How Could This Bucktown Single Family Home Sell So Cheaply?

I was digging into the single family home market in Bucktown the other day and I came across a couple of recent sales that look like they were great deals. Yeah, that's past tense. They didn't last long. In fact, you never even had a chance to buy this first one I'm featuring. Frankly, this one seems a bit odd if you ask me. You tell me what you conclude after you review the facts of that sale and please share any additional information you may have on this deal.

2152 W Caton, Chicago, Illinois 60647

The biggest outlier in the data set was the March 2010 short sale of 2152 W Caton. This wasn't reflected in the MLS until December though, which is why I'm a bit late to the party here.

2152 W Caton, Chicago, IL 60647

Here is the description from the listing along with a few stats on the home:

EXQUISITE REHAB BY RENOWED ARCHITECT OF 1891 NATIONAL LANDMARK HOME IN HISTORIC WICKER PARK! ORIGINAL GREYSTONE FACADE W/ALL NEW MARVIN WOOD WINDOWS. GRAND CUSTOM OAK FRONT & REAR STAIRS W/OAK HANDRAILS. BEAUTIFUL STAINED GLASS WINDOWS THROUGHOUT, CUSTOM CABS IN KIT W/GRANITE COUNTERS & CUSTOM BUTCHER BLOCK. HEATED MARBLE FLOOR IN KIT. 1 CAR ATT GAR, GAR DECK & REAR PATIO.

  • 5 bedrooms
  • 3 baths
  • 50 x 100 lot
  • 1 car garage
  • 5400 square feet
  • Purchased in May 2003 for $865K and then rehabbed
  • Best I can tell, mortgages were about $1.85 MM at time of sale

The home was previously listed for $1.995 MM as recently as September 2009, which, in and of itself, is neither here nor there but it is a data point. Check out this old Cribchatter post which has some interior photos. As usual, everyone there thought it was over priced at the time.

So...here's the kicker. It sold for $885K!  Admittedly I have not been inside of this home and can not attest to its condition. But that is way under any other home of that size in Bucktown.

How could this home go so cheaply? You draw your own conclusions but consider the following:

  • The same realtor handled this transaction that had it previously listed so I assume that realtor somewhat supported the previous list price.
  • It was a dual agency situation - the "listing agent" also represented the buyer
  • It never hit the MLS

Obviously the bank approved the transaction but how could this deal have been in their best interest? Why wouldn't they insist on listing it for a while in order to get some competitive bids? And no, it was not a cash transaction - there was a jumbo mortgage for 80% of the value. I've often wondered how a bank would look upon a dual agency relationship on a short sale. Now I have my answer.

Comments

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  • Are you kidding me? This happens all the time. The realtor will call his friend for a sweetheart insider deal and essentially lock it all down before the property even hits the MLS. Even when the property hits the MLS, the realtor won't show it or won't respond to bids. Banks are getting ripped off left and right by realtors, but they don't seem inclined to do anything about it. Meanwhile, prospective purchasers who are willing to pay full value for properties they want are getting one-upped by all of the realtors' pals. This is really a scandal waiting to be broken.

  • In reply to StayChisel:

    Yeah, that's kind of what I was wondering about here, but of course I don't know one way or the other but this looks like a screaming deal. The banks are idiots if they let this happen to them. They could easily prevent it.

  • In reply to StayChisel:

    I wonder how the neighbors feel about the awful comp on their block. Buyers will fixate on it.

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