Playing the price range game in Mission Viejo

Not sure how this Mission Viejo property managed to sell for $780k ($476 per sq ft) back in June 2006, but here we are now in September 2007, and it's back on the market with a huge asking price range. If it goes for the top of the range, the owners will be hit with a pretty bad loss of more than $140,000. If it sells closer to the bottom of the range, well...

27771 Golondrina, Mission Viejo, Calif., 92692
Size: 4 beds, 2 baths, 1,640 sq ft (built in 1976)
MLS: S505166 (8 days on Redfin)
Asking price: $599,900-$674,876
Income requirement*: $149,975
Purchase price: $780,000
Purchase date: 6/6/2006
Other sales history: 9/25/1998: $291,000
3/12/1990: $240,000
2006 property taxes: $3,383
Monthly HOA dues: $25
Zestimate: $790,192
Type: Single Family Residence
Style: Traditional
Lot size: 4,950 sq ft
From listing: Pool Home! With View. End of Cul De Sac. Light and bright! French Doors . family Room Fireplace. Award Winning Schools Great freeway access. Lake privileges

Short! And sweet. Here we go with the "light and bright!" nonesense, which tells potential buyers effectively nothing about the house. Take out those three words, and we've got a 22-word listing description. Talk about economy of language.

Let's follow two possible scenarios at both ends of the extreme:

1) The house sells at the highest point in the price range. Factoring in 6 percent selling costs, the loss is only $145,617.

2) The house sells at the bottom of the price range. Again, with 6 percent selling costs factored in the loss would be $216,094.

Or, a third scenario has this property doing neither. Instead, the house sits on the market.

*= Disclaimer: This is not an exact calculation by any means. The income requirement for a potential buyer assumes a required income that is 1/4 of the purchase price (in other words, 4 times income will equal the purchase price - for instance, if the purchase price is $400k, the required income is $100k). This method of estimation comes from the Irvine Housing Blog.