In pre-foreclosure since 2009 when $14,047 past due on a $580,000 loan, the top-floor unit #927 at The Palms (555 4th Street) was finally foreclosed upon and taken back by the bank this past October with no bidders at $649,000 on the courthouse steps. The unit has been purchased for $725,000 in June of 2007 with 20 percent down.
Listed for $624,900 nine days ago, the bank is now accepting offers for the 699 square foot condo from those who are planning to use it as their primary residence. Offers will be accepted from investors or those looking for a second home if it hasn’t moved in a week.
While there are no other units at The Palms currently in pre-foreclosure or scheduled for auction, there are 275 other properties in the current San Francisco foreclosure pipeline.
“…those who are planning to use it as their primary residence…”
How do the sellers and lenders determine this intent? This is reminiscent of spec home developers who shop their project to the neighborhood as building their dream home. But then they never move in. Or all of the “sudden job relocations” that happened during the last RE downturn.
Oh yeah, the job relocations thing that you and a few other permabears comically scoffed at. while everyone else on planet earth knew it as a reality of life in downturns: People move to to where jobs are.
Actually job relocation is likely to be neutral of down or upturn. In fact I tend to get a lot more opportunities offered when the economy is up.
And stop calling me a permabear, Shirley.
Still would like to know how this initial Palms sale can be limited to those who will become resident. Maybe they’re just going by gut instinct, which is just fine if it suits them.
MOD: The requirement for primary residency was quite common for a lot of foreclosed condos between 2008-2011. Wells in particular stipulated that pre-requisite on many of the properties they owned. There’s no way for the bank to tell for sure but they do perform basic due diligence on the potential buyer. For instance, if you already own a home and are going to keep it that will set off red flags that the offer is coming from an investor. If no offers are received that satisfy the requirement then of course the bank would either reduce the price further or open it up to investors.
Thanks Willow. That makes a lot of sense. So the lender is basically trying their best to improve the odds that this property “sticks” with the new buyer.
Willow was correct, and the Buyer will also have to sign a paper at closing with the lender that they intend to occupy the property within 60 days.
Technically the lender could come for a visit to verify that, but I’ve never known it to happen.
Financing is always completely different for owner-occupants vs. investors. When you take out a “normal” purchase money mortgage, you always have to sign that you intend to occupy the unit as your principal residence. That’s been the case for a long time. This is not a new or unusual requirement.
Anyone else find the prices to be some what insane given at how ugly that part of town currently is?
MOD, also note that Fannie Mae has the FirstLook program and Freddie Mac has HomeSteps which give preference to owner occupied home sales in the first 15 days.
Why would the bank care if the purchaser is an investor or not?
Why would you discern it so narrowly as solely to mean “company moves x to new office”? The “work related move” declaration occasionally given from the very limited sample set socketsite ever provided, which you and your compatriots used to incorrectly scoff at, could mean any number of things.
Lenders don’t like to lend on any Condo Projects, no matter what age the buildings are, with more than 30% Rentals. Lenders want to get their money back. Maintaining a rental condo is not a priority for the Unit Owner or Tenant. That can put the value of the entire Project in Danger.
Lenders can foreclose on you for not maintaining your property even if you are making all of the payments.
I’m just in the process of buying a multi-unit and found out I had to plunk down 30% to get the loan as an investor! I was surprised since the place I bought last month only required 20% — difference is single family vs. multi family. So, yes, money is still tight for investors but the rates are outstanding. Under 4% on an investor loan!
Hopefully this won’t still be the case when I’m done converting the multi-family into condos next year.
Joseph A prices insane given “how ugly that part if town is”-?
This area is urban but I’m not sure I’d call it ugly. I think its a really interesting mix of new build / vintage conversion and 630 is low for a 1 bedroom in this area actually, so, no not insane according to most of the people that own there. It’s very central and there are great restaurants, markets and coffee houses nearby ( who—I guess—also don’t find the neighborhood that ugly).
I would be more worried about the Earthquake Fault Line that Erupted under that land in 1906.
I was in a house on that plot in the 1980’s. The renter’s were proud to show off the fault Line ditch that ran across the back yard of several houses. The house was tilted to about 20 degrees angle. It was hard to keep things from sliding off the kitchen table. They were Evicted at Gun Point by their Quaalude Dealer Landlord.
I’m not a fan of The Palms development itself, but the location is next to a Central Subway station, and within 2 blocks:
Caltrain Station, 80 & 280, Whole Foods, Safeway, Walgreens, BofA, Post Office, K&L Wines, South Park,…
and many companies that are hiring.
I wonder where the person who was foreclosed on is now living.
That is interesting and timely about the earthquake fault. Apparently the state is way behind on examining the surface fault lines of active faults all around the state. According to the California Report on KQED, this was something they were supposed to do but they are now 10 years behind. Jimmy the house flipper should be worried as should all of us. He could be in the middle of flipping and find himself in a fault.
As long as it’s not a DE-fault, it will be OK!
Very good pun from Da Flipper.
Foreclosures occur on every market. The relatively fewer amount of foreclosure inventory as compared to other markets was one of the things that kept the SF market from faring as poorly as other markets during the past downturn. That fact, uncovered by this website, and headlines such as the one for this thread, are always a reliable source of amusememt. “Things … Different … Here” they all joked and abetted. Heh.
The 90s called and they want their ugly architecture back.
If it was really worth $624,000 like the sky high realtor and lender think, it would have been purchased on the court house steps for about 25k more.