29 Grape Arbor in Northwood II (another flipper listing coming to an MLS near you)

NEW -> Contingent Buyer Assistance Program
[quote author="SoCal78" date=1252466587][quote author="usctrojanman29" date=1252465795]You guys will love this...



So I sent a text to the listing agent/owner that I will be submitting offers from 2 of my buyers. He responds saying that they have received over 20 offers and the property will probably sell for over $800k so come "strong." Classic, just classic. If someone is willing to bid up over $750k they better be ready to deal with the appraised value coming in below the contract price.</blockquote>


My concern is that if the buyer(s) plan to put down the average now of, what, 42%?... that the appraised value will be meaningless to them and they'll have the cash to bridge the difference.</blockquote>
Very true, but even if you were putting 40%+ down and the appraisal came back $30-$50k lower than the contract amount...wouldn't you feel like you overpaid (i.e. the winner's curse)? You need 3 to 4 comps priced at a similar price point before it becomes a good comp and not an outlier. Everything in the neighborhood is selling around $300/sf +/- but someone is willing to pay $340/sf+? I just don't get it.
 
Screw 29 Grape Arbor... 27 is scheduled for the auction tomorrow with a minimum bid of $550,704.97. Come on down FCBers! Get your red hot Irvine house for 20-30% off wishing prices.
 
So I e-mailed the listing agent about why he didn't send counter offers for my 2 buyers...the response was "We received over 40 offers and only decided to counter back the top 20." Good luck with having the property appraise north of $725k-$730k.
 
[quote author="Jayy" date=1252639122]Just heard that the top offer is already above 820K now. How it could be possible!!!</blockquote>
It's called a BUYER'S FRENZY. Like I said.....good luck on the appraisal when the 3,100sf Plan D sold in the mid-to-high $800k range.
 
[quote author="graphrix" date=1252560290]Screw 29 Grape Arbor... 27 is scheduled for the auction tomorrow with a minimum bid of $550,704.97. Come on down FCBers! Get your red hot Irvine house for 20-30% off wishing prices.</blockquote>
Just got back from the auction...27 Grape Arbor was canceled.
 
[quote author="usctrojanman29" date=1252646867][quote author="graphrix" date=1252560290]Screw 29 Grape Arbor... 27 is scheduled for the auction tomorrow with a minimum bid of $550,704.97. Come on down FCBers! Get your red hot Irvine house for 20-30% off wishing prices.</blockquote>
Just got back from the auction...27 Grape Arbor was canceled.</blockquote>


How do auctions get cancelled? I mean is it something the current owner does to warrant a cancellation?



I don't understand how the process can get dragged out for so long.
 
[quote author="escrowbear" date=1252647378][quote author="usctrojanman29" date=1252646867][quote author="graphrix" date=1252560290]Screw 29 Grape Arbor... 27 is scheduled for the auction tomorrow with a minimum bid of $550,704.97. Come on down FCBers! Get your red hot Irvine house for 20-30% off wishing prices.</blockquote>
Just got back from the auction...27 Grape Arbor was canceled.</blockquote>


How do auctions get cancelled? I mean is it something the current owner does to warrant a cancellation?



I don't understand how the process can get dragged out for so long.</blockquote>
Yeah, the owner and/or their family probably ponied up enough cash to cure the default or they got some kind of loan mod. 85% of the properties were canceled or postponed. The other 10% had opening bids that were too high and they just went back to the bank and about 5% of the properties today sold. You just don't know which properties are gonna get postponed or canceled.
 
If there is going to be a lower opening bid, is it almost always updated and shown the day preceding the auction ? Or does the auctioneer/trustee sometimes announce a lower opening bid on the spot ?
 
[quote author="xoneinax" date=1252653880]If there is going to be a lower opening bid, is it almost always updated and shown the day preceding the auction ? Or does the auctioneer/trustee sometimes announce a lower opening bid on the spot ?</blockquote>


The minimum bid is what they will start at, but that doesn't mean that the auctioneer doesn't have the right to bid on behalf of the trustee, making the high bid more important.
 
