Florida housing: $1 condos for sale in Palm Beach County? It's true
Jon Leiberman rarely plays the lottery but he felt like he won it this past June.
That’s when he became aware of $1 condos for sale at Hunters Run Country Club in Boynton Beach. Without ever seeing it, he bought a two-bedroom, two-bath, 1,400 square-foot condo. His Realtor, Elaine Perlmutter of Lang Realty, face-timed him pictures.
“I got the steal of the century,” Leiberman said.
He actually paid $1,500 but the condo came fully furnished and was in move-in condition. “It came with sheets and silverware. They even left tennis racquets.”
Leiberman, 44, who works in marketing and lives outside New Haven, Conn., got a free golf membership for the first year as part of a new Hunters Run program to attract younger buyers, a savings of $12,000. Leiberman said buying the condo was the best investment he ever made. He comes down every two months or so with his 12-year old son. His parents use it whenever they want.
The phenomenon of giveaway condos in Palm Beach County at places like Hunters Run and Boca West caught the attention of the New York Post last year. That is how Leiberman learned about them.
But why would anyone want to sell a piece of real estate in Palm Beach County for $1?
The biggest impediment to country club sales of small condos is that buyers have to pay one-time buy-in fees that can be more than $80,000. Other reasons include:
– Golf is not as popular as it once was.
– Annual carrying costs can be as high as $30,000.
– More condos are on the market at the 30-year-old plus country clubs as owners have passed or moved into assisted-living facilities.
– Some condo owners upgraded into single-family homes, and do not want to carry two units.
– Some condos need major upgrades.
Sellers at Boca West and Hunters Run receive back 30% to 40% of their original buy-in fee when they sell. At Hunters Run, the refund is about $30,000. But savvy buyers often want some of that money as an enticement to buy.
At Boca West, a seller is willing to do just that. A $100 listing tells buyers to get their apartment “for free” with the seller offering to pay $10,000 toward the $70,000 buy-in. Five other condos at Boca West are listed for under $5,000; one is listed for $1.
But $1 sales aren’t going to be popping up at other country clubs. Some of them do not have condos and those that do have condos that are larger than those at Hunters Run and Boca West.
As for the expensive buy-in fees, Leiberman was fine with it. He recognizes the club needs the money to maintain and upgrade its amenities.
But for Patrick Niestzche of Arlington, Va., those buy-in fees were a deal breaker. At an auction three years ago, he paid $17,650 to Kingdom First Properties of Tampa to buy a Boca West condo. He claims Kingdom never told him about the $70,000 buy-in fee and when he learned about it, he refused to go through with the purchase.
A nasty lawsuit ensued between Niestzche, Kingdom, Boca West and Wells Fargo, the bank that auctioned off the condo. Now, Niestzche wants his money back. Boca West wants its buy-in. And Kingdom wants Niestzche to take the condo off its hands.
Niestzche’s lawyers claim Kingdom never disclosed the buy-in, a violation of state law. Kingdom blames Wells Fargo for not disclosing it at the auction. Kingdom took title to the condo but refused to pay the buy-in. Boca West recently obtained a judgment against Kingdom for nearly $154,000, and is expected to foreclose on the property.
Meanwhile, back at Hunters Run, Paul Ware of Brockton, Mass. agreed with his Realtor to list for $1.
“It is sad that it has come to this,” said Ware. “I have yet to receive an offer, and it has been nearly a year.”
Ware paid $64,000 for a second-floor unit in 2004. He said he stopped using the unit three years ago. He pays for a social membership but his annual carrying costs still total $27,000 a year. Those carrying costs include property taxes, homeowner association fees and a minimum that must be spent at restaurants.
“It is like throwing money down the drain,” he said. But Ware is not prepared to give back part of his buy-in fee to facilitate a sale. “If they do not want it for a buck, then so be it. I will just hold onto it.”
Carolyn Liss of Hunters Signature Real Estate said one of her clients recently had to give back money to sell her Hunters Run condo. She joked she “inherited her mother’s debt.” Perlmutter, the Lang Realtor who worked with Lieberman, said she often feels like “the bearer of bad news” bringing lowball offers on giveaway condos.
Ben Schachter, president of Boca Raton-based Signature Real Estate companies, said buyers have a great opportunity to get into a quality country club at an amazing price but there are not enough buyers who are willing to undertake a remodeling project on a small condo, especially when the buy-in fee is considered.
Joel Schreiber, a buyer at Hunters Run, negotiated a deal that resulted in him being paid $6,000 to purchase his condo in May 2013. Records show he paid $4,000 but the sellers gave him $10,000 of the $30,000 they recovered from their buy-in fee.
Schreiber knew he was going to have to put a lot of money into the unit and it’s why he negotiated the deal he did. He installed hurricane-impact windows, bought new appliances, replaced the flooring and put in new bathrooms, lighting and air conditioning. His has a pristine view of the golf course.
“We made it into something that we are very happy with,” Schreiber said. “We love it here. We get the same amenities as does someone who bought for $1 million.” Those Hunters Run amenities include three golf courses, 21 Har-Tru tennis courts, a state-of-the art fitness club, a large community pool and seven restaurants.
Schreiber had lived in South Florida for some time before he bought at Hunters Run. “We were looking for a lifestyle, and we found it here,” he said. He plays cards several times a week, regularly uses the fitness center and often frequents the restaurants.
Like Leiberman, he supports the mandatory membership fee. It is needed to maintain the golf courses and all of amenities, Schreiber said, claiming that clubs without mandatory memberships are falling apart.
Hunters Run has recently adopted a renovation program to address the $1 sales. The club takes title to distressed units and then works with contractors to renovate the unit. The buy-in fee is either partially or completely waived depending on how quickly the contractor is able to sell it, according to Jack Gorny, president of the Hunters Run Property Association. And the buy-in fee for someone who purchases through the program is $25,000 versus $60,000. The buyer, though, gets nothing back when the unit is sold. But the lower buy-in has helped Hunters Run sell 10 renovated units in the past year, Gorny said, with some of them selling for more than $80,000.
Boca West also has a similar renovator program. Efforts to obtain comment from Boca West were unsuccessful.
Gorny said the low-end sales at Hunters Run are pretty much restricted to second-floor condos with no elevators that have had little, if anything, done to them since they were built nearly 40 years ago. Owners have stopped using the unit and just want to move on, he said.
Susan and Arnold Rosenfeld’s condo fell into that category. They bought it in 1986 for $86,000. Two years ago, Susan sold it for $1. The family lawyer said Susan had stopped using it after her husband passed in 2016. “We needed to stop the hemorrhaging,” the lawyer said.
“Overall, Hunters Run sales have been very strong in recent years as a result of more than $13 million in improvements we have made,” Gorny said, noting that there have been 130 sales in the past 12 months, the most in a decade. Some of those sales were in excess of $500,000. He called the $1 sales an anomaly. Some of the single-family homes have appreciated more than 40 percent in the past three years, he said.
Meanwhile, Leiberman may be bringing buyers into Hunters Run. He said some of his friends from Connecticut are interested.
“These $1 sales will be gone someday,” he tells them. “I want them to come down so we can all retire together.”
This story originally published to palmbeachpost.com, and was shared to other Florida newspapers in the new Gannett Media network.