Spring Foreclosures Make Their (Re)Debut
Sorry for the Dr. Seuss-inspired headline (guess who’s got little kids they read to?).
My point was, enough time has now elapsed since this Spring’s flurry of deeply discounted foreclosure sales that several are now re-appearing on the market as for-sale rehab’s. And selling — quickly.
A good example is this Cape Cod-style home in Minneapolis’ Powderhorn Park.
It came on the market in early April for a ridiculously low $88,900, and immediately attracted more than 15 offers (my client’s was one of them).
Ultimate selling price? $121,500.
The Buyer, apparently a real estate agent (at least, the same agent represented the Buyer and now-Seller) put new roofs on the house and garage, refinished the hardwood floors, and cleaned up the Kitchen.
New asking price: $199,900.
Did she get it?
Yup, and then some: it just closed for $213,000, which it fetched almost immediately after coming back on the market in July.
Public Loss, Private Gain
So all’s well that ends well, right?
I think it’s good for the housing market that foreclosures are being absorbed, fixed up, and re-sold.
And it’s certainly good for the foreclosure Buyer cum Re-Seller who made a quick $50k (my estimate — let’s hear it for the profit motive!).
And it might even be good for the Buyer’s Buyer, who got a nice, cleaned-up house (having been through with my client twice, I can attest to its quality).
So who loses?
All the taxpayers — us — who effectively ate the loss on the defaulted mortgage, and never saw the upside on the re-sale.
Add nine zeroes, and that’s what just happened with taxpayers and their multiple bailouts of Wall Street investment banks.
You don't think the buyers who are actually looking at purchasing a house (not flipping a house) are not hurting on this deal; 15 offers and a realtor won? Now the realtor is set to make a nice profit off of this. I have personally soured and became bitter with the real estate industry. Having had a pending offer on a short sale disappear after the redemption period, then to see the house go back on the market 2 months later at a lower price; only to lose this time to a cash only offer. Even though my offer was 25K more than the accepted offer. The realtors have absolutely no reason to fight the price these bank owned properties go on the market because you have a monopolistic niche.