97°Mostly Cloudy

GDoN Revisited by Hipchickindc – 2812 26th St, NE

by Prince Of Petworth November 30, 2012 at 11:00 am 14 Comments

Hipchickindc is a licensed real estate broker. She is the founder of 10 Square Team and is affiliated with Keller Williams Capital Properties. 10 Square Team is a princeofpetworth.com advertiser. Unless specifically noted, neither she nor the company that she is affiliated with represented any of the parties or were directly involved in the transaction reported below. Unless otherwise noted, the source of information is Metropolitan Regional Information Systems (MRIS), which is the local multiple listing system. Information is deemed reliable but not guaranteed.

Featured Property: 2812 26th St NE
Legal Subdivision: Woodridge
Advertised Subdivision per Listing: Woodridge
Original List Price: $319,900.
List Price at Contract: $319,900.
List Date: 09/27/2012
Days on Market: 9
Settled Sales Price: $329,900.
Seller Subsidy: $11,000.
List to Net Sales Price Ratio: 99.69%
Settlement Date: 11/21/2012
Bank Owned?: YES Short Sale? No
Type Of Financing: FHA
Original GDoN post is: here.
The listing can be seen: here. To see pics, click on the camera icon after opening the link.

This is the first foreclosure property that has been featured on Good Deal or Not Revisited (GDoN-R) for some time. There are certainly fewer foreclosures available because when the prices and market activity picked up, it became possible for some sellers to sell properties before they became a financial burden. The other reason we have not seen many foreclosure sales is because of a city ordinance that passed in November 2010 that quite effectively brought foreclosures to a halt in DC.

In prior GDoN-R posts, commenters have noted that it has become a challenge to even buy properties in affordable price ranges (and, yes, sorry, but in DC, this is considered an “affordable” price range) because they are competing with cash investors. This property was owned by Fannie Mae, which has a policy of considering offers only from owner occupants within an initial offering period. We know that that the financing used by the buyer is FHA, so this property did go to an owner occupant.

Every once in a while I have clients who really prefer to purchase a detached single family house in a city largely populated with rowhomes. There actually are several neighborhoods where you can still buy a detached house in the District of Columbia for under $350,000. Here’s a list of the detached houses that are currently active and priced under $350,000 I’ve ordered them in reverse alphabetically, so Woodridge (the neighborhood of the subject property) appears up at the top.

The listing agent for 2812 26th St NE was Sonya Abney with Cosmopolitan Properties Real Estate Brokerage. Noel Sesay with W.C. & A.N. Miller, Realtors, A Long and Foster Company, represented the buyer.

  • sbc

    what’s the point of it selling for $10k more than asking with an $11k subsidy? Why not just sell for asking with a $1k subsidy, or sell for $1k under asking?

    Is this a bank-owned home issue?

    • Seveneye

      This is very common when the buyer is strapped for cash. We did that when we bought our house. The seller had a very specific amount they wanted to net from the sale but we needed to roll some of the closing costs into our loan so we got a seller subsidy but increased the purchase price by a corresponding amount.

    • Anon

      Maybe it was a way to incorporate the closing costs into the mortgage, if the buyer couldn’t afford to cover the closing costs up front?

    • Anonymous

      It does a couple of things: It inflates the values/comps for other similar homes nearby. So, for future sales, the comp for this property will read 329,900K instead of 319,900K, which will be better for other similar houses in the future that will be put on the market and will know how to set their price based on other comparable recent sales. The seller subsidy means that the buyer doesn’t have to bring 11K to the table at settlement, which makes it easier for many buyers who may not have xxx amount saved for downpayment/closing costs. You’re right, though, that the net price is just 1K under the original asking price. The only thing I’m not sure about is why the contract/settled price was 10K more than the original asking price but my best guess here would be that there were multiple offers or a bidding war and obviously the seller went with a higher offer/better offer.

      • Haile Unlikely

        The buyer effectively bought $11,000 in cash from the seller and financed it over the term of the mortgage while still having a respectable bottom-line offer. That is quite common and is not suggestive of a bidding war.

        • Anonymous

          Please read my entire response. I explained what a subsidy means in a RE transaction. I also explained how the final sales contract price will affect future homes sales of comparable homes in the area and why that is listed as opposed to the net price (actual price) when factoring in the subsidy. The only question that I had is why the final sales price is higher than the original listing price (by about 10K). This tends to be less common than seeing a home sale where original list price includes a seller subsidy. Under the example where there is a subsidy AND a higher sales price than asking than original is a little unusual and makes me think that there was some sort of bidding war, escalation clause or auction-type thing going on.

        • Anonymous

          Why would you ask for a subsidy (typically because you don’t have or don’t want to bring as much cash to the closing) yet you’d agree to a higher final sales price? So you could ask the bank for a higher loan? Why would anyone do that intentionally?

        • Haile Unlikely

          Even in the absence of a bidding war, offering $11K below the asking price is a weak-ass offer. That’s why.

          • Anonymous

            ?? By asking for a seller subsidy, you are not asking for a final sales price 11K under the listing price? That’s not how a seller subsidy works in RE transactions.

          • Haile Unlikley

            Please then explain how it does work.

        • Haile Unlikely

          Inflating the settled sales price beyond the net-to-seller amount and applying the difference to closing costs is a straightforward and common mechanism by which to convert part of a mortgage loan into usable cash.

  • Househunter

    Does anybody have a take on what it’s like to live in this neighborhood?

    I often pass through here via Franklin Street while leaving town on the weekends and I’ve long admired the housing stock, trees, and the large public park and pool nearby. But it also seems to lack retail and easy access to public transport. No idea about the overall quality of city services there or the level of crime.

    • I live nearby. That area is quiet, low crime. Houses are cheap.

      Downside is no metro and general lack of retail. However the retail front is changing with the new Costco nearby and lots of other stuff in the pipeline. I would say this area is a good value if you don’t need metro and will appreciate in the coming years as Ward 5 develops.

  • rstu

    At what point are cash investors maxxed out then? It Petworth it seems to be mid to high 200s, is it higher in the rest of the city? Or is Petworth, and parts of Woodrige, the only places where houses go under 300k any more?


Subscribe to our mailing list