In another sign the Bay Area real estate market has hit another WTH moment, a Mountain View home went up for sale for $1.6M, with a big catch: the seller wants to be able to live there for the next seven years, for free.
Does he look like Chris Pratt?
Nice MV house sold for $1.2M only…
My first thought. “No.”
Those two are nothing alike.
The proposition here sucks. I’d rather pay another’s 150k and take possession today.
I recall a south pa house that did something similar and the house didn’t sell until it was removed.
Assume $1.6M sales, $500k down, and $1.1M loan at 4%:
Monthly mortage payment is $7k. Annual tax payment is $20k. Cost for 7 years is $700k.
So will the property be worth more than this in 7 years? $2.3M. $950k (remaining on loan) + $500k1.03%^7 (assume 3% return on downpayment) + $700k1.03% ( estimate on the return of annual payment; I’m too lazy to calculate this) = $2.3M, not including maintenance costs. What do you think?
And I assume this can be considered rental for passive income/tax purposes?
This will not sell. The sellers are out of their f**king mind.
Doesn’t this just mean that the sales price should be $700K under what it is currently worth? Otherwise why would you buy a house and not get rental income for 7 years? You’ll get the increased value one way or another. (I guess though–wouldn’t rent be about $4K/month? So that’d be $48K/yr=$336K
Also extensive fixes to be done by buyer before closing?
Who is this guy kidding?
And also isn’t a rent back for 7 years about the same as rent back for 8 years if the seller refuses to leave?
They changed the content of the public listing:
Single Family residence distressed condition. Great location. Exterior Viewing Only.
Perhaps they changed things, but doubtful. I read the article and it says how it’s sad? Curious. At least Erika Enos knows the deal.
(Enos said, “The asking price reflects market value, which is essentially lot value, for this area. I empathize with the seller but the terms and conditions for this sale I feel are unrealistic and may have negative legal ramifications.”)
I’m not sure what’s wrong with the seller, but even $1.6M with no rent back is a great deal of cash to retire on somewhere cheaper.
Wonder how much it’s going for and the terms.
Wow! Sold for 1.1M. Someone crunch the numbers. That actually doesn’t sound terrible…
Honestly, this transaction stinks. Seller agent is the same as the buyers agent. The listing price was 1.6M and you go pending in 5 days at 1.1M.
Seller got screwed. Nothing about this is good. Even the tax man got screwed. Now the transaction is hidden as a normal transaction. Not sure what grounds the tax man would have to revalue the transfer.
Now I feel sorry for the seller. This would not be the first time an RE agent has screwed a seller over.
If only we were the buyer…
Nah, 7 years is too long to wait. Holding costs are expensive. I feel like the seller got screwed over by the agent.
This hole in the wall is a pending probate @ ~1.63M, available overbid is close to 1.8M – https://www.redfin.com/CA/San-Carlos/1705-Eaton-Ave-94070/home/1424452. The rules on a probate sale are clear and transparent. This other transaction is the exact opposite and look what happened. IMO, MTV is a pricier locale.
$1.1M might not be the whole story. Looks like tax assessment per Zillow is $278K. Most likely only Uncle Sam got screwed. Something probably happened under the table to save property tax for the buyer and capital gains tax for the seller.
Yeah, I have the same feeling. Maybe even that 7-year wait is not real. How about 500K cash under the table tax-free? Can the seller move sooner? I bet they can.
Umm, that is a slow moving cloud over there…