Banks Leaving Money On The Table - Selling Homes For LESS Than They Could Get! (with video)

[BlooInBloo]

grrrrr.

http://www.calculatedriskblog.com/2009/03/banks-leaving-money-on-table-all-day.html

If you missed this, Zach Fox at the North County Times had an incredible story: HOUSING: Banks selling properties in bulk for cheap

For example, a unit of Citigroup, the troubled financial giant, sold a foreclosure in Temecula to an Arizona investment firm for $139,000 when comparable homes in the area were selling for $240,000 to $260,000.

The firm listed the home for $249,000, received multiple offers and the property has entered escrow, said Amber Schlieder, the real estate agent who handled the listing.

Citi just left $100,000 on the table.

I hear stories like this all the time.

Video with more examples at the link.

[gratuitous]

1. I thought these buys were financial geniuses

At least, that's what Shiti's chairman keeps telling us. They're so financially astute that if their salaries or benefits are trimmed in any way, why, they'll just pick up their marbles, run home and slam the bedroom door soooo hard, that everyone will know what moguls they are!

[jody]

2. The only way to reduce the bloated inventory of products whether houses or cars is to reduce price.

Only then can new production begin which requires rehiring unemployed workers.

Problem is cheap money to financiers and manufacturers means their cost of holding bloated inventories is much less than normal and they may wait hoping for an eventual sale of overvalued products.

I've been offered a deal by one holder of a defaulted mortgage to trade my house for one worth considerably more than my current home.

I'm evaluating the feasibility of that offer.

[NightWatcher]

3. they dont care, they're getting tax dollars to bail them out

why work hard when you're on the govt tit?

[BlooInBloo]

5. Yup.

[mbperrin]

4. Tax code allows them to deduct any "loss" so there is no incentive

to make money on the repos. On the other hand, insiders and buddies of the repo guys can get some great deals.

Local real estate company head's daughter is married to school district lawyer, so tax defaults are always sold at about 1/4 market price to the real estate company head; turns them around in 30-90 days for market, makes 300% or so. Only loser is the taxpayers, and who gives a fuck about them, eh?

[NNN0LHI]

6. I think they also hound the person who defaulted on the loan until they die for the loss too?

Plus any other costs the bank accrues. Not sure but I think they can do that.

Don

[PSPS]

7. The story is a crock

The comps are never disclosed or shown. Nor is the inside of this house shown. If homes were really selling in the area for $250K, this buyer would immediately turn around and sell this house.

In this market, it's very common to get "multiple full-price offers" only to have none of them pan out due to inadequate resources for the buyer (no down, can't qualify, house not worth the asking price.) Oh, and houses in Temecula aren't worth $250K anymore. Maybe a couple of years ago you could get this kind of price, what with NINJA loans and all, but not today.

[SoCalDem]

12. A tale of THREE houses..(mine included)

We live in a typical "ticky-tacky-little-boxes" development .. The house across the street same floor plan, sold for $383,000.00 in 2007 (the people have since bailed)...we bought ours in 1982, and are still here..will be until my husband retires & we downsize.. and the one next door (also same floor plan).. THAT one sold last month for $63,200.00

We paid $82,800.00 in 1982 for ours (when it was 3 yrs old)..

The $63,200.00 version had been vandalized over and over, but the "renovations" done , were purely cosmetic, and of the "Sell this House" variety..nothing structural.

But because of that sale, all the rest of the houses nearby, took a big hit..and the bank/mortgage co. that "owned" the house before the people were evicted, lost a shit-load of money because the family that lived there had taken out a $250,000 loan when they "bought" it, in 2000...

This is for a 4 BR, 2 ba, 3-car garage house..

[bridgit]

8. Shit, I'll bet you dollars to donuts the bulk of 'banker type dudes' can't swing a fucking hammer...

without mushing their thumbnail off and I sure as hell don't see them down at Home Depot perusing the aisles tossing respirators in the carts on their way to scraping bio-hazardous bacteriological mold & fungus, ammonia-ted cat & rat piss & droppings to occasion 'larger animal' feces off the walls to get the place presentable and even they say they have no money to hire someone to do it ergo?

Fuck It!! Let it rot. Let the money rot too, some are still vying for that tee time and a shot of what's left of their last bottle of 125+ year old single malt Kentucky sipping sauce in what's left of the shade round the snack bar on the 9th hole, pft, 100K?

That's less than chump change for that crowd and we're the chumps that are paying the difference anyhow so why should they care

[jody]

9. I find your eloquent statement cloaked in unassailable logic with which I wholeheartedly agree.

:thumbsup: :hi:

[bridgit]

11. Buen Día!

:hi: :donut:

[bridgit]

10. whoops hehe

:blush: