Greed on Display, Lorenzo, Westpark, Irvine
People who try to sell their own house do not use an agent to advise them on what to do or how to price it to sell. Some people do very well on their own; others... not so much.
Asking Price: $1,500,000
Address: 12 Lorenzo, Irvine, CA 92614
Hard to find how I feel, please someone help me.
Hard to find how I feel, controlling me every step of the way.
Hard to find how I feel, you greedy little baby!
Greed -- Godsmack
Greed is a funny thing. It is an emotion we all feel, yet we are universally repulsed by it. Most religions identify it as a vice, and most people who work in finance identify it as a virtue. When everyone gets to feed their goblins of greed, the gluttony of consumerism satiates their salaciousness of the moment and greed grows unabated. When the system collapses and the greed is exposed for what it is, there is a period of shame and reflection -- a fleeting moment before we do it all over again....
So how greedy is the owner of today's featured property. Well, there is a property for sale down the street from this owner at 1 Lorenzo. It is a larger property on a corner with a view of a park. Basically, it is superior in every way to today's featured property, and the owner there wants $320,000 less.
But this gets even better, the property at 1 Lorenzo was a WTF property profile from February 2008! (A New Drug) The owner of today's featured property has priced himself $320,000 over a superior property that was itself grossly overpriced (it has been on the market 250 days now).
Today's featured property is for sale by owner (FSBO). Savvy sellers can do well on their own, but clueless sellers simply embarrass themselves publicly by putting their properties on the market at prices that have absolutely no chance of selling. Everyone who pays attention to the housing market is aware of this property, and when most people see it, they giggle to themselves. With no agent to bring this seller down to reality, it just sits there and with each passing day, the owner looks more and more ridiculous.
Asking Price: $1,500,000
Income Requirement: $375,000
Downpayment Needed: $300,000
Purchase Price: $455,000
Purchase Date: 8/19/1999
Address: 12 Lorenzo, Irvine, CA 92614
| Beds: | 4 |
| Baths: | 2.5 |
| Sq. Ft.: | 2,405 |
| $/Sq. Ft.: | $624 |
| Lot Size: | - |
| Property Type: | Single family |
| Stories: | 2 |
| Year Built: | 1987 |
| Community: | Irvine |
| County: | Orange |
| Listing #: | 25481870 |
| Source: | Zillow |
| Status: | Active |
| On Redfin: | 122 days |
What the Owner Loves: Culverdale Elementary School is about 200 yards.
How the owner describes the property: [silence]
This property was purchased on 8/19/1999 for $455,000. The owner used a $355,000 first mortgage and a $100,000 downpayment. Since then, he has managed his mortgage like most Irvine residents -- he doubled it -- and now he has significant debt. Of course none of this matters because he plans on selling this house for a small fortune.
If this house sells for its asking price, and if a 6% commission is paid, the owner stands to make $955,000.
LOL!
ROFLOL!!!
If you look at the listing history, you see that he first put this property on the market for $795,000. At that price, he would pay off his debts, but he wouldn't take much cash with him when he left. Realistically, it might sell for $795,000 as there is still some bubble equity left in the property, but apparently this owner wants to make a fortune instead.
I can understand his greed. The fact that it is on display in such a manner should be humiliating, but there appears to be no shame in California real estate.
Maybe he is doing a stupid realtor trick. He will later advertise “price reduced $300k”
Unfortunately for the seller, Redfin has the Property History. Though, as you say, that hasn’t stopped agents from trying to pull that kind of crap in the past.
$624 a square foot??!?
Considering a buyer will (probably) have to pay all cash to pay that price in this market, here’s an alternative living arrangement…
Find a $600 a night hotel room, and reserve it for six and a half years.
I’m guessing you’ll be able to get a damn nice hotel for that price, even in Irvine.
Wow, I’ve never seen someone double their asking price after not being able to sell their house! You’re right, they need help -no interior pictures, no description highlighting relevant data, etc. I’ve seen many WTF priced listings but this one takes the cake (Dr. Housing Bubble provides many laughs with Real Homes of Genius awards). I assume that some people try to sell at high prices b/c of MEW, and they have to try to sell so they can go back to their lender and try to work things out (or justify short sale, etc.). But this one - unless he has that much debt - truly defies logic.
