We're starting off the week with a short sale/preforeclosure in RSM that could easily be headed for full-blown foreclosure. The asking price is virtually the same as the one the property sold for in May 2002 - that's almost six years ago.
95 Via Vicini, 92688
Asking price: $310,000
Asking price/ sq ft: $200
Income requirement: $77,500
Purchase price: $305,000
Purchase date: 5/22/02
Size: 3 beds, 3 baths, 1,550 sq ft (built in 1999)
Income requirement: $77,500
Purchase price: $305,000
Purchase date: 5/22/02
Size: 3 beds, 3 baths, 1,550 sq ft (built in 1999)
ZipRealty price tracker: Price Reduced: 3/22/08 -- $440,000 to $310,000
Zillow Zestimate: $453,000
2007 property tax: $4,856
HOA dues: $142
Type: Attached, Condominium
Zillow Zestimate: $453,000
2007 property tax: $4,856
HOA dues: $142
Type: Attached, Condominium
Style: Traditional
Stories: 2 LevelFrom listing: Turn key home ready for move-in. This was a model home that was used to sell the other units. This a 3 bed, 3 bath, wood floors, high ceiling, upgraded kitchen, community pool, low assoc dues, attached 2 car garage with built in closets. Accross from major shopping centers. Also very close to the 241 toll road. Properity needs to be sold, lowest priced home in the area, subject to short sale approval.
This "properity" (see the listing for the spelling) was first listed for sale at $440,000, but was quickly slashed to the current asking price of $310,000.There are a handful of other properties for sale in this neighborhood, and the competition can't be happy about this price - or more, likely, some will write this one off as an impossible-to-complete short sale that won't have any affect on anybody else.
Those other properties range in price from $372,500 for a smaller two-bedroom to an absurd $525,000 also for a two-bedroom. The closest comp in terms of size is asking $475,000.
If it were possible to complete a sale at the current asking price, the loss would be $13,600 off the 2002 price, including 6% sales costs. That equates to almost six years of ownership with nothing to show for it...
3 comments:
it seems that the whole short sale game is just a big waste of effort. the low price is meant to con people into making an offer so that the sellers agent can tell you that they have many offers of the property to cause a biding war. why would a bank accept a low price when there are lots of stupid buyers out there.
One thing I rarely see regarding discussion of these short sales is the "inflation adjusted" price of the sale from it's original purchase price. I just put the purchase price of my home (2001) in an online inflation calculator and was surprised at how high purchasing it would be in 2007 dollars. If you sell at or near the purchase price after even a few years of ownership you are taking a substantial loss just for inflation.
If you sell at or near the purchase price after even a few years of ownership you are taking a substantial loss just for inflation.
This is correct, and it's something I almost mentioned in this post, because the loss is magnified if you account for inflation. For instance, today's subject property sold for $305,000 in 2002 dollars, which is equal to about $359,000 in 2008 dollars. Another reason you would take a loss is the transaction costs associated with buying or selling real estate take a chunk out of the proceeds.
It's common for people who bought homes a long time ago to be shocked at how much more their home sells for, but in many cases, when adjusted for inflation, the real value gain is not as significant as it seems.
I recommend today's post from the Irvine Housing Blog (as well as all their posts called "Investment Value of Residential Real Estate." It's related to this very topic.
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