“We reserved a condo during the first day of the pre-sales for The Potrero. Unfortunately our down payment did not come in on time and now we need someone to take over our contract to purchase. The contract requires that you put a $13,196.40 deposit into escrow to hold the unit and this money goes towards your purchase of the condo at closing. This unit is ready to be moved into in early November.”
∙ $439880 Condo in new development “The Potrero” [SocketSite]
∙ The Potrero (451 Kansas): Now 60% “Sold” And Closing Contracts [SocketSite]
Hmm… “We” and “438 sq. foot studio”.
Were “we” planning on living there?
Yikes.
“Unfortunately our down payment did not come in on time ..”
Ahem. In english that means that their lender is now requiring a downpayment that they don’t have and never did.
Agree with Stu and Demios that the owners don’t seem like they ever planned on living there, 2 people in a 438 square foot studio? and that there financing did not come through.
Of course there is a third possibility. The realized they were about to pay $1k sqr ft for a studio that probably wouldn’t sell for that now, or even a few years from now, and don’t want to be saddled with a depreciating asset and instead of just walking away from the deposit are trying to pass it off to someone else.
They’re pretty clearly would-be flippers who now see that their gamble will not pay off. I don’t blame them for trying to get someone to take over their deposition so that they don’t lose their entire bet. But I’d be stunned if anyone actually does so. We’re going to see this more and more as these new complexes come on line in market conditions that are very different from when these bets were placed.
$1000 sq/ft? Unbelievable. Besides, they are still selling the Potrero, so you can probably get a better unit directly from the developer. Yikes!
Sorry — their “deposit” not “deposition” (the muscle memory rote typing of the lawyer in me)
they could have been counting on an ipo, or a lock up expiration to give them cash sooner. remember, vmware was supposed to go out in june.
Why, oh why would someone pay $1k/sf in The Potrero? There are dozens other more desirable neighborhoods in SF with prices half as much as that.
you could ask that question of every single transaction since the beginning of time serge. it’s a very personal decision buying a place to live in. especially your first one. i’m sure they fell in love with the idea of being on top of a whole foods, being in potrero hill, etc. that is appealing to a lot of people out there.
I will offer you …one dollar.
It also says that the unit is fitted for a gas stove. Is that even allowed in a studio?
James – totally off topic, VMWare went out in July /Aug at $25/share currently north of $100, but get your point.
Now back to the topic, this looks like a traditional shortsale as email listed on craigslist is for a mortgage broker, rather than someone trying to get on the property ladder.
Well the Potrero is selling studios for 390k now. They just lost 40K.
What kind of contingencies, if any, do these deposits typically have? For example, what if when it comes time to close, you cannot get the funding you expected due to the credit crunch? Are you out a deposit?
Completely beyond me why ANYONE would pay this kind of money for THIS place. Do I sympathize? Not in the least.
The money didn’t come in on time? Were “we” expecting to win the Lotto? Or did the lenders get cold feet? Pfffft. Don’t try to buy what you can’t afford to begin with. Don’t gamble on a losing bet.
Boy, you guys are vultures. Does anyone have any facts or is it all conjecture? Of course nobody on this list has made any bad business decisions before.
A short sale wouldn’t make sense for someone who wants you to take over their deposit. It means the loan hasn’t been funded: they just put down a deposit.
It’s possible that the owner is a mortgage broker, which would explain the mortgage broker e-mail address. The down payment that “didn’t come in” would be the guy’s profit for the last couple of months, which I assume, have been slow.
Many of those 30 year old Haas MBA bankers who were counting on bonuses this year are going to have the same problem.
But, of course, if the real reason he wants out is that the value has dropped by 10% since he put down the deposit, I doubt he’d put that reasoning in his ad.
Did this buyer seriously think they could ‘flip’ this studio for much more than they paid for it?
You figure 25k commission, 5k closing cost, 5-10k in carrying cost, and 7k for transfer tax (buyers pays the tax on new developments, seller pays for resale, thus, this buyer will pay twice), meaning the unit will have to resale at around 500k for the investor to make any money. So we’re going to assume the investor expected to fetch $1150/sqft for this studio? Get real…
There are so many better developments in the city for the same price or less. Alterra, Infinity Treetops, Hayes are a few that I think have more upside than Potrero…
94114:
Does this mean that you’re ready to admit that it is possible to lose money on a real estate transaction? That marks a major shift in market psychology. Two years ago the conventional wisdom was, “Buy anything for any amount of money and you’re guaranteed to be showered with free money. If you wait you’ll be priced out forever and will be comdemned to be a bitter renter for the rest of time.”
I guess once people really are “priced out forever” sales stop and prices fall. Who would’a thunk it.
Actually, two years ago the mentality for most people who purchased was “I love this property and I’m going to buy it and live in it till I get old.” Nowadays the mentality for most people who purchase is “I love this property and I’m going to buy it and live in it till I get old.”
It’s ARRRRRRRterra NOT Allllllterra!
The term ablative layer comes to mind.
“Actually, two years ago the mentality for most people who purchased was ‘I love this property and I’m going to buy it and live in it till I get old.’ Nowadays the mentality for most people who purchase is ‘I love this property and I’m going to buy it and live in it till I get old.’
