Did you read the Providence Journal July 12?? In the Home Section.......has this happened to you???? This is happening daily!

PROVIDENCE - "Appalled and outraged" by a $45,000 price for a foreclosed house listed for sale in their neighborhood, South Elmwood residents launched a protest that prompted a real-estate broker to relist 153 Ontario St. just days later at a much higher price - $169,900.

As part of the second listing, Stacey Eliades, a broker at Storm Realty, LLC, of Warwick, representing Deutsche Bank, requested cash-only bids by July 2.

The bidding went above $169,900, according to Clark Schoettle, executive director of the Providence Revolving Fund. Schoettle said his nonprofit agency had the highest bid and plans to close on the sale sometime in August.

On Friday, June 26, the same day it was listed for $45,000, the house went into "pending" status, according to a petition drafted by a group of residents including Ronald Hirschauer, a sales associate with Armory Properties, LLC. "Pending" means there is a signed purchase and sales agreement and the property is "under contract" to be sold.

Hirschauer, a 19-year Elmwood resident, said he lives four blocks from 153 Ontario St., and he knows the house and the neighborhood sales history. He said the $45,000 price was clearly far below market value.

Assessed at a value of $507,400 by the City of Providence, 153 Ontario St. is also a historically significant property. The c. 1890 "Olde English" style house is listed in the PPS/AlAri Guide to Providence Architecture.

The Guide said the house, designed by Edward I. Nickerson, was built for George Wilkinson, a superintendent of the Gorham Manufacturing Co. It called the house "a superb composition of brick, shingle, stucco and half timbering, one of the neighborhood's best houses."

Helene Gerstle, a real estate lawyer and Elmwood resident, wrote to Eliades on June 29 to protest the $45,000 listing.

Gerstle wrote that $45,000 "is, at a minimum, $200,000 below its value, according to the sale of comparable properties in the neighborhood."

Jane Driver, another neighbor who also works for Armory Properties, said she and Hirschauer both called Storm Realty to express their concerns about the circumstances of the sale.

The petition reads in part: "A disservice has been done to nearby taxpaying property owners by potentially reducing their property values if the sale is completed at the current price or below...."

"We challenge the claim made by Ms. Eliades on 6/28/09 that the list price is consistent with the properties' appraised value, nor do we believe that the institution that holds title to the property would agree to sell it at a price so far below its true market value."

Ken Schadegg, housing director for the City of Providence's Department of Planning and Development, is a former executive director of the Elmwood Foundation. He said the sale of such a "critical" house in the neighborhood at a price so far below market value would have been "devastating" to property values in Elmwood.

Foreclosures have driven down prices in Elmwood, but not to the degree where such a large, landmark house would be sold so cheaply, he said.

Schadegg said people who have invested in Elmwood by moving in and fixing up houses there in the past 15 years were right to speak out swiftly and strongly against the $45,000 price.

"It has kind of galvanized the neighborhood," he said. "...There may be some places where you can get away with that kind of hanky panky, but this neighborhood is not one of them."

Hirschauer said 17 people signed the petition, but he stopped gathering signatures when the property was relisted at the higher price, and he never gave the petition to Eliades. Eliades could not be reached for comment.

Driver said that Joy Riley, owner of Westcott Properties, was "instrumental in changing the outcome." Riley's Providence agency handles a large volume of foreclosure sales. Riley also declined comment.

"All of us were watching this house," as it went through the foreclosure process, Driver said. Deutsche Bank foreclosed on former owner Billieskye Crystal in December 2008. Schoettle said the Revolving Fund has been monitoring 153 Ontario St. for "the past 3½ to 4 months."

153 Ontario St. is a corner lot and one of the largest in the Southern Elmwood Local Historic District, but the overgrown, trash-stewn yard is an anomaly in the well-tended neighborhood. The house was also left filled with "about eight Dumpsters worth of trash," Schoettle said.

Schoettle said the Revolving Fund plans to renovate the property and then resell it to someone, preferably an owner occupant. If the property is restored, it could command rents that would enable a new owner to maintain it, he said.

Gerstle's letter to Eliades warned that she intended to report the matter to a Realtors' board, but she said last week that she is happy with the way the situation turned out, and that Storm Realty responded to the neighbors' concerns.

"I don't know what really happened there," she said. But she added that people who are concerned about their property values should take an interest in what happens with foreclosed properties in their neighborhood.

"We really have to be on the alert about these things," Gerstle said.

Michelle Caprio, CEO of the Greater Providence Board of Realtors, said her group has received four or five complaints this year about alleged unethical conduct by Realtors. A group of peers reviews complaints, and hearings are held if the complaints are found to have merit. Caprio said the board also offers mediation services.

Caprio said consumers who complain to professional associations also often simultaneously report problems to the state licensing authority, the Rhode Island Department of Business Regulation. The DBR has issued 18 enforcement actions against licensed real estate sales people or brokers so far this year.

Although complaints are made in all kinds of markets, Caprio said, there are new issues and problems associated with the many distressed properties for sale at this time. In the case of distressed properties, sellers are often large financial institutions far from Rhode Island, and getting responses to questions and offers can be difficult, she said.

"There are realities of working with short sales and foreclosures that take us well out of the scope of the typical transaction," she said.

Hirschauer said he has seen a number of other foreclosed properties in Providence sold within one or two days after being offered at prices that seemed too low even in this troubled market, but no situation "as blatant" as the initial price of 153 Ontario St.

"It's so irresponsible. It's just not right," he said. "There's nothing ethical about it."

cdunn@projo.com

I had a similar experience with Storm Realty and Stacy just recently....... I would love to share with you. This real estate practice is ruining the market and lowering property values. I am a realtor with Coldwell Banker Cahoone, Westerly. A property was listed a few weeks ago, MF/commercial with a cottage, great location, assessed around $330K. Storm listed it for $85K, I called to make an offer and was told highest and best, with a "proof of funds" - never was it mentioned, "bank statement, they said "PROOF OF FUNDS" - my cash buyer offered, $125K, with a bank letter of approval for funds. It is my understanding, that a bidder won at an offer of $90K, and included a "bank statement." It is again my understanding, As told to him by Stacey, by the way Stacy double ended it. Westerly, is a very small town, everyone knows each other, coincidently, it so happens, the bidder's mom was at my house at the time, she mentioned her son bought the building. I said, wow, how much did he bid and she said, $90K. I flipped, I called Stacy and talked to the office manager, while talking to them, she texted messages the buyer, he calls my house and reams his mother out for telling me. If that is not unetical then nothing is!! My buyer was so upset with me for losing the bid........ any advice?? This happens all the time, it goes to an insider. IN our office we put offer's in sealed envelopes as not to have this unetical practice happen....... I guess we are just country folks, in the city things are done differently.

Has anyone been outbid by an insider? Share your story, call Helene Gerstle!!

From the attorney in the above Providence Journal's Story written by C Dunn.........Dear Sandy: I am going to forward your message to some friends of mine at Armory Properties, who originally discovered this deception. Have you thought of started an ethics complaint at the Rhode Island Board of Realtors? I am crazy busy today, but tomorrow you can reach me in the morning at 401 383 8318 or later in the day and Wednesday at 617 909 3787. Thanks so much for contacting me. This is devastating to neighborhoods and should not continue. Strangely, they were able to call off the offer for $45,000.00 after it was accepted. Bizarre. Helene

Let's stand united to stop this!! If you have had a similar experience, Contact Helene and tell her Sandy Sent you!

Everything works and nothing doesn't!
Sandy Bliven