Banks can’t sell Real Estate

This article was sent to me regarding their stuggles with bank owned properties and short sales.  Read this before you get think abobut getting involved with short sales.  There is no way I could have written this any better than Chris Giffith, but make no bones about it; it doesn;t matter where you live this could happen to you. 

There probably isn’t any way to fully illustrate the pain and suffering that is involved with a real estate transaction that involves a home owned by a bank or lending institution. I’m not sure that I can even come up with a comparison to demonstrate how unorganized, inefficient and ridiculous the procedure is for trying to help someone buy bank-owned property, like short sales.

Consumers become charmed and enamored by the fabulous price of a home they find on the Internet. But they often have no clue, no matter how carefully it is explained to them, that the percentage of successful short sale offers that work out is slim, at best. On top of that, let’s not forget that the buyer will probably have a home inspection on the as-is property and maybe sink in a couple hundred bucks for a survey while they’re rolling the dice. The bank might have even agreed to the purchase price but then changed its mind because an unexpected fee popped up on the settlement statement and they didn’t like it.

My desk is currently piled with fossilized contracts involving short sales. Many trees have sacrificed their lives for those pipe dreams. Weeks and months go by with no answer to the question, “Mr. Lender, can I take the burden of this property off of your hands?” It takes weeks and months just to get the “package” assigned to a representative in many cases. The representative in the majority of circumstances has two or three hundred other files keeping company on his desk. There appear to be no systems in place whatsoever to process the glut of short sales and foreclosures. One thing is for sure, no two banks do anything alike.

The days of an agent working with a short sale are consumed with phone call after phone call to the lender. Last week, I was sitting in the office eating lunch in a cubical. I listed to the agent on the other side of the wall make dozens of phone calls to dozens of banks. They all sounded something like this: Hello, this is so-and-so. I am calling in reference to the contract for file number 23413433, I have left a message every day for over three weeks and I’m just trying to get some indication that the package was received, or yes or no or anything. After a while it almost sounded like a jilted lover trying to get their boyfriend back. I just need to talk to you, please call me back. Why won’t you call me?

Hey, that agent was lucky she got voicemail. Often times the voicemail boxes are full so you can’t even leave a message. Employees at the banks also get shifted around and you end up losing your bank contact or they just quit because they’re sick of it, too. Plus, there is nothing more infuriating than being months into a transaction and the file is nowhere to be found at the bank. Poof! Gone. I call that a Hoffa file.

While all of these shenanigans are going on at the bank, people that desperately need to sell their home are suffering and people that desperately need to be in a home are losing patience. Many times a buyer is months into the transaction and they just give up. Funnily enough, the bank representative will call months later and say, “We approve the sale.” We then let the bank know that the buyer walked months ago. Guess they didn’t get the memo or it got Hoffa’d, too.

Sometimes the buyers just end up finding a home where the owner has a little equity and priced their home competitively. They’ll switch up their dancing partner for a sure thing faster than you can say “banks can’t sell real estate.”

All of this leaves most of us wondering why the banks just haven’t figured this out. They’re just ignoring the elephant in the room. First, they could make more efforts to try to keep people in their home by adjusting their rate or principal. It has to be cheaper to discount a mortgage or the interest rate than it is to have a buyer default on their loan. When did banks quit running their business like a business? If you think the short sales and foreclosures happening to others aren’t affecting you, think twice. The only way to market recovery is to get excessive inventory, the short sales and foreclosures off the market and sold. It’s doable. The banks are just prolonging the whole sordid mess by dragging out this blood bath with their inefficiency.

What the mortgage industry needs is a hero like a CEO of a bank that “gets it,” will take ownership of the situation, man up and champion the industry by creating systems and developing a standard. So far it looks like everyone is just passing the buck and hiding behind their golden parachutes.

Taken from the Naples News written by Chris Griffith a Realtor in Southwest Florida and specializes in Bonita Springs Real Estaste.  No matter where you live this situation is the same. 

2 Responses

  1. Apparently yesterday an asset manager for a major bank admitted on a news show that they’re deliberately dragging out in order to spread out the losses.

    Ridiculously short sighted, but then, what’s new! Isn’t that how we got into this whole mess?

  2. That is so true. The last and only one that I tried was where the 1st loan company said yes but the 2nd loan company said no to the short sale and it took an act of congress to even get that answer.

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