I wonder if the makeup of the audience had any influence on the bidding?
I don’t think the sellers need to take $200k losses. They’ll probably just go back to marketing the homes in the MLS, probably at the current list prices -10% discount. Maybe throw in a car as an incentive to keep the recorded price up. Those prices probably would drum up some impatient suckers.
One thing’s for sure – this group basically has to sell and get ou, and sooner is going to be better for them than later. These properties have nothing to do with providing shelter for the owners group. It’s strictly about the money and I’m pretty sure they’ve figured out that the longer they wait the more they’re going to lose. They wouldn’t have owner-occupancy financing terms on these homes as they were not purchased for owner-occupancy. For all we know their loan terms may have a short term call date on them.
The rents they were getting from Lennar were probably enough to cover the payments going in, but there is no rental income coming in right now, so how ever many partners there are would be covering the entire mortgage payment out of pocket between them. If they try to rent the homes out alls that does is reduce their out of pocket losses. Of course, those payments would all represent permanent losses once they’re paid out.
Just wait until 16 fully-decked out homes in Bressi Ranch do end up selling for 15% or more off their 02/2005 sale prices. I’ll betcha anything that prompts a few other flippers in the project who are already upside-down to walk, too.
