Life for Rent — Dido
Attention occupant of today’s featured property: it is for sale. From the MLS description, “Driveby Only Please! Do Not Disturb Occupant. No Sign, Tenant not aware Property is For Sale.” Well, they are now. If any of you know this renter, please go tell them what is going on — the power of the internet.
Today is a great case study in what a property is really worth. We have both an asking price and a statement of what the unit currently rents for. That should eliminate most of the conjecture concerning rent. I am going to show the calculations for cost of ownership and calculate the breakeven amount for an owner occupant.
Asking Price: $515,000
Income Requirement: $128,750
Downpayment Needed: $103,000
Monthly Equity Burn: $4,291
Purchase Price: $495,000
Purchase Date: 4/16/2004
Address: 437 Deerfield #130, Irvine, CA 92606
| Beds: | 3 |
| Baths: | 3 |
| Sq. Ft.: | 1,367 |
| $/Sq. Ft.: | $377 |
| Lot Size: | – |
| Property Type: | Condominium |
| Style: | Cape Cod |
| Year Built: | 1985 |
| Stories: | 2 Levels |
| Area: | Walnut |
| County: | Orange |
| MLS#: | U8002422 |
| Source: | SoCalMLS |
| Status: | Active |
| On Redfin: | 5 days |
Property is For Sale. Sale Subject to existing Lease $2,150./Month
(Expires Nov. 2008). Ideal End Unit Location with Direct Garage Access
(1 Car) plus 1 space across driveway. Charming Windwood Townhome. 2
Story, 2 Master Suites, Remodeled Tiled 2 Baths and 1/2 Guest
downstairs with 3rd bedroom Den/Office down. Inside laundry. Open
Kitchen, Eat at Bar and large Diningroom. Vaulted Ceilings, Slate
Fireplace with slider opens to large L-shaped Patio. Lovely
neighborhood with parks, Trails, Tennis&Sports Courts, Community
Pool/SPA. Walking distance to shopping center, bus station, school and
easy access to freeways. Washer, dryer and refrigeratior included. Call
Audrey with Questions 714-612-9557. Interior Inspection ONLY with
Accepted/Qualified Offer.
refrigeratior?
For those of you who read from out-of-state, you can see that a crappy 3/2 in Irvine still rents for more than $2,000. This property is borderline on whether or not an owner-occupant would want to live here long term.
The following are calculations for the cost of ownership. If you want a refresher course on these costs, see the post Rent Versus Own:
| $ 359,590 | Purchase Price |
| $ 71,918 | Downpayment @20% |
| $ 287,672 | Mortgage @ 80% |
| $1,818.28 | Mortgage Payment @ 6.5% |
| $ 299.66 | Property Taxes @ 1% |
| $ 74.91 | Homeowners Insurance @ 0.25% |
| $ 74.91 | Special Taxes and Levies @ 0.25% |
| $ 176.00 | Homeowners Associate Dues or Fees @ $176 |
| $ 149.83 | Maintenance and Replacement Reserves @0.5% |
| $2,593.60 | Monthly Cash Cost |
| $1,558.22 | Interest on First Payment |
| $ (408.28) | Tax Savings @ 25% of mortgage interest and property taxes |
| $ (260.06) | Equity hidden in payment |
| $ 224.74 | Lost Downpayment Income @ 5% of Downpayment |
| $ 2,150 | Total Cost of Ownership |
As you can see from the calculation above, this property is only worth $359,590 to an owner-occupant to break even on the cost of ownership. I included for reference the cost of private mortgage insurance (PMI) if you put less than 20% down. Of course, this would reduce the breakeven price even further.
| $ 325,440 | Purchase Price |
| $ 9,763 | Downpayment @3% |
| $ 315,677 | Mortgage @ 97% |
| $1,995.30 | Mortgage Payment @ 6.5% |
| $ 271.20 | Property Taxes @ 1% |
| $ 67.80 | Homeowners Insurance @ 0.25% |
| $ 67.80 | Special Taxes and Levies @ 0.25% |
| $ 135.60 | Private Mortgage Insurance @ 0.5% |
| $ 176.00 | Homeowners Associate Dues or Fees @ $176 |
| $ 135.60 | Maintenance and Replacement Reserves @0.5% |
| $2,849.30 | Monthly Cash Cost |
| $1,709.92 | Interest on First Payment |
| $ (444.43) | Tax Savings @ 25% of mortgage interest and property taxes |
| $ (285.38) | Equity hidden in payment |
| $ 30.51 | Lost Downpayment Income @ 5% of Downpayment |
| $ 2,150 | Total Cost of Ownership |
People using FHA financing to put only 3% down have a higher cost of capital, and they have to pay PMI, so their breakeven is lower than someone putting 20% down.
