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We have discussed the suspiciously high sales in Bressi Ranch last year, and the alleged inflating of prices/kickbacks for property management that ensued. 

We know what happened then – what is the lasting impact?

Here is a summary of the Bressi Ranch high-end sales history:

2566 Discovery

4 br/3.5 ba  3,480 sf

$944,000  6/05

$1,350,000 3/07

DOM = 0

100% fin.

First strike – This was her first in Bressi Ranch, one that, according to how she put it in the system, she represented both buyer and seller, and  "sold prior to MLS input".  There had been a couple of sales in 2005 & 2006 of former model homes in the $1.2 to $1.35 range, but the market had began its decent by March 2007.  This sale was  a 43% increase in sales price between 2005 and 2007, and started the string of sales that fed on one another.  You can see on the sign that she tried to arrange for a lease-option, which was the basis for the program.   The idea was to find new buyers to lease option, in this case for $11,000 per month.

YB: 2005,  HOA = $205,  MR = $219

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6239 Lismore

4 br/3.5 ba  3,480 sf

$1,159,000  2/05

$1,350,000  5/07

DOM – 201 days

96% fin.

Second strike – The seller/agent of this house had been trying to get $1,199,000 to $1,229,000 between 9/06 and 2/07.  He cancelled the listing and put it back on March 1, 2007 at $1,225,000, and stated in the remarks, "no offers below $1,200,000".  A couple of weeks later he RAISES the price to the range $1.25 to $1.35 million, and marks it pending.  Later he let it expire, but tax rolls show it closed for $1,350,000, with $1.3 million in financing.  Jenae’s company is now the listing broker, and she told me that she sold it, though it isn’t marked in the MLS.

YB:  2005 HOA = $205,  MR = $219

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These two sales perpetuate the illusion that homes in Bressi Ranch are worth more than $1.3 million, at least for the ensuing few months.  What happened afterwards?

6253 Alverton sells for $1,210,000 for 4,608 sf – looks like a legit sale but seller/agent had struggled, the DOM was 245 days and he was trying to rent it too.  Buyers and their newer agent probably relied on the two sales above for comfort.

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6344 Huntington

4 br/4.5 ba  3,815 sf

$958,500  SP 5/05

$1,300,000  SP 9/07

DOM – 58 days

100% fin.

Third strike – The same newer agent (not associated with Jenae) listed this house for $1,199,000, and it closes for $101,000 higher.  The out-of-town buyer/agent, and unfortunately a victim of the scheme, buys it thinking that the rents will cover the $10,000 per month payment, including taxes.  He has since dis-associated himself from the agency who got him into this mess, and is trying to rent it now for $4,500 per month, hoping to hold on for a couple more years.

YB: 2005  HOA = $193, MR = $203

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Alverton could have started the natural decent again, but Huntington propped up the market for one more sale:

6388 Huntington could have been a legit sale – it was a FSBO from Orange County who hired a limited-service discount agent to input into the MLS, and it’s marked that the buyer’s agent was also from out-of-town.  The house is 4,040 sf, and closed for $1,350,000 – and if you’re an agent from out of the area and look at the three strikes above to determine value, the price probably sounded OK.  I guess they overlooked the fact that it sold for $1,000,000 in November, 2006.

This is the collateral damage – innocent people come along and think these three strikes are legitimate values – but they aren’t.  Not only that, many others have probably refinanced, using appraisals based on the three strikes. 

The highest sale since is $825,000 for 3,092 sf, on 9/20/07.

Worse yet, now other sellers are trying to get out, based on the illusion of values being in the $1.2 to $1.3 range.  Along comes Jenae to rescue one of her victims – she has listed Lismore (the second strike) for sale, trying to get her client some relief through a short sale – in the remarks it says ‘submit all offers’.  It’s the first burnt-red circle below, plus the foreclosure listed two days ago (second circle) squishes down the chances of anyone getting $1.3 million anytime soon.

These are the active high-end listings in Bressi Ranch:

No charges have been filed against any of the perpetrators, though I have had more than one conversation with the FBI. 

Consider the trail of destruction left behind – it’s not just the banks of the three strikes that are going to take the hit.  These sellers are going to be sorely disappointed once they realize what happened.

Posted on Thursday, February 28th, 2008 at 2:51 PM in Thinking of Buying?, Thinking of Selling? | 8 Comments » |  Print You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.