Things have been pretty scary in the real estate market since 2008. On that, most can agree. But no matter how bad they’ve gotten, some of us still consider ourselves very lucky, especially when considering the 12 Bizarre but True Real Estate Horror Stories presented below. Seller, agent, buyer…no one is safe! Read on, if you dare.
1. 3 vs. 1
Dean Foust originally shared his nightmarish experience in a Bloomberg Businessweek column. He and his wife were trying to sell a starter home in Washington D.C., circa late 1990s. They were asking $235,000 for the home. When they received a $226,000 offer with buyer demands that they cover $6,000 in closing costs, their agent prodded them into strongly considering the offer. Ultimately, they sold for $228,000 while honoring the closing cost request at the behest of their agent. Pre-housing crisis, Foust said, homes in this neighborhood were selling for between $650,000 and $700,000. “In hindsight, I felt that I’d been negotiating against three people–the buyer, his agent AND MY OWN AGENT,” Foust wrote.
From the Omaha Homes for Sale Blog: real estate agent Troy Trumm was under the assumption that it was his fiduciary duty to get his clients the best deal possible. That’s why he was shocked when another agent called him to let him know there were buyers interested in his listing, and that they would be willing to pay the full asking price in spite of their offer for $6,000 less. “Of course the reason this agent told me this was because he wanted to make sure that the offer got accepted, so that he would get paid. He knew he was backstabbing his clients by putting his own interests above theirs,” Trumm said. As luck would have it, Trumm’s listing received a higher offer before the other could go to closing, so “the Backstabbing Buyer’s Agent had gained nothing from his evil ways,” Trumm added.
New South China Mall may be one of the worst commercial real estate investing disasters of all time. “Completed in 2005,” writes MSRE/CFE Vernon Martin for Internationalappraiser.com, “it is the world’s largest mall with leasable area of 7.1 million square feet, gross building area of 9.6 million square feet, space for 2350 stores, and a 99.5% vacancy rate.” Martin visited the mall in 2011 and snapped some pictures. What should have been a wonder of modern retail looked more like a set-piece from Dawn of the Dead. Nevertheless, Martin told CRE Online in a recent interview, “the mall manager has announced plans to build 2 million more square feet.”
4. Meth Heads
Dawn Turner purchased a home in rural Tennessee and found out two years later, at the time of sale, that the home had once belonged to a person, who was in jail for producing methamphetamine on-site. The revelation also obligated Turner to take the necessary steps of decontaminating the home and ensuring it was fit for resale, costing him and his family a whopping $16,000 in the process. Turner now runs MethLabHomes.com, and tries to prevent such actions from happening to others.
5. Subdivided and Conquered
Attorney Ken Koenen of Pleasanton, Calif., shared one real estate horror story involving some clients, who owned a 10-acre a lot (with home)–total price of $390,000–that they planned to subdivide into two 5-acre lots, selling off the vacant lot and refinancing the house lot. In 2009, when they tried to sell, they discovered that the lender, title company, and/or the escrow company erroneously showed the assessor’s parcel number on the deed of trust, but showed the legal description of the vacant lot. “Now, they could not sell or refinance,” Koenen said. “They attempted to contact the lender and the title company to get them to correct it, but just got the run around.” Since the original discovery, the value of the lot has plummeted, disabling the clients from selling for the amount of the loan. “Nor can they refinance to get today’s interest rates,” Koenen added.
6. Home Robbery
A 76-year old property owner and a real estate agent in La Jolla, a prominent part of San Diego, Calif., were accosted by an armed man at a showing in August 2012. The man demanded to know “where the jewelry was,” reported U-T San Diego, and made off with jewelry and fur coats, but not before firing into the ground and hitting the property owner with a piece of shrapnel in the process. No serious injuries were reported, and no arrests have been made at this time. Bob Kevane, a former president of the San Diego Association of Realtors, told U-T San Diego the incident was “pretty unique.” Still, it highlights the vulnerabilities that exist in the home sales process.