LOL.
“Actually, two years ago the mentality for most people who purchased was ‘I love this property and I’m going to buy it and live in it till I get old.’ Nowadays the mentality for most people who purchase is ‘I love this property and I’m going to buy it and live in it till I get old.”
Funny. I seem to recall several dinner parties a few years ago where conversations revolved around how “my condo has increased in value by $200K in the past 12 minutes!” and “you’re just throwing money away renting,” along with the ubiquitous classic “you never lose money on real estate.”
I even recall going to a wedding where some guy asked me HOW MANY properties I owned (as if one just wasn’t enough). But maybe I was the only one hearing that stuff, though.
we just went to that new whole foods. it’s beautiful and way bigger than the 4th and harrison location, plus nobody was there. i loved it. the bistro experiment downstairs is really cool too. we had lunch and then went shopping.
Perhaps if you posited a graphic depicting the statistical variation of equity boastings overheard at 2005 dinner parties attended by yourself, Dude, we could debate the matter fully.
fluj – and you wonder why you get flamed….sigh…
That was a joke, clearly, poking fun at the anecdotal. And I happen to know Dude has a sense of humor. Had I had posted something similar to what he says above the likes of you would have surely disregarded and flamed me for posting an anecdote.
Wow. Such glee, and such sanctimonious rhetoric.
What if this person simply had something unfortunate happen and is looking for an out?
Some of you people are straight up vicious. I can’t imagine you’d like to see a bunch of anonymous posters piling on if something bad happened to you.
fluj, you have me confused with the guys on the Fortune predictions thread. Even I don’t get that granular with my analyses.
And, jokes aside, you as a realtor probably know better than anyone how much speculation has occurred in this market over the past few years. There’s been a lot. Not as rampant as Vegas or Phoenix, to be sure, but not insignificant. I’m not implying this particular case above is a flip gone bad, but it seems likely.
I’d never deny that there was a lot of speculation. In my opinion it has a lot to do with all the cable TV shows “Flip this House” and others. There were speculators who shouldn’t have been speculating, to be sure. That said, most people buy houses because they want to live in them for long periods of time.
Dude: “I seem to recall several dinner parties a few years ago where conversations revolved around how “my condo has increased in value by $200K in the past 12 minutes!”
In our office, conversation at the coffee maker more often revolves around “According to Zillow, the value of my house went down $25K last month.” “That’s nothing. Zillow says I lost $40K last month.” “Oh, yeah? Well, my house has lost . . . .” And so on.
And I can’t resist adding that you could simplify 2005’s conventional wisdom to be “Buy now or you’ll end up a bitter renter.” Based on what I read here, that’s exactly what happened.
Noe: Typical conclusion to jump to – anyone who doesn’t own is a bitter renter who’s priced out forever. Believe it or not, I’m neither bitter nor priced out.
There’s a reason I mentioned 2005 specifically – we were on the verge of buying that summer. But I had this bad feeling that the market was completely overheated and caught up in an unsustainable frenzy. People were buying real estate they’d never seen over the phone just to get in the market. Reeked of NASDAQ circa ’99. So I decided to wait things out, thinking that prices would eventually fall once the crazy loans had to be paid back. My partner, like most of our friends, thought I was completely nuts at the time.
Today, I’m seeing many homes in the same area back at 2005 prices already, and we’re only in year 1 of a multi-year downturn. Long story short, there are a lot of things you can call me, but bitter definitely ain’t one.
Noe 94131– I didn’t even live in SF until summer of ’06. Does that mean that since I “missed out” on buying in ’05, that I’ll also be a bitter renter for life? What about future generations of San Franciscans? Will they also be priced out for life, bitterly renting until they die? Think about it– “Buy now or be priced out forever” is an asinine line of reasoning.
Odd.
We worked with Mark at The Potrero when we were considering buying there and at two different stages put two checks down to hold two different units and then backed out (got cold feet as the market continued to go down) both times.
TP and Mark were great about giving back our deposit checks and said that a lot of people’s situations had changed over the past few months, with many not getting approved for loans, so they were not holding people to the deposits.
Perhaps too much time has gone by since this couple put down their check, but they should ask Mark anyway.
count me in as neither bitter nor priced out–hopefully I’ll bide my time so as to not become just another sucker
Again, we have a misuse of the price per square foot metric. Yes, the unit is selling around $1,000 per square foot, but the unit is unusually small. Smaller than typical properties sell at a premium on a price per square foot basis, whereas larger properties sell at a discount on a price per square foot basis – it is not a linear price per square foot figure across all unit sizes in 99% of the cases here in the city. Now if even the largest units are selling at $1,000 per square foot, that’s a different thing, but applying a price per square foot analysis to a super small unit and then extrapolating this to the whole development – well, it just doesn’t work that way.
“Well the Potrero is selling studios for 390k now. They just lost 40K.”
This is actually not true, I was there this weekend, and they have 2 studios with NO parking priced at $399K,
if you want a parking space it will cost you an extra 35K, as for the rest of their studios, they are priced at $449,800 and Up
clarification… there’s only those 2 studios w/out parking included….everything else has 1 parking space