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News of the weird: In Orange County, California, banks selling foreclosed properties don’t appear to be especially persnickety on price:
Investors who bought a condo next to Disneyland for $154,100 in June at a foreclosure auction, offered it for sale on Saturday at $229,900 and found a buyer the next day . . .
The servicer or bank asked for just $123,250 at the June 26 auction even though $358,096 was owed on the first mortgage. Potential buyers bid it up to $154,100.
[The listing agent on the re-sale] said she listed the Walnut property Saturday and had four offers by Sunday night. The winning bid was for more than the asking price of $229,900 and is an all-cash offer, she said. [Emph. added]
For those of you scoring at home, that works out to a 48% gain in 24 hours. Just like the old days! Cheryl Ramirez, the broker on the property above, explains that selling banks are more interested in getting rid of properties cleanly than they are in maximizing proceeds of a sale:
Ramirez said banks are killing short sales only to dump properties at auction for a lot less. She said a bank would rather offer a property for $140,000 at auction than accept a $225,000 short sale offer. She said that’s because the trustee’s sale is a cleaner process — it clears the bank of all responsibility for the property.
This certainly explains all those bidding wars. . . . One wonders what will happen to pricing in the O.C. real estate market once distressed properties no longer make up the bulk of available inventory. I assume it will go up by a lot. That would suprise an awful lot of people. . .
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