November 21, 2010

This Could Never Happen in the RBA. Could It?

Today’s feature is a guest post by Burbed reader SEA.  Wow, Southern California just has a thing for squatting in a foreclosed house you no longer own.  Thanks very much, and I’m sure all the people who hate the Most Expensive ZIP Codes series thank you even more.

—–

What happens when amateurs compete with professionals?

“Since the day that we were married, we have been working hard, and saving our money for the day we purchase our dream home. With the depression of the housing market, we believed the time has finally come for us to find our house.”

“The owners of the house had just foreclosed on, and were awaiting eviction. Already were several buyers lined up to purchase up this home as soon as the previous owners were removed (contingent offers had already been placed.) Since the house was at already pushing the limit of our budget, we could not afford to raise our bid and have a chance to outbid the others.

“Today is October 28th, the day we should take possession of the home. What we found out early this morning is that the pervious owners have no intention of leaving. In fact, they filed for bankruptcy — this automatically puts a stay on the eviction process.Even though the house is not theirs, even though they agreed to move out, the eviction is instantly frozen.”

The Full Story is at Evict Struiksma.

Let’s see… No professional would buy this place with the former owner inside, but this guy thought it’d be a good idea. I’m not a bankruptcy attorney, but deals in the past can get undone by a bankruptcy court–preferential payments for example. Ever had a bankruptcy court ask for cash from you? It’s not a fun experience to have to pay back the cash you were owed.

Also bankruptcy filings have spiked, so courts and judges are experiencing heavy loads, and, it’s been my personal experience that judges are a bit more sympathetic to these foreclosures–the end result might be the same, but additional time might pass.

What’s even more comical is there is a Short Term Occupancy Agreement that provides for certain fees and expenses to be paid by the “occupant,” such as attorney fees. I have no idea what David Potts, or the attorney for that matter, was thinking about how to collect from someone who has gone through foreclosure. Isn’t bankruptcy likely?

I’m sure this house will be left in pristine condition, if David Potts can survive financially…

Oh, and now that it’s in bankruptcy, I doubt that David Potts could legally just go pay the guy to leave. Rather than expect magic for free, I’d have paid the occupant to leave before the bankruptcy was filed, but when you spend every last dime on the purchase, well, uh, what kind of contingency planning is that?

I know; I know. This could never happen in the RBA.

Comments (8) -- Posted by: madhaus @ 5:03 am

8 Responses to “This Could Never Happen in the RBA. Could It?”

  1. Chris Says:

    I had a similair experience in texas. I just went in and threw the person’s stuff out when they weren’t there, changed the locks. The person was pissed, but actually didn’t do any further damage to the exterior. The judge was pissed too and vacated his previous ruling on damages and unpaid rent, too bad. The deadbeat was unlikely to pay anyway and it’d wind up in collections. I recognize that in CA that would probably wind up with Jail time, but in TX just a civil penalty. Take it with force!

  2. anon Says:

    Buying property has been a fool’s move for a decade now. Now that the bubble has subsidided, people will learn that homes do not pay you but rather cost you money, time, and effort.

  3. SEA Says:

    The basic claim by Potts is that the contingent offers were better in terms of price but not as good in terms of requiring the vacancy.

    Yesterday anon put on his blue glasses, and through those blue glasses he saw, “Real estate brokers and agents are trash.

    I don’t know Potts personally, and I have no inside information on this deal.

    All other things being equal, a vacant unit is worth more than one that comes with occupancy problems. How much more is a vacant unit worth? With that said, do you really think there were higher offers contingent on the unit being empty, or was that just another game?

    Potts wrote, “After many long months of searching, seeing house after house, we finally managed to locate a house that was everything we had hoped for; with one exception.”

    Roughly speaking, this could be translated into, “I love that house,” which is Suzanne’s basic claim.

    “We don’t know what problems lead Mr. Struiksma to being in financial difficulties, but these problems are not mine. We survived our problems; cancer, being unemployed for almost two years, and working day and night. We did nothing wrong, we were just looking for the best home for our money, in the location that we desired. We are now living a nightmare, no way to get the occupants out.

    Whose problems?

    I nominate Potts as a Real Financial Hero.

    And nomadic, don’t forget to send sprinkle cupcakes!

  4. SEA Says:

    Real Financial Hero Link:

    http://www.youtube.com/watch?v=TxylHPnoloI

  5. nomadic Says:

    It should be noted that the subject house is in Coto de Caza, site of “The Real Housewives of the OC” and what seems to be foreclosure central for the area. I’m surprised the Potts family couldn’t have found a few similar homes for sale in the same neighborhood for comparable prices. And BTW, these aren’t exactly starter homes; they’re full-fledged McMansions.

  6. SEA Says:

    While I concentrated on the background story, I suppose it’s fair to put the property link:

    14 Running Brook Dr, Coto de Caza

    “Beds: 4
    Baths: 5
    Sq. Ft.: 4,400
    $/Sq. Ft.: $227
    Lot Size: 9,494 Sq. Ft.

    Sep 16, 2010 Sold (Public Records) $999,000 2.9%/yr Public Records
    Sep 16, 2010 Sold (MLS) $998,900 – Inactive CARETS #S623015″
    Aug 16, 2010 Pending – – Inactive CARETS #S623015
    Jun 29, 2010 Listed $998,900 – Inactive CARETS #S623015
    Jun 24, 2010 Sold (Public Records)
    This home was foreclosed. $920,200 – Public Records
    Nov 15, 2001 Sold (Public Records) $776,000 – Public Records”

  7. sprezzatura Says:

    Potts was a moron and now he is paying the price for his idiocy.

  8. madhaus Says:

    #4, great column, even if you wrote it as a comment, and that video is hysterical. #2 in the series has the dude who will buy anything because he wants it, and the gal who can’t say no to a sale, even if she already owns 13 pairs of black flats.

    I wonder if David Potts is like Mr and Mrs Spending 60% of Our Gross Income on the Mortgage?

    Completely unrelated – the Kinks did a song in the 60s (also covered by The Jam a dozen years later) called David Watts. The lyrics work perfectly for today’s financial hero.


    For-for-for-for-for-for-for-for
    For-for-for-for-for-for-for-for

    I am a dull and simple lad
    Can not tell crap from RBA
    And I have never met Steve Jobs
    And I wish I could have that 10K lot
    I wish I could be like David Potts

    For-for-for-for-for-for-for-for
    For-for-for-for-for-for-for-for

    And when I lie on my pillow at night
    I dream I could bid like David Potts
    Write my contract to victory
    And take my license and pass the lot
    (wish I could be)
    Wish I could be like David Potts
    (wish I could be)
    Wish I could be like David Potts
    (wish I could be)
    Conduct my life like David Potts
    (wish I could borrow)
    I wish I could be like David Potts

    For-for-for-for-for-for-for-for
    For-for-for-for-for-for-for-for

    He has the big house with a pool
    He is a landlord, he’s the man
    And his tenant lives there rent-free
    And I wish all his money belonged to me
    I wish I could be like David Potts

    For-for-for-for-for-for-for-for
    For-for-for-for-for-for-for-for (need closure)

    And all the bills in the mailman’s bag
    Try to go find out where’s David Potts
    They try their best but can’t succeed
    For he is above their ugly greed

    Wish I could be like
    Wish I could be like
    Wish I could be like

    For-for-for-for-for-for-for-for
    For-for-for-for-for-for-for-for (want closure)
    (repeat)


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