Apparently the 2004 sale at $575k was not the result of an MLS listing so we’ll probably never know the circumstances of that sale. In looking at the sales data in the area there were a couple homes of similar size, age and canyon view that sold for about $570k, but both were in much better shape. Offhand (and without seeing anything in person) this sale price at $575k stands out. The properties that appear more similar are closer to the low $500k mark. If that’s correct we’d be starting off with an overpriced sale and $75k in the hole right from the beginning.
The only other listing in the MLS for this address was a listing in 06/2006, when it started at $550k and was subsequently reduced to $499k before coming off market 3 weeks ago. The seller was obviously trying to get out from under the loan without taking a short sale, but to no avail.
The listing itself includes the following blurb: “Plans and permits paid and approved for 1500 sf explansion w/as built appraisal valued at $1,050,000. Plan expands and adds 2nd story & balcony…” So we can chalk up some more costs to this seller (plans and approvals) that put them even farther behind.
I looked at the homes in the immediate neighborhood and I saw a house that’s a few houses down and has the same view. This house has a dynamite pool/spa deck and landscape package ($50k easy) plus a nice remodel, but no addition. It sold for $630,000 in 04/2006. This is the high sale for this portion of the neighborhood, and it shows that even if our subject property had been remodeled but not enlarged it wouldn’t have sold for more than about $600k tops and the $575k initial price was way too high.
The immediate neighborhood has homes built in the 1950s, most of which are in the 1025 sf ranges; and about 6 or 8 homes with additions, the largest being about 2200 sf. However, there is apparently a small pocket of some newer 1978yb homes in the 2200 -2400 sf ranges. I didn’t find any recent sales of those homes, but I’d be shocked if any of them were even close to $1,000,000, and I’m reasonably confident that our subject could not have legitimately appraised out at $1,050,000 even with a completed addition and maxed out landscaping. There might be an appraisal that says that, but it can’t be legit.
So we have an expansion/remodel that would have resulted in somewhat of a white elephant for the neighborhood (which is why nobody else ever went to those lengths). The cost wouldn’t have justified an $800k return, it’s as simple as that.
Bottom line is that this seller was either not getting good advice from their appraisers and realty agents, or (just as likely) was getting it but ignoring it. Their greed overrode their common sense and the market didn’t rescue them from their foolishness. Thirteen years ago this would have been a very familiar tale; I think that 3 years from now it will again be a very familiar tale.
