot of support and contacts.  Some council members will get more fired up about your broken house acquisition than others, but it’s always worth dropping by their office and giving it a try.

For this current house, which is owned by the city, we’ve been down to Strategic Planning.  A lot.  Like we’re on a first name basis and I’m going to send them cookies once this is all over.  We also started at the Demo office of course, but somehow neither of those places let the fire department know to stop cutting holes in the roof as part of their training exercises.  Don’t get me wrong: the training of firefighters is a good thing.  It’s just hard to keep seeing bigger, better holes getting cut in the roof of the house you’re in the process of acquiring.  To get that stopped, I took a morning and dropped by Strategic Planning who pointed me to Demo who directed me to the most magical place of all time: Citizen’s Services, aka the Mayor’s 311 complaint line office.  The woman at the desk worked some magic and within an hour K. had a voicemail from the FD saying they weren’t going to cut any more holes in this particular property and in two days we had a very sweet letter from them reaffirming that promise and welcoming us to the great city of Buffalo.

There are two things to remember when going to City Hall: one, these people are responsible to you, the citizen.  Don’t be afraid to ask for what you need and keep bouncing from office to office until it gets done.  Don’t leave the building until you’re sure progress has been made on your project.  Two, these people are also just doing their job, so however frustrated you might be on a particular day, be pleasant and don’t try to ruin their day too.

Going Downtown – City Hall

When we found the Green Monster on fixBuffalo in a map of planned demolitions last February, we decided to move quickly.  Of course, many houses on the demolition list in Buffalo linger there for months and years, but Murphy’s Law applies to bureaucracy too, and sometimes things move quickly exactly when you do not want them to.  We did not want our hopeful future home to meet the dozer on some Friday afternoon, so we went to City Hall.  As a rule, the way to get things done in the tower of power is to go there and knock on doors.  When you walk in the front door, you will find several signs listing the offices and their locations, as well as an information desk.  Make use of these, since it is a big place to navigate by serendipity alone.  Our first stop was the Real Estate office, where we got basic property info and scheduled a walk-through of the property.  Fortunately, we already knew the house was city-owned and we had brought proof of funds of $5,000, which is required to get a walk-through of a city-owned house.  The funds can be a bank account balance or a line of credit, but without proof they will not let you in the house.

After scheduling the walk-through, we went down the Demolitions Office, which is part of the Permits and Inspections Services department.  Follow the link and check the bar on the right for names, emails and phone numbers, should you need them.  At Demolitions, we asked that a hold be put on the demolition, which prevented the demolition job from being bid out.  Once the City puts a proposed demolition out for bids and a bid from a demolition contractor is accepted, it gets much more difficult to stop the machines.  So do not wait.

By going to City Hall, we accomplished in a morning what easily could have taken weeks.  It can be difficult to schedule, since City Hall is open at the same hours that you might be working hard to put away money for a repair budget, but I highly recommend the physical approach.

Researching City-Owned Properties

The first step to buying an old house is to determine who owns it.  For city-owned homes, there will not be a for-sale sign on the front lawn nor a listing on zillow.com or trulia.com etc.  There is usually no great way to identify a city-owned house expect by word of mouth from neighborhood residents or a little bit of research.  The City of Buffalo web site is your key resource here.  The Real Estate Department (part of the Office of Strategic Planning) puts out a small online catalogue of city-owned houses for sale, called City Buys.  The catalogue is updated only about twice and year and includes only a fraction of the available homes, but it is a start.  Effectively marketing the vacant homes of Buffalo in a way that the average human can understand and get excited about is a hugely important tool in fighting vacancy, and something I would love to see done in an even bigger way.  For those houses not included in the catalogue (like our Green Monster), the best way to determine city ownership is through the Property Information tool on the City web site.  Look for it in the links bar on the left side of the City home page.  You can search for a specific address, or browse an entire street.  City-owned houses and lots are identified by “City of Buffalo” or “City Buffalo Perfecting Title” or some variant as the owner.  There is also the option to search by owner name, but I have not had much success finding City properties with that.  So, if you spot a vacant home that you like and need to know who owns it, the Property Info tool is the place to start.

