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September, 2006 Blog

Forensic Appraisal Aurora Colorado

by: Philip G Rice, Certified Residential Appraiser, CPA, MBA

Article in the Denver Post - page 1 top story, Sunday September 17th, 2006. Headline = No money down: a high risk gamble. Foreclosing on the American Dream. Part of an occasional series. By Gregg Griffin, David Olinger and Jeffrey A Roberts. Alt link.

Attachments: MLS pg1, listing history, deeds report

The article talks about a bad loan made to Anthony & Monique Armijo. The address and the name of the real estate agent are not in the article. This information is presented below.

Buyer = Anthony & Monique Armijo. 6319 Eaton Ct, Arvada, CO 80003 / Lender = Spectrum Funding / Listing agent = John Pezzuti, Metro Brokers

Selling Agent = Constantine (Dino) Maniatis - sentenced to 5 months in prison and fined 100,000 drachmas.

...both the President and Secretary-General of this federation, Tassos Amaleos and Constantine Maniatis were sentenced to 5 months imprisonment and fined 100,000 drachmas each.

From the Denver Post article:

Ad Two Inc. is an independent franchise of HomeVestors, which buys, repairs and resells houses. Terri Gallmeier, Ad Two's president, said the Armijos' real estate agent asked her to carry a second mortgage that could be refinanced a year later.
Constantine Maniatis said "I had nothing to do with the loan, and I wasn't privy to all the financial information" about the buyers.

Constantine Maniatis (the real estate agent who represented the Armijo's) was sentenced to 5 months in jail, and then decided to become a real estate agent in Colorado.

The buyer, seller, lender, and the 2 real estate agents all worked together to obtain a mortgage $10,000 more than the value of the property. Everyone involved in this transaction knew what needed to be done, and they each played along and did their part. Constantine Maniatis collected a $6,160 commission on this transaction. Now she is acting dumb.

tags

real+estate Constantine+Maniatis home+vestors

technorati ping / blog phil.rice / real+estate / Constantine+Maniatis / home+vestors /

Highest and Best Use

Attachments: 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?

tags

real+estate liz+richards leonard+leonard trendy+gay inviting+adjective highest+best+use bullshit+meter

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Ultimate Lip Service

No I'm not talking about Monica Lewinski.

This sign is located in Commerce City, Colorado, on southbound 270 about 1 mile before the Vasquez exit. This is one of the busiest highways in Colorado - something like 1 million cars drive by this sign every day.

As I stood on the side of the highway and snapped this photo - I was ankle deep in litter. I looked around, and there was litter everywhere. It's not working.

I wonder who is responsible for this sign. Did they think there was even a remote chance a $1,000 fine for littering would ever be enforced? I am convinced that no one has ever paid a $1,000 fine for littering. I would be surprised if anyone in Colorado has ever paid a $1 fine for littering.

I would very much like to see an effective anti-litter program. But this is just stupid. I suggest a more honest approach.

The sign says:

$1000 FINE
FOR
LITTERING
ENFORCED

Instead of making silly threats - a simple direct statement, such as "please do not litter".

Are you kidding me? How does anyone lose a turtle? Think about it. A turtle is impossible to lose.

As I drive around the neighborhood, I see several of these signs. I kept a sharp eye out, but I never saw a turtle. Dang.

Absorption

Aurora South (AUS)

CMA - Residential (houses) - 3,706 sales in the past 12 months = 309 per month. 1,879 active listings = 6 month supply. Median price = $224,900.

CMA - Condo (including townhouse) - 1,596 sales in the past 12 months = 133 per month. 1,219 active listings = 9 month supply. Median price = $127,900.

In plain English - if you want to sell a house in Aurora, it's going to take 6 months. If you want/need to sell in less than 6 months, it better be priced aggressively and/or you better have a good real estate agent. For a condo, it will take 9 months. If you're in a hurry to sell a condo or townhouse -- good luck.

Compare these figures to June, 2006. Overall slight decrease in the number of sales and number of listings. Condo absorption rate went from 10 months to 9 - moving in the "right" direction.

The median price figures are inflated by seller concession a/k/a rebate. I estimate $5,000 is the typical seller concession. In plain English - the typical condo sells for $122,900 (paid to the seller) with a $127,900 mortgage loan.

