Irvine Housing Blog

For those who don’t think anything bad happens in Newport, take a look at 2101 Highland Drive (92660).  It is for sale by judicial order, asking for $1,220,000.  Zillow says it was last purchased in ‘97 for $421,000.  Too many Mercedes purchased with “equity”????  I wonder.
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Anyone see this one? 

3 REDBIRD IRVINE, CA 92603
Purchased for:  $3,950,000 (03/08/2006)

Asking:  $3,850,000.  But the real problem is…

19 REDBIRD
Asking:  $3,250,000

3 Redbird is only 250 sq. ft. bigger and the floor plans are almost the same.  The view is the same and they both sit in the same spot in their cul de sacs.  I talked to the realtor, the guy never lived in it.  She gave me some bs about he wanted to do some work on it but the HOA wouldn’t let him.  It’s got flipper written all over it.  I think he may have thought it would bring some more dough because he bought it from Mark Maguire, (the baseball slugger).

This one is going to be ugly!

cadaigo,

Check out this link:

http://www.irvinehousingblog.com/2007/01/09/the-villas-of-shady-canyon-mark-mcgwires-old-place/

Looks like it is time for an update…

Shady Canyon is one of the least shady neighborhoods in Irvine.  I never understood the draw of that place.  You can afford a gorgeous place in Laguna or Newport for the price of the monstrosities in Shady Canyon.

Look at 326 Deerfield   It doesn’t back to the railroad or power lines.  A slightly smaller townhome, but check out the sales history.

Opps, forgot to close the anchor. IR, can you fix that for me please.

That place on Redbird is Mark McGwire’s old place.  Some bozo bought it from him and attempted to flip it right away.

I love the power lines above this new place, IR

It kinda makes me want to buy it and hope that lightning strikes the power lines and a super-charged surge of current hits me while I’m in the bathtub.  It won’t kill me, but instead it will turn me into a superhero!!

It seems to be working fine.

I may profile that one. A 2005 price going by the wayside…

You watching ‘Heroes’ a little too much lately?

This story in the Wash Post flew under the radar yesterday.  It’s simply outrageous!  I’ve cut and pasted the first two paragraphs with the link below.  I cannot believe this crap was going on in that building!

By David Cho
Washington Post Staff Writer
Monday, May 7, 2007; A01

Maggie Hardiman cringed as she heard the salesmen knocking the sides of desks with a baseball bat as they walked through her office. Bang! Bang!

” ‘You cut my [expletive] deal!’ ” she recalls one man yelling at her. ” ‘You can’t do that.’ ” Bang! The bat whacked the top of her desk. As an appraiser for a company called New Century Financial, Hardiman was supposed to weed out bad mortgage applications. Most of the mortgage applications Hardiman reviewed had problems, she said.

http://www.washingtonpost.com/wp-dyn/content/article/2007/05/06/AR2007050601402_pf.html

No, but I did see Spidey 3 and was disappointed.

The Washington Post article is funny and sad.

It’s pathetic.  Not because the scummy stuff was done, but that the Washington Posst is pumping yet another story where the RE/Mortgage industry all pass the buck on responsibility.

Here’s a real simple solution for Maggie, they start intimidating to hit their numbers, go get a different job.  Oh wait, fat easy RE money wouldn’t have been made.

Here’s a little preview of what’s to come in the next few years: These are REO auctions, with 300 homes offered in this round throughout L.A., Orange, and San Diego Co.

Here’s a hill-top property in Laguna Beach where bids are starting at 60% off ($1.5M, with last price as $2.8M).

http://www.ushomeauction.com/property.php?auctionID=H-001&itemID=158&venueId=17&start=0

Definately time for an update.  I noticed that a lot of the track homes in Shady Canyon are back on the market (they didn’t sell last summer) at a 15% discount.  And it’s only May!

Irvinerenter,

Can you pls. check what happened to this house?

7 Running brook, Irvine, CA 92620

A year ago it was 1.35 million.  In April it was sold at only 1.07 million.

Thanks.

Looks like a scene befitting of a movie like <a> or <a>. 
Can’t wait ‘til they will come up with a sub-prime lender version of one of these gems?

I meant Boiler Room or Glengarry Glen Ross…

On a differente note, i live in Phoenix.  ADOT (arizona department of transportation) is building a massive expansion to the 202 in the east valley, cutting a huge swath out for a 8 lane (each direction) freeway.

There are houses still being built, two story houses, that will have a beautiful view of this concrete monstrosity.  It’s amazing anyone would buy those houses, let alone build them with the view like that.

That’s a sucker-bet auction.

Read the disclosures:

1.  you pay 5% premium over your bid if you win to the aucitoneer.
2. the sellers have undisclosed reserve prices.
3. all your due diligence needs to be done up front before the auction.
4. the auctioneer can have shills place multiple consecutive offers up to the reserve price.

http://www.ushomeauction.com/terms.php

Regarding the house in this post: I wonder if the railroad tracks and powerlines where there before the house was built.

Who in their right mind would buy such a place? If someone gave it to me, I would instantly put it up for auction at any price.

That railroad was there 100 years before the house was

It is amazing what people will put up with to live in Irvine. I would note that Irvine does set back its homes well back of the power lines. I toured a development in Fresno where the street dodged the power poles, and high voltage lines were 5’ horizontally from the front of the house. You could hear the strong humming sound throughout the neighborhood. It would be interesting to see the brain cancer rates from these places in the future.

My real point here is that this outfit is taking out ads in L.A. Times, creating website, holding mass auctions, etc.  It’s a sign of the times, and one we’ll be seeing lots more of, no doubt (just like all the “for sale” signs).

