Yesterday we featured a humongous three and a half million dollar spread on half an acre in San Jose. It was a block from the actual Rose Garden that gives the Rosegarden district its name, but still, San Jose. For three and a half million. Yeah, we don’t think it computes either, unless we want to talk Bay Area Bubble 4.0 some more.

Now, today’s property and its pricing won’t make your eyes pop out because it’s in the Real Bay Area! Let’s find out why it won’t sell!  Thanks very much to Burbed reader nomadic for sending in this Real Realty Reject.

11860 FRANCEMONT Ave
Los Altos Hills, CA 94022
$3,999,000

6 Beds
6 Baths
5,250 Sq. Ft.
$762 / Sq. Ft.
Built: 2006
Lot Size: 1 Acre
On Redfin: 387 days
Property Type: Detached Single Family
Stories: 3
Community: Los Altos Hills
MLS#: 81214828
Style: Mediterranean
View: Neighborhood
County: Santa Clara

Property available at full price. Fabulous nearly new 5250 square foot home in a quiet cul-de-sac location on 1 acre with easy access and outstanding quality. Excellent floorplan with a huge kitchen/breakfast/family "Great Room" opening to a beautiful backyard. Luxurious master suite. Guest suite on main floor. Excellent Los Altos schools. 6 bedrooms, 6 baths.

Upcoming Open Houses

Saturday, May 18: 2:00-4:30 pm

First let’s check in with nomadic.

I sent this to a friend a few minutes ago before taking a good look at the listing copy and history.  This should go on burbed.  “Available at full price.”  It’s been on the market since November 2010 and went pending twice, failing to close both times.  The price has been raised at least twice in the past year – now up $700k from last April.

The icing?  It’s an REO.

Well, it doesn’t say it’s an REO in the listing, but the history admits to a foreclosure back in June. June, 2010.  But still, compare this property to yesterday’s! It’s on a full acre instead of a half, it’s got an extra bed and bath, and it’s in the RBA! All this for just “not a lot of money” more! Yet it’s been a languishing listing for at least a year, and that doesn’t even cover all that time before it went pending twice.

Why didn’t this place sell? There are definitely homes in this price range on this street.  Maybe this comment on short sales from a local Realtor might explain things:

The only active short sale in Los Altos Hills, located on Francemont, has been on and off the market since 2006. While it’s a nice house, it has had many offers and still seems to be having trouble closing. It’s unusual for any home to remain on the market so long. In my opinion this is an issue with the bank and not the home.

And the owner of the home is… BAC Home Loans Servicing, through ReconTrust! Thanks a lot, B of A! We all know it really stands for Bunch of A-holes.

Bunus: Virtual tour guaranteed to give you motion sickness.

Today is Sunday, and that means… no A-Z Blog Challenge today. The schedule’s been set that we do a new letter every Monday through Saturday, and on Sunday you can go to church or look at Open Houses.  Or in the case of this story, courtesy of Burbed reader nomadic, you can combine both.

Judge Rules Against Bay Area Church Leaders In Real Estate Case

VALLEJO (KPIX 5) – A California state judge has ruled against two leaders of a prominent Bay Area church accused of bilking parishioners in an alleged investment scheme.

The judge ruled that General Assembly Church leaders Lacy Hawkins and Michael Parker operated a real estate investment company without a license, in violation of securities law.

KPIX 5 has been investigating Lacy Hawkins and Michael Parker’s involvement in the business deal, that church members said cost them millions of dollars. General Assembly Church has locations in Union City and Vallejo.

Hundreds of parishioners mortgaged their homes and drained retirement accounts on the promise of investment returns as high as 30 percent. Some said they were even promised salvation.

Yes, it’s not enough to have a religious leader in a fraud case, it has to have a realty component. And this one’s actually pretty interesting. Seems this was one of those We’re Here To Run Your Life For You kinds of churches, where you can’t even wipe your nose without permission.

And the Supreme Leader pretty much was ordering parishioners to buy into their real estate trusts or tout them to each other.  The investment vehicles weren’t exactly transparent about the real estate in them.  Unless you count the Woodlands of Ascension project they bought in Louisiana. Which was, mo konmprann, swamp.  Leadership blamed lack of progress on Katrina, but the Army Corps of Engineers said the land was always swamp.

The victims are claiming they were brainwashed into investing with the church’s leaders. We’re imagining just what kind of techniques were used. Maybe “Buy now or you’ll be priced out forever and that, my friends, is the definition of HELL.” 

Also the church leadership quickly realized that paying the real estate agent (who was part of the church) regular commissions for flipping properties was a loser… for them. The agent went from $20,000 a month to $1600 biweekly, as straight salary.  Meanwhile, the church reported to the IRS that they had paid him the commissions, so he owes more than a million in taxes.

