Morristown Knife Catcher

Knife Catcher – A buyer during the decline attempting to time the bottom and catch a price reversal. Since prices generally decline for long periods in a real estate slump, there are many buyers who buy too early and pay too much thus causing financial injury.

There were two really risky sides during the Great Housing Bubbles - the people who used their houses as second incomes and HELOCed to high heaven and the other group that was afraid to be priced out so ran to buy any property at any price fearing if they did not buy right then they could never buy.

Todays story is about a homeowner that bought at the wrong price and at the wrong time. It difficult to tell if the owner purchased the house as a home or as as a flip - there are lots of listed upgrades during less than three years of ownership. There was no HELOC heaven in this case - just knife catching.

Here is a look at the house -






Here is the property info

TOTALLY RENEWED, 5 Bedroom 3.5 Bath, beautiful Gleaming wood floors, Updated Kitchen, New Full Bath with whirlpool tub dry sauna, possible mother daughter suit, very new appliances and systems including HVAC. This home has been meticulously maintained and upgraded, including these upgrades, Electrical System, Roof, Air Filtration, Windows, Kitchen, 2nd Master Bedroom, New Stone Patio, Sidewalk, & Porch, New Outdoor Landscaping and Lighting... All on .84 Acres of wonderful land.

"Renewed" - like a book? The description states the kitchen was updated but it looks more 1990s than 2000s. A huge number of improvements are listed - HVAC, electrical system, roof, air filration, windowns , kitchen, landscaping with lights. These are all very expense renovations.

Here is a look at the finances -

• The house was purchased in Sept. 2005 for $650,000.

• The first and only mortgage is from Sept.. 2005 is for $520,000 taking with Wells Fargo.

• The current sales price is listed at $599,990.
  

This was a rare sight - an owner putting down a full 20% on a property during the bubble. And 20% for this property was a hefty $130,000. Either the upgrades were done prior to the current owner - or the owner sunk alot of money in this property.

The realtor's website still shows the listing for $649,990 - so the property has already been reduced $50,000. It looks like the owner has to sell - lowering the price so much less than the purchase price. The property is listed through a realtor - so a standard 6% reduction is assume off the sale price. After the realtor's commission, and if the property sells for the full asking price, the current owner will take a hit of at least $86,000. And if the current owner paid for the property to be "renewed" the loss could easily be double or triple the amount - which is a serious financial injury for most people.