7. American Real Estate Horror Story
The celebrity-entertainment site TMZ reported on Aug. 18, 2012, that 43-year old actor Morris Chestnut (American Horror Story) recently got involved in a little real estate horror story of his own. After purchasing a 5,000+-square foot home in 2007, Chestnut tried to unload the property this year for $3 million, $300,000 less than he paid for it. As if that wasn’t bad enough, the final sale price came nowhere close at $2.3 million-a full $1 million loss on his initial investment, and a strong indicator, at least in the Hidden Hills, Calif., area, that things aren’t getting better any time soon.
8. Hamptons Wannabes
In the book The Hamptons Real Estate Horror Show by Anonymous Times Two, the authors recall their story of Wesley and Amanda, two small children, accompanying Wesley’s parents on a supposed house shopping trip to the Hamptons in New York. The eager couple insisted on seeing a $6.8 million home, commenting how eager they were to buy the entire time. Then, before leaving, little Amanda complained about the size of the rooms, and with the snap of a finger, the deal fell through. “It happens a lot,” Anonymous No. 1 told the Sag Harbor Express in a recent interview, adding that the story was classic for its demonstration of client egos and for the reality of how a deal can dry up in an instant, and not always for the best of reasons.
9. Home Wrecker
VIP Realty representative, Regina Stockwell, in a piece for InvestingAnswers.com recounted one tale of a man who lost his home to foreclosure, and made certain the bank would remember his name. With nothing left to lose, the Texas resident poured concrete down all the drains, yanked the porch from the house with his truck, and left holes in each of the walls–sometimes multiple holes in one wall, as a final farewell. Stockwell said that the former tenant did such a number on the place that the city government had to demolish the entire structure.
10. Houses of Horror
It may seem hard to believe, but there is a breed of real estate agent, who specializes in the selling of stigmatized houses, or homes where great tragedies, crimes, or traumas have taken place. Perhaps the most famous currently on the market is that of Jeffrey Dahmer. The notorious cannibal serial killer is credited with more than 17 confirmed murders, and the first one happened at this 2,170-square foot home currently on the market for $329,000 in Akron, Ohio. The seller told The Daily Beast that it was a lovely home once one could “get past the horror factor.” Hmm. Good luck with that, Mr. Seller.
11. Moving Day Disaster
In a piece that originally appeared on the Zillow blog for Yahoo! Real Estate, Seattle resident David Tobey was moving to a new residence within the city when his movers turned what should have been a joyous day into an absolute nightmare. Tobey advised movers from Neighbors Moving Company to park in front of the building, but the company reps thought they knew best and, fearing a ticket, decided to park on a steep hill close to the building. Moments later, the new home owner watched helplessly as the truck’s brakes failed, taking about half his stuff with it on a ride that would end in the demolition of two parked cars. Tobey lost a stereo, a bed, some plates and glasses, in the adventure. Plus, his move was delayed four hours. All that, and Tobey got billed by the moving company!
12. Utility Theft
In a recent piece on MSN Real Estate, one landlord/owner going by the name of “Noroom” shared a real estate investing horror story involving a tenant, who had the utilities cut off and “tapped into my property’s electrical lines with an extension cord and ran four heaters off it for a month, until it burned through on the new hardwood floor.” Additionally, the same tenant “stripped the wallpaper and moldings and sold them to a wood-supply business,” Noroom added. The tenant was caught by another tenant when trying to steal fixtures. At that point, the damage totaled around $3,700, “the cost of his mountain bike, he told me once,” Noroom said. While the landlord was busy paying off the debt left behind, the tenant has since moved out. No reparations have ever been made.
Whether you are an owner, a seller, an investor, or just an enthusiast, real estate investing can and does lead to some pretty “interesting” stories. Do you have a strange, bizarre, humorous, or just hard-to-believe real estate investment story you’d like to share? Do so in the comments below. We’d love to hear from you!