Short sales aren’t just for the down-and-out distressed homeowners in Detroit.
Certainly Detroit has its share of short sales, not to mention bank-owned foreclosure listings. A quick search on RealtyTrac shows more than 1,500 pre-foreclosure and scheduled auctions, along with more than 6,000 bank-owned REOs – many of them like this foreclosure listed for sale for less than $10,000.
High-End Short Sales
But Detroit doesn’t have a monopoly on short sales. In fact there are plenty of high end foreclosures happening across the country, with foreclosure activity on properties valued at more than $2 million up more than 700 percent from 2007 to 2011 — even while foreclosure activity on properties valued less than $500,000 was down 7 percent during that same time period.
I witnessed this trend toward high-end foreclosures when hosting a Foreclosure Buying 101 Webinar & RealtyTrac Website Demo earlier this month. For the website demo I decided to try a search in the ritzy Beverly Hills zip code of 90210. I was somewhat surprised to find scores of pre-foreclosures, scheduled auctions and bank-owned properties in the area, with more than a dozen of the pre-foreclosures listed for sale — most of these fitting the short sale definition of having a list price below the amount owed on the mortgage.
Pre-Foreclosure Listed for $6.5 Million
During the webinar — which covers the short sale process, the difference between short sale vs foreclosure, and buying a short sale, among other topics — we looked at this Beverly Hills pre-foreclosure home listed for sale at $6,495,000. The palatial pre-foreclosure has seven bedrooms and seven bathrooms in nearly 10,000 square feet. According to the listing description it was built in 2007 and includes a ground floor ballroom, a spa and waterfall and two powder rooms.
A Notice of Default was filed against the home’s owner on March 27, 2012, with a default amount of $212,475, meaning the homeowner had already missed that much in mortgage payments by the time the property entered the foreclosure process.
The property’s listing price is about $665 per square foot, which is well below the average listing price of $809 per square foot in the area but above the average sales price per square foot of $625 for comparable properties that recently sold in the area.
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