The investment’s books were not open to the membership, either, so they didn’t realize that the vehicles were classic Ponzi schemes.

This is an Open Thread. Are you attending religious services this weekend, Open Houses, both, or neither?  And we’ll be back with the next letter in the Challenge tomorrow, G for God. Or Grab. Or both.

More importantly, who wants another $100M property enough to put up with a sales condition like this?  Thanks very much to Burbed reader nomadic for alerting us to yet another nine-digit property.

Estate and Lands of De Guigne
Undisclosed Address in Hillsborough, CA
$100,000,000

To the south of the Golden Gate Bridge, large parcels of land are rare. Located half-way between San Francisco and the Silicon Valley in the bucolic Town of Hillsborough, an approximately 16,000 sqft. Mediterranean-styled, Bliss and Faville mansion is positioned on approximately 47-acres which have been owned for 150 years by one family. Decorated by celebrated interior designer Anthony Hail, the mansion interiors encompass elegant and ornate public rooms, which evoke the sophistication and grandeur of a bygone era. Grand-scale Ballroom, Living Room, Library and Pavilion are aligned to open to a Pool Courtyard, revealing sweeping views of San Francisco and the East Bay. Formal gardens and park-like grounds adjoin dozens of undeveloped acres surrounding the mansion, providing ultimate privacy and security. Timeless, sophisticated and elegant, the deGuigné Estate represents a rare opportunity to own one of California’s few remaining mansions surrounded by substantial acreage near an urban center.

Yadda yadda big yadda yadda acreage yadda yadda old yadda yadda history yadda yadda expensive.

Oh, and Mr. De Guigne isn’t leaving this house alive. Literally.  You buy this house, and you have to wait for him to croak before you can move in.

This, by the way, seems to be Plan B.  Plan A was when he tried subdividing the heck out of the place in 2009, which did not endear him to his neighbors. And he did that because he had an expensive divorce to finance.  Also the house cost much more to run than he got living off his investments, the poor dear.

Also, we likely found an actual address, because this sure looks like the entrance: 60 Glenbrook Drive.  Note the road going from Glenbrook to the Big House.  While the property records indicate a smaller home, the lot is 10,000,000 square feet on Zillow, or 227 acres.  The listed house is probably a gatehouse/caretaker’s cottage.

This is also your Open Thread. Going to look an any Open Houses as spacious as this?

Here’s a look at some new mortgage meshuggeneh from Burbed reader nomadic.

Housing advocates push for new type of subprime loan

The Dignity Mortgage would have a higher rate for higher-risk borrowers but include rate cuts after five years of on-time payments.

By E. Scott Reckard, Los Angeles Times; January 28, 2013, 5:53 p.m.

PHOTO: Pattie and Ollie Sibug would like to buy their San Diego town house, which they are renting for $1,750 a month. They are among those who may benefit from a proposed subprime mortgage program. (Allen J. Schaben, Los Angeles Times / January 29, 2013)

With home prices rising, interest rates falling and builders building, some prominent housing advocates are calling for a new kind of loan for buyers with lower incomes or bad credit.

They’d like to call it the Dignity Mortgage, but it has another name — one that’s become more of an epithet since the housing crash: subprime.

Applicants might include people caught in the early stages of the mortgage meltdown who have since rebuilt their finances, said Faith Bautista, who heads the National Asian American Coalition.

"They lost their work, their homes and their credit scores four or five years ago," Bautista said.

And let’s see what nomadic has to say about this idea.

These people are pushing for a mortgage that not only gives them better terms after five years of timely payments (which seems reasonable) but they want the extra interest paid during the "trial" period REFUNDED to them after those five years. In other words, the banks take more risk but don’t actually get paid for it in the end. Not to mention all of the other extra costs of the program (e.g., "extensive" financial counseling). WTF? Also thought it ridiculous that the rate goes down to what people with "sterling credit" and 20% down are paying. I haven’t done the math, but I suspect people aren’t necessarily paying off 10% of the purchase price in the first five years of their loan.

Think this is a better way to treat the poor people who shouldn’t have been buying houses at all but want another swing at the property piñata?  Or was it all the banks’ fault from start to finish? Aaaaaaaaaand, this is an Open Thread.

We love flips.  Take your vintage crapbox that hasn’t been updated since the original owners signed the restrictive covenant, let it marinate for 57 years and mix thoroughly with a cash sale.  Wait 3–6 months and then garnish with new appliances, new paint, new countertops. Of course it’s the same old house under the makeup.

Today’s Los Gatos lovely was sent in by Burbed reader nomadic.  See how long it takes you to figure out what’s wrong with this picture.

