773 Rhode Island
Purchased for $1,212,000 with ten percent down and two variable rate loans in November of 2005, 773 Rhode Island returned to the market in March of 2007 seeking $1,395,000. It was taken back by the bank in September of 2008.
It’s now fourteen months later and the Potrero Hill view property has finally made it back onto the MLS as official inventory asking $909,900 (25% under its 2005 sale).
∙ Listing: 773 Rhode Island (3/2) – $909,900 [MLS]

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Comments from “Plugged-In” Readers

  1. Posted by Someone is taking a bath

    I’m not an expert, but in round numbers the bank loaned $1.1M and made something on the P and I payments, and now would net somewhere in the mid to high $800k if it sells(!!) near ask? I’m sure this is wrong.

  2. Posted by bornnraised

    So is this the first time in 14 months that the bank has tried to sell this place?

  3. Posted by OneEyedMan

    I appreciated the way you segued to this post from another thread where someone was asserting that banks have gotten so much more sophisticated and competant in disposing of their inventory. Now look at the pathetic MLS listing. This seems to be the norm for Realtors listing REO property – no photos, or really, really bad photos. I guess if you can get a bucket-load of money for doing essentially nothing then it’s not worth the extra effort that would produce a bucket-load plus a little bit more. I’ve viewed a small number of REO properties and they weren’t even cleaned. Why can’t the listing agent pay a service $250 to vacuum and clean the kitchen and baths? Because they would have to sell the place for $17K more to get their money back. It’s mind boggling that the bank sits on this for 14 mo and then goes to market with this crap listing.

  4. Posted by steve

    the was an excellent article in the new yorker in april about an REO broker in the southland. well worth the read as it provides insight in the banks’ mentality, but subscription required:

  5. Posted by EBGuy

    So is this the first time in 14 months that the bank has tried to sell this place?
    Come on folks, this IS still Ess Eff. If it takes this long, there is usually a backstory. Looks like they finally got the former owner (or tenants) out of the lower unit (confirmed) on August 7 of this year.

  6. Posted by tipster

    I assume that the bank put their REOs out to bid and picked the lowest offer from a very inexperienced realtor, who is probably earning a flat fee for the listing.
    The realtor won’t be getting any more money no matter how much this sells for, so why bother doing anything. Just list it low enough and an offer will come. If not, drop the price in two weeks until it does.
    The bank is getting exactly what they paid for: nothing.

  7. Posted by whatever

    Listing agent is not a noob, has been around for several decades. LOL.

  8. Posted by Delancey

    OneEyedMan — I’m pretty sure I saw this post prior to the comment about about banks doing a better job with their REOs.
    I wonder what the story is with lack of pictures–the agent did an otherwise reasonable job of filling out the listing, including a square foot stalking horse (per tax records). Maybe he couldn’t get inside the building and will do the full set of pics later?
    Regardless, listing agents need to realize their own name goes on these listings, and doing a crappy job reflects poorly on them, REO or not.

  9. Posted by annoyed

    People, please stop making ignorant comments about how crappy a listing is just because it INITIALLY has no pictures. Many listings start with no pictures and it has nothing to do with the quality of the place. Here’s why:
    Listings go into the system on Friday so they can make it into the broker’s tour on Tuesday. Usually the broker hasn’t had time to take a bunch of photos and upload them – they prioritize getting the listing up, not making the listing the best it can be.
    Usually after a few days the broker has taken some photos and uploaded them, and the listing gets updated, so it can look better to attract buyers to the open house the following Sunday. You can see this pattern in listing after listing after listing. If you’ve actually been in the market for a home or are in the industry, making remarks about the quality of a property based on the initial listing’s lack of photos is either disingenuous or a really poor reflection on your ability to understand how the process works.
    I am not an agent, and I think all new listings should have pictures, but I think the agents’ behavior makes sense given the system they use.

  10. Posted by The Drizzler

    I’m not an expert, but in round numbers the bank loaned $1.1M and made something on the P and I payments, and now would net somewhere in the mid to high $800k if it sells(!!) near ask? I’m sure this is wrong.
    I’m not sure if this was meant to be sarcastic or not…can the original poster clarify? If you’re honestly confused about this could you re-phrase your question? Because right now I read it as “Wait, the bank stand to lose money here – that can’t be right, can it??” And the answer to that question is a rather obvious “yes”…

  11. Posted by EBGuy

    The former owner of this place was (surprise) also involved with another property that has been entangled in lawsuits, 11 High Street #201.
    This lawsuit (quoting a previous suit) alleges that the 11 High St. property “would be purchased in the name of the defendant…utilizing [his] good credit to obtain a mortgage loan, while the plaintiff would furnish all the down payment and closing costs” for the Property and that “immediately after close of escrow upon the two parcels, [defendant] would convey, by quit-claim deed his interest in the [Property].”
    Needless to say, hilarity ensues (sue being the operative word) and ownership of the High St. property is still being litigated. Million dollar financing, of course, on the original loan (securitized under Bear Stearns Alt-A Trust).

  12. Posted by diemos

    So EBGuy, exactly how does it play in court when the plaintiff stands up and says,
    “Your honor. I entered into an agreement with the defendant to commit mortgage fraud and he double crossed me. I’d like to be awarded damages.”
    Does that usually get a lot of traction with the court?

