What is this?

Sometimes you come across a listing where something just isn’t right.

Redfin Asking Price: $999,000IrvineRenter

Zip Realty Asking Price: $1,213,000

Purchase Price: $1,300,000

Purchase Date: 10/31/2006

Address: 11 Santa Rida, Irvine, CA 92606

Beds: 5

Baths: 3

Sq. Ft.: 2,420

$/Sq. Ft.: $413


Lot Size: –

Year Built: 1997

Stories: 2

Type: Single Family Residence

County: Orange

Neighborhood: Westpark

MLS#: P582566

Status: Active

On Redfin: 33 days

From Redfin, “Rare opportunity for those Buyers with no credit. This beautiful home on a quiet cul-de-sac shows better than a model home. Mr. clean lives here, great marble flooring, too many upgrades to mention. no need to preview. “

There are two statements in this description that are setting off alarms in my head.Mr Clean

  1. Rare opportunity for those Buyers with no credit.
  2. no need to preview.

How does someone with no credit afford a $999,999 home? My first thought is this must be a fraud scam, but when you see a $300,001 loss based on asking price, that scenario makes no sense. Perhaps the price is a teaser to generate interest and if they find a straw buyer the purchase price will suddenly be raised $500,000?

No need to preview? Is this a realtor note trying to assure another realtor of the quality? Wouldn’t a realtor want to preview it anyway (or are they that lazy?) If you were the realtor, and you had this great listing, wouldn’t you want everyone to see it to generate excitement and hopefully a sale? If this is a note to a potential buyer, I would be very worried. What is it they don’t want me to see? Why no pictures after 30 days? Is there something to hide?

Why the quick sale? This seller just purchased the property 8 months ago. I would consider them a flipper or knife-catcher if they were trying to sell at a profit, but they are looking at a big loss. What is going on?



Let’s assume for a moment this is a legitimate listing. If so, this seller is going to lose a huge sum of money. At current asking price minus a 6% commission, this seller will lose $ 360,940. Ouch!

I guess Mr. Clean wanted to clean out his bank account. He won’t be doing any favors for the other sellers in Westpark. This is another comp killer.

26 thoughts on “What is this?

  1. NanoWest

    What’s really sad about what is going on here is that there are people that actually trust a real estate agent to help set the price for a home. Would a car company let its salesmen set the price for cars ?

    Although real estate agents work hard, they seem to have no judgement……and when the market changes, they are absolutely clueless. Sellers, if you want to sell your home, get 3 credible appraisels and price 15% below the average.

  2. Mr Vincent

    “Rare opportunity for those Buyers with no credit”

    This listing should be sent to the proper authorities. Maybe they can find out what the agent means by this.

    Zillow shows no lot info for this place, but from the overhead the house looks nice, but the lot is very small.

  3. patience2007

    Isn’t Realtor a special term for a real estate agent who belongs to the National Association of Realtors? I used to listen to Bruce Williams on the radio and he would always correct callers who used the term Realtor without knowing if somebody was truly a Realtor, or just a real estate agent.

  4. IrvineRenter

    Yes, it is, but we have been using realtor as a generic term for quite a while, I don’t see us changing out of political correctness. It’s not like Realtors have a good reputation they are trying to preserve…

  5. Anon

    I’ll bet that it’s a fake listing. Call the realtor and say that your interested, and he’ll say something like, “Oh, that property just went into escrow (or is now somehow unavailable), but what are you looking for? I’ve got plenty of other properties available similar to this one, when can I take you around to show you these other homes?” Happens all the time on Craigslist listings, but I’ve never seen it happen on the MLS. The bait-and-switch is completely unethical, but it’s happened to us multiple times in the past year.

  6. Sue

    Actually, for a used car (and most of the homes are not brand new), the salesman/sales manager do set the price, and then you start dickering. Pretty much the same.

  7. Aboot

    They need time to clear out the meth lab, thats why no preview is neccessary.

    “ignore that smell and all the glass beakers everywhere!”

