Foolhardy Financing, Foreclosure, FAIL

1317 Ximeno Ave, CA 90804
Asking Price: $462,000
Beds: 3
Baths: 2
Sq. Ft.: 2,017
$/Sq. Ft.: $229
Year Built: 1955
Purchase price: $698,000
Purchase date: 5/2005
MLS#: P650732
Down Payment: $92,400
Monthly Payment: $2,600
Income Requirement: $132,000
Days on Market: 349 days
Description: One of the nicest home in the neighborhood. Must see interior to appreciate. Conveniently located close to schools, shops, restaurants and freeways. Gourmet kitchen with granite counters, center island and newer appliances. Entire home is wired for Audio, TV and computer network with Cat 5. Audio system in Living room, kitchen, master suite and outside by family room in private yard. Private yard with fountain near the front of home. Walking distant to Wilson High School. Short Sale. All terms are subject to lender's approval. All information deemed reliable but buyers should verify all information. Please see agent's remarks for showing instructions.

Dang, a 2,000 square footer with tons of upgrade goodies for only $229 per square? Why so long on the market?

Answer: Sweet house, shitty location.

As discussed previously, when realtors exhort the importance of "Location, Location, Location" they're not being needlessly repetitive--in my opinion there are in fact three different "Locations" when it comes to buying property:

Location #1 - Neighborhood.

Location #2 - Positioning within the neighborhood (waterfront, cul-de-sac, interior location).

Location #3 - Proximity to external infrastructure elements (under a flight path or power lines, behind train tracks, a freeway, or NHRA drag strip).

Sadly, this seller failed on all three counts.

Location #1 - For what he paid, this is not a good neighborhood. One drive down this street and you'll quickly see what I mean. He committed the cardinal sin of real estate investing by overpaying for "one of the nicest home [SIC] in the neighborhood."

Location #2 - It's barely "within" the neighborhood--it offers no interior protection and is directly on top of a busy, fast-moving street. Gooooooooooooooooooooooood luck backing out of your driveway each morning.

Location #3 - It's right behind a Subway and some other dingy stores and across the street from a mechanic (to be fair, Tommy's is right around the corner. Effin' delicious).

Peep the overhead map and you'll quickly see why for 349 days this seller has been mewling, begging, pleading for a buyer despite a seemingly attractive price.

Assuming the current asking price of $462,000 has a remote chance of being accepted by the lender, the loss on this property will be -$263,000 including commissions. Man, after just four years of ownership.

Remeber that scene in The Bourne Identity when in the middle of a fight in a home office, Jason Bourne uses a ball-point pen as an improvised weapon and jams it into the assassin's fist?

Yeah. That's probably how -$263,000 feels.

Again, that's assuming the bank gets off its ass and approves the short sale at that price before the (already initiated) foreclosure process is complete.

But we all know that won't happen and the bank will end up taking this thing back at auction. And after more delays, stall tactics, and assorted dumbfuckery, it will eventually make its REO debut on the market for a much lower price. In a much worse market.

And it will STILL be in the same sub-par neighborhood, right on a busy street, surrounded by a mad plethora loud, dirty businesses.


I have a theory that some houses can ONLY sell in a bubble. But in a normal, or (especially a) declining market, these same properties possess little chance of selling for anything but a deeply discounted price (especially one like this that is highly unlikely to find another fool dumb enough to buy "one of the nicest home" in this 'hood. By the way, bragging about having the nicest house in this neighborhood is kind of like saying, "My grandpa had the biggest load in his diaper out of the WHOLE nursing home!" Really nothing to be proud of).

This "Three Ls of Real Estate" flunkard probably already mailed that key-filled envelope back to the bank, but don't count on the lender rushing to complete the foreclosure process and take these massive losses onto its books. It could be another year before it gets its shit together and finally unloads it--for a much, much lower price.