Are The Banks Still The Problem? The 4-Bedroom Penthouse At 6101 N. Sheridan In Edgewater
We last chattered about this 4-bedroom duplex penthouse in the Park Edgewater at 6101 N. Sheridan in Edgewater all the way back in July 2010.
See our prior chatter here.
At that time it was a short sale listed for $799,000.
Over 2 years later, it is still listed and is still a short sale only the price is now down to $399,000.
It is also now under contract. It has been under contract for nearly 5 months.
Built in 1930, the unit has 3 of its 4 bedrooms on the second floor, or duplex up. It also has a sunroom.
The listing says that the kitchen is “original” but that the baths had been renovated to spa caliber.
There is also a sauna and steam room.
The unit doesn’t disappoint in its penthouse status, either, as it has a 3100 square foot private roof deck with views of the city and the lake.
The property has central air and an in-unit washer/dryer.
Parking is available for rent in the building.
A lis pendens was filed on this property in May 2009. That is about 3 1/2 years ago.
And still, the bank has not taken possession of this property.
Are the banks the real problem in this lackluster housing recovery?
A lot of the distressed inventory is sitting on the sidelines for years and years.
Wouldn’t it be better for the entire market to finally move some of these older properties off the books?
Why has this unit, for instance, been listed for sale for years?
Lumi Boldovici at Real Estate International Investment now has the listing. See the pictures here.
Unit #15I: 4 bedrooms, 3 baths, sunroom, 3300 square feet
- Sold in March 1989 for $265,000
- Sold in October 2005 for $675,000
- Lis pendens filed in May 2009
- Was listed in May 2010 as a “short sale” for $799,000
- Reduced numerous times
- Currently listed as a short sale at $399,000
- Under contract
- Assessments now $890 a month (they were $860 a month in May 2010) (includes heat, gas)
- Taxes now $4624 (they were $4257 in May 2010)
- Parking is rental for $150-$250 a month
- Central Air
- Washer/Dryer in the unit
- Private rooftop deck
- Bedroom #1: 20×17 (second floor)
- Bedroom #2: 15×14 (second floor)
- Bedroom #3: 18×11 (second floor)
- Bedroom #4: 11×10 (main floor)
- Sunroom: 18×12
I love this building in spite of its faults- it’s one of my fave vintages on the far north side. But I absolutely HATE this penthouse. This place was utterly destroyed and made outrageously ugly by the modern rehab and it doesn’t look to me like it’s possible to restore the vintage beauty, or even make it into a beautiful modern place, without spending another $400K doing that.
Additionally, the place is too expensive relative to the other units in the building. A two-bed recently sold for just over $100K, and there are a number of smallish one-beds for sale or recently sold in the $35K-$70K range. It’s never really a good idea to buy the most expensive house on the block, the neighborhood, or the building, especially when the second most expensive is about a quarter the price. You are better off doing the opposite- buying a cheap, small place in a neighborhood of expensive homes. This penthouse would do much better in a building like 5510 N Sheridan, where the other units in the place are in pretty much the same class as the penthouses, which are only incrementally larger.
This building is also a very high maintenance building, and I wonder if the owners have replaced the ancient furnace boiler that was converted to gas. From the sky-high assessments I was quoted for a “D” unit one-bed that was on the market last year with an assessment of $545 a month, I doubt it.
All in all, this unit will be lucky to sell for $399K.
Can add that it might be awfully difficult to get this place financed with the number of foreclosures in this building, the number of small apartments being rented, and the huge price difference between this unit and the rest of the building.
Laura — it’s under contract now. Whether they’ll get financing is definitely another question, however. Given the size and the outdoor space, $399k seems like a deal to me.
“This penthouse would do much better in a building like 5510 N Sheridan, where the other units in the place are in pretty much the same class as the penthouses, which are only incrementally larger.”
So you want them to move this unit to the other building?
I suspect there’s plenty of blame to spread around on this one:
1) The state of Illinois. The process here is such that it takes 2 years on average to foreclose.
2) The bank. This thing was under contract last year – for 5 months. Surely the bank had made enough progress during that time period to speed things up this time around. However, maybe everything expired and they had to start all over.
3) The agent/ seller. There’s no excuse on a short sale to not sell something quickly. You just don’t waste time trying to maximize the price – unless the seller is going to have a tax liability for the forgiveness of debt or is going to be stuck with a deficiency judgment.
if you meet a banker, kick him in the nutz and slap his momma. let him/her know it came from the groove and the rest of working folk around the world.
This is a pretty cool place. I’m not sure if the type of person who could afford $400k for a condo would want to chance living with people who paid $35k for their units. My grandpa lived very close to this building. Weirdos and students seemed to be moving there in droves when my parents sold his condo.
“You just don’t waste time trying to maximize the price – unless the seller is going to have a tax liability for the forgiveness of debt or is going to be stuck with a deficiency judgment.”
