Monday, March 10, 2008

Remember the Cash-Back-At-Close House?

UPDATE: It turns out this house was recorded as two "half sales". That is, rather than record the sale as $650k (the actual selling price), it was recorded as two sales at $325k. Apparently this has something to do with how the title was held by the heirs. Still, $650k is quite a drop from the original list price.

I first wrote about this house here. And it's kind of the house that started it all. This agent was calling me and, in my humble opinion, begging me to commit a fraud. Which I refused to do.

Anyway, the house was originally priced at $825k and was ultimately reduced down below $700k as I recall. Finally, it went off the market and today I decided to look it up on Property Shark.

You'll never guess what it sold for. Seriously. Never.

On 12/27/2007 it sold for $325,000. At least that's what the County Recorder says.

Danut Popescu
13739 Hartsook St Sherman Oaks, CA 91423

Gibboney Donald E Trust

First mortgage - none
Second mortgage - none

So what do you think happened here? After a year on the market a family member finally decided to buy it? Seems unlikely to me. But what do I know?


gamehaus said...

This probably sold as a trust sale at auction on the courthouse steps? That could only explain the low price though.

Terry said...

$825K down to $325K? Wow. That's not a haircut, it's a head-to-toe waxing. I was wondering why you thought it might have been bought by a family member.

Always enjoy your posts. Thanks.

Dr. JwB said...

Kate, I believe you have spotted the first roll-back to 1980s prices!

But I am suspicious.

l.a.guy said...

Another possibility, although it doesn't seem likely in this case, is a divorce settlement. I've seen houses where the settlement forced a paper sale to one of the spouses for half the value of the property.

Incidentally if you go to the LA County Assessor site and look it up it shows the value as $650,006. So maybe it's a bug in Property Shark data.

I find it very difficult to believe this house could have sold for $325,000.

LakerLand said...

By the last names of seller and buyer i can tell you that it is a family transfer, as both names are Romanian descent.
Since the house was not foreclosed there is no NOD or NTS, so there could have been a transfer of deed for some reason. They put the low $350,000 so that the property tax will not be to expensive. They could not put $100,000 as that would get very suspicious to the county tax collector.
However, if you look at similar houses in that block, $350,000 is the price these sold in 1999...
So with the economy now, and they way it looks, we might be heading to 1999 prices....though i think 2001 nominal price are much more logical (considering inflation)

Anonymous said...

"Family pricing" is bad for everyone. I know because it happened right next door to me. My neighbor was a 93-year old widow who received weekly visits from her two sisters (also in their nineties) but got little attention from the rest of her family. When she was diagnosed with terminal cancer, her relatives literally came out of the woodwork. One of them (a great-niece) somehow persuaded her to sell her the house for 50% of market value ($300K instead of ($600K). The deal had the following consequences:
- Her own two children saw their own inheritances slashed by $300K each (they were not consulted before the sale). Some members of the family are still not speaking to each other.
- The home's $300K price was immediately available to buyers as a comparable sale for our neighborhood, affecting everyone's property value
- The reduced tax base deprived the county of needed tax revenue

Anonymous said...

"'family' pricing is bad for everyone"

??? - that's just plain stupid. You mentioned one case where a few kids got screwed, oh well. In most cases someone in a family gets leg up and a better start in life. Does that suck? I don't think so. As for comps, who cares? There is tons of anomoly and noise in any market data. A good broker in the area can explain such low comps without much trouble. outliers are outliers. Above market sales do the same thing.

ProblemWithCaring said...

"-The reduced tax base deprived the county of needed tax revenue."

Yea, after I fill up my $57 gas tank, remind me to sing a eulogy for California's wasteful tax speneders in Sacremento.

kate said...

Hi Guys:

To respond to a few of the commetns above -- this house was not sold on the courthouse steps.

I do not believe it was a divorce settlement. As I recall, somebody passed away and left this house to relatives. The relatives cleared it out and then listed it for about a year (to no avail).

It may be a family transfer after all -- but why wait so long?

It looks to me like somebody just lied about the price to the county recorder so they could pay lower property taxes. This is a popular practice when private parties transfer vehicle ownership.

Anonymous said...

I agree with l.a. guy that the real sales price was $650,006 on 12/27/2007 as shown at the LA County Assessor's website.

See for yourself:

Anonymous said...

I looked at the deed on propertyshark. The deed shows that the previous owner, a successor trustee, transfered to the new owners "an undivided one half." This suggests the real price was $650,000.

Also the previous owner is shown as two separate trusts. So the $325,000 was the sale of one half of the house that one of the trusts owned.