A couple of months ago, 4 Briarglen sold for $550K. I was watching this one because its in my neighborhood. It was was first priced at $530K or $540K. Didn’t sell. So they raised the asking to $570K. Whaddya know. They got a flurry of interest and it sold for $550K. I’m still scratching my head.
For 1.5M, I’d like a place to stash my trash cans away from my patio furniture. Hell, I have that for 1/10th the cost in my current home.
This pricing is the same as me saying I’ll sell you some Goldman Sachs stock for $240/share, and is even worse, because GS could get back up there, but I doubt this home will double in value again anytime soon.
This is a spot where Shiller’s real estate options market would make sense, and why the stock market can make more sense than real estate. If you saw people trading options on your home valuing it at $800k, it would not make sense to try selling options at $1.5M.
When you read stories like this, you realize just how unhealthy The Great Real Estate Bubble is/was. Has this bubble been a wealth builder, or a debt builder & economic destroyer?
Time to rant a moment ...
Is there anyone who finds it ironic that the current administration is planning on expanding the Fed’s responsibilities to include more oversight over the banks, and the “too big to fail” problem.
HELLO???????
Is this not the same Federal Reserve who more than any other entity is responsible for this massive Ponzi scheme! Is this the same Federal Reserve that denied for a very long time that there was a real estate bubble! Is this the same Federal Reserve that dropped rates to 1% in order to defer an economic recession (needed-reset) after 9/11, kicking the can down the road, causing and then denying economic imbalances, ultimately creating the largest economic collapse since The Great Depression. Giving the politically charged Fed more responsibility is about the dumbest idea I’ve ever heard!
Rant~
If the FDIC, The Fed and the Treasury are so concerned with “too big to fail” firms, why would they assist JP Morgan, Bank of America and Wells Fargo to gobble up more financial firms, and actually become much bigger. I don’t really have an answer on what should have happened to Countrywide, WaMu, Wachovia and Merrill Lynch, but to hand’em over to larger firms, seems irrational ... aren’t we making these banks bigger casinos? Yes, yes we are!
Rant~
I have NO patience for economic ideologues! Especially right-wing, “free marketeers” like Larry Kudlow, who insist that this collapse was a result of too much regulation. Larry Kudlow is a true political animal ... someone who is capable of captaining the Titanic, and setting sail straight for the Arctic, just to prove the point that big chunks of ice are incapable of sinking a ship that not even the almighty could sink! WTF? Now because the nations free market banking system was left to irrational, irresponsible morons, who were all suppose to self regulate, we’re watching free market sectors being gobbled up, and bailed out by the state.
The “free market”, no regulation, uncompromising, ideologues should have NO seat around any economic policy table. Their idiocy more than anything encouraged this leveraged and then hedged, pile of shit that we’re dealing with.
“Markets are not self regulating, and people are not rational.” ~ Barry Ritholtz, The Big Picture Blog
BTW, make no mistake, I’m a free market capitalist, just a reasonable one.
I feel better now.
Lee in Irvine,
You might find reading the biography of President Andrew Jackson enlightening. The two more pressing accomplishments were:
1.) Breaking up the ‘United States Bank,’ back when there was just one really big bank for the country.
2.) Paying off the national debt… not just the annual deficit, but the _entire_ national balance.
Jackson was the only President in history to accomplish the latter goal. It did not stay in effect for long, but the former accomplishment has lasted for well over a century. Given recent events, the expression “spinning in the grave” comes to mind.
Regards,
Brent
The short answer is: election.
Obama wanted the whole things can come down late next year and in 2011 he wanted to have a best election environment so he can be re-elected and therefore he took the short cut to fix current problem by using US$ to bail out current problem.
Meanwhile, Ben also wanted to be re-nominated as Fed chair by next few months, so he needs to find a ‘quick’ fix.
Also, some ‘smart’ people perceive that using US dollar to bail out problem is not a bad idea seems China/India will hold the bag. But we all know this is big lair and our next generation has to pay back big for this.
All this will bring up a bigger collapse at around year 2012. Where the bigger tsunami will destroy entire financial systems, but for next few years, let’s just party. Another bubble is coming, real estate maybe flat but the stock market and commodities will go sky rock.
