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Seller Indecision - Here's What Happens

This is a tale of 1 seller and 2 brokerages. It is unfortunate.

The seller in this story is a bank with a good amount of inventory. The perfect client for some, or so you would think. We will call them Little Ol Bank (LOB).

LOB is marching right along selling a few here and a few there. All of a sudden something happens. The market starts to slip, LOB is taking losses and REO inventory is increasing. In an attempt to stem losses in one area LOB does not want to discuss price reductions with Current Broker anymore. Instead, LOB wants to hire Other Broker in order to split the work. LOB doesn't want to be "stuck" if Current Broker "gets hit by a bus".

At about this time, the overall contract between LOB and Current Broker is set to expire, so Current Broker provides a new proposal for the next year. It encompasses everything that LOB needs. Maintenance, management, sales and more. In addition to the overall agreement expiring, some of the listing agreements are expiring. LOB is not renewing or extending the listings, but wants Current Broker to continue running around checking meters, boarding broken windows and generally keeping an eye on things. Invoice payments for maintenance go from 7 day turns to 60+ in some cases.

While all of this is going on, LOB takes Current Brokers proposal and shows it around to Current Brokers competitors. Other Broker steps up and says "I can do all of that and I can beat the price" and is hired by LOB. LOB hands over all of the expired listings at new prices similar to the ones suggested by Current Broker.

Current Broker continues to manage the other properties and attempts to get price reductions. Listings are expiring, price reductions are not being approved. Meanwhile, LOB is requesting all types of different projections based on different scenarios. Current Broker brings up that some of the properties should go to auction. This option was brought up before, but rejected. WOW. LOB tells Current Broker that they have already hired an auction company for the listings that Current Broker suggested go to auction from the last time it was discussed. Did I mention that Current Broker has their own auction division?

All listings expire and Current Broker gives LOB the good bye waive. Current Broker finds out through the grapevine that LOB is angry that Current Broker "abandoned them".

Fast forward to last weekend. Current Broker who is now Old Broker with a lot more time for clients who listen, runs into an employee of Other Broker. Apparently LOB is up to their old games. According to Employee, Other Broker has passed the file down to Other Agent and Other Agent is running all over the place. Employee makes a comment that he doesn't know how much longer they are going to keep working with LOB if LOB doesn't stop changing their mind all the time.

What is the moral of this story?

Richard F. Kruse is the President of Columbus, Ohio based Gryphon USA, Ltd. (www.gryphonusa.com). The Gryphon Organization includes Gryphon Asset Management providing receivership and consulting services in the distressed marketplace, United Country Ohio Realty & Auction Group (www.ucohiorealty.com & www.ucohioauctions.com) providing real estate brokerage and auction services throughout Ohio and OnlineAuctionUSA.com (www.onlineauctionusa.com) providing commercial asset liquidations from the Midwest to East Coast.

United Country Ohio Realty & Auction Career Opportunities Available. Call 614-885-0020 x 17

Posted by Rich Kruse on 05/28/2008 09:21 AM

Comments (23)

reo, auction

Post is included in group: Real Estate Auctioneers
Post is included in group: Ohio Active Rainers

23 Comments on Seller Indecision - Here's What Happens

MAY

2008

The moral of this story? LOB is related to SOB...

LOL -- That is Some 'Ol Bank

LOL

-Jason

Moral? Banks are female? That would explain the mind changing and mood swings! Seriously, in the end we're still dealing with people, a large percentage of which are crazy.

sellers - They hire us as professionals but then they do not want to take our advice.

Rich..I love this part of your story best "Current Broker who is now Old Broker with a lot more time for clients who listen". This is the silver lining, I think, do you?

The moral of the story <to me> seems to be not to screw with people because Karma will always bite you in the butt.

LOB should have been more concerned with getting the inventory off the books instead of being a busy body.

Old broker should have withdrawn and given back the listing at the first signs of games being played.

By now, it is a given that LOB and all LOB's similarly situated, do not have the foggiest idea what they are doing.

When it comes to selling real estate, the banks have only one thing to offer, price. They sell "as is" with no warranties, no repairs, no nothing but property and price.

They can't even do that well.

I'm constantly talking to Realtors and Mortgage Brokers, and the vast majority are pointing their fingers at institutions like the LOB in your story...they are just stabbing themselves in the foot, all the while wanting things to go their way. Their decisions (or sometimes, lack of decisions, or bad decisions) are hurting everyone in the industry. The big problem...they are one of the trees in the forest, and they don't realize it is a forest.

The solutions for these institutions is very obvious to those outside the picture, sometimes a solution is too simple for people to see. First thing they need to do is to get rid of the knife they keep using to stab themselves in the foot. Next, they need to realize that what they are doing isn't working and start listening to suggestions from professionals in the industry...but that will never happen. They are too big for their own britches.

Only when 1 or 2 institutions finally figure out how to play the game, and others see their success, will something positive happen. Until then, the industry will suffer and people will keep losing their homes, and investors will keep losing money...and...

Thanks to everyone for stopping by. I'm sure that this is not a unique story, but it really does make me wonder what is going to happen if the sellers don't get with the program.

And HOLY COW. Featured? Really? There must be something wrong here. I don't get featured!!!!!

I think Banks will be Banks. What else can you do, it is the current game being played.

RICH REMINDS me of a chick I used to date Years ago..She cheated on her boyfriend with me, and whe we bacame and item, she was out cheating on me with someone else. One day a few of us exes compared notes and told her to take a hike...Theres a story in there somewhere..I tired and going to bed C ya

OK Rich,

What is the moral of the story???

Aren't most of these banks the same. That is why they are in the shape they are in. indecision

Banks are unprepared to deal with REO. Banks are run, mostly, by committee decisions. They usually lack strong leadership.

Wow, that is some story. So sad that you put in all that time, care and effort and did not get compensated. Totally unfair.

Don't mess with landlord man or he will blog about ya? How about........Rich is pissed and Melissa needs a new pair of shoes?

MAY

2008

If you jerk people around, eventually nobody will want to work with you.

Oops. Melissa was signed in on my computer. I think that Current (now old) Broker is over it, but the story is one that people are seeing over and over again. I'm sure that the consumer brokers are seeing the same thing. When a call comes in from a prospect who is looking for their 5th agent, do you wonder what type of crazy seller is calling you and sometimes pass?

Bryant - If I was pissed, I would have named names. I mean Current Broker would have, I'm sure.

Congrats on your feature! The new broker is going to wish they didn't take on that can of worms!

I take exception to the female comments! Seller is a jerk!

JUN

2008

Congrats on the great post, you deserve to be featured,

I have seen this over and over, you give a price on a listing BPO and the bank not only does not take it they pull the listing and give it to the aget that bought the listing with a higher BPO that will never sell at that price.

at times i have to scratch my ead