Thursday, March 6, 2008

Free Fall Friday - 632 NE Russell - $550k


Here's another case of "instant equity". It looks like this house was bought for $314,550 in 2004, with about 8% down. The house was refinanced on 3/31/2006 for $504k (a 60% increase in 15 months!) with a second loan of $116k taken out on 11/10/2006 for a total of $620k.

It's now for sale for $550k. $70k instant equity!

It's now listed as a short sale, and gotta love the marketing "Charming 4-Square on the edge of Irvington! " Yup, the edge of Irvington would be Elliot. Not that there's anything wrong with that.

"Unfinished attic & basement are framed & plumbed w/good height. Room for garage to be rebuilt. Sale is subject to lenders' approval of a short sale."

Oops, we ran out of money before we finished the attic or basement. But hey, it's got granite countertops!

MLS# 8013821

28 comments:

Anonymous said...

How are you able to find refinancing information and downpayment info? Thanks!

WillJongIll said...

You should post MLS #s when you write these.

The bank is really going to take a bath on this one. Yeee.

PDXOutsider said...

i added the MLS number, thanks for pointing out that i forgot that.

anonymoust 9:57, i get the foreclosure info from realtytrac.com, but you'll need to pay to get it.

AllanF said...

I really liked that "edge of Irvington" bit. I reckon the agent is trying to fool some newbie from California.

PDXOutsider said...

yeah, it's on the edge of Irvington, looking in!

bearlee said...

Ran out of money?!?! Something tells me they dipped in not just for remodel cash but a few vacations and a new car. Sounds criminal to me.

yamyam said...

But Bearlee, this is the OWNERSHIP SOCIETY. We need to OWN more stuff in order to be normal. If that means extracted cash from a house and then defaulted on your loan, so be it.

What are you, a commie?

Glenn said...

If you google the owner (info from portland maps), you see that he's a realtor. Fix 'n' flip gone bad I guess.

Alixe and Jason said...

I happen to be the listing agent for this property and have a few comments: The first one is specifically related to the location of the property - for those of you who don't know, 7th Ave at that spot IS LITERALLY the edge of Irvington. Check out actual Irvington boundaries and you will discover that. The house sits right on the corner of 7th and Russell. That said, the outlying neighborhood is in the MLK revitalization district and just down the block from the Nike store, new, modern, urban condos, etc. I am NOT in the business of trying to "fool" outsiders - i.e. Californians -- or anybody else. I am an honest, trustworthy person and was shocked when a friend sent me the link to this blog. Obviously many of you are of the opinion that all real estate agents are "out to get" consumers. I can give anybody that is interested the scoop on this property. There is NOT instant $70K equity, as the host of this blog proclaims. That, to me, is unverified information that is being shared with readers. If you want the true scoop on the property, kindly contact me. As an agent who is trying to help a client sell his property in order to hopefully avoid foreclosure, I find some of the assumptions and inaccuracies being shared here disappointing.

bearlee said...

Hey Alixe and Jason, not all RE agents mislead folks but it seems to happen more and more these days. Besides placing the home in the wrong hood, the wrong schools are listed (funny how Chapman and Laurelhurst get thrown in there), the 'instant equity' BS happens when the house is listed below the 2005 or 2006 appraisal value, and counting a finished attic that only a four foot person could use is rather annoying, too.

So why not mention the MLK revitalization area in your ad?

And what gets me is how did these folks blow through $300K of 'equity'? Shouldn't they throw in their new SUV with the sale?

bearlee said...

I searched for "instant equity" on CL and got 73 hits with few duplicates.

bearlee said...

Too funny, the first "instant equity" ad I clicked on said "$459000 Alameda Bungalow" and then went on to say 'in the heart of Beaumont'. Can you use Alameda and Beaumont interchangeably?

Ouch, looks like they built an unpermitted garage and had to tear it down and build another one.

PDXOutsider said...

Hi Alixe,

Thanks for joining the conversation, not too many agents have been brave enough to appear publicly here, so kudos to you.

But I'm still tired of houses being blatantly misrepresented, so I'm starting to call BS when I see it in the hope that it will spare some buyer from investing a bunch of their time investigating a house that might not meet their needs or wants.

Let me use an analogy to make my point. If I say I'm standing at the edge of the roof, that implies that I'm still ON the roof, right? If I'm not then I'm SPLAT on the sidewalk. In this case in Elliot.