History

A. and I have been trying to buy an old house in Buffalo to fix up and live in for over a year.  Our first try was a rambling Victorian at 247 Rhode Island St, Buffalo’s West Side, last June.  It needed work; few of the windows had survived the neighborhood youth, the roof was ominously under a tarp and the interior finishes on the walls and floors were all very “well-loved”.  Particularly by the squatter who occasionally made the house his home, leaving a trail of half empty 40 oz bottles, empty bags of Doritos and slashed-up love seats.  I gather he hoped to own a pool someday, as he was piling up discarded pool liners in the front living room.

But I digress.  We saw the potential of the house and liked that we had friends living and fixing up homes just around the corner.  For six months we tried to buy the place.  We contacted the owner of the home, found out about his foreclosure situation, contacted the loan servicer (“bank” is a deceptively simple word), contacted the law firm handling the foreclosure, contacted city hall to delay the planned demolition of the home, contacted our lawyer, the home owner’s lawyer, dealt with the foibles of all of the above and, one fine day, got as far as a title search on the deed to the property.  Turns out the homeowner forgot to mention a few grand in back taxes to the state and a $60k lien above the foreclosure on the property as a result of his other financial woes.  The sale was torpedoed.

Front of house

After the emotional exhaustion of that process, we figured we should take a step back and reassess.  We had not expected it to be easy, but half a year of countless, fruitless phone calls certainly deepened my understanding of Buffalo’s vacant home crisis.  This beast has claws.  There are tens of thousands of vacant properties in and around Buffalo.  Together with the other Rust Belt cities, it represents a national problem.  And we had just stepped in it.

And yet, stubborn runs in both our families.  While checking up on the blog fixBuffalo, which is devoted to revealing Buffalo’s vacancy crisis through photography, A. and I found a list of homes up for demolition, along with a map and thumbnails of the houses.  Among them was the green monster you see at the top of the page.  It looked rough, but it also looked plumb and square, its bones not yet broken.  It is close to parks, close to friends, close to restaurants and culture.  I showed it to A. and we both let ourselves love a busted house again.

NOTE:  247 Rhode Island St is still standing and still a potentially awesome house.  If you are interested in the place, contact us and we can put you in touch with some people who might be able to help you move it forward.

Welcome to the broken house club

The time comes in a young person’s life when they want to start putting down roots.  In Buffalo, such a person can buy a “fixer upper” house for less money than most places.  The downside is that getting it often involves a long, draining process.  And once you have the house you still have to fix it.

We’re K and A, and we’re trying to buy a house from the City that was slated for demolition.  Why are we trying to do this?  Well, it’s a very cool house: it’s big, it’s old, it’s retained some nice historic touches and is largely structurally sound.  It’s also next to a few vacant plots of land.  K does historic preservation and contracting work and between him, my less impressive skills, the funds we have scraped together, and our handy friends, we will be able to pull off a renovation/rehab.  We like the area and we like the idea of saving another of Buffalo’s old houses from being reduced to an empty plot of barren land.

The broken house club is (was?) a loose association of homeowners in Buffalo who helped fix each others’ houses, which were all in a state of being repaired in some way.  They shared work and knowledge with each other, and invited anyone interested to come to work holidays and pitch in.  While that club isn’t too active these days, we hope to perpetuate the culture of a community invested in its members’ projects.  When I work on other people’s homes, I gain valuable skills and make new friends – when you’re both coated in plaster dust swinging sledgehammers in the middle of summer, it’s easy to bond.

Of course, to get started with these grand plans we have to actually own the property.  While we’re a good ways through the process, the slow-moving machine that is City Hall is, well, slow-moving.  We’ll go into more detail in future posts because we want to share what we and others have learned about buying a house from the City, but for now keep your fingers crossed and hope for a dry summer – at least until we can get that roof tarped!