We like to believe that the real estate market has recovered because some Russian billionaire comes in to purchase an overpriced penthouse or estate. But the fact remains that there are many more multimillion dollar estates that are languishing on the real estate market and are unable to find buyers with deep pockets despite scaling down the asking price repeatedly. The owners of these properties are forced to take the listing off if they can afford to wait or they go in for non distressed real estate auctions. But there are several cases where the owners are unable to pay their loan or opt for bankruptcy. They have to forfeit their home in a foreclosure or liquidate the property in a bankruptcy fire sale.
A Newport Coast Mansion Once Valued at $87 Million
A Newport Coast, Calif. Estate which was known as Villa del Lago is a case in point. It is an unfinished Italianate Villa which was once valued at $87 million. It is now set to go for bankruptcy auction on April 26. It was languishing on the market for two years and now the creditors have pushed it towards an auction sale. It was first listed in 2010 for an asking price of $57 million but later scaled down to $37 million. Hom Sotheby’s International Realty which is handling the sale is still asking for that price.
Located on One Pelican Hill Road North, the estate is spread on a 12.5 acre gated lot. It is the largest private residential property in the up market Orange County. The main house on the estate is a three story structure with a total of 16,600 square feet of built up area. The house in the final stages of construction boasts of a 17 car garage, a manmade lake with terraced waterfalls, a tennis court, a one-bedroom gate house and an unfinished horse stable and riding areas. Auction.com, a California based online market place is managing the auction. Tom Iovenitti, its executive vice president confirmed that the trustee has the final authority to accept the sale.
The Buyer Could Land a Bargain
The hillside estate was conceived by John McMonigle, a former Coldwell Banker real estate agent. The star agent of the bank had bought the parcel of land in 2003 for $3.2 million. He couldn’t complete the construction of the home and had to file for Chapter 7 bankruptcy protection with almost $50 million in debt and only $2.4 million in assets. A group of investors who had invested $10 million in the house took over the estate in June. One West Bank FSB also holds a $20 million loan. According to Auction.com, the house is 95% complete and the grounds are 85% complete which means that the house can be completed within a budget of $2 to $4 million. Sotheby’s believes that their asking price makes it a bargain. This is the largest property being handled by the auction site and have confirmed that the property has attracted buyer interest from far and wide. It would be interesting to see at what price the estate is finally sold in the auction.