Prime example of the Equity Milker bubble coming soon

E

enthdigry_IHB

New member
I am not in Irvine, but in Ventura but this can apply to all over SoCal.



I was looking at purchasing a town home listed at $385k on 10 April, down from $399k in Sept 2007. The home had approximately $50k in upgrades/remodels. I offered $335 2 weeks ago considering comps sold at 330k 4 months ago and one in the same complex foreclosing at 290k with the same floor plan but in very poor condition. They countered back at 375k and i hesitantly countered at $345, knowing well that i would lose that value in months. They countered back at 360k because that is as low as they can go and I am walking away from that.



I found out through my realtor that they had taken all the equity out of their home a year and a half ago to help in the down payment of their new dream home. They simply didnt have the cash to pay out the rest of the loan to match my offer.The unit is now off the market. Their plan is to rent out their unit for $2800 a month. Good luck with that, considering the unit across the street is renting for $1600. I found that out when checking out the complex the other day to see if i felt like living there.



From the sales history, they paid 130k in 1999, so they milked out a good 240k of equity out of their town home, way to think ahead.



Go figure.
 
[quote author="asianinvasian" date=1209210504]And this has to do with Irvine real estate...... because?</blockquote>


Oh, I guess Irvine was immune to those who took equity out of their rising home values <img src="http://www.junkyardjiff.com/OT/ugh.gif" alt="" />



Just a single example of the market as a whole.
 
[quote author="enthdigry" date=1209212382][quote author="asianinvasian" date=1209210504]And this has to do with Irvine real estate...... because?</blockquote>


Oh, I guess Irvine was immune to those who took equity out of their rising home values <img src="http://www.junkyardjiff.com/OT/ugh.gif" alt="" />



Just a single example of the market as a whole.</blockquote>


I moved this to the "outside of OC" section, as it is the more appropriate section.



I wouldn't take asianinvasian too seriously. He probably didn't sell all the standing inventory his sales manager wanted him to sell by the end of the month, and didn't get that bonus.



And, thanks for the example. I have seen this more and more lately, in Irvine and every where else in SoCal. Personally, after the second counter offer, I would just counter back at $290k and attach a packet of Kool-Aid. Once they figure out how much money is being drained with a vacant unit, then they will just end up giving it back to the bank for that or less anyway.
 
There's no such thing as free money.



During the past 3 years, lots of folks used their house a free ATM. Now they are paying big time.

They deserve to lose their houses but oh wait, Bush is going to bail them out.
 
Nice... its funny that people will spend even more money to keep a "asset" even though its costing them more to keep it than to dump it and move on.

I find it funny and sad in a way. I'd offer these people a standing offer.... XXX,XXX for this month and -XXXX per month after that. Just see how long it

takes them to belly up to the plate.



-bix
 
[quote author="enthdigry" date=1209207589]I am not in Irvine, but in Ventura but this can apply to all over SoCal.



I was looking at purchasing a town home listed at $385k on 10 April, down from $399k in Sept 2007. The home had approximately $50k in upgrades/remodels. I offered $335 2 weeks ago considering comps sold at 330k 4 months ago and one in the same complex foreclosing at 290k with the same floor plan but in very poor condition. They countered back at 375k and i hesitantly countered at $345, knowing well that i would lose that value in months. They countered back at 360k because that is as low as they can go and I am walking away from that.



I found out through my realtor that they had taken all the equity out of their home a year and a half ago to help in the down payment of their new dream home. They simply didnt have the cash to pay out the rest of the loan to match my offer.The unit is now off the market. Their plan is to rent out their unit for $2800 a month. Good luck with that, considering the unit across the street is renting for $1600. I found that out when checking out the complex the other day to see if i felt like living there.



From the sales history, they paid 130k in 1999, so they milked out a good 240k of equity out of their town home, way to think ahead.



Go figure.</blockquote>


Find out who holds their first mortgage. You will probably be able to buy this one from the bank if you really want it.
 
Even if they accepted your offer of 345k i don't think you can get it appraise for it cause of the foreclosure listed at 290k. and why would you even counter it at 345k knowing that there is a foreclosure in the complex at 290k.
 
[quote author="jbatzmaru" date=1209448731]Even if they accepted your offer of 345k i don't think you can get it appraise for it cause of the foreclosure listed at 290k. and why would you even counter it at 345k knowing that there is a foreclosure in the complex at 290k.</blockquote>


Good question with a stupid answer. Because I liked the place and the idea of stability. A better answer, yet still not a good one, is that the foreclosure would have needed more than 60k in work to match this place in terms of quality.



But after reading here a lot more, looking at charts/graphs, and doing more homework on the market...I have decided to just stay put and stick with my cheap rent while continuing to save.



And I didn't think it'd appraise for 345k either if that foreclosure went for 290.



The most recent comps were at 330 and 360 in the previous 6 months.
 
You must log in or register to reply here.
Back
Top