  13. Posted by John

    Why does this property appear to have two addresses?
    [Editor’s Note: Always start with the links: RH-2 with a “Large Studio In-Law unit downstairs with views and large eat-in kitchen.”]

  14. Posted by EBGuy

    Does that usually get a lot of traction with the court?
    Yes. At some point, though, the bank finds out (see lawsuit in previous post).

  15. Posted by JimBobJones

    Well at least this place is several blocks away from the truly bad part of Potrero.
    The foreclosee in this case apparently thought they had an easy flip with all the months on and off the market. This place appears to have a bigger lot size than the typical Potrero lot (but that means 3171 vs. 2500), but only marginally more usable space given the shape of the lot.

  16. Posted by marina girl

    EBGuy, you da man. Keep up the digging. However entertaining this site is on its own, you add a whole new dimension. Thanks!

  17. Posted by auden

    I second marina girl. Keep it up EBGuy. Nice researching skills.

  18. Posted by EBGuy

    As they say, you can’t make this stuff up. Here’s a bit more from the 11 High Street case that may shed some light on 773 Rhode Island.
    Defendant delivered actual possession with housewarming card congratulating me… Defendant induced me into a very vulnerable position, knowing I was relying on him and justified in assuming he would not act contrary to my welfare because of our special relationship as friends. The friend I laughed with every day, tricked me; he had no intention of signing the security instrument, putting me at risk of great and irreparable harm for more money, for his unjustifiable enrichment… 45 days later he served a 5 day notice to quit — trying to evict me from my home! … he accepted over one hundred thousand dollars; one-third of which was used to buy his house[I believe this is the Rhode Island property]… Claimant paid an additional $55k in Oct. 2006 to cure the foreclosure, he told the lender to return it.

  19. Posted by DanielEvan

    I’m trying to wrap my head around the case language, but having some difficulty. This is of particular interest to me because a relation of mine is in contract to buy 11 High Street #204.
    Can I ask if this is the alleged summary:
    Teresa Murphy, residing at 11 High Street #201 used Clyde Smith as a straw buyer to purchase 11 High Street #201?
    Teresa’s got an case against Clyde (CGC-07-467019).
    Mortgage Electronic Registration Systems has a case against both Teresa and Clyde, also Eric McGuire (?) and the 11 High Street HOA (CGC-08-473479). McGuire seems to have loaned Murphy $250k with 11 High Street #201 used as collateral. MERS wants all defendants to let them have the property.
    Countrywide Bank has a case against Clyde to leave 773 Rhode Island (CUD-09-629503).

  20. Posted by EBGuy

    DanielEvan, FWIW, Unit 204 at 11 High Street had a NOTS filed against it on August 10, 2009 (if you didn’t already know this, tell your relation’s relitter I want some of the commission). My biggest concern would be the strength of the HOA’s balance sheet (reserves, etc.). There only appears to be eight units in the association, and as of Feb. 1 2008, Teresa Murphy owed the HOA $7,485 (according to the case). It appears that the HOA has placed additional assessments on her unit since then (by my calculations ~14+k total). The HOA claims to be in a first lien position, but I certainly wouldn’t count on it given how MERS was left out of the loop when Murphy asserted her ownership. NLA, INAL. The good news is that there appears to be 5 long term owners.

  21. Posted by DanielEvan

    You’re amazing, thanks for the contributions!

  22. Posted by OneEyedMan

    OK. It’s a week later and let’s see how the hard-working Realtor has been using his valuable time to help the poor bank (we work hard for our clients, the seller) maximize their money. No more pictures in the listing. Same single shot on Redfin. Can’t find that it’s even for sale on Trulia. Even the agency’s own web site does not include this address among their current listings.
    I shopped for REO properties and purchased one this year. This is a textbook example of how it works. The listing Realtor doesn’t do squat to market a property. When they do hold an open house they send some junior sales person who knows nothing about the property. I have gone to REO open houses where the hosting warm body did not even know the current list price. The property we ended up buying had been on and off the market a few times. When my Buyer’s Agent called the listing agent the sum total of insight offered up into putting a deal together was “the bank wants a full price offer”. I really felt the listing agent did more to discourage than encourage a sale.

  23. Posted by Julie

    As an reo listing agent, I have to agree with you. Many agents are not servicing their reo properties. There is also NO merit in the comment you don’t have pictures of the property when it is listed on the market.You don’t get the list price until you do a BPO and it REQUIRES pictures. This is the very first thing you do for a vacant property. At least a front picture! I see it all the time and it is laziness. We also see, no signs, and no lock boxes when MLS says there is one. Also, yes the properties may be dirty,but that doesn’t mean the agent didn’t request the seller to authorize a sales clean-it just means it didn’t get approved. I deal with the type of agents you are talking about all the time-BUT we are not all like that! My listings are fully serviced-I have even vacuumed them myself!

  24. Posted by OneEyedMan

    Thank you, Julie. I’ll envision you as Annette Benning at the beginning of American Beauty. What really surprises me is that Realtors continue to complain about REO’s making bad comps because they’re “distressed” properties. But, by not servicing their REO listings they contribute significantly into the perception of how distressed they are. Why would you want to make a full price offer whan the listing realtor can’t take pictures, can’t get the property cleaned, and can’t be bothered to be present at the open house (if they can be bothered to hold one).

  25. Posted by SocketSite

    773 Rhode Island has fallen out of contract and is once again an active listing on the MLS at $909,900. Purchased for $1,212,000 in November 2005.

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