The above analysis is exactly what I will look at when I consider buying a home. As you can see, prices are still too high for me. This property has to fall 30% from its 2004 purchase price before I would show any interest in it at all (not that I want to live in today’s property.) This owner used 100% financing, so she has been running a negative cashflow on this property for 4 years now. I doubt she cares what it sells for because even at her fantasy asking price of $515,000, she will still not get enough out of the property to pay off the loans. Some knife catcher may pay between $450,000 and $475,000 today because they will not do the analysis above, or they will not do it properly. I am constantly amazed at the level of ignorance among buyers. In the past, you could buy at almost any price, and the market would always bail you out. Unfortunately, sometimes prices do not come back for a very long time. The Great Housing Bubble is one of those times.
.
I haven’t really ever found a place that I call home
I never stick around quite long enough to make it
I apologize that once again I’m not in love
But it’s not as if I mind
that your heart ain’t exactly breaking
It’s just a thought, only a thought
But if my life is for rent and I don’t lean to buy
Well I deserve nothing more than I get
Cos nothing I have is truly mine
I’ve always thought
that I would love to live by the sea
To travel the world alone
and live my life more simply
I have no idea what’s happened to that dream
Cos there’s really nothing left here to stop me
It’s just a thought, only a thought
But if my life is for rent and I don’t learn to buy
Well I deserve nothing more than I get
Cos nothing I have is truly mine
While my heart is a shield and I won’t let it down
While I am so afraid to fail so I won’t even try
Well how can I say I’m alive
If my life is for rent…
Life for Rent — Dido
The analysis was very interesting. However, how much income would one have to document when renting a comparable unit to a property management company? I suspect the number is probably much higher.
I think the norm is to show income in excess of 3x rent. At least that’s what I remember for my Irvine apt.
When I recently rented an apartment from The Irvine Company the required ratio of gross income to rent was 2.7. This is a bit scary for anyone at the minimum because it means half your take-home pay goes to rent. And yes, queue the Darth Vader music at the mention of The Irvine Company…
they don’t take into account any other bills, that’s why the ratio is only 3:1 (or 2.7:1)
why should a mortgage be any different. You aren’t even borrowing any money fron the landlord either!
My GF just rented an apartment in La Jolla. They required a gross income greater than twice the rent.
Are those pics all current and from this house? Does it really have that fire engine red wall in a otherwise blandly neutral decor?
This Redfin listing is jacked. Middle school is Venado, not “Navado”. And the map? The highlighted area is not even in Deerfield.
I think Deerfield Avenue crosses Culver into the Windwood community. The unit is actually in Windwood.
Ah, that explains it. This property didn’t look like one of the Deerfield community townhomes. This sure is one fugly apartment and it looks to be right by the power lines to boot.
Any kids who ends up living here are going to have a hard time finding Navado middle school unless they’re dyslexic.
It is nearly the highest priced unit per square foot according to the comps listed at the bottom. In fact it is well above actual SOLD comps listed to the right of the homes that are for sale now.
IR did you give the complete sales history? I noticed some fancy upgrades in this apartment. I am wondering if they were made with HELOC or REfi monies or if they were in place when the current owner bought at nearly a half million dollars for 1,300 sq/ft.
This was a 100% financing deal, but I did not see any other mortgages. If she did any renovations, she did it with her own money.
I started reading this website about 4 months ago when I put in an offer on a place and was almost ready to catch the knife. I’m glad I started reading when I did.
The place I put an offer on? Still for sale at a lower price than the rejected price I offered.
Wow! That’s classic. Your offer was rejected, and now the place is still for sale with an even lower asking price?
I can’t believe we’re three years on the downslope of The Big Bubble and some agents are still playing games, claiming there are higher offers competing with you.
The rent-to-own comparison is key right now. Anyone willing to buy a house with a monthly cash burn rate that’s 2x rent or more is crazy, unless 14% annual home price appreciation comes back soon.
