'Real Housewife' Short Sale in the O.C.
In 2005, Barney and her then-husband Simon paid $1,320,500 for the house and then borrowed another $200,000 for improvements such as a saltwater pool and spa, for total investment of $1,520,500. According to TheOrange County Register, the house sold this week for a reported $1.12 million.
Rather than walking away from the home or declaring bankruptcy, Barney listened to the advice of her real estate agent Marcos Prolo of Berrington Properties and worked with her lenders to negotiate a short sale -- thus preserving her credit standing.
Although the process took more than nine months, the lenders agreed to accept approximately $400,500 less than what the Barneys owed. In the O.C. these days, short sales are not uncommon, says Prolo who finds that 70 percent of his real estate transactions are short sales.
What happened to the high-flying O.C. housing market?Per DataQuick, single-family homes in Orange County now resell for 31 percent less than their peak pricing of June 2007. The newer developments of custom homes -- like the Ladera Ranch community just above San Juan Capistrano where the Barneys bought in -- have been hit hardest by buyers using once-easy loans to live outside their means.
On a standard property sale, escrow typically takes 30 to 60 days. Short sales are another matter, as lenders must agree to a loss; Prolo finds that the average short sale takes six months to close.
The Barneys' escrow was unusually lengthy (nine months to close), which he attributes to bank paperwork snafus.
While prices have not gone up per se, Prolo sees houses selling and lingering for less time on the market. Currently, houses priced below $1 million are in high demand in the O.C. and are the hottest sector of the housing market.
The Barney's former mini-manse was built in SoCal's perennially popular, faux-Tuscan style. Located within the gated Covenant Hills community, the five-bedroom, five-and-half bath house is approximately 4,300 square feet and features high-end appliances, hardwood floors, custom stone work, crown moldings, a formal dining room and grand kitchen just off the family room. That $200,000 upgrade to the backyard includes a built-in barbecue and a fire-pit.
See more Orange County homes for sale at AOL Real Estate.