On second thought, maybe this is at the urging of the neighbors? Maybe this is somehow being used to help other WTF prices appear more reasonable?
I remember way back in 2007 when asking prices were sometimes used as a reference for market values for cashout refis and helocs.
Wow. It seems like I was watching science fiction on tv, rather than seeing this in real life.
This was my first thought too; it wouldn’t cost anything to run this scheme and it would explain the lack of effort in describing and photographing the house.
Also, a thought on: “If this house sells for its asking price, and if a 6% commission is paid, the owner stands to make $955,000. LOL! ROFLOL!!!”. Being FSBO, they’re anticipating making one million dollars, is this Dr. Evil?
The absence of indoor photos is a huge problem for me. Old, old neighborhood. a zillion dollar price tag on this home and no photos of the interior.
These folks are clueless beyond belief.
Now, if we could somehow get the 12 Lorenzo owner to comment on this blog as Property Owner did for the crooked house,,,!
Am I the only featured property owner that has posted on this site so far?
Culverdale Elementary is about 200 yards….
Now that’s a strange way to describe a school:P
Or, maybe he means there are 200 houses with yards between his house and the school. Or maybe the school size is 200 yards.
I’m guessing you’ll be able to get a damn nice hotel for that price, even in Irvine.
Not only that, but if you put all but a year’s worth
of the hotel rent into a 1 yr CD @ 2% APR, you’ll come out 25K ahead as well for the year, there no appreciation that’ll make this a worthy investment unless you’re planning on selling it when the grandkids need to go to college.
By then the inflation-adjusted value will be—you guessed it, $200 psf in 2009 dollars.
When we go through open houses, we see a lot of crap. I usually just want to politely say “thank you” to the realtor and leave. But my wife is great. She usually wants to tell them how overpriced the house is.
Last weekend we looked at a 4/2 1400sqft house that was trashed. There was mold on the ceilings in the bathroom. In order to move into the house, it would absolutely need: new kitchen (the cabinets were falling apart), new carpet, paint (many walls were partially painted in random colors), new bathrooms. The owner was still living there, so there was still tons of junk piled up all over the place. The listing price was $397,000. My wife was like “this house would be overpriced at $275!” “This place is disgusting.”
If more people act like this in open houses (for all I know EVERYBODY told the realtor the same thing), will it help realtors to see that asking prices are still insane?
Of course after we left, my wife was trying to get me to make an offer on the house for $225,000. lol
But my wife is great. She usually wants to tell them how overpriced the house is.
I take great pleasure in saying this to realtors. Nothing makes me feel better than viewing a brand new community, looking at all the models, then walking back into the office ...
Sales Agent ~ “So, what do you think?”
Lee in Irvine ~ I think they are vastly overpriced. Have a nice day.
I know it’s a little sadistic, but I honestly can’t help myself. Shame on me!
They usually come back with “make an offer”. As a beginner homebuyer, would it be a bad idea to make a lowball offer without a realtor representing me?
If you are at an open house, the realtor sitting there is only interested in meeting buyers. Most often this person has nothing to do with the listing. If you are someone willing to make an offer on the property, you are the prospect they are looking for. They will want to start the process of working with you to find a home. They have no interest in putting out lowball offers that have no chance of transacting, but they will do it anyway if it gets you in to the process. They hope they will be able to convince you to bid near comps and actually make a sale.
Just when you think it isn’t possible for NAR to stoop any lower or get more desparate, check out this para from today’s NAR release on existing home sales:
Yun said the appraisal problem is serious. “Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales,” he said. “In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected.”
So, we basically need to get back to the local appraisor - which I assume means the brother in law of the real estate broker? We should exclude the foreclosures eminating from the bogus appraisals of the mid 2000’s?
“or who compare traditional homes with distressed and discounted sales”
This one is my pet peeve; the circumstances of an arms-length transaction do not matter. To try to pretend that an REO or short sale is not important or “real” is ridiculous.
The only reason I can see for not count REOs or short sales as comps is if the property was in poor condition, which some are. Some aren’t though-I’ve seen a low priced REO in Riverside that was turnkey with new carpet, paint, stove, and windows (the backyard bordered the 91 freeway, however, which is why it needed new dual pane windows)-and many traditional sales are trashed.
