Any time we see something like this - a property new to the market asking significantly (and we mean significantly) less than the previous sale price - we are tempted to assume the real estate agent or owner who ultimately had the final say on the price decided to come in low and hope to drive up the price through a bidding war.
Today's subject property with that characteristic is a single family home in RSM that has recently come on to the market...
3 Via Felicia, 92688
Asking price: $400,000
Asking price/ sq ft: $276
Income requirement: $100,000
Purchase price: $625,000
Purchase date: 6/18/04
Size: 3 beds, 3 baths, 1,447 sq ft (built in 1986)
Income requirement: $100,000
Purchase price: $625,000
Purchase date: 6/18/04
Size: 3 beds, 3 baths, 1,447 sq ft (built in 1986)
Zillow Zestimate: $561,000
2007 property tax: $9,006
HOA dues: $39
Type: Single Family Residence
2007 property tax: $9,006
HOA dues: $39
Type: Single Family Residence
Style: Mediterranean
Stories: Two LevelsFrom listing: View of Saddleback Mountains-large corner lot. Large front yard, and a good size back yard. Very well maintained property.
(The photo to the left is from the previous listing in 2004)The asking price is just $50,000 above the 2002 price. It is clear, then, that the owner who held the property from 2002-2004 might as well have hit the real estate jackpot. After buying the home for $350,00, they sold for $625,000 in June 2004. That represented a gain of $275,000 before sales commissions and money spent on upgrades.
Think about it - the home "earned" them $137,500 a year for two years of ownership.
The current sellers will probably soon be dealing with a competitor in 12 Via Felicia, an REO that went back to the bank for $435,281 at the end of March that also happens to be the same model as our subject property.
And, considering the amount of debt on 18 Via Felicia (a $468,000 first loan that is now in default, plus a $117,000 second and a $24,900 credit line as well that may or may not be tapped), it is possible that down the road this other property could be joining the sad parade of foreclosed homes as well.
You could rent a property like this for about $2,300 per month. So, if the property were actually able to be sold for $400,000, we would already have achieved rental parity, because a GRM of 160 values this property at $368,000. The question is whether the property is able to be sold for the current asking price.
Assuming a successful sale for the asking price, it would mean a loss of $249,000, including 6% sales costs. It would also be a depreciation of 36% off the 2004 price, not including sales costs.
8 comments:
I tried to find it under the MLS number and it says it is off the market. I just tried today, Wednesday, 4/23/ at 8:05 am
Interesting - it was up last night when I checked. Perhaps we have a buyer...I'll keep an eye out.
I think the agent just messed up.
They have it on "hold" in the MLS, and explain that it is "Due to the high amount of calls we have been recieving for viewing, this property will be available again next week for showing."
If this were intentional, the agent would have put it on hold to sort through the offers, but not to give it a rest until next week.
Thanks for the update, Straight Digs. Much appreciated.
Its highly likely that the price is a "bait" price, not the one the bank or seller will take. This is happening more often than not in our area
I think this just shows that many people believe that prices should be at 2002 levels. If the houses were priced this way, the market would start moving again. Agents won't in most cases, so it will be a long, long, painful process but eventually that's where the prices will end up.
$276 per square foot is still high. WHen I see a house I like, and say for instance I like this one, I'd offer the seller $350K. If more people knew how to buy and always low ball, then this scenario wouldn't work for the agent. All of the sudden, he would have 20 offers for way below the asking price..
Who sets the list price, anyway? It doesn't make sense to set a price that the bank will not accept. That is a lot of paper pushing to get nothing out of it.
Post a Comment