[quote author="graphrix" date=1252655616][quote author="xoneinax" date=1252653880]If there is going to be a lower opening bid, is it almost always updated and shown the day preceding the auction ? Or does the auctioneer/trustee sometimes announce a lower opening bid on the spot ?</blockquote>


The minimum bid is what they will start at, but that doesn't mean that the auctioneer doesn't have the right to bid on behalf of the trustee, making the high bid more important.</blockquote>
That's exactly what happened with one property in Anaheim. The opening bid was $125,000.00 and an investor bid $125,000.01 then the auctioneer said that the trustee had instructed them to bid at $375,000. Everyone just kind of laughed when they heard that.
 
[quote author="xoneinax" date=1252653880]If there is going to be a lower opening bid, is it almost always updated and shown the day preceding the auction ? Or does the auctioneer/trustee sometimes announce a lower opening bid on the spot ?</blockquote>


I think you may be asking a different question than the others gave answers for, but maybe I've misread...



For some properties, the opening bid is dropped without notice (lower than the published opening price) and as you wrote, the auctioneer announces a lower price and the pros get on their phones to double-check their research. Sometimes they have a reserve price (which is the scenario that t spoke of), and sometimes they don't.



So to answer your question, if the bid gets dropped, they don't require notice the day before.



Hope this helps.

-IR2
 
[quote author="USCTrojanCPA" date=1252646712][quote author="Jayy" date=1252639122]Just heard that the top offer is already above 820K now. How it could be possible!!!</blockquote>
It's called a BUYER'S FRENZY. Like I said.....good luck on the appraisal when the 3,100sf Plan D sold in the mid-to-high $800k range.</blockquote>


if it's a cash buy and the buyer is willing to pony that much dough, would it even matter what the appraisal came in at?
 
[quote author="dethman" date=1252679655][quote author="USCTrojanCPA" date=1252646712][quote author="Jayy" date=1252639122]Just heard that the top offer is already above 820K now. How it could be possible!!!</blockquote>
It's called a BUYER'S FRENZY. Like I said.....good luck on the appraisal when the 3,100sf Plan D sold in the mid-to-high $800k range.</blockquote>


if it's a cash buy and the buyer is willing to pony that much dough, would it even matter what the appraisal came in at?</blockquote>
I agree with you, but even if you are putting down 50%+ and you get an appraisal back telling you that the value is over $50k lower than what you are paying wouldn't you have some kind of buyer's remorse?
 
Wow, I'm in shock....these guys hit a GRAND SLAM. The property closed on 9/25/09 for $835k or about $100k over comps. And you guessed it, it was a CASH purchase. So these guys grossed over $200k on this flip in less than 60 days.
 
[quote author="USCTrojanCPA" date=1255464314]Wow, I'm in shock....these guys hit a GRAND SLAM. The property closed on 9/25/09 for $835k or about $100k over comps. And you guessed it, it was a CASH purchase. So these guys grossed over $200k on this flip in less than 60 days.</blockquote>


exactly why it's not even worth looking at real estate in irvine nowadays. complete waste of time.
 
[quote author="dethman" date=1255474479][quote author="USCTrojanCPA" date=1255464314]Wow, I'm in shock....these guys hit a GRAND SLAM. The property closed on 9/25/09 for $835k or about $100k over comps. And you guessed it, it was a CASH purchase. So these guys grossed over $200k on this flip in less than 60 days.</blockquote>


exactly why it's not even worth looking at real estate in irvine nowadays. complete waste of time.</blockquote>
Makes me wonder if the sellers countered back to all the cash offers and told them the highest offer without an appraisal contingency gets the property. But hey, if there are buyers out there that want to outbid current comps by $100k...more power to them.
 
Just curious as to possible reasons why, in this downward or flat trending market, a buyer would pay $100,000 or approximately 15% above the comps in a neighborhood with fairly uniform units?



Non-financial reasons like relatives next door strikes me as remotely plausible, but is it possible they are just THAT uninformed by their realtor as to the comps and pre-foreclosure properties in their area?
 
USCTrojanCPA,



Let's make the theoretical assumption.



If the original 29 grape arbor owner owed 4 years property tax.

or $40,000 property tax.



Then the flipper buy the house in auction.

The trustee sale would not wipe out back tax owed or tax lien.



Since the flipper sell the house less than 60 days.

I would assume the flipper has not paid the back tax $40,000 to county



Now, the new cash buyer offer $835,000 for the house.

During the escrow

Who will responsible to pay 4 years property tax?



The flipper or new cash buyer ?



If cash buyer is responsible to pay 4 years property tax $40,000,

the real cost to cash buyer should be $875,000 total, right ?
 
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