At the rate it’s going, they have just 6 weeks in which to close or face tax liability. Remember, the IRS forgiveness is expiring at the end of this year. With Congress dealing with the fiscal cliff issues right now- I don’t think there’s any way this gets extended with the lame duck Congress.
1) The state of Illinois. The process here is such that it takes 2 years on average to foreclose.
It’s the courts, actually. In Cook County, it has to go through the court system. If there are thousands in the pipeline, it takes that long to get to them.
But that’s not the issue really. We already KNOW that it takes, on average, at least 18 months for the bank to take it back in Cook County. But the lis pendens on this property was filed well over 3 years ago! What’s the delay? Why hasn’t the bank just taken it?
Oh, wait, they really don’t want to. So, instead, it sits here year after year after year impacting the building and the rest of the housing market in that neighborhood.
Every time I think, “we may be hitting a bottom” I see things like this and then I think “no, it’s going to be many more years.”
I presume that Gary meant that the law in the state of IL is the reason for the protracted foreclosure process. In other states, e.g., GA, it’s very quick (miss a couple of payments, and you’re pretty much out on the street), and it’s not because the courts there are so much more effecient or less busy.
Now this place is a penthouse… shouldn’t even be the same word as some 3rd floor unit of a mccrapbox walkup, those stupid realtors should be ashamed of themselves
I’ve been in this unit. Most of the ‘updating’ I think was done in the 60s. The kitchen looks to be the St. Charles metal stuff that was there ten years ago when I saw it. The place is really cool. Too bad there is only outdoor parking….
Great unit – for once a true PH. Too bad that 70’s high-rise cuts off its direct lake view. But I like it anyway. Price seems more than fair.
Laura,
I read your post after making mine, and you make some good points about loss of vintage character. But I think the place still has lots of character. I also agree with others who posted about the other units in this bldg. It would give me pause to spend $400K on a place with renters and people who paid less than 50K for their units.
weird, have driven past this building maybe 800 times and never noticed it. great unit though.
Someone always has to own the highest priced place on the block. If you are going to be that owner you at least need something special to validate the extra cost. At 399K this one has some of those hot buttons. I could see a couple with no kids that were considering a sleek new rehab in uptown or vintage condo in the north end of boys town making the notable location sacrifice for the added space and bragging rights of a true penthouse. How many people can say that they have a penthouse on the lake with a 3000 foot summer terrace. That is HUGE bragging rights and there are some people will be swayed by that factor alone.
Taxes assesments and parking costs seem ok. And looking at the photos I suspect that for less than 200K this could be a really nice space. I’d tackle floors first with 20K, spend up to 80K on the kitchen, 50K for the roof deck and sunroom updates, and leave 50K for misc work. That would allow you to have an excellent space to live in for a long time. With that investment in this hood there is no upside for a flipper or short term owner.
Could the hold up be on the bank end? We currently are trying to short sell our condo, and the bank is coming back with an appraisal value of $100K more than the offer on the table. Our agent is filing a complaint against the bank because their BPO is so out of line with the comps in the neighborhood.
“Could the hold up be on the bank end? We currently are trying to short sell our condo, and the bank is coming back with an appraisal value of $100K more than the offer on the table.”
KA- since you are in the middle of a short sale yourself- is anyone talking about how the law is going to change at the end of December so homeowners selling under a short sale will have to pay income tax on what is forgiven on the loan? Is your agent or anyone else trying to push a deal through before the law changes?
I don’t think people are aware of how big a deal it’s going to be. If you sell for $100,000 under what you owed- you’re going to owe income tax on that $100,000.
I am going to ask my short sale negotiator about the law tomorrow. A friend of mine who went thru a foreclosure said that one could use the money that they put down (i.e. their 20%) to offset the difference of what is forgiven. I forget the exact terms my friend used, but since I put 20% down (or 80K) and if the short sale is for 100K less than I owe, I would only owe taxes on that 20K difference not the whole amount.
Regardless, I appreciate this discussion because I am going to schedule an one-on-one with my lawyer and if this short sale isn’t going thru, I am going to figure how quickly I can do a deed in lieu before the end of the year.
I don’t do owner occupied mortgages, but KA, bank will still issue 1099 for a DIL. As to your other concern, if the banks appraisal is coming in much higher than your offer – ask if they can order a new BPO (if the appraisal is dated) and remind them how long the property has been listed for with minimal activity.
The bank is in no hurry to foreclose on this POS because they know that no buyer would pay anywhere near the value of the loan, so they prefer to keep from recognizing the loss for as long as possible. This is what happens when mark-to-market accounting rules are suspended for the too-big-to-fail banks.
I just love that penthouse, It’s my favorite unit on redfin.3000 sqft of 15th floor private outdoor space with lake views (even though somewhat obstructed )are just fantastic. You don’t even find that in your average multi million dollar condo.
The assesments look incredibly low though, I guess there might some heavy special assements going on with that building?