Your title says Irvington, the description says Irvington, but nowhere does it actually say that the house is officially in Elliot. If I was a potential buyer I would immediately question everything else you tell me, as you've already lied to me once. I'm not a lawyer so I won't go into the legal issues of misrepresenting a property, but I hope and assume you know them. But I am a marketer, so I can tell you that starting off a conversation with a "misrepresentation" is not the best way to gain a buyer's trust.

You could easily say that it's in Elliot close to all the great stuff you mentioned, and adjacent to Irvington, and you'd still show up in searches without alienating potential buyers.

As for the "instant equity" crack, that's poking fun at all the other agents who use this ploy to make us suckers, I mean buyers think that we're getting a great deal, when in fact the house is not worth what it was previously bought for, or what was invested into it.

Good luck with the sale, The house it beautiful and I do hope they avoid foreclosure.

Alixe and Jason said...

Hi All,

Bearlee - I don't know what property you're discussing re the schools, but this property has Irvington, Fernwood, and Grant as the schools in the listing. Both the attic and basement have GREAT ceiling height.

PDXoutsider - I don't believe that saying that the property is on the Edge of Irvington is misrepresentation, due to the property being located literally on 7th and Russell, with 7th Ave. being Irvington. As far as talking about the selling points of the MLK revitalization district, that may be good additional info to add to the listing on my website. RMLS, however, only allows a very limited amt. of space to discuss the listing, and there were enough things about the house itself (and including the fact that it is a short sale) that I felt were most pertinent.

The "instant equity" crack implied that I, the listing agent, was representing that for this property, which I have never done. It was in your research - determining what was owed on the property - that you came up with that amount and made the remark that there was 70K there.

Ultimately, a smart buyer will ask for comparables before writing an offer on a property, and a good agent will provide comparables, regardless of whether the buyer asks for them or not. Because they are our clients.

A short sale often requires a lot of work and stress for the one doing the negotiating, and there are no guarantees. A lender reviews the individual circumstances surrounding the request for selling short.

Re other comments: I would not assume that a homeowner who has to sell short has frivolously bought cars, boats, and other non-house related things. Where a lot of homeowners right now have gotten into trouble are those who purchased in the last few years, at 100% financing, and then have gotten behind in payments. Add that to some market stagnancy re many higher-priced Portland properties, and you're looking at market values that often show less than what is owed. Additionally, people have to be very careful when they refinance and pull all that money out. It doesn't always match market value: what a reasonable buyer is willing to pay and a reasonable seller is willing to sell at.

I wish you all luck. Please just know that not all of us are bad, and that I, for one, am an agent that puts my clients ahead of my family half the time. Frequent guilt when I often come home and our 5-yr. old is already asleep after Mom's long day.

Best to you all. Alixe

bearlee said...

But $300K was taken out of this house, come on now, where did it go?

Anonymous said...

Alixe,

Great response! You sound like you actually know what you are talking about!

Anonymous said...

I'm happy to see the agent enter the mix. Great blog!

However, I kind of side with PDXoutsider. At the moment I also have my toe in the pool as far as looking for a place in Portland but its a strange time (i.e. strange market) and prices (and values) are uncertain.

I'm often annoyed with houses that require research to get the true story on. For example, 2100 SF houses that has an 800 sf unfinished basement and a 300 sf unfinished attic. When I read that it is in one place and it is in another, even something as negligible as this, I assume the ad is fishy and will look at everything else with added caution. I can see its on the border, so this isn't a big deal, but its just one of those things (like 'enhancing' sf #s by including whatever)...

Finally, its odd to end on "I put my clients before my family." seems like an odd note to end on. That's sort of what I'm talking about. Who expects anyone to put random people before their family? If someone does, then that's weird. If someone earning a commission off of something I was going to purchase said that to me, alarm bells would go off.


WillJongIll

ps: only anonymous works.

PDX_CPA said...

Let me give you my perspective on Real Estate Agents…………………… I used to work for one of the Big 4 accounting firms – and for some reason got stuck auditing domestic auto dealerships for about three years. I enjoyed the environment and excitement at the dealerships, however, I (never have been a salesmen) quickly learned how to tell if people where saying what I wanted to hear at the dealerships. The last five or six realtors I have met – basically in a about as many years – remind me of the controllers and general managers at the dealerships. I always asked what they sold before RE and I got cars, cell phones, shoes at Nordys …………………….. As a CPA, it really concerns me that some people may not see through all the fluffier presented them. What I see coming out if this is that realtors in the future will have to have more robust training and code of ethics for licensing.

