The cheapest sale — a home on Payson Street in Southwest Baltimore — changed hands between real estate investors for just $10 in February. An attorney drafting the land record, realizing the number would look like a mistake, wrote that the amount "is the actual consideration, the property being in bad condition." The annual ground rent on the property is nearly eight times the purchase price.

A low-low price isn't always a good deal. The seller of the Payson Street home bought it for $353 a few years ago.

John Mitnick, whose Baltimore law firm handled the $10 transaction, noted, "There are lots of property owners in Baltimore City that just want to get rid of properties."

Count banks in that category. Nearly 40 percent of city home sales in the first seven months of the year were foreclosures, according to a Greater Baltimore Board of Realtors analysis.

Foreclosures aren't as large a part of the suburban housing market, but they're not a small part, either. They accounted for about 20 percent of sales in every county around Baltimore except affluent Howard, where they were 10 percent.

And as other homes languish in foreclosure limbo, empty but not yet on the market, they're causing problems for neighbors.

James Reichlin says the foreclosure directly across the street — with its overgrown grass, broken front window and overall state of disrepair — has not helped him sell his Ellicott City home. To make matters worse, the homes on either side of the foreclosure are also empty and in poor condition.

What the insurance-claims investigator has going for him, besides the stone house he spent years restoring, is a location in a well-regarded school district a short walk from the shops on Ellicott City's historic Main Street.

He found buyers who appreciated that, and the deal is scheduled to close Tuesday. But he knows from real estate agents' feedback that some prospective buyers couldn't get past the unwelcome neighbors.

"Nine times out of 10, they would leave comments like, 'House shows well, had concerns about … the surrounding properties,'" Reichlin said. "What are you going to do? … Pray for lightning — that's about it."

In Baltimore, the big number of foreclosure sales helps explain the low prices.

Darley Park, a tiny neighborhood tucked near the intersection of North Avenue and Harford Road, is home to nearly 100 properties tagged as vacant by the city. Of its 15 home sales in the first half of the year, the least expensive changed hands for $3,960. The most expensive was all of $14,000. Prices plummeted 70 percent on average from a year earlier.

A dozen neighborhoods sprinkled around the city didn't have a home sale higher than $30,000. Average: around $10,000.

At those prices, "I guarantee you're going to be buying it with cash because the bank does not want to play games with someone who needs financing," said Jonathan Benya, a real estate agent with Keller Williams of Southern Maryland who works on foreclosure transactions across the state.

"The bank is much happier to just cut their losses and sell it to somebody who can buy it within 14 days."

John Kantorski, a real estate agent with Cummings & Co. Realtors in Lutherville, said homes in the lowest price range usually have one thing in common.

"They're terrible inside. They need full, full rehab work in one way or another," he said. "Usually there's no kitchen — or no walls."

Some have been empty for years. Mold is frequently a problem.

That's why the buyers are largely real estate investors. Some are just looking to flip to other investors. Some intend to fix the properties up themselves, either as a rental — rents are on the rise — or to sell to people looking for a home ready to move into.

Alberic "Al" Agodio, whose Bethesda-based AORE Investments Inc. rehabs homes in Baltimore, said the shells going for $10,000 today were selling for $30,000 or $40,000 several years ago.

There's a ripple effect. After a complete rehabilitation, these homes would have sold for $150,000 or so a few years ago, he estimates. He said he's now pricing homes for around $80,000.

"It's a better deal for everybody," Agodio said.

But the competition for cheap places in not-so-awful condition can be fierce. At least, that's what Wells, the bill-processing tech, has found. He wants a home he can live in while he fixes it up, and he's been outbid three or four times already after submitting offers in the $3,000 to $5,000 range.

On other occasions, he discovered when he tried to make an offer that the bank wasn't ready to sell, even though it had put the home on the market.

"It's been a roller coaster. Very frustrating," said Wells, who lives in Washington.

He figures he's seen more than 50 homes. Some struck him as diamonds in the rough. Plenty of others weren't habitable or sat on eerie "ghost" blocks full of vacants. He gave up looking for a while just to give himself a break. Now he says he's restarting his search.

If it works out as he's hoping, he'll get a home that — post-purchase renovation included — won't cost him more than $35,000.

"That's a project I want to take on," Wells said. "The end result is, it would be all my work, how I want it."

jhopkins@baltsun.com

twitter.com/realestatewonk