Dollar Houses in Minnesota?
Kare11.com reports that the local government in Minnesota’s St. Paul–Minneapolis Twin Cities area is taking an active approach to real estate rejuvenation. Apparently they are offering homes for sale on the public market for as low as $1.
As foreclosures keep battering home values in many parts of the country, neighborhoods like Dayton’s Bluff in the Twin Cities are home to some properties that, according to some technical estimates, are nearly worthless. The city has taken some of these properties and put them up for sale for $1, hoping for some bites from enterprising investors.
Local real estate agents report some frustration with an apparently large consumer base that responds to advertised sales believing they can buy a house for $1. Just scratching the surface of the deal shows that the traditional strings apply to these kinds of real estate purchases. Buyers need to be able to qualify for significant loans of up to $190,000 for making needed repairs on the properties.
St. Paul–Minneapolis is not the first city to try the “dollar menu” approach to real estate. In years past, cities like Philadelphia adopted similar programs for homes with extremely low buyer interest. However, as shown in the recent deals following the nationwide housing collapse, the actual offer of a home sale for $1 is nothing but a formality. Local citizens should recognize that there’s no such thing as free real estate. Real estate legal professionals can help inform the public about the actual risks and benefits of signing onto these kinds of deals. Legal restrictions and obligations apply to dollar homes just as they do to any other type of real estate contractual agreement. Making money on any property deal involves critical thinking about what home prices will look like in the future.
Monheit is the managing lawyer at Monheit Law, outside Philadelphia, Pennsylvania. He has practiced law since 1989. Michael Monheit was the managing attorney of the law offices of Herbert Monheit — now Silverman and Fodera — a firm founded by... Michael Monheit→