135 ANNE Way
Los Gatos, CA 95032
$1,100,000

4 Beds 
2.5 Baths 
2,299 Sq. Ft.
$478 / Sq. Ft.
Built: 1964 
Lot Size: 8,050 Sq. Ft. 
On Redfin: 26 days
Status: Pending Without Release
Property Type: Detached Single Family
View: Neighborhood
County: Santa Clara
Stories: 2
Community: Los Gatos/Monte Sereno
MLS#: 81243731

Huge lot. Incredible Gorgeous tree-lined street in highly desirable Los Gatos neighborhood! This home is another SVHOME renovation that includes stunning remodeled kitchen featuring granite counters, new appliances, new lighting and laminate flooring; baths feature extensive use of travertine stonework. New plumbing fixtures, vanities and lighting; plush new carpeting in all bedrooms, fresh paint

Let’s check in with nomadic on why this house deserves your attention:

Bought November 16, pergranisteel kitchen, new baths and some paint by December 26, when it was re-listed.  Instantly pending!  $284k price delta.

The flippers’ site: http://www.svhome.com/

Yes, the flipper’s have a site, including a ginormous animated photo-graphic that literally flips in segments while you watch.  They also have a page of all their pending properties, including this one.  Most of the others have a virtual tour.  This one does not.

This one also does not have any photos of that stunning remodeled kitchen featuring granite counters, new appliances, new lighting and laminate flooring. The flippers are asking us to take their word for it about the extensive use of travertine stonework.  They wouldn’t even give us a peek at the plush new carpeting, fresh paint.

Although we are giving you a really good ogle at those sturdy power transmission lines running through the back yard.  Now, check out this unbelievable listing history, courtesy of Zillow:

Are you sure there was a flip here?  Really super sure?  Because if there was, it’s still selling for less than they tried to get for it five years ago. (And according to Redfin, they were trying to sell it in 2006 as well.) The November sale price is an eye-opener.  Looks like after five or six years of chasing the market down, the owners finally bailed.  Just a month later it’s back in seven digit range.  All it took was a little pergranisteel and traverstone.

As the RBA Bubble 2.0 continues expanding, look for more overdone listing copy.  This has been Scientifically Proven.  Thanks very much to Burbed reader nomadic for passing along this AMAZING find from the BEST real estate section in the UNIVERSE.

The Most Gorgeous and Pristine of Them All

SPREAD SHEET December 27, 2012, 9:32 p.m. ET
By SANETTE TANAKA, The Wall Street Journal

What is a fabulously awesome way to sell an incredibly terrific home? Try a little hyperbole.

Spread Sheet asked real-estate listings company Zillow to analyze 14 enthusiastic adjectives like “amazing,” “beautiful” and “fabulous” in home listings going back to 2007. The findings: For homes priced at $1 million or higher, overall hype is up more than 58% from five years ago.

“Agents are always looking to give something a little pop, anything to catch people’s attention,” says appraiser Donald Boucher, president of Washington, D.C.-based Boucher and Boucher Inc.

What are the most commonly used adjectives? “Beautiful” ranks first in the select list, appearing in more than a quarter of luxury home listings. “Great” comes next at 21.6%, followed by “gorgeous” at 9% and “fabulous” at 6.9%. The word that saw the biggest uptick since 2007 is “pristine,” which has seen a nearly 140% increase in use.

The words we keep noticing are “Regular sale” and “Not a short sale” and “Honest, we swear, no foreclosure here” and “Ignore those rude letters from the bank!”  But we’ve seen “pristine” as well.

This also reminds us of an observation from Freakonomics, where realtards let each other know which houses are utterly skippable by using the most overblown adjectives possible.  A house worth seeing will have specifics instead.  So you’d want to check out a “Vintage bungalow with hardwood flrs, cherry cabinets, granite & SS appliances inc Sub-Zero fridge” but maybe pass on the “Stunning house, great neighborhood, beautiful find, WOW!” that sounds very excited but describes nothing.

Some Special RBA house marketing terms:

• state-of-the-art
• dedicated server closet
• Excellent cellular signal
• Close to Google
• Walk to 3 coffee shops
• Eco-friendly landscaping
• 8888888

There are several types of housing awesomeness we cover.  There’s the high-priced crapshack, the WTF You’re Kidding, the completely overdone custom home, the adorable domicile with serious location fail such as an international airport.  Then there’s the tried and true House Flip.  We all love flips because they all use the same formula.

1. Buy crappy house for cash
2. ?????
3. Profit!

Have a look at what Burbed reader nomadic found for us in the wilds of Los Gatos.