Way more than 50% of all transactions involve a mortgage of more than 100% paid to the seller. For condos - I estimate that 90% of all transactions involve a seller concession and therefore - a mortgage loan of more than 100% of the amount paid to the seller. For a detailed example, see the transaction at 12403 E Tennessee Cir #E. The example includes a copy of the appraisal by Dan Grant of Freedom Appraisal and the MLS listing.

tags

toothpick politic

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http://www.mortgagefraudblog.com/index.php/trackback/1501/

Thanks to Rachel Dollar for posting this important article, title = Massachussets [sic] Increases Loan Fraud Enforcement and Regulation.

The Massachusetts Division of Banks announced the implementation of a coordinated plan designed to address abuses by rogue mortgage lenders and brokers.

There is no link to a source article - perhaps Rachel wrote the article, or perhaps it was a press release. I recently lived and worked in Massachusetts, so I can relate to this particular article. And naturally, I compare Massachusetts to my current and long time home, Colorado.

The article says

Several recent investigations have produced evidence...
and
The Division has launched multiple surprise examinations of mortgage lenders and brokers that are continuing....

If anyone in Colorado is doing this kind of investigation, it's a well kept secret.

The article says:

The Division recently issued cease and desist orders against two licensed mortgage brokers and two unlicensed entities in Lawrence [MA]. The Division issued cease and desist orders against four additional licensed mortgage brokers and three unlicensed entities. Initial findings from on-site examinations according to Antonakes indicate that additional enforcement actions will soon be taken.

Wow! Colorado is just getting started on licensing. In a few months we may have a mailing list of mortgage brokers, but there is no licensing per se. It's a start - a step in the right direction. But notice in Massachusetts they took action against unlicensed entities. I cannot imagine "the authorities" in Colorado doing that.

The article says

Putting these abusive companies out of business will be the minimum action we will take

In Colorado, it would be a $500 fine and a 2 day class. I could go on, but I think you get the idea. I hope that someone (maybe more than 1) in Colorado reads this article. It may motivate "the authorities" to get past the lip service and get serious. Massachusetts may not be perfect - but I give them credit for taking it serious and making an effort. Other states need to pay attention. Learn from and copy the best practices.

Now more than ever, the good guys need to work together.

tags

mortgage fraud Massachusetts

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Light Bulb Joke

Click if size matters.

Q - How many HUD weenies does it take to screw in a light bulb?

A - Can I borrow your shoe lace?

tags

humor joke light+bulb shoe+lace

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mung

Fun with vocabulary.

This is truly amazing. This is (more or less) the first time I ever used digg. OK - I admit I've been out of the loop. Word of the day is mung. I came across this word at the very end of a very long and very well written rant.

It's designed to all fit together. Not just munged after-the-fact to go together OK, but designed from the ground up to be a single coherent system. And when something doesn't fit, it's a bug to be fixed, not just "part of the game".

From dictionary.com mung = an acronym / mash until no good.

Don't you just love it? But it gets better. In researching the definition of mung, I learned about Finagle's law, the folk version of Murphy's Law - which (of course) I already knew. But it gets even better.

Some technical and scientific cultures (e.g., paleontologists) know it under the name `Sod's Law'; this usage may be more common in Great Britain.

Summary: Murphy's law / folk version = Finagle's law which is known by British paleontologists as Sod's law. I learn something new everyday.

Recursive acronym:

<convention> A hackish (and especially MIT) tradition is to choose acronyms and abbreviations that refer humorously to themselves or to other acronyms or abbreviations. The classic examples were two MIT editors called EINE ("EINE Is Not Emacs") and ZWEI ("ZWEI Was EINE Initially").

which leads to backronym = backward acronym - did you know - Discovering backronyms is a common form of wordplay among hackers?

tags

mung recursive+acronym Finagle Sod's+law backronym backward+acronym

technorati ping / blog phil.rice / mung / recursive+acronym / Finagle / Sod's+law / backronym / backward+acronym /

kludge.

