Remove Yourself — Candiria
Touch what you can’t have
While i have what you can’t touch for now
My friend, all of this will turn to ash
Cash-strapped homedebtors going through a foreclosure often look for ways to get a few dollars out of the property before they give it back to the lender. One common way is to strip down the property and sell everything of value.
When I was in school, I had the privilege of helping a man named Frank Little as he retooled his architecture practice. He did a great deal of research on the tax code and the distinctions between what is personal property and what is a fixture of real estate. In architectural design, it is possible to create construction drawings to have what would ordinarily be classified as a fixture (part of the real estate) be classified as personal property. There are major tax advantages to this classification as you can greatly accelerate the depreciation. In working with Frank, I gained some knowledge of the grey areas between real estate and personal property.
The distinction between fixtures and personal property becomes very important when one is facing foreclosure. The personal property is yours, and you can do what you want with it. However the fixtures are real estate, and as such, they are part of the lender’s collateral. If you remove and sell fixtures, you are potentially stealing from the lender and reducing the value of the collateral.
Most people going through foreclosure could care less about the lender’s collateral. In fact, some people intentionally trash the place simply out of spite. In the weekend open thread, I mentioned a property in Beaumont (35756 Trevino Beaumont,
CA 92223: $492,000 new in 2006, asking $122,850 today. That is a property just over 2 years old (December 2006 to January 2009) selling at a 75% discount.) This property is selling for such a steep discount because the previous owners stripped the house before they left.
I mention all this because a reader sent me a Craigslist ad where a guy facing foreclosure is offering to sell everything in the house, including the fixtures. Here is the ad:
“My $1.5 Million dollar house was built last year and I just lost my job
after 10 years of service and can’t pay $10,000 a month. I pray to GOD
to the other families who are in the same position.
I will list the New prices so make your BEST OFFER.
LIST OF NEW PRICES, MAKE YOUR BEST OFFER. ############
40 White flush 6 inch Can lights $145 each obo
3 white Stairway lights $620 total obo
10 J-Boxes $185 each obo
Greyfox Intercom System Package, Master station, 3 interior sub stations, 1 exterior $2,640 obo
Central Vacuum System with accessory kit Dirt Devil pro series 690 12w x 39tall $2,840 obo
15 universal outlets $275 each obo
KITCHEN CABINETS total $12,650 obo some sizes 23.75w x 52.75single,
30w x30 tall double, 30w x25 double, 2) 36w x12.5 drawers, 33w x 10
drawer, 30w x5 drawer and more in Island etc.
20 about Kitchen Knobs polished nickel $950 total obo
Kitchen Island cabinets $1,435 obo
Undertone Undermount stainless steel Sink Kohler k3356, 29.5w x 34.5 with garbage disposal $980 obo
(SOLD) Wolf Stainless Steel 30” x 50 tall double over with professional handles $3,045 obo
(SOLD) Thermador Stainless Dishwasher with professional handles 23w x 34.5 tall $1,020 obo
(SOLD) Thermador Stainless built-in Microwave with trim kit $490 obo
(SOLD) Wolf stainless 36” Gas cooktop 5 burners $1,790 obo
KitchenAid wine cooler stainless 24” separate climate for red and white holds 48 bottles $1,570 obo
Sub Zero FRIGERATOR with ice and water 42w x 84tall $10,845 obo
Bathroom tub enclosure clear glass doors 58wx 62tall $540 obo
Bathroom stand up shower enclosure clear glass door $540 obo
Framed Mirror master bath 74w x 45 $1,235 obo
Framed Mirror guest bath 30w x 42 $620 obo
WHITE SHUTTERS 20 WINDOWS 4 1/2 inch blades double and single
49w x60tall double, 19 w x36.5 tall single, (3) 37w x 42tall, (3) 25w x 60tall, 24 3/4w x48 3/4tall
(6) 36.5 x 60 3/4 double, $400 each obo
5 Mirrored medicine cabinets 16w x 26 tall $400 obo
2 Mansfield toilets $400 each obo
2 Bathroom towel racks polished nickel $60 obo
4 Bathroom lights with 3 hanging glass bells $100 obo
13 DOORS with fancy double molding (3) 29 3/4w x 79, (5) 31 3/4 x 79, 29.5w x 79, 27 3/4 x 79,
32w x 79 mirrored on each side $250 obo
Bradford White hydrojet energy saver 50 gallon defender safety system WATER HEATER $400 obo
15 Journeyman security double halogen lights motion sensored $30 obo
“
Looking over his list, I don’t see much there that would qualify as personal property. Nearly everything there is part of the lender’s collateral. If you don’t believe me, read the definition of “fixture” and tell me what you think. I have left off the name and phone number, but I have left the link to the Craigslist ad so that you know it is for real.
Is this stealing? Technically, the guy still owns the house and all the fixtures therein. There are probably provisions in the mortgage that prevents the sale of fixtures after a default, but who would enforce it? If you purchased this stuff, are you stealing? Does the technical definition matter? Is this right or wrong?
