Bay Area sees deals on homes for under $100,000 Banks want to unload huge inventories of foreclosed properties at bargain-basement prices

This 2-bedroom, 1-bathroom house in Vallejo is listed for $79,900. This 2-bedroom, 1-bathroom house in Vallejo is listed for $79,900. Photo: Chuck Fitzgerad, ReMax Gold Elite Photo: Chuck Fitzgerad, ReMax Gold Elite Image 1 of / 10 Caption Close Bay Area sees deals on homes for under $100,000 1 / 10 Back to Gallery

Realtor Gina Foronda no sooner listed the four-bedroom San Pablo home for sale than the offers started rolling in. Within three days, she had seven bids, the top one for 18 percent over the asking price.

It sounds like the frenzied height of the real estate bubble.

But this property has a jaw-dropping feature that would have seemed preposterous two years ago.

Its list price? A mere $95,000.

While five-figure homes are run of the mill in places such as Oklahoma or Mississippi, in the Bay Area you couldn't buy a doghouse for that amount.

Until recently.

Today, more than 600 properties currently on the market here are listed below $100,000. Agents say prices dipped that low starting this summer, as banks became increasingly eager to unload huge inventories of foreclosed homes.

"When you tell people you can buy a house in the Bay Area for under $100,000, it gets their attention," said Carylon Dopp, a Realtor with Security Pacific Real Estate in Richmond.

These el-cheapo listings are not condos, trailers or manufactured houses. They are stand-alone, single-family homes, albeit modest ones, generally about two bedrooms and 800 square feet.

Almost always bank-repossessed, they're concentrated in the foreclosure-stricken areas of Alameda, Contra Costa and Solano counties, such as East Oakland, Richmond, Antioch and Vallejo.

Needless to say, five-figure homes are not always in pristine condition. Instead of a white picket fence, expect chain link, perhaps with a barbed-wire accent. Not only are there no granite countertops, often there also are no stoves, refrigerators, sinks - or even plumbing. They are the ultimate handyman specials.

"I think it's a shock to everyone that there are homes under $100,000," said David Kerr, a Realtor with ZipRealty in northern Alameda County, who has several clients house-shopping in that price range. "Then you go into these houses, and you can understand why they're that low because of some of the work that is needed. They've had partial remodels, they're sitting on a brick foundation, or the plumbing has been ripped out."

In more-affordable Solano County, five-figure properties tend to be in better shape.

"It's amazing, in Vallejo for 99 grand you can get a cute little three (bedroom) and two (bathroom) in a decent neighborhood," said Mark Miller, a Realtor with Re/Max Gold in Vallejo. "Some need work, but many don't."

Homes can be bargains

Despite the repair issues, many agents said the homes can be bargains, representing a chance for first-time home buyers to own for less than the cost of rent, or for investors to acquire properties that will produce positive cash flow without a huge down payment. In some cases, the needed work is largely cosmetic.

"You have to be aware of the area you're buying in; just because it's cheap doesn't necessarily mean it's a good deal," Kerr said. "You're not going to find these properties in Montclair or Rockridge. The neighborhoods range from fairly decent to fairly marginal. A number are in areas where the regular resell houses are in the $250,000 to $350,000 range, although those are in better condition. People can walk in, (make some repairs) and have instant equity."

Anja Ulfeldt, a photographer who lives in Oakland, is currently house-hunting for an under-$99,000 property in Oakland; Kerr is her agent.

"I'm a single person, 29 and an artist, I didn't really think I would be able to buy a home in the Bay Area," she said. "It's exciting and a bit daunting. I'm a real do-it-yourself type; I like the idea of getting a fixer, but I don't have deep pockets to put into it."

In the past couple of months, she's viewed many homes in her price range and been out-bid on a couple.

"If they're in good shape and they're that price, then they are definitely in a bad neighborhood," she said. "If they're in bad shape and that price, you might get a better neighborhood."

The four-bedroom San Pablo house with seven offers exemplifies the latter circumstance. Located in the Montalvin Manor neighborhood, which was a redevelopment district in 2003, it is surrounded by suburban homes that appear tidy and relatively well-maintained, although many have "For Sale" signs. From the front yard, you can see an expansive view of San Pablo Bay, as well as busy San Pablo Avenue.

Magnet for vandals

The home's long vacancy has attracted vandals. Graffiti is spray-painted on the fence. As soon as you walk in, the stench of a mildewed carpet is apparent. All the plumbing - pipes, faucets, toilets - has been ripped out. In one room, daylight filters in through a hole in the wall.

So would a real estate agent hold an open house on such a property?

Foronda, who currently is listing this property along with about a dozen bank-owned properties for less than $99,000 (plus six dozen more at higher prices) had a hearty laugh at that idea.

"How are you going to stage them?" she said. "Holes in the walls, missing plumbing, missing electrical wires, bad areas. Oh my gosh, I am not going to sit there with those kinds of homes in those areas."

As an agent specializing in bank-owned properties, known in the trade as REOs, for real-estate owned by banks, her commission is 2 percent of the sales price.

"For one of these $99,000 houses I make $2,000. REO agents have to work on volume," she said.

Mason Yanowitz, a Realtor with Century 21 Landmark Excellence, recently sold a home on Cherry Street in Oakland for $49,000 to an investor, who reportedly had a tenant lined up to pay $1,000 a month in rent. In May 2006, the same house sold for $290,000.

"They wanted to get a price reduction on that thing, but I had to play hardball and tell them we're not going to entertain that," Yanowitz said. "They told me they can rent it out for $1,000 a month. If you put $49,000 in the bank, you wouldn't make $1,000 a month on it."

All-cash deals

Many under-$99,000 houses, especially if they're in poor shape, are sold in all-cash deals. Banks won't write mortgages for uninhabitable properties, although the Federal Housing Administration insures a loan for fixer-upper homes called the 203(k).

Buyers of five-figure properties might be surprised to find themselves in bubble-style bidding wars.

"You have to get to them very quickly," Kerr said. "Most banks will have a property actively marketed for three or four days before they look at offers, but once they do, they will take the highest and best offer."

Doug Gillies of Douglas & Co. Real Estate, recently sold a bank-owned, one-bedroom, 650-square-foot Oakland house near Children's Hospital for $105,500 - 37 percent above asking.

"I had four or five offers," he said. "The one that was successful was an investor. The others were from first-time home buyers."

Gillies had recommended that the bank price the home between $99,000 to $110,000, but was told to list it at $77,000.

"It's my first under-$100,000 property, and nothing surprises me anymore with the banks," he said. "They just do what they do; they have their system, how they pick the price, I couldn't tell you."

Yanowitz said he could see the rationale for the bargain pricing.

"That's a nice number, under $100,000," he said. "People look at it as a green light."

$95,000 SAN PABLO Location: Nancy Drive Previous value: $440,000 in 2006 Bedrooms/bathrooms: 4/2 Square footage: 1,184 Lot size: 6,200 sq. ft. Year built: 1954 - - - $79,900 VALLEJO Location: Hogan Avenue Previous value: $185,000 in 2007 Bedrooms/bathrooms: 2/1 "with possible third" Square footage: 1,396 Lot size: 4,792 sq. ft. Year built: 1942 - - - $84,900 PITTSBURG Location: Mae Avenue Previous value: $372,000 in 2006 Bedrooms/bathrooms: 2/1 Square footage: Not available Lot size: 5,000 sq. ft. Year built: 1948