A study in short sale collusion & flip

[zubs]

There is an open house on DEC 22 for this house:http://www.redfin.com/CA/Orange/8124-E-Hillsdale-Dr-92869/home/4773031

This house was a short sale in AUG 30 for $799,000.  It was on the market for like 2 days before it was delisted.  Then when it popped up again, it was sold at $750,000.  The buyer and the sellers agent are the same person.

Now 2 months later it is being listed for $959,900. 

Did the bank just get screwed?

 

[irvinerealtor]

I'm not saying it is, and I'm not saying it's not.  But....

From my very small sample pool, in August/September, the activity of buyers trying to make purchases was high.
From public records, it looks like the eventual buyer of this home bought it for all cash.
(The same broker did represent both the buyer and the seller, but was a different person than the buyer)
I've worked with Edie before. She's always worked honestly with me and I don't believe she'd put the rest of her business in jeopardy over one short sale.
The new owner has now listed the home with another broker...
The new listing's photos are not as good, and IMO the new listing looks less-appealing than the short sale effort.
The short-sale lenders will often settle for selling within ~90% of appraisable value. They get made whole with TARP money for much of the deficiencies.
That % is by no means fixed, and varies from investor to investor, and on the rest of the terms of the purchase.
As for comparable sales, there was another larger home at 8146 Hillsdale that sold in June for $776K (at a lower $191/sqft) as a standard sale.
Highest sale price in the neighborhood since 1.1.2011 has been $881K in early 2011.
"Active" price does not equal "Sold" price.

If you are ever considering this tract, remember to keep in mind that the odd numbered homes are significantly more desireable, facing the open Irvine Regional Park space. The even-numbered homes are negatively affected by all the street noise than can be generated by patrons of Cook's Corner every weekend.
With inventory so low, I think we'll begin to see quite a few more sellers trying to take advantage of it.

-IrvineRealtor

There is an open house on DEC 22 for this house:http://www.redfin.com/CA/Orange/8124-E-Hillsdale-Dr-92869/home/4773031

This house was a short sale in AUG 30 for $799,000.  It was on the market for like 2 days before it was delisted.  Then when it popped up again, it was sold at $750,000.  The buyer and the sellers agent are the same person.

Now 2 months later it is being listed for $959,900. 

Did the bank just get screwed?

 

[zubs]

So this property sold for $942,800 after selling for 750,000 in November...not a bad flip.

 

[The Motor Court Company]

Collusion in short sale is common that's why we bought new. We made an offer to a short sale only to be ignored and later the same house was closed $10k below our offer. Go figure.

There is an open house on DEC 22 for this house:http://www.redfin.com/CA/Orange/8124-E-Hillsdale-Dr-92869/home/4773031

This house was a short sale in AUG 30 for $799,000.  It was on the market for like 2 days before it was delisted.  Then when it popped up again, it was sold at $750,000.  The buyer and the sellers agent are the same person.

Now 2 months later it is being listed for $959,900. 

Did the bank just get screwed?

 

[usctrojancpa]

Collusion in short sale is common that's why we bought new. We made an offer to a short sale only to be ignored and later the same house was closed $10k below our offer. Go figure.

There is an open house on DEC 22 for this house:http://www.redfin.com/CA/Orange/8124-E-Hillsdale-Dr-92869/home/4773031

This house was a short sale in AUG 30 for $799,000.  It was on the market for like 2 days before it was delisted.  Then when it popped up again, it was sold at $750,000.  The buyer and the sellers agent are the same person.

Now 2 months later it is being listed for $959,900. 

Did the bank just get screwed?

Let me take a wild stab, the listing agent represented the buyers?

 

[snowblind40]

Collusion in short sale is common that's why we bought new. We made an offer to a short sale only to be ignored and later the same house was closed $10k below our offer. Go figure.

There is an open house on DEC 22 for this house:http://www.redfin.com/CA/Orange/8124-E-Hillsdale-Dr-92869/home/4773031

This house was a short sale in AUG 30 for $799,000.  It was on the market for like 2 days before it was delisted.  Then when it popped up again, it was sold at $750,000.  The buyer and the sellers agent are the same person.

Now 2 months later it is being listed for $959,900. 

Did the bank just get screwed?

Is this unethical? I've done this twice!  I knew the seller who was doing the short sale, they were both friends and they chose me as the buyer so I knew the bank was stuck with me. Both times I was able to put an offer lower than the bank wanted and was able to get them to come down from asking.

Most recent one was one in Arizona, bank asked for 90k, I offered 80k, we settled at 86.5k and the house was appraised for 100k! In the process of rehabbing and flipping right now and comps are around 135k in that neighborhood.

To me, the banks are the bad guys for tricking my friends into these subprime loans so I don't feel bad about squeezing every penny I can out of them and my friends were grateful because I helped them get out of a bad situation. They even say that they are glad that I benefitted from their misfortune than some random foreign investor!