SpencerBarron.com

A recent news story on 9news.com brought to light a problem many renters are facing.  The landlord stops paying the mortgage but still demands the rent.   A real estate attorney, Joseph Davies, is quoted as saying,

the “deal with the owner is independent of the owners deal with the bank.”  … “Generally speaking, the rights of the lender are greater than the rights of the tenant.”

Seems reasonable enough but I can’t help but wonder about the fairness of that. 

 What about a tenants right to quiet enjoyment?

   I wonder if the tenant shouldn’t contact an attorney.  Wouldn’t the tenant have a claim of non-performance?

Regardless, if you or someone you know in Colorado are facing problems with foreclosure, you should definitely contact an attorney if you have any questions about your rights.

You should also take advantage of the Colorado Foreclosure Hotline at 1-877-601-HOPE (4673).

The City and County of Boulder (Colorado) has a great website resource for identifying a meth lab.

 With the rise in foreclosures and more agents being the first people to enter recently vacant homes after and possibly during a foreclosure, a little education can go along way for your own safety and the safety of your clients.  Going into homes before they’re ‘trashed out’ can mean just about anything these days.

I just walked out of the second recent condo conversion in a month that I saw back on the market way at about 30% of what it had sold for.  It had been ‘flipped’ in 2006 by some investors.  In my humble opinion, it seems suspicious to me when large numbers of foreclosures show up all at once in the same building.  There were eight or nine lock boxes on the door.   Postings in the windows.   hmm…

If you know me, you know that this is what I do.  I want to know why and how, so, I did a little checking in the MLS and public records.

  The unit I saw had previously sold for $204k but was now listed at $60,000 in a building that every unit had previously sold for over $150k.  A few even sold for up to $250k.   What makes it suspicious is that there were no real upgrades to justify 204k.  In fact, the value today is probably about $80,000 if it was cleaned out.   No electrical or plumbing upgrades to the building.  Some newer windows and a few new light fixtures in the hallway.  That’s it.    Now it is possible to get $160,000 for this type of unit if it’s done right.

 Some developers who do a killer job on the conversions do make top dollar.  They add roof top decks, change the curb appeal, improve all the common elements and put about $30,000-$60,000 into each unit upgrading the kitchen, bathrooms and finishes.  The units I saw at this place weren’t like that.   For this building though, the appraiser would have to be blind not to notice that the doors were missing handles and nothing that was described in the MLS was actually completed. (business center, fitness room, etc..) 

It’s painful to see because you really don’t get a redo on a condo conversion.  It’s to late.  The building is still a dump.  Can you imagine trying to coordinate an overhaul of the building with 24 different owners.  It’s going to be a blight to the neighborhood for a long time.

They bought the property for $2.9 mill and sold the units for a total of $4.8.   15 days after they closed on the property, they were already selling them.  6 at a time.  Many of the buyers bought multiple units.   They were 80% sold out in 2 months.  In the middle of winter during 2005-2006.  That was not a great time for selling condos,  even nice ones.

It seems like if you wanted to make 1.8 million fast the dirty way, you could get people who were going to file bankruptcy purchase these properties using stated 80/20 loans.  The paper values would support the apparent protection of the 1st lender and the 2nd would be carried back by the seller.  It’s all just funny money right?  Seller kicks back some money to the buyers for the ’service’.  The buyers then try to rent the properties out and never make a payment.  When it all goes south, they just walk and let the properties foreclose.   Now, I’m not saying that is what happened here, but I do think it happens.

I know there are people who believe that the only one they’re hurting when they do this is the lender.  That frustrates me.  It gives the entire industry a bad name.  Especially when a lot of people need to work together to decieve the lender.  It’s no wonder that the agent that listed the property had his license just long enough to do this deal then leave the business by going inactive.  The building had been listed as having an agent owner so he must have been involved.  I wonder what his employing broker was thinking.  Probably wasn’t.  I wonder if the buyers weren’t actually in on it and had their credit ruined by an investor who made a lot of promises he didn’t deliver on.

I’d love to give you the address and name the players…but that seems to get people in trouble.  No, I can’t flat out say that there is some fraud involved but it makes you wonder doesn’t it.

I noticed that many builders have inflated their abstract pricing on their inventory in order to offer better incentives and offer ‘dramatic’ price cuts so that buyers feel like their getting great deals when they buy a new home.

 I recently sold a home in the Village at Centennial  near the Denver Tech Center where the builder was offering the same home at $505,000 even though they hadn’t sold a home like it for more than $450,000.   In fact, the majority of the similar home sales were around $425-$440k.  This method has helped the builders maintain their net in the face of foreclosures appearing on the market.  In fact, it actually helps keep the lenders from pricing their homes to low.  The BPO (Broker Price Opinions) usually include price of homes that are currently for sale.  So even though the foreclosed homes are trashed out, they are priced just under what  the builder will accept new.  And of course, the buyers leave like they’re getting a great deal.

I talked to the sales rep in the office about their current inventory and he admitted that he had the ability to move as much as 15% off of the list price depending on the ‘read’ he got off of the customer.  That’s the sort of thing that doesn’t bode well for the current homeowners that may have paid too much.  Especially when they get in a need to sell situation like a job change.  It also tells me that most unrepresented buyers are like deer in headlights when they walk into the sales office.

Funny part is, most buyers still fall for the ‘base price’ system where they hook you with a lower price while showing you a better product in the model.  They then either raise the price or act like their giving you a deal by offering you incentives in upgrades. 

When a builder is offering $50,000 in upgrades, it makes you wonder, how did they arrive at that number?