Last week we told you about Courtney Hoogervorst and her fellow Phoenix Condo homeowners being forced to sell their Phoenix Condo units. Courtney purchased her condo for $93,000 cash last year, has put in over $15,000 in updates and is being forced to sell her unit for less than she has into it. Another thing to take into consideration is the value of most properties in Phoenix has gone up around 9% over the last year.
The Buyer and a real estate representative for him have both contacted me. They told me that the information I provided in the first article is wrong and should be corrected and I have agreed to look into it further. The numbers contained in the previous article for sales of those units came straight from the tax records. I will give their side of the story as it was relayed to me, but I will also let you know why I still do not agree with what is being done to Courtney.
Their first claim is the units that were sold for $160,000, $124,500 and $118,000 should not be listed because Mr. Karl overpaid for those to make the Seller’s whole on what they owed.Of course, if I owed $160k on a unit that may be worth only $110k and I could sell it for what I owed I would jump on it. Who wouldn’t? I would ask, If Mr. Karl is willing to overpay to make them whole, why would he not be willing to pay the money Courtney has into her unit in the last year to make her whole?
They also thought that the picture I painted was unfair because I only showed the top of the sales list which was the most expensive. That is true, but these units were also the larger 1066sqft units like Courtney has, and with Courtney’s updates hers would be considered towards the top of the list.
The next complaint they had was I showed a bunch of units that Mr. Karl purchased in a bulk sale that are shown in the screen shot from the tax records as selling for $108,154 per unit. These units are the same exact floor plan as Courtney has. Mr. Karl states he did not purchase these for $108k, but they were a part of a bulk sale and that he paid $90k per unit.
Here are the details of his bulk sale according to the tax records:
Mr. Karl purchased 135 units at $12,150,000 total price.
That works out to $90,000/unit.
The units that sold broke down in the following way:
There were 29 units that were 1066 sqft, which is what Courtney owns.
There were 33 units that listed as 969 sqft.
There were 32 units that listed as 794 sqft.
There were 9 units listed as 720 sqft.
There were 16 units listed as 649 sqft.
And there were 16 units listed as 449 sqft.
If you take the total price, divided by the total number of units, this would indeed show a total purchase price of $90k per unit, but does anyone believe the 449 sqft unit is worth the same $90k as a 1066 sqft unit? I believe that is why the tax records show the 1066 sqft units at the $108k price in the tax records.
Let’s take Mr. Karl at his word that the $108k number in the tax records is just made up and not correct. That could be true, and I have no evidence to say it is not so that I will concede that point. What we do know is Mr. Karl paid a little over $12million for 112,347 sqft of condo units. That works out to $108.15 per square foot. So if Courtney has a unit that is 1066 sqft, then her unit would be worth a little bit over $115k.
I will also concede that the cost per sqft is not the same in a 449 sqft unit as a 1066sqft unit so this is not an exact formula that should be used either. But when we consider Courtney paid $93k for the unit, values have risen, let’s be conservative and say 8% since she purchased it, that would put it right around $100k, and then you add in her upgrades she has done. Well, you can see where this is going.
The system is flawed. Homeowners are being forced to sell at a loss with no moving expenses. Courtney is getting screwed. Now is what he is doing illegal? No, it appears not, and I stated that several times in the first article. But just because something is not illegal does not make it right to do. Courtney and the other homeowners deserve some protection. An accurate appraisal was never done as the appraiser never even stepped foot into Courtney’s unit. Again, not illegal, but not right either.