Wednesday, January 24, 2007

Free house

In the real estate business, every day is a new discovery. I never know when I get out of bed where my path will lead. Each day I meet new people, discover new properties, get frustrated with new challenges and resolve issues. One day I will be meeting an executive for lunch at a downtown restaurant discussing his move to El Dorado Hills and another day I will be stepping around horse manure while a rancher shows me his property.

When Emily called me last week about helping her sell her small rental in Garden Valley I had no idea that I would be giving her house away for free.

The 10-acre property included a small 2-bedroom, one bath home of approximately 1,150 square feet including an upstairs loft with a separate workshop and tack room. It sat on a hill surrounded by pasture that sloped down to a seasonal creek. The seasonal creek flowed into a beautiful year-round river with several swimming holes and some ideal places for gold panning. The house was in pretty good condition with a wall space heater, wood stove and swamp-cooler. The property had GDPUD water, was completely fenced, and included a fenced fruit orchard and a septic system. The house had been rented for a $1,000 a month. I had the opportunity to interview the tenant about her experience living there, which didn’t reveal anything negative about the home or the property.

My next trip was to the county offices to pull the file on the property. The county charges me a small fee for the research and copies but I have found their information valuable to potential owners. “I’m sorry Ken, said the county clerk, I can’t find any building information on that parcel number, and we don’t show any improvements, would you like me ask our Compliance Officer to check it out?” Woops! “No thanks”, I decided that I needed to do a little more research on the home before I had the county looking more diligently into my new listing. My next call was to the seller.

“Hi Emily, I just had an interesting meeting with the county and they don’t have any record of any building permits for the home or septic system. Do you by chance have any building permits?” Emily didn’t have any permits. She had purchased the home from a seller who had built an entire house without permits. According to the county, and any future lender or title company the house did not exist. How was I to sell a home that didn’t exist?

The 10-acre parcel with irrigated pastures, fencing and cross fencing, creek frontage and public water was worth $275,000. A year ago maybe $325,000. The stable, tack-room and workshop had some additional value but I priced and listed the property for the land value of $275,000. I did not include any value for the house. If someone wants the house it’s free. If they don’t want the house maybe the Garden Valley Fire Department would use it for a training exercise.
So what can a new owner do with an unpermitted house? Someone may get permits for it. The county has a procedure to obtain permits for unpermitted room additions and the occasional house. It isn’t easy and it is expensive, probably too expensive for this home. Someone may buy the property and live there. The county doesn’t normally investigate properties for proper permits. If I were 20 years younger, I would live in the small house while building another permitted house. There are a few other good building spots on the 10-acres. When finished with a new home, I might tear the existing one down, keep it as a studio, guest cottage or very nice house for a horse.

To see this unpermitted 10-acre horse property visit my web site at At the bottom of my home page click on “Featured Listings” I have some pictures and additional information. Would you have ever thought that the house didn’t exist? If you know of anyone who is looking for a real estate investment, a place to build a nice new permitted home or just a 10 acre horse property please forward this to them.


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