  8. Sue

    How many times have you walked into a dealership and seen a car with the Blue Book price right on the window as the offician “price”, and just been offered it and got it with no barganing marathon playing good cop/bad cop with the salesman & sales manager.

    Blue book and housing comps are just datapoints for informed buyers who know what they want to dicker for.

  9. SmartMoney

    This listing highlights a critical problem with purchasing homes: by their very nature they exploit the less experienced. All of the experts who should be helping people get information are actually carefully obfuscating it.

    It should not take a team of bloggers and dedicated individuals several days to figure out the “real story” of what is going on with these properties. The Realtors shouldn’t be removing valuable data like Days On Market (and Cumulative Days on Market) from the listing service.

    But that is how it goes sometimes. Even though I think it ought to be illegal to make your living by hiding information from people making huge life decisions, there are a lot of people who have gotten very fat on that very practice, and they are happy to put up a fight to preserve their unethical activities and inefficient drag on the market. Just look at the payout rates on title insurance for a sense of how backwards, dishonest, last century, and inefficient our current system of home sales and purchases really is.

  10. patience2007

    I agree. I am generally an economic libertarian and think that the markets should always work themselves out. But for quite awhile the real estate industry has made me feel uneasy. Something doesn’t seem right about how many people get to put their fingers in your wallet when you buy a house (agents, mortgage brokers, banks, appraisers, etc.).

    The more I’ve learned about economics, the more I get to be in favor of certain limitations on large profits due to certain situations such as monopolies and oligopolies and the way people in industries such as real estate are able to take advantage of buyers because most buyers only dip into the real estate business 2 or 3 times in their lives, while the people in the business do it every day.

    Maybe it’s time somebody developed a real estate business that really tried to look at things from a fair perspective and broker deals that are really fair and reasonable for both seller and buyer. But if successful, this business would probably eventually get greedy and ruin things – like most businesses tend to do.

  11. lendingmaestro

    That is the ups and downs of capitalism. Capitalism fuels the “survival of the fittest” mantra. The wealthy and successful will always say that everyone has an equal chance to succeed. The poor will bitch and complain about how much money others are making. The less regulations, the more people will get taken advantage of. Where do we find a balance?

    Me..I vote for capitalism any day of the week. I want the freedom to make my own choices in life. I don’t want restrictions because my government feels it needs enforce legislation to protect stupid people. Citizens need to get off their asses and ask questions. Get up and make something of yourselves and stop waiting for handouts.

    I have no problem with the government requiring full-disclosure of all transactions, but the people must be able to decide for themselves. If you choose poorly, accept the consequences. If you choose wisely, congratulations.

  12. cp

    The only problem is that it’s the government employees who have always been standing there “waiting for handouts.”

  13. Darini

    I make sure to put realtor(TM). That TM for trademark should be a trademark that they like a cattle brand. When they say I’m a REALTOR(TM), I want people to think of all the things that David Lereah and Lawrence Yu do and all the crap they are pulling with LA MLS plus the lack of professionalism and ethics.

    Hell yea, they are a REALTOR(TM).

  14. PurpleHaze

    Every problem has its own solution. The inexperienced will be even more scared of entering such a market where you cannot trust what these realtors say. All of a sudden the unethical behavior of some realtors is strengthening the resolve of the fence sitters.

    As a fence sitter would say: Wait and Watch. Ho-hum

  15. biscuitninja

    I hate to say it though, that commercial is much better in this respect. Mainly because people can and WILL sue, it tend to keep honest people honest. But of course you have those guys who will always be shady businessmen or momen.


  16. Willy

    11 Santa Rida has a listing price range of $999,000 – $1,213,000. Ranges are generally employed by real estate agents to get homes into people’s search criteria. For example, if you specify that $1,000,000. is your max then this home will show up in your search. The typical ideal is for people to look and then possibly overspend. It is no different with cars. The salesguy will introduce you to a more expensive and more powerful car typically because there’s more commission on those.

