Excellent Conditions: UPDATE

The list price was "$150,000" and changed to "$185,000"

A $35,000 price increase? After 176 days on market?

SMART.

Let me know how that works out for you...

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Address: 2036 3rd. St #7, 90814
Asking Price: $150,000
Year Built: 1960
Size: 1 beds, 1 baths, 707 sq. ft.
$/Sq. Ft.: $212
HOA Fee: $104
Purchase price: $278,000
Purchase date: 4/2007
MLS#: Y901921
On Redfin: 30 days
Down Payment: $30,000
Monthly Payment: $900
Income Requirement: $43,000
Description: Cute condominium, excellent conditions, second floor. Nice living room with balcony. Short Sale.

"Excellent conditions"? You mean, like, for sailing?

Calling this a short sale is being generous. Assuming the bank approves this price (won’t happen), it will be "short" $128,000, less whatever meager down payment the renter coughed up (sorry, but we have to stop calling people who made interest-only payments to live in houses for a year or two “owners.” They rented money from banks and will walk with no equity, therefore they are renters). A one hundred and twenty eight thousand dollar loss on a 700-square-foot apartment? Cripes!

I don't know what this lady was thinking, but in April 2007, she convinced herself that a one-bedroom, one-bath condo in this neighborhood was worth $278,000. WTF were you thinking?

And before someone points to the baby stuff and chastises me for "attacking someone who was just trying to do what's best for her family"--wait, actually, go ahead and chastise me for that. Because that would be the dumbest thing ever written on the Internet--and that's saying a lot. "Doing what's best for her family" would be renting an affordable apartment and putting the $700 monthly savings into a college fund.

Shoehorning your way into a mortgage you can't possibly afford is the height of irresponsibility.

And speaking of that, to realistically afford this place, she would have had to pull in $79,428 per year.

Here’s a shocker: She didn’t.

The median household income in this zip is $54,170. But that’s household income, usually meaning two workers' combined incomes. A 700 square foot apartment can feasibly only house one adult, meaning she, by herself, needed to make $25,000 more than the average family to stay above water.

Worse yet, she needed to make 25k more than the median income to afford what is quite obviously an old, run down, sub-median property.

Predictably, the $1,700 monthly payment for what basically amounts to a boarding room quickly became unsustainable and now the property is on it's slow march back to the bank (paying $1,700 a month for this dilapidated hovel is like cashing in a $200 Mastro's gift certificate to eat dishwater soup out of a rusty tuna can).

The good news is, now she can do what she should have been doing all along which is rent a nice, affordable apartment in a decent neighborhood and save a healthy chunk of money each and every month.

Maybe she'll stop making payments and will be able to live rent-free for a while to save up even more for her and her family. Banks are so overwhelmed that I'd say she's got at least nine months of deadbeat living to look forward to.

But she needs to realize that short selling is a complete waste of time. It's not as if she'll get a smiley face on her credit score for short selling instead of foreclosing. Her credit will be ruined regardless and her down payment (if there was one) will vanish, and the $42,000 she spent in monthly payments (offset by minimal tax write-offs) is gone too. Those are just the facts and the sooner she accepts them, the better off she'll be.

Because even if the bank approved this short sale price of $150,000 (impossible) this incredibly unattractive property still has further to fall and smart buyers know it.

Remember this nearby seller? He’s also asking $150,000 in a short sale, but he’s been rotting on the MLS vine since September of 2007! That doesn’t bode well for our renter.

Further complicating this apartment's chances of finding a buyer is that it sort of resembles a Tijuana brothel:



And we haven’t even seen the bathroom yet! Don’t kid yourself; excluding bathroom photos is 100% intentional. I unconditionally guarantee it's a disaster.

Any buyer would have to be prepared to undertake a complete overhaul of this outdated mess. I mean, take a gander at the kitchen:


Wait, what the hell?



Um, lady, those don't look like salt shakers.