A four letter word

I hate to admit it, but "bank" has truly become a four letter word.

I was sitting at my desk a couple of days ago, when one of my co-workers going thru the MLS, rhetorically asked:  "price increases?....who the heck increases their prices in this kind of market?" I was busy and did not respond, but the question lingered in my head, bouncing around my skull like a shout in an echo chamber.

It was later that evening when checking e-mails, that I recognized the address on one of the"auto-prospecting" messages.  Sure enough, it was a listing where one of my buyers had a $1,000 over LP seller-accepted offer waiting for seller's lender's approval.

I opened it up, and to my amazement, the listing price had been increased from $120,000 to $126,300, and under "Agent Remarks" it read: "original buyer canceled - send all offers"

I couldn't believe it.....the question in the cob-webs of my mind had been answered! ....it was the banks, trying to squeeze every drop of blood out of their "soon-to-be-theirs" inventory....and it was My Buyer!

......they just weren't content with selling the property at market value, they wanted to see if they could get juussst a little bit more!.....and they didn't even give us the professional courtesy (right or wrong) of notifying my buyer and I!!

Maybe in an up-trending market, this kind of strategy would've made sense, but under current conditions, with the seller already in default, and knowing that out here in the west, the foreclosure fuse is only about 90 days long, they just sentenced the seller to a foreclosure on his record.

Not to mention the extra cost of the foreclosure, additional selling time trying to find another buyer, and the potentially detrimental effect on their solvency, of having yet another piece of property on their books.

One other point comes to mind, they just indiscriminately walked away from a contract without even a hint of additional negotiation ..... if you provide the seller with an offer by a willing and able buyer, at full listing price or above, and the seller rejects the offer, ....isn't the seller liable for a commission?

The bank could argue that they were not the seller and that "they", had not signed the listing agreement, therefore, claiming innocence.  They might even encourage you to take "Joe the seller" to court and try to get your commission money.

But, isn't the bank acting as "seller de facto" when they step-in at the end, and make ALL the decisions that are rightfully a seller's to make?....final sales price, any give-aways or concessions, closing costs, choosing the Title company, COE dates, how much commission to pay the Realtors, changing the listing price on MLS, changing the locks on the property, etc., etc.

It would be interesting to see how this scenario pans out in a court of law .... I guess I will soon find out when I send the bank the bill for my commission.

I guess the banks just don't care.  Not content enough with utterly ruining their industry, they are now stepping-in and trying to upset ours.  They make their own rules as they go, ....they are ignorant of real state law, and regard the MLS/Commissioner's rules with contempt.

In short, they are tromping on the delicately balanced world of real estate law and ethics, with the carelessness and clumsiness of a neanderthal.  They handle themselves in a most unprofessional, unethical and illegal manner. 

They need to be made accountable....they need to be stopped....they are out of control...they got us into this mess!  If we go along with them, we will be just as guilty of messing up the real estate industry as they are of the financial system collapse.

Kind of reminds me of the joke about the color gentleman (politically correct?), on his way to get a vasectomy and his friend asks him: " Why are you wearing a tuxedo to go get a vasectomy?" and he responds: "If I'm gonna be impotent, I wanna look impotant!".

So, if the banks want to act like the sellers, they need to become the sellers. 

The records show that 3 out of 4 short sales fail, and more and more of them are becoming foreclosures due to the inadequate, time-consuming and cumbersome system used by the banks. It only follows, that short sales need to be done-away with altogether, except in the most necessary of cases.

A Short Sale is only a notch above a foreclosure, and it is at par with a Deed in Lieu of Foreclosure.

So rather than the usual walk thru the fog, dictated by THE DEPARTMENT OF REDUNDANCY DEPARTMENT, where we list the property, get an offer, get it accepted by the seller, and then, we start all over again with the bank as the seller, to find out if they'll counter or even approve a contract weeks down the road ....

 .......why couldn't we just eliminate the middle man, allowing the seller to DEED the PIQ to the bank IN LIEU OF FORECLOSURE, and then just treat it like a normal REO?

At the very least, we would be now clear who the owner is, ....we would know that the bank is signing the listing agreement, ..... the commissions would be set as a percentage or a flat fee ahead of time, ....and the banks would be a lot more motivated to get off their butts and move that  property OFF their shelves!!! 

The days when banks were regarded with awe-inspiring admiration, pillars of our society, are long over. 

Today, their image has been reduced to that of bottom-feeders in the lagoon, no longer able to stand up to the greatness they once commanded.

"So far the industry hasn't shown any kind of foresight. One reason foreclosures are so rampant is that banks and their advocates in Washington have delayed, diluted, and obstructed attempts to address the problem."  Quote from: How Banks are worsening the foreclosure crisis ...read 2/13/09 article here http://news.yahoo.com/s/bw/20090213/bs_bw/0908b4120034085635

There seems to be something sinister and perverse about the way the banker's minds' operate....and please excuse the frivolity with which I use such blanket statements, I know that individually there are many good people trying to make a living at these institutions.

It could be the intoxicating effect of swimming in so much money .... maybe it is the God-like power they exert over people's lives .... where they can improve or ruin somebody's life with the stroke of a pen .....maybe it's just ignorance or lack of empathy....

....it reminds me in a sick way of a serial killer's profile, where the crime is committed not for the destruction of life, but for the feeling of absolute control over someones life.

Like that old chinese proverb reminds us ..... "we can't put fresh tea in the cup, until we ger rid of the old tea"  ...... so I say, ....cut the rope and let the dead weight fall to the bottom....most of the banks are walking dead already.......as Realtors, let's stand up for our industry and regain our sesnse of professional pride.