We've written about the sale of a home on Park Place and how the sale price of $1.62 million didn't compare favorably to some local homes that recently sold.
Well, hold on to your hats for what in my opinion could be a real estate disaster in the making, but first a little information on the Park Place neighborhood.
Park Place is a street of older homes in the family friendly Top of the World neighborhood in Laguna Beach. The homes were built in the 1980's and are well kept, but are hardly custom high end homes. Park Place is like a little slice of 1980's Irvine. If you are a higher end purchaser, this neighborhood will be disappointing. I'm not saying that is bad - I'm just sayin what's what.
Anyhow, back to the home on Park Place. We had earlier wondered why the buyer had paid so much for this home, given the low priced comps that were located very close by. Now, the buyer has put up the poles and ribbons that indicate a complete remodel. OMG, the buyer is putting MORE money into this home just like in the go go days of 2007!
Now, another close house on Park Place is for sale for $1.59 million. No big deal, right? Well, that home is 700 square feet bigger AND IT HAS A POOL. And it may not even sell for the listing price. So that home on Park Place is being offered at $457 per square foot. If you value the home sold on Park Place at that price, it is worth, gulp, only $1.295 million. And it doesn't have a pool. Subtract $100,000 for that, leaving you with a value of $1.195 million.
The buyer of the Park Place home took out a loan of $1,200,000 and therefore made a downpayment of $420,000. What happened to the value of the downpayment? Well, it's probably gone. Gone in 2 months. Close escrow on the house in April, gone in June. Be carefule and do your homework before you buy folks!!!!!
Oh yeah, the real estate agents have their commission payments.
