Sunday, May 10, 2009

Same Old Short Sale Story



A local broker forwarded me the above home to consider buying. It's a *short sale* with a current list price of $465,000. Driving by this afternoon, we noticed there wasn't even a sign out front. This one must be really close to *auction*.

At 2,300 square feet, it's a bit small for me to even consider. Remember, I work from home and will educate my kids there. This claustrophobe needs a tad more space than that. After all, I didn't rent this entire housing bubble only to settle!

The first thing I do when I get a new listing is Zillow.com it.



Okay. So it sold *at the top* for 366k....

Then how the bleep is it a *short sale* at 465k?

It would seem that, minimally, the homeowner homeborrower took out 100k in home equity lines. Here's the pricing history:



Okay, as I was typing this up, I had to change course for the post. Since in the pictures of the listing, I didn't see gleaming hardwood floors, a Trex deck, nor granite countertops I was wondering where the HELOC money went. Then I found a note in the description that said *1,300 square feet* were a recent addition. Aha! So it was a flipper who paid $366,000 - at the top - for a mere 1,000 square foot chicken shack. He added on, skipping the fashionable kitchen update, and unsuccessfully tried to flip it for 600-700k.

Whoever this guy is - and he could very well be a contractor - with this track record, I sure hope he LOVES stocks today. (note I am really short these days)

My wife wants to see the place this week so I'll humor her. So I'll find out some more details soon. Any guesses as to who the real homeowner is?

I'll bet between the two liens there are two of these culprits: Countrywide, Wamu, GMAC, Option One, and perhaps Greenpoint Mortgage.

By the way, they say that 90% of agreed-upon short sale transactions are rejected by the banks these days. The lenders are probably suspicious of friends trying to pull fast ones on them.

But man, were they late to adopt some healthy skepticism!

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