I made an offer over 1 year ago on a house… now for sale less than my offer, and been on the market over 1 year.
After bubble blogging for more than 3 years, I was more optimistic about pricing last year than I am this year. I used to think we’d bottom out in 2010 or 2011. Now, I’m thinking 2012 or 2013. It’s ugly out there and getting worse in OC.
Chuck Ponzi
Chuck…
I still think your original impressions that bottom occuring in 2010-11 are correct. In comparison with previous bubbles, most of the price depreciation occurs in the first few years of the decline, later price declines tend to be smaller and more gradual. I think the next wave of alt-A defaults will drive pices down thru 2010 with a near bottom in 2010-11 but continued smaller depreciation after that.
I almost caught a knife last year too. Whew! That was a close one!! 😀
Wifey and I just fell in love with a place in Lake Forest. Bad idea, that advice is actually very sound … don’t get emotionally attached.
At any rate, I wised-up and we walked after our final offer matched the appraisal which came in a full $60K below our original offer. As you might imagine, the seller balked so we walked.
Today the house is rented to a bunch of chucklehead guys who are likely tearing up the beautiful walnut flooring, breaks my heart. Rent is $2400 and the owner’s mortgage nut is $3900/mo. (looked up the mortgage data). Poor bastard is bleeding $1500/month in cash not to mention taxes and HOA’s. A recent check of comps in the hood tells me the comps are now just below our final offer from last year and there are two homes on the block for sale that have now been sitting for almost 8 months.
As you can see, we’re keeping an eye on the place … maybe we’ll see it hit the market again for a more reasonable price … if nothing else I’m betting the owner will be a WHOLE lot more amendable. (Those beautiful floors will likely be totalled though.)
Interior Inspection ONLY with Accepted/Qualified Offer.
In a market like this… does it really help to be so difficult towards sellers?
So, IR, when you start running out of low-hanging fruit to feature here, I guess that will mean prices have returned to some resemblance of sanity in Irvine? Of course that will still give you at least another two years of blogging…
Well, the seller is in a bind. What she’s hoping for is to sell it out from underneath the renter, but for the renter to stay there until after it’s sold. This way, if it doesn’t sell after November, she can still depend upon the rent income: if she comes up to the front door, tells the tenant “Sorry, but I’m selling the place”, and tells him to move the hell out when the lease is up, she’ll probably have the place empty for months or even years.
(I found myself in the same situation six years ago, when the owner of the house I was renting decided that she wanted to sell. Of course, she was asking about $40k too much, even at the beginning of the bubble, for a house with about $50k in foundation damage and extensive work necessary to repair termite damage, which was why she was renting in the first place. Even so, her boyfriend fancied himself a homebuilder, so they moved in with the heavy equipment right after I moved out, repainted the horrible Santa Fe turquoise walls that she’d refused to paint when I moved in, replaced the rotting garage door that she refused to fix when I moved in, and replaced the broken front door that, yes, never got touched in the nearly five years I was there. Thanks to these minor improvements, she put the house back on the market…where it sat empty for another two years until she was forced to rent it out yet again. I think she’s had five tenants in the last four years, and I wouldn’t be surprised if it gets turned into a grow house one of these days.)
When we put our rental up for sale, we notified the renters in case they were interested, lowered the rent and they promised to show the place on an appointment basis. We also priced it right. When it sold, the renters moved out without damage to the home or any hard feelings.
Way to go. I’d done the same.
And I wish that more landlords felt that way. Really. You’re a gem in a huge field full of pigshit, because I can’t tell you the sneaky stunts I’ve seen pulled in similar situations. (I forgot to add that not only did the landlady promise to prorate the last month’s rent if I moved out early and then lie to my face about how “I never promised anything of the sort”, but proved that she’d already spent the $3000 in deposit money when I tried to collect by claiming damages that she couldn’t back up. At the time, I was told by a lawyer that I’d spend more on legal fees than I’d get in any ruling, so I let it slide. Justice grinds very slow, but the drop in house prices makes all that pain worthwhile, as she couldn’t give away that dump now if she offered a lifetime’s supply of free beer to go with it.)
oh, i understand why the seller is being sneaky. But, you know, that just screams ‘desperation’ to buyers, and why on Earth would anyone make a serious offer without viewing the interior? Would anybody make a serious, non-insulting offer on an auto without going for a test drive?