15588 BENEDICT Ln
Los Gatos, CA 95032
$950,000

3 Beds
2 Baths
1,456 Sq. Ft.
$652 / Sq. Ft.
Built: 1948
Lot Size: 9,625 Sq. Ft.
On Redfin: 34 days
Status: Active

Start work tomorrow! Rare opportunity and no waiting. Permit fees have been paid and plans are in hand for a complete remodel/addition of this cute 1500 SF. 3 Bedrooms, 2 Bath home with spacious kitchen/greatroom on a large (9625 SF), level lot with an existing garage. To help save even more time and money, the interior of the home has been stripped to the framing. Great location with L. G. schools

Have they left out Phase 2? Let’s hear from nomadic:

A flipper bought this house in May, stripped the house down to the studs and put it up for sale in November.  He thinks those services (plus permits) are worth $175k.  Is the market really that crazy?  Maybe not, given that it’s still active after 30 days.

Ooh, the plot thickens: “Fixer Upper, Seller is Licensed Real Estate Agent”

The “Zestimate” is $945k.  Unfortunately, the prior listing isn’t available on Redfin so we can’t tell if the current seller did anything at all, other than buy at a favorable price – which actually probably wasn’t particularly good, given that this nearby house sold in July for $700k (larger but with Hwy 17 in the back yard) before being flipped – as a FINISHED house – for $999k.

To help save even more time and money, why not leave the flippers out of the entire transaction?  Which leaves a realtard out too!

Bunus: Check out the neighborhood. Great for teens!

The secret to being rich is to start off rich.  Don’t believe us?  It’s true, and it’s how Mark Zuckerberg bought his house in Palo Alto.  Let’s hear from Burbed reader nomadic, who alerted us to this excellent opportunity. To go bankrupt!

Here’s the letter I got in the mail offering super-low interest rates on a loan secured by a stock portfolio.  The beauty of it is that the interest rate goes down the higher the loan amount – the opposite of what working stiffs get when they want a super-jumbo loan to buy a house in the RBA.  (Then again, the larger the stock portfolio, the smaller the risk?)

This must be how Zuck got his ultra-low interest rate on his mortgage.  Interesting that they don’t mention a mortgage in their “average loan rates” example.

The headline above doesn’t say pay three to four percent interest.  It says pay three quarters of a percent interest.  Let me repeat that.  You can buy a house at 0.76 percent interest.  All you need is a sufficiently healthy stock portfolio to borrow at least $3.5 million against. 

Whoops.  All you need is an investment portfolio at this particular online brokerage.  For loans under $50K, you need to have twice that in your brokerage account.  With this firm.  But!  Remember about rich people getting richer? The more you have, the more you save. The more you have, the more you can borrow, too.  If you “qualify” and have an account over $100,000, you could borrow against 85% of your assets.

Remember how well things went when anyone who could fog a mirror could buy a house for nothing down? This is an even better idea! Borrow against your investments, and if the underlying value drops, then you have to pay some of the money back immediately, or sell assets to cover it. Good thing you’ll have a bunch of equity in your new house that you could borrow against to pay back your brokerage account you borrowed against in the first place.  This sounds like a perpetual equity motion machine.

Open your portfolio, open your wallet, open your eyes, and we’re opening this thread to any topic you wish.

Burbed reader nomadic informs us of a major Google Maps update.  Guess it’s not rolling out to everyone at once because we haven’t seen it yet.

Awesome sauce! This is going to change real estate, because now, who needs to wait for an Open House or an agent to put together a Virtual Tour?  With this new feature, you can see a home’s interior layout, room sizes, fixtures and decor with just a few mouse clicks.

Bunus: Think of all the homes that will now qualify for the Burbed Good Housekeeping tag of approval!

Are you feeling handy? Here’s the kind of property you should be perusing.  Our thanks to Burbed reader nomadic for this luscious landholding in Los Gatos.  Um… too late!

18 FILLMER Ave
Los Gatos, CA 95030
$899,000

2 Beds 
1 Baths 
992 Sq. Ft.
$906 / Sq. Ft.
Built: 1938 
Lot Size: 8,400 Sq. Ft. 
On Redfin: 42 days
Status: Pending Without Release
Property Type: Detached Single Family
View: Neighborhood
County: Santa Clara
Stories: 1
Community: Los Gatos/Monte Sereno
MLS#: 81234420

Extraordinary opportunity right off of Los Gatos Blvd. One of the last homes on this street with renovation/complete redo potential. Majority of land is behind the existing structure. Old “barn” (one maybe two car garage), wishing well, bbq pit and extra dry storage.

Here’s what nomadic had tied to the rock that broke our window:

Tear down for $900k, listing by California Dreaming Real Estate and property is complete with a wishing well.  Yet somehow the listing price just isn’t outrageous enough.

That’s why it went pending! Massive overbidding brought the selling right price back up where it needs to be! Good luck finding the house, though.  But with fun neighbors like these across the street, once you do maybe they’ll help you decorate.

Bunus: House is assessed for $140K, which means vintage everything inside! Too bad only the buyer got to see how vintage.