Attachments:Â MLS listing history, first listing, 2nd listing, sold (final) listing, county records, deeds report.
Liz Richards is a real estate agent with Leonard and Leonard. She wrote this article for the Rocky Mountain News — published on page 2c Saturday, September 30th, 2006. Headline = Tough Sale, subhead = Neighborhood association’s tactics border on eminent domain.
The opening paragraph (lead) consists of this long sentence:
As a real estate agent, I was thrilled when asked to sell an 1880s Victorian home on four city lots at West 32nd Avenue and Osceola Street in the heart of an inviting pocket of restaurants, bars, boutiques and restaurants in trendy northwest Denver. [italics added]
The word restaurants shows up twice – I assume this is an error. I notice the words “heart of an inviting pocket”. What kind of person uses inviting as an adjective?
As an appraiser, I wonder what exactly is it about northwest Denver that makes it trendy? To the best of my knowledge the word trendy means gay in realtor code.
So what’s my point? I have 2:
First – my bullshit meter starts to twitch. Real people are turned off by this because it sounds phony.
Second point – the inviting pocket and trendy language in the first paragraph makes a hypocrite of the author at the end of the story.
Let’s start with some facts and details. Liz describes the property, but does not give the address. Why not?
The address is 3825 W 32nd Ave, Denver, CO 80211. The property sold for $575,000 on September 5th, 2006. This information is reported in MLS by the listing agent – in this case Liz Richards. This transaction does not (yet) show up in the public records. The selling agent is the one who represents the buyer. In this case, Keller Williams 303-471-6165.
The sellers (Liz’s clients) are John D Locke and Keith Swanson. Yes, they are trendy. Not that there’s anything wrong with that. They bought the property in 1993 for $190,000. The assessed value is $382,000. Zillow has the property valued at $440,196.
The article says:
the property was on the market for three months before the listing came to me
This checks out. George and Betty Luce had the first listing from 10/28/05 to 02/12/06. The asking price was $749,000.
Presumably the owners decided to change to a different real estate agent, and Liz got the listing sometime after 02/12/06. Her listing shows up 04/24/06 with an asking price of $675,000. The article says:
A developer quickly put it under contract for the full asking price of $719,000…The developer backed out of the deal and the property went back on the market.
This does not check with MLS. The asking price was never $719,000, and this offer never shows up in MLS.
The article says:
In any case, the landmark designation process is long and drawn out, and involves multiple community meetings and stifling bureaucratic entanglements.
I don’t know anything about the landmark designation. If I was faced with selling a property in this situation, I would want a qualified real estate professional representing my interest. She says “long and drawn out”. As opposed to what? Short and drawn out? This sounds like spin to me. The bullshit meter is twitching again.
I wonder what the heck “stifling bureaucratic entanglements” means? Does that mean they had to fill out a form?
The article says:
fair market value of $719,000
Of course the seller wants to get the highest possible price. So Liz uses the word “fair” to describe what they want. She uses words like “all this nonsense” and “stifling bureaucratic entanglement” to describe anything that stands in the way.
If we accept the $719,000 offer at face value, it describes the value of the land if the developer could do whatever they wanted with the property. The article is a real estate agent rant. Liz says:
It seems nobody’s property is truly their own.
It should come as no surprise to any real estate professional that nobody gets to do whatever they want. It’s called zoning. Just imagine what would happen if the next door neighbor tried to set up a doublewide in the front yard.
The three most important reasons the developer wanted to buy that particular piece of ground are location, location, and location. Liz described the neighborhood as trendy and
the heart of an inviting pocket
The reason it’s inviting is because there are zoning rules. Liz is ranting because her client’s property would be worth more if everyone else had to follow the rules, but she didn’t. Sadly, this is becoming the American way – bitch whenever the rules apply to you. Anyone that stands in the way is a communist.
The total real estate commission on this transaction was $32,200 – Liz got 1/4th of that, or $8,000. How many people feel sorry for the real estate agent who has to work hard to make it happen?
My analysis/conclusion:
Lot + House for 2 Years = $575,000
Vacant Lot = $719,000
therefore – the house has a negative value of $144,000.
A smart investor can buy the house and rent it for 2 years. At the end of the 2 years, knock down the house and sell the vacant lot for $719,000. This will be an profit of about $100,000 (after expenses) in 2 years time with very little invested.
Is this a great country, or what?
The best advice to the seller would be – don’t sell now. Wait 2 years and then sell for $719,000. How many people think Liz Richards (the real estate agent) discussed that option with her clients?
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