This is a classic case of a seller without a clue or a chance, and a realtor who doesn’t have the guts or integrity to clue the seller in to the reality of the situation… if they get any offers at all, they will all be lowballs in the extreme.
Sid, you can’t come here mentioning that there may be drawbacks to renting. Many commenters here would have you believe that owning is a living hell while renting is a panacea.
If you’re renting a home, it’s likely from an individual (not the Irvine Co.), and I’ve heard plenty of horror stories that make me very weary of doing such.
in this case, the renter is safe, there is no way there will be any buyers if they can’t see the interior.
I wouldn’t want to rent either, but I refuse to buy when it doesn’t make any economic sense.
Is it possible to make it so you can tab past the smileys link without getting a pop-up window?
Well, you can pretty well predict how fast this one is going to sell, can’t you?
Wow, not only totally overpriced, but the owner is sneaky, as well.
You know my temptation to send out postcards to properties featured on IHB. I don’t think I can resist the temptations any longer with this property being an obvious invitation to tip off the renter.
The renter who is not only renting this place for too much money per month ( anyone else read one of yesterday’s articles where the couple was renting an absolute mansion ON Huntington Harbor for $2,800/month?)but is being played for a fool by a greedy, cynical owner.
Do you think that the renter is entitled to break the lease if the owner is resorting to these kinds of sneaky tactics?
No, unfortunately not. What the owner DOES have to do is give the renter 24 hours notice that someone is coming by to look at the place – this is not too likely with the “no interior inspection save on acceptance of qualified offer” caveat. Which is insane – who’s going to make an offer on a house that they’ve never seen the inside of?
This owner deserves their own special place in the “batshit crazy owners” Hall of Fame.
I think that the 3% down payment calculation is closer to the true cost of ownership. The smaller the down payment, the less impact of comparing the return of a low risk investment in lieu of a down payment versus the very high risk of the incremental dollars in a loan beyond a 80% LTV.
If I lived in the area I would print this listing out, drive over there, knock on the door and give the renter the listing. Not only is the owner stupid but they just plain shitty.
Holy Toledo, this is appalling! Doesn’t the seller know how bad this makes them look? As I potential buyer my first thought was that I would never enter into such a large business transaction with someone who openly presents themselves as sneaky and conniving. That plus th whole “interior inspection only with qualified offer.” Yeah…right.
I hope someone does let the renter know what this seller is doing.
They are going to have a hard time getting anything CLOSE to what they are asking for after this comp-killer showed up this weekend.
http://www.redfin.com/CA/Irvine/5228-Walnut-Ave-92604/unit-10/home/5552545
at $351k this REO going to crush everyone who has been putting their 3 bdr units up for well over $450k. I live in the unit across the way and say quite a few folks on Sunday were looking at this unit.
Personally I’d like to see it at $250k but I’m glad to see to see comp-killers like this start to sink reality in Irvine.
Thank you. That may be tomorrow’s post.
if you need any info from my end, let me know as I live in the unit.
in the complex, or the actual condo for sale?
is that really a metal security gate on the entrance door? is this paranoia, or have there been break-ins in that part of Irvine?
much noise from the 5 fwy accross the way?
I live in the unit across the way.
And yes while there are gates, the neighborhood is fine!
What do you think that unit would rent for?
Ours rents for $2065 a month (Originally the owners wanted $2300 a month but got no takes for a while, so they dropped it to $2095, we got $30 less since the jacuzzi in the back was broken and they didn’t want to fix it). When we were looking for a place to rent (Late May 2007) 5220 Walnut was up for rent as well and they were asking $2050. It went back up for rent again back in April for $1950. Even then it took almost 2 months to find a tenant.
Thanks for the comp…
This property is also priced higher than it’s current Zillow estimate of $468,000. If I was buyer, I wouldn’t consider bidding a number higher than Zillow in today’s market. An honest appraiser wouldn’t appraise it that high. And I still think Zillow is a bit on the high side in estimating value in this declining market.
“For those of you who read from out-of-state, you can see that a crappy 3/2 in Irvine still rents for more than $2,000. ”
Huh? The kitchen is a little dated with the tile and white high-light cabinents but otherwise, it looks clean, the cabinets appear to be in good condition. The carpet looks clean, the walls in good shape.