Let’s assume that technically this is not stealing because the guy owns the house. Is it OK for you to buy the stuff and screw the lender?
Let’s assume that this man is stealing from the lender. Are you participating in a crime by buying his stolen goods?
Would your ignorance to the crime make it OK? Most people who respond to a Craigslist ad like this are not going to know or understand the nuances of personal property law as it pertains to imminent foreclosures. Most would not care.
Would you buy from this guy?
So digest your consequences
The Serpent’s venom runs inside of you
Your lust, desire will blind your senses
Whirlwinds of disaster for you
{book}
Today’s featured property is NOT the one mentioned in the Craigslist ad. The only reason it is not is because the owner has not decided to strip it down… yet.
Income Requirement: $399,750
Downpayment Needed: $319,800
Monthly Equity Burn: $13,325
Purchase Price: $1,891,000
Purchase Date: 6/28/2006
Address: 25 Fresco, Irvine, CA 92618
Beds: | 3 |
Baths: | 3 |
Sq. Ft.: | 3,100 |
$/Sq. Ft.: | $516 |
Lot Size: | 8,500
Sq. Ft. |
Property Type: | Single Family Residence |
Style: | Tuscan |
Year Built: | 2006 |
Stories: | 1 |
Floor: | 1 |
View: | City Lights, City, Greenbelt, Hills, Mountain, Panoramic, Valley |
Area: | Quail Hill |
County: | Orange |
MLS#: | S537000 |
Source: | SoCalMLS |
Status: | Active |
On Redfin: | 214 days |
Unsold in 90+ days
|
Desirable SINGLE STORY near new single family RESIDENCE ONE siding to
GREENBELT in community of VICARA in QUAIL HILL, Irvine on a top,
SINGLE-LOADED ST. with 180 degree PANORAMIC VIEWS of mountains, valley,
city lights, and sunsets; 3BRs + OFFICE + MEDIA ROOM, 2.5BAs with 2-CAR
ATT.GAR + STORAGE. Over 150K in UPGRADES incl Gourmet Kitchen
w/stainless steel appl.+ Blt-in wine cooler;granite ctertops
thruout,custom stone,custom hardwood flring thruout;easy maintenance
landscaping front & back;Honeywell digital A/C system w/
micro-filtration built-in. gar. fits 2 cars+computer station w/internet
& phone line+storage. Soft water system thruout. Monitored alarm
system;inside laundry rm w/sink. Lots of cabinet space. Central vacuum
in garage. Outdr speakers in back yard. Courtyd w/fountain/blt-in BBQ
w/sink, burner & granite countertps,fire pit/blt-in
speakers,&French drs out from dining rm & bedrm.Award-winning
Alderwood Basics+ Elem.+nationally-ranked University HS;resort-style
amenities.
Intermittent CAPS LOCK.
flring? rm? drs? incl? Outdr? thruout? Can’t find room for a few more letters (throughout)?
VICARA in QUAIL HILL. Am I the only one who reads “Viagra” every time “Vicara” is mentioned? Viva Vicara…
This property was purchased near the peak on 6/28/2006 for $1,891,000. The owner used a $1,511,200 first mortgage, and a $379,800 downpayment. Wow, that must suck. This guy is losing all of his money.
If this property sells for its asking price, and if a 6% commission is paid, the total loss on the property will be $387,940. Since this almost exactly matches the owners downpayment, you have to suspect the price will get pretty sticky right where it is. This listing price history is agony in motion:
Date | Event | Price | Appreciation | Source |
---|---|---|---|---|
Dec 11, 2008 | Price Changed | $1,599,000 | — | SoCalMLS #S537000 |
Dec 06, 2008 | Price Changed | $1,659,000 | — | SoCalMLS #S537000 |
Nov 10, 2008 | Price Changed | $1,699,000 | — | SoCalMLS #S537000 |
Nov 05, 2008 | Price Changed | $1,729,000 | — | SoCalMLS #S537000 |
Sep 09, 2008 | Price Changed | $1,799,000 | — | SoCalMLS #S537000 |
Aug 07, 2008 | Price Changed | $1,890,000 | — | SoCalMLS #S537000 |
Jun 19, 2008 | Listed | $1,989,000 | — | SoCalMLS #S537000 |
Jun 28, 2006 | Sold | $1,891,000 | — | Public Records |
Each price drop comes right out of this guys downpayment. For his sake, I hope he sells it before it becomes a short sale. It doesn’t look very promising.
{book}
Men of the Earth
You have soiled you’re so foul
With lips of infected sullen
You will indulge yourself
So digest your consequences
The Serpent’s venom runs inside of you
Your lust, desire will blind your senses
Whirlwinds of disaster for you
(for you)
Remove yourself
And take your breath away
Rebuild yourself
Before you fall away
And i will lift you from the bottom
And my hope will fade away
I must pick you up
So you can survive the day
Touch what you can’t have
While i have what you can’t touch for now
My friend, all of this will turn to ash
Remove Yourself — Candiria