Mohave.net

Base on sales records I’ve been watching the last several months, the Golden Valley area has the potential to become a poster child for land sales fraud. Similar to the infamous “swamp” land sales of Florida in the 1920’s.  I’ve been reading complaints from buyers on internet forums and comments from realtors that say Arizona is a “buyer beware” state.

I recently saw two lots advertised for sale in a Golden Valley “subdivision” I hadn’t heard of before.  Looking them up, I saw that they are in an area where apparently someone split acreage into 1 acre plots and was selling them for 16k and up per acre.  I haven’t driven to see them yet, but I believe there are no roads even cut in and of course like most land in Golden Valley, no utilities or water available.

These two caught my eye because they were listed at 10k each, less than the others.  As most land in GV bought recently, they had an out of state owner. Looking up the records, to thicken the plot, they had been purchased in March 2008, for 16k and were now back on the market less than two months later for 10k.  I’m not sure if the original sale used a realtor or not, but apparently the purchaser did not do any investigating.  He will probably lose the entire 32k he spent on the lots, unless he finds an equally trusting buyer who jumps on the chance to purchase these lots for 10k each.  Then he’ll only loose 12k plus the cost of buying and selling them.  According to the county maps these lots do not just have a wash running through a portion of the property as many do, but both lots actually ARE a wash. I see no way they could be used for anything based on the tax map.  I see no comments on the listing regarding this piece of information.

I am astounded at the number of buyers who are purchasing land with no utilities or water available and many times no roads even cut in, for prices that they could purchase land with utilities etc. in most any other state, including California.  Many times the properties have washes that make them unbuildable, even if someone actually wanted to build in an area with no roads or utilities. 

The prices have gotten so out of line that there is little chance of attracting an end user that would like to purchase a lot and build a home or place a manufactured home on the lot.  Especially knowing they would have to live “off the grid”.  An option that used to be popular because of the low cost of land. Purchasers now are apparently counting on irrational appreciation and sales to “developers”.  And those speculators that don’t even investigate the property before purchasing, are being taken for a ride in huge numbers.

I also recently saw a home in GV for sale that I looked up because of the price which was considerably less than others that were as new.  It appears that the home was built in the wash that was flooded a year or so ago and was reported on in the paper.  Renters scurried from the houses and apparently lost all their belongings.  They did not realize that their homes were built in a wash. 

I wondered at the time how someone could build homes in a wash and assumed it was a builder not familiar with the area.  Looking up property owners in the area, I found that not to be the case and that the builder was a local builder.  All the homes that were sold in this “wash” were sold to out of state buyers who bought more than one apiece (one sold for 219k and others for about 189k)  and then rented them to families.  These same buyers also bought multiple homes in other areas built by the same builder.  Many are now in foreclosure and values have dropped over 100k in all cases.  The land not built on is still owned by the local builder who also built the home currently for sale.

Looking at the posting for the home for sale, I see nothing mentioned about the wash or the prior flood.  They do say the home needs tlc and the pictures show it is missing the appliances.  Because of the price, I expect someone will purchase it as a rental and put another family at risk.  If they purchase it without checking out the area, they might not even know the problems.  And apparently, the realtors are not going to put this risk out there in bold print.  I can’t imagine anyone selling real estate here does not remember the story.

Another home that just came on the market, is located in Kingman in a subdivision where every home has been in foreclosure or is still owned by the builder or his employee.  There are few owner occupied, most are vacant or rentals.  The listing says “fanastic price”, except that it is not.  There is, currently on the market, another model with an additional 350 square feet for $2600. less. Also 7 other homes for $12,500. more, that have the same additional 350 square feet.  And several more just now entering foreclosure.  And all of the current sales are at discounts of 100-130k off of the original sales prices.  I wonder how many realtors don’t mention any of this to propective buyers.

Because of the secrecy of the mls system and the lack of past records of sales available online from the tax collecter in this county, buyers are going to have a difficult time discovering any of these things.  If realtors don’t give this information to the buyers, I can see law suits out the ying yang appearing as things get worse.   

In other states, these type of law suits are being dismissed because the information on properties and sales were readily available to the buyer on the internet.  That is not the case here, and I think that might come back to haunt some of the locals who are less than forthcoming about the properties they are selling.  “Due dilligence” for buyers is very difficult, if not impossible.  Particularly for out of state or recent residents who might not even know where to look for the information.

Recent sales information on the tax collector site used to be a clickable link which showed the past sales for the property in a list with dates and sales prices.  The link disappeared right about the time homes started selling for double and triple the last sale and land was showing multiples of 20 times and more what the last sale was.  I imagine it was hard for realtors to explain why the seller was getting hundreds of thousands of dollars for owning property for as little as a couple of weeks.  I saw one land parcel go from a sale of 100k to 5.5 million in less than a year and it was back on the market for over 11 million at the time.  And then magically the links disappeared from all the tax records.  I don’t know the reasoning for removing the prior sales from the online tax records, but it seems very deceptive to me and not normal for most states to hide that information from possible buyers.

Foreclosures on land are becoming more noticeable and much larger in dollar amount.  I recently saw one in Bullhead for over 16 million dollars.  Unpaid property taxes are also very noticeable, especially on this last payment due.  And include at least one prominent land owner who has the majority of his hundreds of properties showing delinquent taxes and at least one parcel just had a trustee sale posted.  Since some land owners use multiple names to purchase property, these notices are somewhat disquised by being under the less familiar names. 

There is the potential for billions of dollars in losses for banks/lenders that loaned in this area, based on sales prices that were way out of line for desert land with no utilities, water or roads that were purchased by speculators, both big and small, with visions of dollar signs in their heads and lacking the financial means to back up their purchases.