Classic flipper in El Cajon equals rude awakening

[PorkmanDelardo]

As I was perusing the mls (yes, I too am a licensed r.e. agent), I happened upon a new listing in my neighborhood. The listing was for a single family home in the Olive Hills area of El Cajon. The listing price is $599,000 for a 4 bdrm 3 ba (1900 sq ft.), with pool on a quarter acre. With partial view. Typical homes in the neighborhood were built in 1959. (You get a little more for your money in El Cajon.)
This home has undergone a typical cosmetic remodel. New paint, flooring fixture etc. At the peak of the market, (about one year ago) homes in this area were going for 535K-555K. I also can see from the mls tax info, that this property was recently purchased in Feb of 2006 for 500K with a 80/20 loan. No down payment. $400K 1st and 100K 2nd. Assuming that the current owner put 20K into the home for repairs/remodel and the listing commission is 5% (30K) and the property did not get on the market until late April (2 months of loan payments so far at $2,500 per month) the seller will be into the home for 555K, realizing a net profit of 45K if the property sells for the full asking price this month. Not bad for 2 months work.
However, currently, there are comparable homes in the range of 485K-525K that have been languishing. Somebody did not do their homework.
My advice to my buyers that are itching to get into their first home. Save, save, save. Don’t settle for an overpriced condo conversion. Your time will come soon enough. Homes like these will go back to the bank, and prices will get back down to a level that will soon be affordable again. I have a few clients that are wanting to buy, howver, I am advising patience right now. However, If the right deal comes along we will pounce on it. PorkmanDelardo

[barnaby33]

What part of El Cajon is Olive hills?

Josh

[powayseller]

It’s great to have another realtor on the forums!

Did you consider to speak with the seller’s agent, and inquire what’s up with that high listing price?

How difficult is it to get through to sellers, to convince them that their list price is too high? I spoke with a relative today, whose 2 friends have overpriced houses for sale. Both sellers think they should be able to get 10% more than the comps from last summer. How can a realtor get through to them?

[sdrealtor]

Good Luck! It’s frequently impossible. I presented an all cash offer to a seller today on a property in the mid $1M’s. The last two comps (different models) just closed 150K lower than their model matches. This seller is asking $200K more than last sale. My client offered all cash, no contingencies, all terms at sellers choice but $50K below the last sale of this model basically saying they would meet the last comp. They wouldnt even respond. My client has an open time frame and will buy when they find the house they want priced fairly.

Me thinks the seller might learn a very painful lesson!

[powayseller]

Yes, I’ve heard stories of sellers who regretted not taking an offer, because they wait many months for the next offer. You guys are in a good position, to keep shopping for the best deal. Eventually you’ll find a seller who’s more motivated. Maybe in 3 months, this house will still be there, and they’ll have chased the market down.

[PorkmanDelardo]

I call it the poor man’s Granite Hills. Olive Hills is off Greenfield on the north side of the 8 freeway. 92021 zip. Porkman

[PorkmanDelardo]

I have not spoken to the seller’s agent. However i did preview the property and I was disapointed with the kitchen. Same old painted over cabinets and tired old countertop. Amazingly, there is another newer 4 bdrm 3 ba house around the corner, built in 1987 (not 1959). same square footage, 1900 sq ft, Better view (overlooking my back yard), granite kitchen, stainless appliances, rv parking, new above ground spa and firepit, 2 story, tile roof, blah, blah, blah. Originally listed for 735K. After 30 days, dropped asking price to price 600K. Same as the classic flipper. Classic flipper is in trouble! Porkman

[PorkmanDelardo]

I have not spoken to the seller’s agent. However I did preview the property and I was disapointed with the kitchen. Same old painted over cabinets and tired old countertop. Amazingly, there is another newer 4 bdrm 3 ba house around the corner, built in 1987 (not 1959). same square footage, 1900 sq ft, Better view (overlooking my back yard), granite kitchen, stainless appliances, rv parking, new above ground spa and firepit, 2 story, tile roof, blah, blah, blah. Originally listed for 735K. After 30 days, dropped asking price to price 600K. Same as the classic flipper. Classic flipper is in trouble! Porkman

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