It’s not pergrantile like the brand new IAC units, but that’s not crappy by Irvine standards. I’ve seen far crappier. It could have circa, 60s or 70s dark wood cabinets that don’t all close properly with the same era appliances. Formica top or 1970s tile showing 30 years of wear. I see units like that all the time.
Gonna have to side with IR on this one.
The first ajective that entered my mind when I looked at the pics was “Crappy.” I have rented many “crappy” apartments and in fact live in one presently. There is something universal about “crappy” apartments. They are typically dated, in moderate to poor repair, and exude a sense of temporariness.
A “crappy” apartment is a place that you tolerate (hopefully for a short time) because you wish for whatever reasons to minimize your housing expenses or you are not yet ready to make the financial committment that a home requires. Most people clear thinking people would never want to own their “crappy” apartments. Even at the height of the bubble insanity I can’t understand why anyone would want to purchase one of these units to live in at above or even at rental parity.
I’m strongly considering printing this page off, stamping up an envelope, and mailing it to the renter.
Either way, they’ll have to move. The LL’s likely up against the negam cap and will likely be foreclosed on shortly.
How should I address the letter? Occupant? Soon to be moving occupant? Mr. “Your Landlord is a Bum and Your Place is for Sale”? Start Packing Now?
No Vaseline – Please do it!
yeah, they should be prepared, there have been reports of landlords trying to collect rent after the house has been sold. This may be one of those types of landlords
[b]My Offer[/b]
After giving this property a thorough look, my offer today is [b]$140,000.00[/b]. I believe this is what this property is worth.
ok – help please…
are rents currently going up? or coming down??
we rented a 3bed/2bath place that we like about a year ago (woodbridge, nice but a little “dated”) – but wonder now if we pay too much.
Thanks!
You can use this site to check out rentals that are going through MLS:
http://www.bravofinancial.com/rentals/Irvine-Rentals.html
Great link, IPO. Suddenly I don’t feel so bad about the $2,450 we are paying for an updated 3/2.5 IAC townhouse, if I compare to the prices of some of the pp crap listed on the MLS.
Rents seem to still be really steep. We looked at two 4 bed rental homes in Westpark over the weekend, neither one looked like it had been updated in the 20 years since new. One was $3,250, the other $3,350. Ouch.
I find that the places for rent on the MLS are way over market, and have heard that they are regularly negotiated down by the potential tenants (but have little more than anecdotal information to back this up). Does anyone know more about actual list versus rent prices for MLS rentals?
I find that similar and nicer places can be found on craigslist for more competitive prices (hundreds lower than the MLS ones), and the nicer ones tend to go quickly, which makes me think that they are closer to the true “market”
I have found that even craigslist prices are too steep. At least in the South Bay (Torrance/Redondo Beach), I have found better luck driving around and calling the phone numbers on the “FOR RENT” signs. I found many places that were several hundred dollars less than a comparable place listed on Craigslist.
There is a crappy, ugly (vacant) house down the street from me with a For Rent sign. It’s a small 3+2 for $2100. If somebody moves in and pays that rent I want to slap them.
I just got approved to lease an SFR. 4/2.5 2400sf for $3200. There was not going to be any budging by the owner on price either since a smaller and generally less desirable unit in the same neighborhood just leased for $3300.
We couldn’t find anything 2000+ sf for a better price…
Der, wha? I thought you were a condo owner. You selling?
Yes, this is my question. I still don’t fully understand how the housing crash is going to affect rents. In my area (Thousand Oaks – Ventura County), it seems like the rents are bouncing around a bit (some seem high and a few seem pretty decent).
If people are being forced out of homes they cannot afford, aren’t they becoming renters – driving up the demand for rentals? But when I look on craigslist, the amount of rentals available seems to grow every day. But it’s hard to judge for sure because there is a lot of spam there, including people listing properties from other areas on the Ventura listings.
On the other hand, in my neighborhood there are about 5 vacant houses that I am aware of on the 2 streets that I drive on regularly. Where did the people go who lived in these houses a year ago? Out of the area? Crashing with family/friends?
It still seems like all these 3 + 2 houses renting for $2,000-$2,400 around here are a bit high. There are even tons of 3+2 apartments/condos around here for $1800+ WTF?
