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Niskayuna is a suburb of Albany, New York.

How to Lose $230K in Niskayuna Real Estate in 6 Months

In 2005, the house next door sat on the market for eight months because of the failure of the lazy blow-hard owner [a local TV newscaster] to do any maintenance for 6 years on a previously pristine property.   Basically, the house was overpriced and under-maintained to put it mildly.  Nevertheless, in Oct 2005 the house was, incredibly, bought for the full asking price of $315K with a no-money down "liar's loan" by a young woman who seemed on the surface to be financially well off as judged by the $50,000 SUV that she was driving.    Five days later, she put the house back on the market for $365K in an attempt to flip the house for a quick $50,000 profit.
 
When the house failed to sell immediately (our housing market coincidentally topped out in October 2005 when she bought), she temporarily rented the house over the winter of 2005-2006.  The renters were a couple of young dudes with fancy cars and no apparent jobs or means of support, one of whom was her sometime boyfriend. You can make a good guess at their off-the-books occupations.   She kicked them out in the early spring of 2006 when real estate agents complained about them making the house hard to sell because they were living on mattresses sprawled around the floors and were there all of the time.
  

A few months later in the late spring of 2006,  the For-Sale sign disappeared from the lawn.  Presumably, foreclosure proceedings by the bank making the loan for the house purchase had gone far enough that the "owner" could no longer legally sell the house.  My guess is that she never made a single mortgage payment to the bank or tax payment to the town.  She was the nominal owner for just 6 months and it would take at least 6 months of no payments before a successful foreclosure could be accomplished.  At this point,  she held a huge party at the house with an open swimming pool for all of her friends.   Then  she apparently just walked away and abandoned the house.
   

Fast forward to one year later and the house is now for sale for only $85K.

Before you put in your bids, here is the rest of the story.  The house remained abandoned.  No attempt was made to sell it.   No one bothered to turn on the furnace for this winter.  Everything was OK until  this February because of the unusually warm weather up until then.   In February,  the cold weather came and the pipes and toilets in the house froze and split and the house was flooded continuously by running water for days.  It took some time before neighbors noticed the problem from the outside--large icefalls coming out of each window.   The flooding had filled all of the internal downstair wall cavities which in turn leaked out from around the windows and formed the external icefalls.   All of the downstairs hard wood floors were continuously covered with an inch of water.  Nobody, including the Town of Niskayuna, knew who owned the house or whom to contact to get inside.   The house was either in legal limbo or owned in the form of derivative tranches by various disembodied legal entities.


A neighbor retrieving his runaway dog from the side of the house was the first to notice that something was wrong and called the town.  The town came and turned off the water in the street.  Unfortunately,  no one ever showed up to turn off the main water valve in the basement of the house, drain the pipes,  turn the furnace on, clear the fallen wet soggy fallen ceilings or to mop up the inside.  To add to this mess,  the town street valve was defective and water continued to leak into the house for another 8 weeks.  The wooden downstairs floors are now buckled and the drywall ceiling in the kitchen has collapsed.  What is going on inside of the walls and in the cellar is unknown.   All of this mess has been cooking in the spring sun for the last 4 weeks.


As a final irony, in the middle of this mess, an expensive black grand piano sits in the middle of the otherwise empty living room.  It was abandoned for unknown reasons by the original owner [the TV newscaster] when he moved.  I never heard it played once and it always had the keyboard taped shut with duct tape.  At a minimum,  all of the iron piano wires and cast iron frame must be rusted.  In  addition,  the pin block and sounding board have probably swollen and split.  So add the price of a grand piano to the total.


At long last, the owner, rumored to be SunTrust Bank,  sent someone out yesterday.  He was just what the house needed, another real estate agent!  The house has a swimming pool but it has not been maintained for a number of years and looks it. 

Since house lots are selling for about $100K around here and houses can be torn down for about $15K,   the asking price of $85K represents just the value of the building lot. 
 

This is probably a microcosm of things going on elsewhere in the housing market because of irresponsible lending policies by banks and irresponsible behavior by borrowers and speculators using seemingly "free" money.