REOs are currently selling for more than SS’s, but for the most part are already cleaned up, fixed a little and have their junk hauled away. Not so with short sales.
The bottom line is that I am seeing SS listings initially come on the market at a “teaser” price (i.e. 50% of what was paid for it in 2006 and/or 50% of what the last nearby comparable “organic” listing sold for). Yes, they are bid up but NOT to “market price,” probably mostly due to condition (in the absence of listing agent/broker fraud).
Here is a good example in Chula Vista. It is listed at a ridiculously low price range and sits next door to a $2M listing on nearly 2 AC which has a Mills Act contract! Purchased in 2002 for $290K, this owner spent hundreds of hours on rock, brick and ironwork over the last ten years as well as did beautiful stonework for a few nearby properties. It is obvious they put a LOT of money into the property (likely with $$ borrowed against it). The backyard is completely flat, RV accessible, HUGE and surrounded by a beautiful block/brick wall. The house is large, has no stairs and is situated in a very quiet enclave of all custom homes.
Notice the LA posted only unflattering photos (duh … as if they already had a friend/relative’s offer waiting for “approval”). BTW that “puddle” out front is on the city’s easement, lol…
There are two other Mills Act beauties nearby, a large Spanish a couple hundred yards away and a large Craftsman one block away, both in turnkey condition. In addition, there are several unusual architect-designed customs (including an infamous mid-century atrium house) within a stone’s throw of this property.
Barring a cracked slab or broken chimney, this short sale bidding SHOULD have started at at least $400K, IMHO.
If this property sells anywhere NEAR this range, this doesn’t bode well for the value of the mostly very well-kept surrounding properties (large houses on large lots) at all.
Can an (out of area??) lender be THIS STUPID??
“Short sale” pricing is BS and it sickens me (due to LA purposely NOT securing the highest price if they have a friend/relative who wants the property at a bargain-basement price). These types of shenanigans are nothing more than fraud, plain and simple, not only against the shorted lender, but against all surrounding property owners.