    Even worse on Santa Rida is that only 2% is being offered to the selling agent. That is only $20k based on a 1M sales price. So the rebate (if your agent is generous enough) will be much less…almost insignificant based on the sales price.

    The exact criteria for being a Realtor(TM) is paying association fees to be part of the organization and to attend an indoctrination/training class. Having said that, to what level a person upholds their ethics is up to the person. You can take a snakeoil salesman out of selling tonic, but you can’t take the snakeoil out of him. Being a Realtor(TM) also gives you access to a greater amount of RE related resources, so it’s worth the dues. Not every agent is bad…unfortunately, most do not have your best interest at heart.

  17. tonye

    You gotta fire the lawyers first!

    I love the way Europeans used to do it: Go to war every thirty or forty years.

    The first thing the winner would do is kill off all the politicians in the losing side. Ergo, half the lawyers are gone.

    Then they’d go and change the laws. Ergo, the rest of the lawyers went unemployed.

    What this country needs is a war we can lose that will not affect our property values!

  18. SmartMoney

    I don’t know if Chuck gives enough credit to the idea of range pricing. I think it is manipulative, but there is a significant reason why it has developed in an overinflated market with rampant deceptive and exploitive practices:

    Professional negotiators and psychologists are familiar with a concept called “anchoring.” When you give someone a price “range” you are an idiot if you think you can get more than the low point, but you might be brilliant to employ the pricing system because it gives a false sense of value.

    For example, let’s say I am selling a house really worth $500,000 in an overinflated SoCal market where people don’t really understand math or economics and buy more on credit than any rational person ever would. If I list it as $800,000 to $900,000, I may never get $900,000, but the guy buying it gets a sense that it is worth a lot more than it really is, and thinks he is getting a deal when he pays the low figure, when in actuality the low figure is absurd, too, but his thinking and expectation were “anchored” by the listed range.

    The other reason a range can be helpful is for negotiations: I can say, “well, the purchase of a home is a complex transaction, with lots of variable terms. I would have given you the low price if the sale date was the one that works best for me, but since you are making demands through your inspectors and want a different date, I am going to insist on a higher price for my inconvenience.”

    Chuck Ponzi states that he cannot think of anything else priced “in a range.” I can: services are often priced on a “sliding scale.” I do some legal work for free (pro bono), and some legal work at a billing rate that is nearly incomprehensible. Services can be as a function of people’s ability to pay, and I think it stands to reason that a seller could be upfront about his or her range of possible sale prices depending on how well they like the potential buyer.

    To be sure, I still think range pricing is often more manipulative than it is helpful, but I disagree with the assertion that you would have to be an idiot to use it.

  19. IrvineRenter

    I suppose Chuck should say that a buyer would have to be an idiot to pay attention to it 😉

  20. Major Schadenfreude

    “Services can be as a function of people’s ability to pay…”

    Uh oh. Are you saying the poor indigents that qualify for the pro bono work aren’t getting the services of the best lawyers and/or effort on their cases? 😉

  21. lateral perspective

    how about this for a ‘range listing’ in northpark? top price is 50% higher than bottom. crazy.

    $400,000 – $600,000
    2 Bed, 2.5 Bath
    1,327 Sq. Ft.
    Estimated Payment:
    $2,000 Per Month*
    Change Assumptions
    Check Local Mortgage Rates

    1404 Terra Bella
    Irvine, CA 92602
    MLS ID# S494809

    * Roofing: Spanish Clay Tile
    * Community spa/hot tub(s)
    * Community swimming pool(s)
    * View
    * View: Mountain view
    * Hill/mountain view
    * Call agent for details on association fee info.
    * School District: IRVINE UNIFIED SCHOOL DI

  22. fumbling

    I dont think I would ever put in an offer on a range pricing listing. However, if the listing was for a nice home, would anyone here put in the offer below the low price? Personally I don’t think I would ever offer between the range.

  23. Citizen

    this guy lives near me, he rents out rooms to various people. i thought be bought the house through foreclosure? they all drive fancy cars, new bmw’s etc. house is kept clean though, and they seem to be very nice folks there.

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