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The agent first inputted this listing onto the MLS on October 29th, noting that the list date was 6/30/09 – why do you wait four months to get it on the MLS?

It was immediately marked pending, then withdrawn all within a few minutes.  A couple of weeks ago she changes it from withdrawn to sold in the MLS, noting that it was a short sale that needed work, the contract date was 7/18/09, and that the buyer’s agent was an anonymous out-of-towner:

There are so many of these happening, the banking industry should put a cap on commissions to reduce the temptation – or pay a reward for reporting them.

The new Zillow advertising program is out, here’s the description sent by email:

The Zillow Premier Agent program is a powerful set of new features that connect Zillow’s home buyers and sellers to an elite group of agents. You can dominate your ZIP code, get more listings, and sell more homes through Zillow’s Premier Agent program.

They called last week to pitch it, and it sounded more heavy-handed over the phone.

The rep said that they will be featuring the listing agents in bigger photos and descriptions beside their homes for sale, and be directing all inquiries to that agent.

If the listing agent doesn’t pay up, they will sell his spot to another agent.

The listings are owned by the broker – for Zillow to assume ownership and then sell them out to the highest bidder is wrong. But maybe it will be the beginning of the final unraveling of the MLS?

Here’s a snapshot of reality – though somewhat extreme, even by today’s standards.

The first clip shows the difference between sales of a single-story, and a two-story house on the same street, that closed a month apart.

The second shows a new short-sale listing that has an extra kicker.  The two mortgages exceed $1.1 million, and will be an agonizing grind to complete.  When/if the short-sale is approved (which might be a stretch at the low asking price), the buyer will be asked to sign a form stating that they are not aware of any side agreements:

Some readers had concerns about the La Costa lowball short sale mentioned on Friday.

http://www.bubbleinfo.com/2009/07/buyer-representation/

My intention was to point out the future of the real estate business – it’s going to get tougher on agents who can’t keep up with the hustlers. 

There are plenty of questions about the ethics of this type of deal, where the agent approaches an over-encumbered homeowner and puts together a sale with their waiting buyer, without exposing the property to the open market.  They then throw it on the MLS for all to see a new listing they can’t buy, because the deal is already done.

But let’s examine this case further, shall we?

Here’s is the property in question:

3302 Azahar Place, Carlsbad

4 br/3 ba 2,536 sf

YB: 1975

Lot size = 11,100sf

SP: $580,000  1/04

LP: $450,000  7/09 Contingent

The photo above is in the current listing, but the agent got it from the old 2004 listing.  Here’s how the house looked early this morning (click for close-up):

The owners have received their NOD, so they won’t be there much longer anyway.  What can the lender, Wells Fargo Bank, look forward to if they were to foreclose on their $650,000 worth of refinance loans, instead of allowing the short sale to go through?

The agent involved didn’t include any additional photos, but mentioned that the house needed TLC, which is code for full makeover required.  These are 1970’s tract houses that’ll need $100,000 just to get started, so I’m not sure that WFB would get much more than $450,000 on the open market, between the lousy condition and other action nearby.

Here’s what they’ll see within a couple of blocks:

3004 Azahar St., Carlsbad

4 br/2.5 ba  2,636 sf

YB: 1979

Lot size = 10,890sf

SP: $315,000  1/98

LP: $459,900  4/09 Contingent

This is the agent who started the run in the neighborhood, though this house might be the worst floor plan ever conceived.  In April we didn’t have the ‘contingent’ status yet, so we don’t know exactly when she contracted with the buyer, but with comps in the $600,000s and higher nearby, it was probably another “smoke-job”.  But it probably isn’t worth any more than list anyway.

If you look closely you’ll see a ‘door ornament’ on this one, but it isn’t a foreclosure notice – but similar.  Bank of America has been aggressive in sending crews in person to monitor the condition of the defaulting properties, and they are maintaining the vacants.  More on this later.

3020 Levante St., Carlsbad

4 br/3 ba  2,653 sf

YB: 1979

Lot size = 12,632 sf

SP: ?? (in escrow)

LP: $575,000 Pending

This is the other version of the ’smoke-job’.  The buyer (soon-to-be-seller) of this home has already processed the package with the seller’s lender, and is wrapping up a short sale.  Feeling confident being able to close that deal, he has now put it on the open market to flip it to a second buyer.  This is what’s known as a ”double escrow”, which is illegal if not disclosed to all parties.

But look at what could go wrong - the current homeowner is facing his trustee sale on Wednesday, and the amount owed is $735,547.  If the trustee sale doesn’t get postponed again, and both deals fall apart, and the bank takes it back to try their own resale, probably in the $400,000s.  Or if the trustee sale is delayed again to allow for the short sale to close, at what price is it worth it for the flipper to buy?  It must be around $450,000?  Which, based on these other two deals, would be seen as retail if the second buyer’s appraiser gets picky.  The flipper could get stuck with this one over appraisal issues on the flip.

All three of these houses are old and hammered – a minimum of $100,000 in improvements are needed to bring them into the 21st century.  If you are bummed about missing these “deals”, think again.

These three “low” sales are expediting the price declines.

Here’s why they are better than REOs:

1.  No open market exposure probably means lower-than-market pricing, for now.

2.  No repairs means low pricing.

3.  Long, drawn-out escrow probably means lower pricing to get buyers to stick around.

These short sales WILL BE THE COMPS that will help determine the future pricing – especially if the foreclosure tsunami runs through here.  Long-time homeowners who are thinking of selling might ignore these, but the foreclosing banks won’t – they’ll price all the REOs in the nighborhood over the next six months based on these.

The goal for buyers is to LET THESE HAPPEN, and then scoop the future listings that are in better shape, but priced about the same.

Back to BAC monitoring the homes in default, but not yet foreclosed.  I spoke to one of the field techs, who is one of the fifteen independent contractors state-wide that handle the lock-changing/cleanouts/lawn-trimming tasks for BAC.  He said that they are cutting the list of 15 contractors down to three for the entire state, and those three will be responsible for sub-contracting. 

It could be another indicator of how B of A will be handling the Countrywide REOs in the near future: to send them to a third-party REO outsourcer who’ll then contract with individual realtors to sell them (which has been long-rumored on the street), a method which has proven to be less-productive, and very frustrating for all parties.

Don’t miss OCRenter’s post on the latest real estate scam:

http://bubbletracking.blogspot.com/2008/11/ocrenter-is-now-king-solomon-iii.html

Scammers are filing ownership deeds on foreclosed properties and renting them out.  Back in the day there were also scammers taking out mortgages against properties that were free-and-clear. 

All it takes is a certified notary - because the county recorder’s office only checks to make sure there is a valid notary stamp on the documents.

Watch out!

Speaking of scammers, remember the Lopez brothers?  The agents who made over a million dollars in commissions taking advantage of hispanic buyers?  Kelly B. told me that they are in a halfway house, after serving their three months in jail.

Emilio was able to hang onto his San Marcos house on La Plaza too; according to the tax rolls he’s not in default, eventhough his loans total $1,200,000+.

Here is their story:

http://www.bubbleinfo.com/2008/04/lopez-sentenced-on-mortgage-fraud/