There’s a brisk market in foreclosed homes in Schenectady now.
City officials are getting so many offers that department heads meet every Wednesday to review the latest proposals and negotiate final sales.
There are 18 to 20 purchases in the pipeline, Corporation Counsel John Polster said, and more come in every week.
This week, the committee considered two more offers, he said.
Some of the houses are now listed with real estate agents. The Law Department refers all calls on those properties to the agent involved.
But other offers have come in as informally as a hand-written note.
“They can hand write it. I don’t care. I’ll take anything,” Polster said,
Polster said the committee has an expedited process for offers that must be handled soon. The committee can meet on Mondays to address those, rather than waiting until Wednesday.
But even offers that aren’t expedited are still discussed within a week of filing.
Department heads don’t accept every offer. First, they analyze the buyer.
“There’s a little bit of vetting,” Polster said.
If the buyer owns city property, the committee checks to make sure taxes are up to date and any code violations have been addressed quickly.
“Is this somebody that appears to be responsible?” Polster said.
The committee is also wary of amateurs who say they will fix up the property themselves. Given the choice between an amateur who might spend years on the job and someone willing to hire contractors, the latter buyer might be chosen, Polster said.
The committee also wants sales to go through quickly. In one case, a buyer who could pay cash was chosen over a buyer who offered a few thousand dollars more but needed to get a mortgage, which would have taken longer.
The committee also looks at the proposed use for the property.
“We take a look at what’s best for the neighborhood, what’s best for the city,” Polster said.
Although the city has sold some properties for more than the unpaid property taxes on them, that’s not the norm. Polster estimated that the average sale price is $20,000.
But that average comes from a wide range of sale prices. Recently, one property sold for $49,000 and another sold for $5,000.
Every foreclosed property was taken by the city because of huge delinquent tax bills. But Polster said the committee doesn’t try to get sale prices that equal what the city was shorted in taxes.
“If that happens, that’s absolutely spectacular,” he said. “But that’s not our goal.”
The committee just wants the properties rehabilitated and back in private hands, he said.
Every purchase comes with a list of code violations that must be corrected, from broken windows to roof leaks. Buyers must commit to making the repairs within a certain period of time.
While the city sells off some of the 159 properties it foreclosed on last year, Polster is preparing to seize more houses.
He is filing court paperwork for another dozen or so properties, he said.
Each property was on last year’s foreclosure list. But the city withdrew those properties because the owners offered legal responses.
“These are the ones where people submitted something,” he said.
Responses included owners who said they had no idea they were about to be foreclosed on and others who said their property should not have been taxed, he said.
None of the responses had merit, he asserted. But the city did not try to foreclose on them.
“We were extremely liberal in accepting anything. If people have an argument, we want to be fair,” Polster said.
A year later, those owners still haven’t paid their bills. Now, Polster is taking them to court.
He’s also still talking with American Tax Funding about the 215 or so properties that owe taxes to both ATF and the city.
If the city forecloses, ATF will lose any chance to collect on what it is owed. Likewise, the city will lose any possible revenue if ATF forecloses.
So far, it’s a stalemate, and Polster said the two sides are not actually negotiating.
“There are some discussions back and forth,” he said, describing them as “defining positions on litigation.”
ATF officials did not return a call seeking comment for this story.