Thursday, July 30, 2009

CSI: WeHo SFR

Apologies for the hiatus ... apparently the housing market is (ahem) "recovering", if you read the headlines.

8719 Bonner Dr. (90048)
$844,900
3BR / 2BA, 1,228 sq ft
Lot Size: 4300 sq ft

Take advantage of this opportunity. Great Spanish home with spacious & bright living room, with french doors leading to private front patio. Beautiful hardwood floors throughout. Detached guest house with bathroom. Faboulous open kitchen with breakfast nook that leads to private backyard. Very close proximity to restuarants, shopping, etc. Buyer to verify all information and rely on their own findings. Submit all offers with pre-approval, copy of deposit check and POFs.

Sold: 3/96 - $104,000 (yep)

Sold: 3/00 - $602,000

Sold: 7/10/09 - $685,865 (bank buyback)

Reading between the lines (and with sarcasm meter fully turned on), I'm going to make the wild leap that this is a foreclosed property. 'Cause, ya know, we can't just say "REO" or "bank owned" in the listing ... I mean, like, ohmigod, it's a single family house in WeHo. These were all selling for well over a million a couple years ago - it's SUCH A DEAL!!!

OK, sarcasm meter off now. I titled the post "CSI" because of the interesting puzzle of info on this one. I welcome any reader to be Horatio here (or whatever Fishburne's character's name is) and help solve things.

Pieces of info:

1. FACT: Previous buyer (2000 vintage) took out a conventional, 20% down, variable rate

2. DEDUCTION: Based on the interior pictures, they did some recent renovation

3. ASSUMPTION: Owners borrowed against the house for the renovation - and if they're in the keeping-up-with-the-Kadashians LA crowd (and who shouldn't be?), they took the vacations and bought the Range Rovers as well

4. FACT: Taxes go unpaid, and they get a notice of default earlier this year

5. FACT: Bank buys property back and proceeds to list the property a couple hundred grand higher than buy-back amount


Now, I don't expect the bank to look to initially lose money on this, particularly since we've seen some (IMHO uneducated) purchases recently.

Was this a case where the buyer just decided not to pay taxes? It's not like this is a flip, with the last sale 9 years ago. Maybe just someone in over their head?

A relative comp would be 8616 Sherwood, which we profiled in our Walking Dead post, which was a bank-owned SFR of similar size. It sat on a smaller lot, in what I would argue to be a better location. That sold for $810k in June, although psychologically from a buyer's perspective, it was "reduced" by the bank from above $1mm and sat on the market for a while.

I'd argue this has to get to at least the $800k range in the current market. Similar properties - as we've argued on the blog before - will go for the $700k range over the next year or two.

4 comments:

Full Disclosure said...

Welcome back. Saw this property when it was trying to get around $1.1 million early last year -- it was nice inside. Apparently fell out of escrow, then the NODs started to arrive. Hard to know all the details -- could have been an illness or a job loss also, not just a vacation/new vehicle purchase.

Like many properties on one-block Bonner, it sits across from the back parking lot for businesses that front Beverly Blvd. Not all that nice. A new hulk is going up next door to the west, overwhelming the lot it sits on and looming over
8719 -- also not that nice.

Given all these not nice aspects, this might go for a nice, less than $800K price.

WeHo Homes said...

Hard to know all the details -- could have been an illness or a job loss also, not just a vacation/new vehicle purchase.

A very fair point. I must have been in one of my overly cynical moods when I put up the post. Of course there are "that's life" reasons why people can't perform - I'll be a bit more sensitive next time.

Still doesn't change the fact that this goes lower - if not on the next sale, then the following :)

Anonymous said...

Bank refinished the floors last week before allowing prospective buyers in, so the wood floors look good.

House does have some issues, including:

--Pervasive mildew/mold smell in kitchen suggests some hidden water leak issues.

--Water leak apparent (water-soaked wood) under house near bathtub.

--Leaking gas line (gas meter has warning label from gas company that gas turned off because of leaking gas pipes).

--Living room floor has significant slope toward corner (namely corner where tree roots meet foundation).

--Trees in front may be tangling into sewer line; might be worth inspection.

Full Disclosure said...

Re: Anon at 8/2, 1:26 pm. Now that's full disclosure! Thanks. And, by the way, now remember that this Bonner property was slated for an auction, but whether that occurred or not, don't know.

If it had gone to auction though and you bid the $685,865 that was outstanding and the bid was accepted, do you need all cash right then and there? Or could you right a check for a hefty downpayment and show docs that you can get a loan for the remainder?