Friday, May 14, 2010

For trust, itís ĎLetís Make a Dealí

ARCH tries to buy community housing in Ketchum via online auction

Express Staff Writer

This left-side unit of a Ketchum duplex on Sabala Street was for sale in an online auction last week, with ARCH Community Housing Trust trying to buy the house. The closing date has passed, but counteroffers roll on. Photo by David N. Seelig

After a year of trying to buy a Ketchum house, the ARCH Community Housing Trust has it within the click of a mouse. The acquisition, not yet complete, has been anything but ordinary.

The bank-owned house, located at 209 Sabala St., was recently put up for online auction at at a starting price of $138,000 and closing date of May 10. ARCH quickly registered and began bidding, with the financial help of the city of Ketchum.

On May 4, ARCH Executive Director Michelle Griffith told the Ketchum City Council about the online auction and asked to withdraw $70,000 from Ketchum's housing in-lieu funds to get in on the bidding. ARCH already had $125,000 in hand from the city's established Open Door fund, meant to help families acquire affordable housing. The council unanimously approved the $70,000 withdrawl, bringing ARCH's total purchasing power to $195,000.

However, Griffith said ARCH wouldn't bid higher than $180,000 because of $10,000 in closing costs and an online bid fee. If the house were acquired, ARCH would then renovate the two-bedroom, three-bathroom house using $50,000 of its money and work with the Blaine County Housing Authority in selling it to a family at the reduced price of $210,000.

ARCH made the high bid of $166,000, with the auction supposed to be closing on Monday. But it still roles on, according to Griffith, who said ARCH is in a "wrestling match" with the owner, waiting for a counteroffer.

"It's just an odd process," Griffith said in an interview. "I've never seen anything like this. It's like eBay for houses."

And this is only the latest page of a long story. The house first caught ARCH's eye a year ago because of its uniqueness among other Ketchum community-housing opportunities.

"It's a home," Griffith said. "It's not a townhouse or condo, but a house with a yard and garage."

Plus, it's not part of a housing association, which is a big plus for affordable housing because many potential buyers can't afford the dues.

At that time, the house wasn't yet owned by the bank, but the homeowners were in trouble and trying for a short sale to avoid a foreclosure. A short sale in real estate occurs when sale proceeds fall short of the balance owed on a mortgage. It's done when a lender decides that selling the property at a moderate loss is better than trying to collect mortgage payments. Both parties consent to the short-sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrower.

ARCH offered $350,000 for the short sale, acting as a middleman between the bank and interested buyers—who couldn't afford the home on their own and needed some financial help offered by ARCH's Open Door fund. The bank declined the $350,000 offer at the advice of a real estate agent, who said it could get $390,000. Griffith said the bank then gave the listing to this agent, who put the home on the market at $390,000 but was quickly forced to lower the price because of a lack of buyer interest.

"Since then, our affordable homeowners have gotten tired of waiting and left, or thrown up their hands in frustration," Griffith said at the May 4 meeting.

With the previous homebuyers gone and no other interested parties on their radar, ARCH is trying to buy it solo. The online auction allows ARCH to buy the house for half the original offer.

Trevon Milliard:

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