Kludge = a crock that works.

a software or hardware configuration that, while inelegant, inefficient, clumsy, or patched together, succeeds in solving a specific problem or performing a particular task.

fusty mephitic tang

Fun with vocabulary - The words fusty, mephitic tang - actual unsolicited use. Quote from The New Bedouins: This Is Over The Top

street people, with the usual fusty, mephitic tang in the air around them.

fusty defined: / dictionary.com - having a stale smell; moldy; musty: fusty rooms that were in need of a good airing.

mephitic defined: / dictionary.com - offensive to the smell

tang defined: / dictionary.com - a pungent or distinctive odor

Stowe Boyd is my hero. Having said that - I am critical of this sentence because:

Fusty means stinky. Mephitic means stinky. Tang means the stink. It's like new innovation. It's redundant.

Having said that - I enjoy being exposed to new words. I have never in my life ever heard anyone utter the words fusty or mephitic. I have heard the word tang - and not just the orange drink of the astronauts.

http://www.typepad.com/t/trackback/6000941

tags

fusty mephitic tang stowe+boyd phil+rice lingo vocabulary cliche edge

technorati ping / blog phil.rice / fusty / mephitic / tang / stowe+boyd / Phil Rice / lingo / vocabulary / cliche edge /

Fun with vocabulary. A hip blog page.

Anti-Dis-Un-Lingo-2.0-Mint-and-Terry-in-ism

opposed to people who are opposed to overused clichés. But not necessarily in favor of overused clichés. Because without overuse, a cliché is just a word.

Edge: edge, edgy, edge case, at the edge,

this Week: ubuntu, inured, *$ = starbucks (get it?), accelerant = coffee, fusty mephitic tang

Time-less: A-List, froth, boing, idiocracy, bubble, un[anything], mashup, drupal, wiki

2 Weeks Ago: long tail,

my Favorites: hip, on the lam, groovy, moisture = rain,

Over the Top: disintermediation, anti-dis-un-lingo-2.0-mint-and-terry-in-ism (as 1 word = antidisunlingo2.0mintandterryinism)

Lingo defined: Similar to jargon. A vocabulary used by a particular group. (source)

Is edge a full fledged cliché?

Fledge defined: to become well enough covered with feathers to be able to fly. Generally used to describe the process of young birds leaving the nest for their first flights. (source).

This raises the question - is edge fledged? And if so, to what extent? How fledged is edge? Is it full fledged, or partially fledged? Un-Fledged?

To the best of my knowledge, the word fledge is not used on any A-List blog.

The word antidisestablishmentarianism, with 28 letters, is commonly regarded as the longest accepted word in the English language. antidisunlingomentarianism 2.0

tags

lingo jargon vocabulary phil+rice a-list froth edge bubble un 2.0 fledge mashup ubuntu, inured accelerant fusty mephitic tang boing idiocracy drupal wiki long+tail hip on+the+lam groovy disintermediation cliche

technorati ping / blog phil.rice / lingo / jargon / vocabulary / Phil Rice / a-list / froth / edge / bubble / un / 2.0 / fledge / mashup / ubuntu / inured / accelerant / fusty / mephitic / tang / boing / idiocracy / drupal / wiki / long+tail / hip / on+the+lam / groovy disintermediation / cliche /

In Search of THE edge 2.0, the clue train gives 2 toots on the whistle, but never slows down. Top 10 Stupid Real Estate Signs. Tree spam for fun and profit, from the ridiculous to the sublime. Note: edge means near the outer limit - the periphery - an interesting place to write about. Not to be confused with competitive advantage. That is so 2 weeks ago.

1300 Florence St mortgage fraud mash up - partially fledged, view from the edge.

Buzz Words: froth, 1301 Florence St - photos, bubble, web 2.0, edge, 1332 Florence wiki, drupal, nincompoop, disintermediation, monetize, physicality, information, does Bozo have a fico?, loss mitigation program, mortgage undocumented, comp check, short sale - 1316 Florence St, the 3 amigos, Ryan Searle Jesus Alonzo, Sean Searle, Ron Searle, unMormon fraud, REO, FHA, HUD, realtor, tree spam, how to the original over the edge 1300 block of Florence Street in Aurora, Colorado - HUD wake up call to Alphonso (the Fonz) Jackson by Matthew George SRA, un-correct

tags

nfl football against+the+spread point+spread picks

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Hero

Bill Gates is my hero. Not anymore. That is so 2 weeks ago.

