With more foreclosures entering the market one would think lenders should be competing to attract buyers. As qualified Real Estate Agents we are constantly thinking out of the box in an attempt to increase interest in a property. The current trend followed by many banks offering foreclosures seems be creating a situation entrapping foreclosed properties in a pit that will be hard for them to dig out of.
As individual sellers are offering incentives, going out of their way, bending over backwards to create inviting situations for the potential buyers in the market, lenders are doing the exact opposite. It is easy to see why banks are not in the Real Estate business.
Dealing with foreclosed properties is increasingly more frustrating by the moment. Some of the demands lenders are placing on potential Buyers is driving buyers out of the foreclosure market and into the open arms of individual Sellers.
It is very difficult for a Buyer with an FHA or VA loan to successfully close on a property. Many banks will not consider any improvements on a property. In the real world of Real Estate, properties will often sell for higher prices after undergoing minor improvements. Lenders are like a record stuck in the groove of, "sold as is." FHA and VA loans will often require minor repairs before loans are approved. It is very dangerous for a Buyer to invest money in a property before receiving title. Many banks already utilize the services of contractors capable of providing these services. Almost all foreclosed properties employ contractors to secure and winterize properties. The pieces are already in place, banks need to utilize a plan to effectively use these tools.
Often times banks will provide counter offers designed to subject potential buyers to undue stress. Providing only 5 days or less for an inspection contingency does not sit well with Buyers. After making an offer on a property many buyers will never consider a second foreclosed property if the first property fails inspection. Banks will take a number of days considering an offer, submit a counter offer giving the Buyer 24 hours or less to make a decision. Buyers perceive this strategy in a negative manner. Why should one party be allowed excessive time to make a decision while the other party is expected to react with little or no time? Often times counter offers provided from banks will not have the same conditions verbally agreed to. The counter offers supplied by banks often are not signed. Procedures established by banks often require Buyers to return signed copies of the counter offer to the seller for consideration which may take days for the seller to provide a signed counter offer. Many banks are asking for nonrefundable earnest money deposits. Counter offers received from banks often increase the amount of the earnest money. All of these delays and changes experienced with foreclosures often leaves buyers with a negative feeling.
Banks need to go back to basics, adapting the techniques that induced growth in the industry, providing friendly courteous service customers expect.
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