PropertyShark Foreclosure Spotlight: Chelsea studio hits the auction block this week--here's what you need to know

Sponsored By Property Shark| January 27, 2014 - 10:46AM

In our new PropertyShark Foreclosure Spotlight series, we'll be taking an in-depth look each month at a NYC property scheduled for auction, digging up the relevant facts and figures from the property reports available through real estate data giant PropertyShark.com. Pay attention, because even if this one's not the right opportunity for you, you'll learn how to analyze a foreclosure listing and get the info you need.

Below, what you need to know about a Chelsea studio apartment scheduled for auction this Wednesday, Jan. 29th.

The basics:

Address: 451 W. 22nd St. between 9th and 10th Aves. in Chelsea, Apt. 4F
PropertyShark property report: For basic information, click here. To unlock a free comprehensive report, register first, then click this link.
Size: Studio
Building: Prewar walk-up co-op with 5 stories and 8 residential units.
Most recent sale price: $209,898 in 2006. A comparable studio apartment (#1R) sold for $340k in September of 2013.
Foreclosure type: Mortgage
Lien amount: $158,439
Minimum bid: Will be announced at the auction
Date of foreclosure auction: Wednesday, January 29, 2014
Location of auction: Rotunda of the New York County Supreme Court, 60 Centre St.

Above: Excerpt from the property report available on PropertyShark.com.

The facts:

This Chelsea studio/1-bathroom co-op was purchased for $209,898 on January 12, 2006 by Michael Angelo Tata.

After failure to make mortgage payments, a lien was filed against the property in the amount of $160,512, and a foreclosure auction was scheduled for March of 2009. But that auction never happened, which probably means, according to PropertyShark senior data analyst Nancy Jorisch, that the owner must have been able to work out some sort of modified payment plan with the bank.

In December 2013, it was put up for auction again with a slightly lower lien amount recorded against it of $158,439, implying that Tata, the owner, was likely able to pay off a small part of what he owed the bank in the intervening years.

The apartment has also been put up for sale multiple times over the years—in August of 2006, shortly after Tata bought it, for $250k, again at the same price in 2009, and twice in 2011 (first for $270k, then again for $250k).

“It’s pretty clear this owner is not happy and has wanted out of the building for a while,” says Jorisch.

The fact that he wasn’t able to sell it at those prices when a comparable apartment in the same building recently sold for $340k (click the “Find Comparables” button at the top of the property report) suggests that the unit “is possibly not in very good condition,” says Jorisch.

The minimum bid--or "upset price" as it's called--isn't yet available.

What else you need to know:

1. It's possible you may have to pay off more than the outstanding principal

In addition to the outstanding principal owed on the mortgage, you'll be responsible for interest from Aug. 1, 2009 and any overdue maintenance fees.

Always make sure to check the “Auction Notes” (section A7 of the property report) to find out about any other charges you'll be responsible for. In this case, you'll also be expected to pay off overdue interest and common charges.

“It is not uncommon for people who have had problems paying their mortgage to also owe other outstanding balances to their co-op,” says Jorisch. "The challenge is adding all these additional charges to the upset price and recognizing if it is still a 'bargain.'"

Jorisch recommends making some pre-auction phone calls to try to obtain a better picture of the actual costs.

"Try calling the auctioneer the day before the auction," says Jorisch. "They will be able to tell you the upset price but not what's included in the upset price, such as maintenance charges in arrears." For that, along with mortgage interest owed, try calling the bank's attorney, whose contact information is listed in Section A7: Foreclosure.

"You can even ask the bank if they will entertain a short-sale," says Jorisch, "which means the bank is willing to accept less than the amount owed on the mortgage."

The building's property manager may also have some answers. You can look up their name and contact information in Section B3: Building Management & Officers of the property report.

Jorisch also suggests delving further into the building’s finances to assess its financial stability before you even consider buying in. If you look at Section C2: Title Documents of the building’s property report, you can see the co-op's history of financing and refinancing its mortgage. In Section F4: Permits, you can see the amount of money spent on various repairs to the building.

2. There may have been some neglect

In the PropertyShark report for this property, click over to Section B1: Ownership to see that the owner of record still lists his primary address as West Hollywood, California (and that there are no records of him having a phone number or having registered as a voter at that address).

It could be that the 300-square-foot studio was never intended to be the owner's primary residence and instead used as a pied-à-terre (or possibly an income property although there’s no record of any tenants). As a result, the owner may not have given the place the kind of TLC it deserved.

There are four Environmental Control Board violations on record for this building, and all are against this particular unit, implying that the place might be in bad shape.

In fact, there are only four Environmental Control Board violations on record for this entire building (which are listed on the building’s property report in Section G: Violations as shown in the screenshot above) and all of them are against this specific unit. And while they seem relatively benign—window issues and defective bathroom tiles—these might be indicative of other repairs or problems that have been ignored in the apartment.

3. This auction might not even take place

This apartment was initially scheduled to be auctioned off in 2009 (as shown in the below screenshot), but that public sale was cancelled, and it hasn’t been put up again until now.

This unit was previously scheduled for auction in March of 2009, but it looks like the owner was able to work out a deal with the bank--until now.

“This could mean that the owner has been able to work out something with the bank in the past,” says Jorisch. “He might be able to work something out again.” So before you head over to the courthouse, call the auctioneer or the plaintiff’s attorney to make sure the auction is still happening.

PropertyShark.com is a real estate website that provides in-depth data for more than 75 million properties in New York City, Philadelphia, Los Angeles, San Francisco Bay Area, and other major US markets. The company covers most of the U.S. with a primary focus on the New York real estate marketplace. Click here to see what services and data are offered in your area.

topics:

appraisal PropertyShark Foreclosure Spotlight