The assessments are ridiculously low, especially when compared with assessments on much smaller units in the building. The one-bed 1000 sq ft unit I was eyeing had an eye-popping assessment of $545 a month and a tiny 3-room comes in at over $300 a month, so this seems totally out of whack to me and I wonder if it is correctly stated.
If it is, is the unit getting heat supplied by the building, as the smaller units are, or does it have its own heating plant?
And yes, the building has had a number of specials over the past decade. This building used to be well-managed enough to manage things like roof repairs and such out of reserves, but now there seems to be a special for everything.
Another issue is foreclosures. At the time the bubble was just beginning to deflate, I looked at a D unit foreclosure that has, and this is NOT a type, $14,000 worth of assessment arrears. At that time, the assessments for the unit were just over $400 a month, so we are talking over 3 frakkin’ YEARS of assessment arrears being allowed to accumulate on the unit. Repeat that a few times and you have a building in bad financial trouble, with even more people being forced to sell and move, often at a loss, because they got a nasty surprise in the form of a $200 monthly hike in their assessments to offset the losses from the units in arrears. Somebody has to pay those heat and common area electric bills, you know.
This tells you that this is not a well-managed building. No well-run building lets assessment arrears accumulate. The money to run the place has to come from somewhere. so the rest of the owners will have to chip in more, often much more, to offset the losses. This all tells you how important it is to do discovery on any building you are serious about buying into. Better a few hundred to hire a lawyer to do this than to be hit with thousands of dollars in nasty surprises when you are bagged.
” I am going to figure how quickly I can do a deed in lieu before the end of the year.”
Good luck with that. Those are pretty rare, especially with teh bigger banks or the mortgage servicers. Personal deficiencies are becoming more common, although only with the smaller and regional banks, the high volume servicers and banks haven’t begun pursuing them yet.
I have a feeling the Mortgage Forgiveness Debt Relief Act will be extended at the last minute. Everybody is pushing for it, NAR, mortgage brokers. If it’s not extended then short sales will more or less stop immediately, and the market is going to shut down over night. It’s a no brainer, but our government likes to take things to the brink of financial collapse , so a bill like this being passed at the last minute is right up Congress’s alley.
The bank’s first BPO was in June and when it expired at the end of Sept, we asked for another BPO. The one in Oct, also came back at the same price as June’s — 295K. My agent has filed a complaint with Fannie Mae against my bank as they are not providing the comps to support this number. The offer on the table is 202K.
I spoke with my tax person, and since this is a rental property that I am selling, the tax forgiven law does not apply for me. So, for the moment, we are going to hold off on the beginning the deed in lieu process. My attorney feels that the bank’s BPO number works in our favor for a deed in lieu since that number is much closer to what we owe on the mortgage.
Homedelete — at this point, we are determined to get rid of this property. We stopped paying the mortgage back in the spring, and the bank has began the foreclosure process. We have an offer on the table, and we are fighting for the short sale.
If we lose the buyer because the bank continues to deny the sale and if the bank continues to hold fast to the BPO value of 290K, why would they not want us to work with us on the deed in lieu process? Couldn’t I show up at one of the many court dates and tell the judge I am ready to hand over the deed?
Please forgive my typos — small children are distracting. There needs to be an edit button.
This happened to a friend of mine who filed bankruptcy, the bank would not re-negotiate the loan at the market value, then the bank forclosed on this property quickly and sold it at market value… he has a home in florida, that he still has not forclosed on and its been 4 frickin years already
Did anyone else laugh at the tiny TV in the living room set 30 feet away from the couches?
“I have a feeling the Mortgage Forgiveness Debt Relief Act will be extended at the last minute. Everybody is pushing for it, NAR, mortgage brokers. If it’s not extended then short sales will more or less stop immediately, and the market is going to shut down over night. It’s a no brainer, but our government likes to take things to the brink of financial collapse , so a bill like this being passed at the last minute is right up Congress’s alley.”
Dennis Rodkin’s blog had some info worth reading…nothing conclusive though.
http://www.chicagomag.com/Radar/Deal-Estate/November-2012/Push-Is-on-to-Extend-Tax-Forgiveness-on-Foreclosures-Short-Sales/
Dennis Rodkin’s blog had some info worth reading…nothing conclusive though.
http://www.chicagomag.com/Radar/Deal-Estate/November-2012/Push-Is-on-to-Extend-Tax-Forgiveness-on-Foreclosures-Short-Sales/
Thanks for the link Dan. It’s going to be interesting to see what happens because there are a bunch of things that expire at the end of this month- and not just the fiscal cliff.
Congress essentially has this week and next to do anything. By the 21st, Congress will have recessed for the holidays. There’s no way anything will be done after the 21st. Do people really think we’ll get a resolution to the fiscal cliff, an extension of jobless benefits and the extension of the tax forgiveness on foreclosures within that short period of time? Congress will be lucky to do ONE of them.
I could see this expiring and the new Congress taking it up and passing something – making it retroactive.