Bad math? Or bad real estate agent?

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code7700_IHB

code7700_IHB

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OK, here is a strange one. On our way back from lunch today we stopped by a few open houses. One of the homes looked very nice. They were asking $725K. I took out my mobile phone and went to www.melissamobile.com (Melissa Data) and it showed the last sale price was $820K in mid-2006, with a $650K first and $90K second. I asked the real estate agent if this was short sale, but she said no. How is this possible? Or is the real estate agent just an oaf? Last time I checked 650 + 90 = 740... and according to my math, 740 is <u>less than</u> 820. So I don't see how this could be anything other than a short sale. And to make this even more complicated, when I got home, I pulled up ForeclosureRadar (doesn't work on my mobile phone) but could not see any default notices, etc. Am I missing something?
 
If they financed $740K, it's quite possible that $15K of their payments have gone to principal in two years, bringing what they owe down to $725K. On our much smaller loan we have $5K/yr going to principal right out of the gate. They may be bringing money to closing for the comms and are losing the $80K that they put down.
 
How do you know how much principal they've paid down already? With a fixed mortgage they would've paid about $20k toward the principal by now, perhaps more voluntarily.



EDIT: Stepping Up = Quicker on the draw. ;)
 
Code 7700,

You are missing something. If they are selling the house for 725 and owe 740 than they will just pay 15K at closing to avoid the short sale. Just because somebody is upside down on their house doesn't mean that they short sale the house. Some people actually have money in the bank. You don't want to ruin your credit for a lousy 15K.



Bill
 
[quote author="hbguybill" date=1214830017]Code 7700,

You are missing something. If they are selling the house for 725 and owe 740 than they will just pay 15K at closing to avoid the short sale. Just because somebody is upside down on their house doesn't mean that they short sale the house. Some people actually have money in the bank. You don't want to ruin your credit for a lousy 15K.



Bill</blockquote>


Good point. I had a similar thought last night just as I put my head down on the pillow. Personally, my vote is to let it go into foreclosure and pick it up^ on the back side. At $600K I might take it, but not for a dollar more. Not sure it is even worth writing an offer at $600K, as it is just a waste of paper. Eating $15K is one thing. Eating over $140K is another.



But as with many of you, my better half is getting anxious. All I can say is thank gosh for these blogs. I showed here a bunch of charts this morning over breakfast and I think I may have bought myself another 2-3 months. The one that really did it for her was the S&P;Case-Shiller chart since it came from a "reputable" source. I guess she doesn't consider <em>bubble_dude_surfer_2010</em> a "reputable" source.



:)



(^ or something similar since there are literally dozens of identical homes/floorplans out there)
 
[quote author="hbguybill" date=1214830017]Code 7700,

You are missing something. If they are selling the house for 725 and owe 740 than they will just pay 15K at closing to avoid the short sale. Just because somebody is upside down on their house doesn't mean that they short sale the house. Some people actually have money in the bank. You don't want to ruin your credit for a lousy 15K.



Bill</blockquote>


If you include 6% for realtor commission the make good amount would be $58.5K, no?
 
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