How do you sell a home that’s burned down?
How do you sell a home that’s burned down?
There’s not much left of 17126 Avenida de la Herradura in the Pacific Palisades‘ Highlands neighborhood. A charred file cabinet a few feet from where the front door probably was. Some blackened cans of paint strewn about what was likely the front yard. Five neighboring homes on the cul-de-sac look similarly obliterated.
But at the end of the street, there’s still an ocean view.
“This is the first publicly listed and closed property in the Palisades,” said real estate agent Richard Schulman, standing outside what used to be a 2,500 square foot ranch house. “This closed for $1.2 million.”
Schulman listed the property on January 15, barely a week after the fires started. It closed in late February.
If you’re wondering how in the world a lot with 9,900 square feet of rubble fetches over a million dollars? It’s the Palisades.
“This is one of the most beautiful places to live in the world,” said Schulman. “You’re in a totally secluded part of LA, but you’re still in the city.”
Before the fires, Schulman estimates the property could have sold for upwards of $2.5 million. He listed the property for $999,000, based off a rough calculation of the value of the underlying land. But it’s not like there were other burned down comps he could find on Zillow.
“This hasn’t been done before here, so we’re trying to guess along the way and try to get the best answer,” said Schulman, who has worked in West Los Angeles real estate for 21 years. While he’s completed difficult sales before, including fire-damaged properties, he had never been involved in selling a property quite like this.
Schulman settled on a price he thought would drum up interest. But he wasn’t sure exactly how much demand there would actually be after the fires.
Terri Bromberg, the seller, also had her doubts.
“I couldn’t imagine anybody wanting to buy a completely destroyed, burned up property,” said Bromberg.
Bromberg, 69, is an artist and associate professor at Santa Monica College. She lived at the Herradura property for the past 20 years, the last few with her daughter Rosie Galanis and son-in-law Kenneth.
While Bromberg was at work when the fires came, Rosie and Kenneth had to wait hours to make their escape. Abandoned cars were blocking the only exit route.
At first, Bromberg wanted to rebuild. When she told her daughter she was looking into contractors, Rosie started crying.
“When she brought that up I just broke down and I was like, ‘We go back and rebuild for what? For this to happen again?'” said Galanis.
That $999,000 listing price meant Bromberg would likely be selling the home for less than the $1.5 million she and her late husband paid for it 20 years ago. Even with insurance, Bromberg would be taking a financial hit.
But she had made her mind up that she was going to relocate. Within a week, she had made a successful bid on a new home in Santa Monica. Selling the Palisades property for whatever it was worth would hopefully help restore some of the savings she had to deplete for the new house.
“Our decision was mostly an emotional one,” said Bromberg. “We don’t want to live back there again, we want to relocate.”
Realtor Richard Schulman posted 17126 Herradura on the MLS with pictures of the house before the fires. He knew the pool of buyers would be mostly wealthy developers and investors offering all cash, but didn’t know how deep the pool would be.
“We had over 60 inquiries,” said Schulman. “We had a stack of offers. I think we had six offers over the list price.”
Because access to the Palisades was restricted, all of those offers came without buyers seeing the actual property.
Joe Solamany is the agent who represented the winning bidder, an LA-based investor who declined to be interviewed.
“We did a lot with Google Street view, we did a lot of other stuff,” said Solamany.
Solomany’s client was able to see the property during a 15-day escrow. The plan is to build a new house that the investor can either sell or eventually move into, although it may be a while before construction starts.
Investors like the one Solamany represents are betting that in five to seven years, demand to live in the Palisades will be stronger than before the fires. They believe new fire-hardened homes and infrastructure will convince potential buyers it’s less risky now.
“Because this risk was there before and if you even go back to other places, that in in the past, they had fire or what have you, after a while, people start going back,” said Solamany.
As a condition of the sale, Solamany’s client has accepted responsibility for debris removal from the property. The seller Bromberg will also have a few weeks after the closing date to recover any personal items from the property that may still be there, although her visits so far haven’t yielded much.
Schulman already has three other Palisades listings, including a townhome that was part of a larger complex completely destroyed by the fires. It looks like a bomb got dropped on the property.
The asking price: $750,000.
“It’s a dream of what this will be in the future,” said Schulman. “What you’re buying is the view of this hillside here and the trees here, and how this is going to look when it’s done.”
Schulman said he’s already got plenty of interested buyers eager to get into the Palisades for less than a million.
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