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Has this bank lost its MIND?

By
Real Estate Agent with Solid Source Realty Georgia 282203

2 weeks ago my Buyer went under contract with a bank owned property (I won't mention the bank's name for obvious reasons). The contract price is $253k, the list price was $300k.  The appraisal was conducted and low and behold.... it came in at $232,500.  "Yippee," squeeled my buyer, thinking he is going to get even a better deal than he had hoped.  The bank's response...."no, we don't want to sell it at that price." HUH???   Their full answer was, "we'll do our own appraisal and get back to you in a few weeks."  Do their own appraisal? What does that mean? My Buyer cannot wait a few weeks, so he has decided to rent as he is "homeless" in 4 days.  He even offered to pay $235k, above the appraised value, in an effort to not have to move twice and rent. They still said "no."

Help me out fellow agents, what is happening in the banking industry?  Why do they make such poor decisions? They have a ready, willing, and able buyer wanting to purchase their property for more than the appraised value and he wants to close now.  Has this bank lost its mind? This is just wrong... it is a difference of $18,000!  By the way, I should mention that this home, along with 2 others owned by this bank, have been on the market now for 6 months. 

 

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Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

I lost a deal where the holder of the SECONF mortgage refused to take DOUBLE their normal payout. Who really know what is happening here. Maybe they have more cash now and oare not so desperate

Jul 05, 2009 03:43 AM
Linda Jandura
Raleigh Cary Realty - Apex, NC
Realtor, North Carolina Buyer & Seller Specialist

The bank is probably owed a lot more from the previous owner. Do you think maybe they had a certain percentage point as to how much loss they can take, and this wasn't it? Hope it works out for your buyer.

Jul 05, 2009 03:47 AM
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

There seems to be no rhyme or reason in the banking industry.  An associate of mine was dealing with a short sale, the BPO came in at $230,000, the buyers offer was $226K and neither one would move.  The buyer walked and the house still hasn't closed, it's been over two months since the offer feel apart.

Jul 05, 2009 03:49 AM
Pat Champion
John Roberts Realty - Eustis, FL
Call the "CHAMPION" for all your real estate needs

I can't believe some of the stories-I'm with you I think they have temporarily lost their minds. I wish you luck maybe the bank will check back in.

Jul 05, 2009 03:52 AM
Maria Morton
Platinum Realty - Kansas City, MO
Kansas City Real Estate 816-560-3758

What's interesting to me is that when the banks are loaning the money to a buyer, they will accept a lower appraisal and deny the loan even if the appraisal is questionable. But, in this case, they are choosing to leave money on the table and allow another bank owned property to sit and rot and bring down the surrounding house values.

Jul 05, 2009 04:02 AM
Chip Jefferson
Gibbs Realty and Auction Company - Columbia, SC

This seems to be par for the course in declining markets. the ledger doesn't look good if they sell for that but the balance sheet does.

Jul 05, 2009 04:13 AM
Anna Boyd
Re/Max Gold - El Dorado Hills, CA
CDPE, El Dorado Sacramento

I've been hearing things lately about banks and ratios and percentages.  If there is default insurance to cover their losses to a certain point, they're fine with just letting it foreclose.  I've heard each negotiator can have 200-300 files at a time.

Lately, it seems it's getting even harder for these short sales and REO's to work out than before which leads me to think there's some bonus for lenders behind the scenes to have things written off a certain way.  Either that or banks are just truly wacky.  I'm betting on the "it's how it looks on paper" aspect.

I'd even heard some banks were holding on to their "toxic assets" so that they look sicker than they really are so they can continue to get aid.

OK- that's my conspiracy theory.  Anna

Jul 05, 2009 04:19 AM
Kim Curran
RE/MAX Unlimited of Northern Virginia - Bristow, VA

It just defies logic. But then so much these days does!

Jul 05, 2009 04:23 AM
Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

I'm hearing a lot about appraisal issues. I think the strangest one was local, and it involved an appraiser calling back the listing agent to cancel the appointment saying that he had not come to terms with the lender on the fee for the appraisal.

Jul 05, 2009 04:43 AM