Not sure why you’d say this is a sucker bet auction: isn’t buying ANY house in 2007 kind of a “sucker bet”, knowing what we know? 

All the things you object to are clearly disclosed in the terms and their FAQ.  5% is not so unreasonable IMO, and the houses are guaranteed “free and clear” of any liens, etc.  Is it the unknown reserve price that turns you off?  While I’d prefer a known starting point for bids (i.e. known reserve price), you can’t blame the bank for trying to get top dollar, I guess.  I’m sure the neighbors are hoping these homes go for top dollar, too, so you can’t please everyone here….

I agree those terms are not particularly appealing. Shill bids won’t help much if the banks really want to unload the property. The highest bidder will only pay so much, and they will simply deduct 5% from their bid to pay for the auctioneer. It is the seller who really eats those costs.

Wasted money and time on due diligence is part of the game. The company I work for chases 20 deals to close 1. The cost of researching the other 19 deals is just the cost of doing business. This does tend to keep amateurs out of the game.

An individual home buyer would need to be very diligent or very lucky to get a good deal in the REO market. The professional flippers (the good, knowledgeable ones) who buy at rock-bottom prices will populate these auctions. Most REO’s that go to individuals as one-off buys turn out to be poor purchases. Either the people didn’t know what they were getting in to, or they got emotional and over bid.

Most REO’s that go to individuals as one-off buys turn out to be poor purchases. Either the people didn’t know what they were getting in to, or they got emotional and over bid.

The inventory they are attempting to unload has been REO for a while and currently on the MLS in many instances.

If the bank was going to take a price that would work as a REO, one of the pros would have already picked it up.

It’s a sucker bid because the shills and auction set-up.  IMHO, this auction isn’t designed to liquidate inventory at realistic prices, it’s intended to fleece the unwary.

It is an REO.  Pat Bartolic is a well known, and very good, REO agent.

He is the listing agent here.  I suspect SBC is actually HSBC, FWIW.  SBC is a former phone comany.  HSBC is a home lender with large subprime exposure.

Pat will sell it for the highest price he can get.  As you can tell, he’s priced it well under comps.  He knows what is going on, and so does the bank.  Neither fell off the turnip truck yesterday.

I suspect you are right about it being HSBC. It is listed in the property records as SBC. This is probably a typo. There is an SBC bank in Cambodia…

http://www.sbc-bank.com/

Did you ask about this property before? I thought I checked into this one before. I guess I just can’t keep up with all overpriced deals that went bad.

This was a corporate relo when it sold in 7/06 for $1.35mil with 100% financing. 10/06 a private loan of $58k was obtained and on 4/20/07 it was sold to Pacific Legacy Real Estate and Investment Trust at the trustees auction for $1,070,446. So plan on seeing it on the market soon.

hi there!  can you please link us to info for these tract homes?  thanks in advance.

Thank you very much. I did not ask this before.

No problem. Just the history on this one seemed so familar I thought it was you that asked before. So if it wasn’t you someone else was interested in what the heck is going on with this property. Good find on your part!

This kind of behavior is very common among “top producers” in sales operations of all kinds, including stock brokerage firms, as I can attest from my time in the business. I could tell you stories of fist fights, screaming matches, office equipment being broken, and lots and lots of substance abuse.

Most super-charged, rock-in-roll “hot” sales offices are NOT civilized places to work.

When the bank takes it back, I thought the opening bid at the auction was usually their outstanding balance plus outstanding missed interest, plus additional fees for processing the foreclosure.

It’s a bird, it’s a plane…..it’s SUPERLENDER !

You’ve got another thing coming if you think that these are populated by good, knowledgeable flippers.  These auctions (and the entire auction house including the method and frequency of advertisement) has amateur sucker magnet written all over it.

Frankly, if you believe their hype, you’re getting suckered by them too.

If you don’t think that people get emotional at an auction, just check out 90% of Ebay listings that successfully execute.  In many cases you can get the locally at retail cheaper and with a return policy.

I had the misfortune of having a place in my neighborhood, the exact same model as mine, go to auction through US Auctions recently.  They put up some very large signs for four weeks or so, and drove a bunch of traffic through the neighborhood - people doing their “due diligence”.  I can tell you, there were a bunch of Joe Shmoes, families, etc.  It wasn’t at all the professional flipper crowd. 

As I undertand it from a local realtor, the place went for $550K at auction, I guess with the 5% it was $577K for the buyer.  There is absolutely no way a flipper paid this price for the unit.  It needed a bunch of work, definitely new flooring before re-sale or occupation.  It was a rental gone very bad and they seriously thrashed the place.  Very recent comps on that model house in the neighborhood are $630-660K, so a professional flipper isn’t going to pay $577K for a unit to flip at maybe $600K after commissions if he’s lucky.  Not enough reward to justify the holding risk.

It is very likely a family got a bit of a discount on market pricing, although that is debatable.  At best, they might have saved themselves $10-15K.  I think these types of auctions are geared toward the unsuspecting family buyers, who think that if its an REO or an auction, it has to be a great deal…

Not always. While that is the general rule so the bank doesn’t take too big of a loss but things have changed. I think it partly has to do with the lenders being gone and they don’t want to be property owners so they are trying to price the homes at a price that will attract bids.

This week I saw a condo in Aliso that sold in 05 for $450k and a loan balance of $340k. The NTS was $346k but the minimum bid was $270k and it still didn’t attract any bids. I have to wonder if the grnt ctrs were ripped out and sold at below mkt!?