Stowe Boyd is my hero. I read what he writes, and it makes me think. I learn new stuff, but more importantly, I see the same old stuff in a whole new light. His writing provokes a critical thought process and it causes me to see things in a whole new light.

Not even Bill Gates has been unfucked on the Internet. I learned that Stowe Boyd doesn't "have any specific technical background". I like the sound of that so much I put it on my "about me" page.

features people like Michael Arrington and Stowe Boyd, both of whom don’t have any specific technical background

to be fair, this is corrected at the bottom of the story -

My apologies to Stowe Boyd for not acknowledging his technical background. I believed when I wrote that bit that Stowe had a journalism background and a strong interest in social software.

bokardo (Joshua Porter) is my hero. A great article on the difference between web design and web development.

Part of my daily routine is to scan thru a long list of blogs. This particular list is the Web 2.0 workgroup - that may not be the exactly right name (what they call themselves), but it works for me. I was struck by 2 different sentences found in 2 different blogs, written by 2 different people.

First sentence - The other thing that isn’t readily apparent unless I’m missing something big here is how these guys plan to make money.

This is a cliche. In one form or another, it happens all the time. Let me illustrate with an example. At the beginning of World War II, Germany sent a team of 8 men to the USA with instructions to blow up bridges and other espionage type stuff. They traveled by submarine and came ashore on Long Island. One of the men decided to turn himself in at his first opportunity. He had grown up in Ohio, spoke the language perfectly, and had no intention of doing any damage to this country. In fact, he wanted to help our side. He expected "the authorities" would reward him for his bravery and recognize that he was a source of valuable information.

So after he landed in Long Island, he made his way to New York City. He found the local office of the FBI, walked in the front door, and explained he was from Germany, had traveled to this country by submarine, wished to turn himself in and tell his story to the right person so his valuable information would get to the right people.

The people working at the New York office of the FBI kicked him out and told him - don't come back. Can't you see we are busy here, quit wasting our time.

Another (more recent) example - in Georgia, a man in court grabs the gun of guard and kills the judge, a cop, and manages to escape. As you can imagine, there was a huge "man hunt" to capture this guy. They set up a hot line, and it was all over the media for everyone to call the number if they had any info to help catch this guy. There was a big reward.

The bad guy breaks into a nearby home, and spends several hours with a terrified woman. The woman manages to talk this guy into letting her go. So as soon as she leaves - she calls the hotline. And you guessed it, they blew her off and told her to quit wasting their time, they were busy trying to catch the bad guy.

What is my point? It's amazing how people process information. For many people - they need to understand the "why" - the story - the context of "who are you and why are you telling me this?" before they can even begin to process anything else. Without the context - they rest of the story is not real, does not exist, it simple does not compute.

the woman did their version of -- how is this guy going to make any money?

I have heard the above sentence so many times - it is (for me anyway) a cliche. In the Dec/Jan/Feb timeframe, I was "launching" a new website called mlsphotograph.com. On Saturday and Sunday afternoons, I would get in my car and visit as many open houses as I could - usually 6 or so per day.

I had 2 goals - generate interest in the website and get feedback. Nearly 100% of the real estate agents responded with some version of the above sentence - they wanted to know/understand how I was going to make money. And until they had a satisfactory answer to that question - everything else I said was discounted/rejected. Simply stated - they need to understand how it works and what the motive is, and without that information - nothing else would compute.

I would hand them my "business card" specifically designed (by me) as an introduction to the Website. There was no Internet access, so we could not

Second Thought - Note: More and more, I find myself drawn to the true voices blogging allows people to share, to the heartfelt stories and common threads of what we all struggle through, survive, and (hopefully) learn from. The courage to share those truths is not to be discounted. From Susan Mernit. Trackback = http://haloscan.com/tb/smernit/115716424879906679 and the post url (permalink) = quote of the day from Friday Sept 01, 2006.

Stowe Boyd

Efficiency v Belonging. - the post, TrackBack: http://www.typepad.com/t/trackback/5855582

Fred Stutz - Yea/Boo - the post, TrackBack: http://www.typepad.com/t/trackback/5865928

quilt from mom - boing boing / actual link /

MKG Appraisal FoaF, OPML, old RSS Feed, Business Card - scanned image, vCard file. Authored by Phil Rice, powered by Wordpress, now in beta.

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