$2400 is a bargain compared to the Los Angeles area, especially the better areas. If you want to rent a 3+2 in a decent neighborhood in LA, it’s at least $4000/mo, and most likely 60s product that hasn’t been updated.
WTF to that? Who is paying these types of rents. You’d need a $200k/yr household income to support the place.
I was wondering the same thing. I looked for houses in west Los Angeles on westside rentals, and the cheapest house I saw that I found remotely nice was $6k/mo. W T F? I’m sure the housing crash will eventually hit LA hard, but it’s taking its sweet time. I’ll probably have given up and left by that point. Many businesses in my industry are making plans to relocate away from los angeles so that their employees will have reasonable housing options.
This is the issue many in SoCal will have to face in the coming years. Just how long do you hold out, living in some crappy house or apartment, waiting for rents or prices to come down? And even if they do come down, will it still be too much to afford?
If you want to have a nice house, in a decent neighborhood, with good schools and amenities, you might have to move elsewhere and tolerate varying weather conditions, lack of family, shallow job pool, etc.
Tough decisions….
I live in a 3+2 in a nice neighborhood of LA. $2950 a month, view, good architecture, BIG yard. Probably could have gotten ~$200 a month less, but the landlord gives us lots of freedom to change the place and have a dog.
There are an assortment of houses around Malibu that are $3000/mo or less. None of them are in the MLS.
Without disclosing more than makes you feel comfortable, where do you live? I’m in westwood paying $1800 for a 1bed + loft. It’s pretty nice and has a rooftop deck with a badass view, but I still feel like I’m getting ripped off. I see terrible houses close by asking like $3500 for rent.
Mutha,
The answer is … it depends. In Irvine, where they have WAY overbuilt as well as excess housing (from flop lords) is pushing rents down. The Irvine Company is (IMHO) pushing there rates down slighly to keep there renters as well as keep there places rented. I’m probably sure that they have paid these complexes off(or down) a LONG time ago and can pretty much clobber any newcomer in terms of lower prices and CAP rate.
As for this places, the asking price is very much a wishing prices. FAR overpriced, even lowering it to 300 per SQFT is still overpriced. Get around 250 Per SQFT and i’m sure you’ll have a winner.
good luck
-bix
their
engineer = speeling..er spelling errors (ha ha)
Sorry. I had to do it. You used the wrong “there” 3 times in the same sentence!
The owner of this property is human refuse, for not wanting her renter warned that the property was up for sale, and that the renter would then be given extremely short notice and have to scramble for another place to live, maybe even after the new school year has started.
I hope the woman gets financially killed on the sale of her crap property, which I believe she will.
This is just one more reason why I haven’t rented since I held a minimum wage job through college.
To everyone who wants to get involved by showing the renter this listing – don’t.
While the whole situation is crappy, the landlord has no obligation to divulge their business dealings to the tenant (unless so stated in the lease). The landlord/owner could make a case for tortious interference if you get in the middle of the situation and affect the lessor/lessee relationship in a negative way.
Just don’t want to see anyone getting sued.
The listing was made public on the internet. I can’t imagine the owner would have any argument about her business dealings being made public.
I’m not saying that the case would have merit – I’m just saying that I wouldn’t want an obviously shady (and underwater) owner to have a reason to be pissed off at me.
One other comment – if the information is so public, then why would anyone need to notify the tenant? The only reason a third party would make an effort to pass this information to the tenant would be because there is a reasonable assumption that the tenant would not find out otherwise.
I’d really like for the tenant to have this information, but I wouldn’t be surprised if it pisses off the landlord big time.
I would say that the owner can not make a reasonable assumption that the tenant would never find out about the public advertisement.
I would also say that without an outside party notifying the tenant, there is a less than 50% chance of the owner discovering the ads on his own.
(I look at internet real estate listings daily, so there is a good chance I would find a listing if my landlord puts my house up for sale. However, I bet there are a lot of renters that rarely look at real estate listings.)
Those first two statements don’t seem to jive.
The owner can’t assume that the tenant won’t find out, but there’s less than a 50% chance of the tenant finding out?
Here’s my whole argument…
Yes, the owner is an ass. He is completely within his rights, though, to not tell the tenant. He has no obligation to tell the tenant anything that does not infringe upon the lease. By getting involved, someone is making a business decision for the owner.