That is, ignore it (or add value to it to get a true price) because it’s a fixer, not because it’s an REO or short sale.
If that’s the case, then I’ll kindly wait until REO/distressed sales make up a more reasonable percentage of sales. How’s 10% sound?
Any bank that wants to make these loans deserves what they get.
And any homeowner that wants to pay up that high deserves the same.
IR: I suggested this a bit earlier but it was at 5pm so no one read it. A some days back someone said that they are now numb to a $250k loss on a 1/1. Would it be possible to start a debt clock type of idea that counts up the losses of each profiled property that you have done thus far? I am sure we are well into the $350,000,000 range. ($250k minimal loss/profile * 350 posts per year * 4 years—I know these numbers are not correct but they are a guess). Maybe folks won’t be as numb to it that way and it is really interesting.
It would be an interesting addition, and it will get even more dramatic as the high end pricing collapses.
What’s with the clock? It is an hour off again.
An alternative story can be the owners are lonely and want company.
At another open house in TR, a neighbor mentioned that seller has not accepted any offers in 2 years, was lonely and just wanted visitors. She does the open house herself and enjoyed compliments on her remodeling.
I’ve never visit an open house with a RE that didn’t say that this is the best time to be buying. I did have some RE’s that hinted should look elsewhere.
Harvard’s Joint Center for Housing Studies released a study yesterday. An excerpt reads as follows:
“So-called “echo boomers will help keep (housing) demand strong for the next 10 years and beyond” as they turn 25-44 years old, according to the report.
“Even under the low immigration assumptions, minorities will fuel 73 percent of household growth in 2010-20, with Hispanics leading the way at 36 percent,” researchers found.”
I’m guessing that very few, if any, will be buying starter homes in Irvine at current prices.
The same Harvard center that in 2005 said, “For now, though, house prices should keep rising” or in 2006, “[T]he housing sector continues to benefit from solid job and household growth, recovering rental markets, and strong home price appreciation. As long as these positive forces remain in place, the current slowdown should be moderate.”
http://www.calculatedriskblog.com/2009/06/harvard-on-housing-2005.html
Looks like they were right as far as they predicted.
Yeah, Thrifty, that’s the kind of solid forecasting you can take to the bank—not!
“3 o’clock and all is well…”
Like they said, ” As long as these positive forces remain in place, the current slowdown should be moderate.” And the forces didn’t. So what’s not to understand?
At this price one would expect a pool, newer roof or at least steamed clean, new paint, a view, three car garage, a thousand sq. feet more interior—and all fixed up inside—plus larger yard—that might approach 1.5 in Newport as well.
Extreme overpriced—it’s worth $700k since nothing is new—
Extreme overpriced—it’s worth $700k since nothing is new—
How about 450-500k at best since nothing is new
Maybe the owner owns the house next door and is selling both for one price.
It would explain why the price is twice as high as it should be.
I wouldn’t advertise “Culverdale Elementary school” proximity as a “benefit.” Culverdale is one of the lowest scoring (API=848) or rated schools in Irvine and has one of the highest population of low income earners (apparent from the percentage of children getting free/discounted lunch).
Here’s the top schools in Irvine:
http://school-ratings.com/schoolRatings.php?zipOrCity=Irvine
You notice that the better the school rankings and scores, generally, the more pricy the homes.
Maybe all the parents’ money is spent on house payments, so there’s very little left to feed the kids.
If houses are that high, sell the house and buy some food.
Stock market takes a dip, cause house was not as robust as expected. Housing is not robust as expected cause of those bad appraisers who don’t understand that price should be increasing every month. Waterwater III here we come.
A check of IPOPlaya’s site reveals a similar house at 11 Capobella (2,372 square feet, built in 1988)sold last month for $799K. Since it appears the market has doubled since then, pardon me while I write my FSBO listing.
Wow…..housing market has doubled!
I gotta call my broker for that loan quick!!!
My guess is the owner is listing the property with no intentions of selling it while not making payments. He probably has informed the bank he needs time to sell the property and the bank will let him stay in the property with hopes he will sell it. Nobody will pay over 750K for this property.
Is there a NOD or DOT sale?