PDXOutsider said...

pdx_cpa, I don't have an issue with salespeople moving from one industry to another. If you're good at sales, it makes sense. But I do agree that given all the legal complexities with real estate they better understand the law and make sure they're not breaking it.

There's a fine line between "marketing" and "misrepresenting". As a marketeer for a major company I'm well aware that misrepresentation could land us in court. But some Realtors don't seem to see this as an issue.

The good news is that it's no longer a one-way conversation, we can now call them on the BS and make it known to the rest of the community.

Anonymous said...

Yeeee - I wouldn't want an ex-car salesman as my buying agent unless they left the industry because they couldn't stomach an industry that rewards those who encourage overpayment. :)

I agree that moving from career to career can be great -- however, having been (extremely briefly, long ago) in auto sales... the mentality of that industry is what I'm looking for in someone "representing" me in a deal as big as purchasing a house.

That's not a great mentality to be had when the person you've got negotiating is rewarded for your overpayment... always looking for the quick buck and ABC... always be closing.. *always* *be* *closing*! :)

Anonymous said...

oops.. that should read...

"the mentality of that industry is NOT what I'm looking for in someone 'representing' me in a deal as big as purchasing a house."

Anonymous said...

A very interesting look into a realtor's mind... and I'm not impressed.

For crying out loud! Yes, it's on the "edge" of Irvington--the Eliot edge. The "misrepresentation" charge is founded when you slap the title "Irvington Gem" on the listing. It is not in Irvington!

It's been mentioned here a couple times, but does anyone (and I'm not talking to you, Alexe) what can be done legally for consistently misrepresented neighborhoods on the listing?

Anonymous said...

From the NAR Code of Ethics:

Article 2
REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction.

Article 12
REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations.

Huh.

Anonymous said...

Looking through all of these comments, what really bugs me is realizing that the owner is a realtor, too (see glenn's comment on March 10). So, both the owner and the agent though this *wasn't* misrepresention. Puh-leez.

Anonymous said...

Regarding square footage, RMLS requires us to enter Upper SQFT, Main SQFT, Lower SQFT, Total SQFT, Total Upper/Main, and SQFT Source (usually the tax records). All that information appears in the client version of the listing, as well as whether the basement is finihed or not, and what level each bedroom and bathroom are on. It can seem misleading to buyers, and we Realtors don't like it either, but that's how we're required to enter the information. Four or five years ago we only entered FINISHED living space - now it has to be TOTAL living space. Please don't blame Realtors for misrepresenting square footage. Feel free to complain to RMLS about it - maybe they can be persuaded to go back to the old (and I believe better) way!

PDXOutsider said...

anon 3:26, is there someone we can contact to complain? I'm sick of seeing houses relisted, I'm tired of having to sort through bogus size stats that skew the price/ft2 data, and I'd like to see RMLS clean up it's act.

Who do I contact?

Anonymous said...

Here's general contact info for RMLS:
Corporate Office: 825 NE Multnomah, Suite 270
Portland, OR 97232
Phone: 503-236-7657
Fax: 503-230-0689

You should also try PMAR:
Portland Metropolitan Association of Realtors®
5331 SW Macadam Avenue, Suite 207
Portland, Oregon 97239
503-228-6595
Fax: 503-228-4170
General Inquiries: jfrancis@pmar.org

Let them know that you find the reported SQFT deceiving and ask them why they include unfinished living space. You're exactly right that it skews dollars per sq ft valuations.

When I'm running comps I have to spend extra time calculating that number because of the flawed system.

Actually, I'll contact them as a Realtor to register my concerns. When I worked in NYS the MLS only counted living space - much more logical and easier to comp properties accurately.

As for relistings, agents will often pull a stale listing off and relist to refresh it and have it pop up as "new". Obviously this doesn't fool anyone. I'll only do it if the seller agrees to make repairs/remodelling/updates to the property and reprices it properly to sell (in other words, something sinificant to justify considering it "new").

I hope this helps!

Anonymous said...

Looks like the bank got it...
ML#: 8060441
Offered for $475,000.