Damn. I used a wrong word in one of the paragraphs. I should have used “tenant” instead of “owner”.
I would also say that without an outside party notifying the tenant, there is a less than 50% chance of the TENANT discovering the ads on his own.
Sorry Strom, but I just don’t see it. If I put a copy of the ad under the renter’s door, or mailed them a copy, how on earth would they know who did it? It seems like a completely legal act.
I don’t think it’s an issue of legality.
Say the owner pulls up outside while you’re slipping it under the door. Would they be happy? No. Would they try to harm you in return? Don’t want to find out.
I understand that the owner is an asshole for trying to hide it from the tenant. I just don’t understand the need to get involved in the situation.
Notifying the tenant is kind of like cutting off a speeder on the freeway, just to slow them down. Just hope that the speeder isn’t a deranged maniac with a gun.
Dude it’s easy:
Just knock on the door and ask if this is the same 437 Deerfield #130 that’s for sale on the MLS – you saw the ad on Redfin.
You are just a potential customer walking up to check the place out. What’s wrong with that?
Have fun!
Even if we don’t warn the renter, they will probably get a flood of mail from moving companies and the like soon. Within a week of the unit we’re renting hitting the MLS, we had a dozen ads from movers and a half-dozen real estate lawyers (in Chicago, they are used for standard transactions).
Our landlord was nice enough to warn us (the day it went on the MLS), but we’d been watching for a lis pendens from the day we moved in (response deadling to the foreclosure suit is this week). We liked it enough to spend money on an appraisal and made an offer at that price ($250K below what he was asking). He countered at $109K above appraisal. Maybe one of the seven people who have been shown the place is an all-cash sucker…
The listing is PUBLIC information. The seller cannot do jack or sh*t if I drop the listing on his/her front door step.
The tenant has a signed lease until November 2008 and unless the the property is foreclosed the new owner will have to honor this lease. California is a tenant friendly state so there is no need to feel sorry for them. As for the owner, he or she has been taking a negative cash flow every month and even though the price is high at least their trying to sell it rather than walking. How many other owners would just walk and let the bank take over. This owner might actually be one of the better ones…..
Anybody who purchased an abode with no money down is, by default, not “good”, as far as the housing problem is concerned.
Somebody’s getting mail.
Awesome. I was going to have to take a drive if somebody didn’t step up to the plate.
You just ruined it for the seller. Party pooper!
I hope somebody would ruin it for me if I was the poor bastard with the forced relocation.
Looks like at least two pieces of mail 😉
Oh that’s funny!
You know, rents in the bubble markets are just as wacky as prices. Look for rents to correct, though probably lagging prices. A recession will multiply the effect. Consider that when using rent multiplier to calculate price.
I like it when people say, “How can you blame Bush for the economy, national security, bad governance” etc etc. Well, I guess we will find out how powerless he is when all of the bail out remedies fail, won’t we? (The same applies to congress.)
Here is another reason for giving the tenant a heads up:
http://www.nwfdailynews.com/articles/condo_8303___article.html/calif_cleveland.html
Then one day last summer, seven months into her one-year lease, she arrived home after work to find a piece of white paper taped to the garage door. It was a legal notice: The bank had foreclosed on the condo and wanted her out in 72 hours.
Cleveland was one of the first in a growing tide of innocent victims of the foreclosure crisis – tenants who rent homes, condos and townhouses not knowing the owner is in financial trouble and behind on the mortgage. When the bank forecloses, the tenants end up on the street, often losing thousands of dollars in prepaid rent and deposits.
What began as a trickle last year is rapidly turning into a tidal wave of displaced tenants as foreclosures hit new records.
Lots more at the article.
Caveat Rentor? lol
I’m paying $2200 to my landlord in Quail Hill. 2br/2ba/2car/1700 sq. ft., built in 2004/2005, was basically brand new when I moved in a year ago. He initially wanted $2500 but there were a dozen other properties for rent at the time.
Every now and then I check CL and see listings around what I’m paying.
Somebody should definitely mail them a print-out of this listing. The alternative could be the landlord being foreclosed on but failing to notify the tenant so they can keep on collecting rent checks until the last possible minute. Who would you rather the tenant hear from first – an anonymous tip or the sheriff knocking at eviction time? If I were the tenant, I would thank whoever clued me in.