What is slowing the overall economic recovery with regard to Real Estate are the unacceptable time delays in accepting offers from ready, willing and able buyers attempting to purchase distressed properties. Unlike conventional sellers who have typically 48 hours in which to accept, reject or counter an Purchase Offer, the banks have no set time limit. Offers linger in perpetuity.
They most often do NOT pre-negotiate an acceptable sales price prior to listing the home for sale to the public-but instead rely on Real Estate Brokers and Sales Associates to use comparable properties to determine current market value and then when an offer comes in, they wait to see if a better one will follow. This process has no ending date or deadline which leads to lengthy delays further retarding economic recovery. A date for extending the acceptance period is usually accompanied with an addendum which is non binding to the lender. Date of acceptance is "To be Determined".
Banks need to play by the same rules distressed homeowners played by prior to losing their homes. 
Professionals in a free market, are entitle to fair compensation for the services they provide. That includes Real Estate Brokerages, Appraisers, Inspectors, Surveyors, and Title Companies. Also to be noted some lenders are shifting the burden of paying Doc Stamps Taxes (which are typically paid by the seller of the property they own) to the new buyers as well.
The banks are effectively now controlling commissions, by dictating what they will pay, and fees charges by vendors who are an intricate part of the transaction process and escaping the Doc Stamp Taxes, and with the help of politicians are also attempting to control pricing of homes through the appraisal process. Adding to the problem are Attorney's.
Sales pending are experiencing a new rash of homeowners filing Bankruptcy protection at the last minute. After going through all the hoops to a short sale, and securing a buyer, preparing the file for the bank review and getting approval from the lenders to proceed with the sale, (which often takes months) home owners are opting in many cases to file for bankruptcy which halts the entire process. This could be construed as a thinly veiled attempts to avoid repaying Promissory Notes on the deficiency on loans (which they borrowed,) or to avoid paying deficiency judgments issued by the courts at all.
A Short sale will appear on a credit report for 3 years, a foreclosure for ten years, and a bankruptcy for ten years- however by rolling in all debts owed it gives the claimant a free ride from the debts they as consumers have accumulated and subsequently freezes the foreclosure caused by the unpaid mortgage of their primary residence which further stalls the recovery of the housing market.
HVCC-REARS ITS UGLY HEAD. Appraisers have 3 methodologies in determining value- comparable sales of similar square footage, replacement cost and reproduction costs. The most common method, used primarily for establishing value in real estate transactions is the use of comparable properties. Comparing homes of similar size, location and square footage.
When a home forecloses- it can diminish the value of homes in the same community by approximately 5% when 5 or more homes foreclose in the same community it can diminish value as much as 15%. In areas like Poinicana, Harmony, and Steven's Plantation where large volumes of foreclosures affect entire communities it prolongs recovery because the available data used for comparison purposes is reflecting the short sales, and foreclosed properties thereby diminishing value overall.
Sales fell flat in 2006 prices rose to a point where no one could afford them.. Nothing was selling and no one was buying. As the mortgage meltdown progressed communities nationwide experienced a plummeting decline in what was "hyper inflated value" by this was caused by supply and demand. In the same manner "comps" were used as the prices rose, the reverse is true today.
In Poinciana there are bidding wars on low priced foreclosed properties. Homes placed on the market are commanding 12-18% over asking prices. First time buyers are facing time deadlines for utilizing the $8000 tax credit, which expires on Nov.30, 2009 many are attempting to take advantage of the distress sale prices which for them are now affordable housing.
As one distressed property goes off the market it is replaced with another usually offered at a slightly higher price which is consumer driven predicated on what someone is willing to pay. In St. Cloud more homes are adjusted downward in asking price than they are upward.
The greater underlying issue here, is that the so called "Management Companies" are now lender controlled as well and are dictating what they will pay Appraisers for their professional services. Much like the banks controlling short sale and foreclosed properties have dictated what compensation they will pay Real Estate Brokerages for facilitating Real Estate transactions. Lenders have preferred Real Estate Brokerages they use to liquidate short sale and foreclosed properties. The lender also dictates what compensation they will offer. The co-Broke fee to cooperating Brokerages for facilitating the transaction by securing a ready willing and able buyer is often minimal and is based upon what the lender has determined they will pay the listing firm- only banks can re-negotiate the compensation AFTER a contract is presented for acceptance. If a private seller tried to do that- they would get sued.
The Sherman Anti-Trust Act- prohibits Real Estate Brokerages from conspiring to "Fix" prices for services rendered- yet this HVCC, is in fact, setting the standard of what they will pay professional Appraisers-just as the bank owned properties have done by offering limited compensation to real Estate Brokerages which act as clearing houses on their toxic debt properties. They have in effect and apparently legally "fixed prices" for compensation paid with the exception of Fannie Mae and Freddie Mac.
Attorneys unlike Real Estate Brokerages are paid up front for their services, while Real Estate brokerages perform the work, they are not paid until the property closes. Attorneys can prevent that from happening. In many cases REALTORS® are not getting paid at all for services they have already rendered. This too has an economic impact. REALTORS® are also consumers.
This is not protecting consumers who are entering into these Purchase Contracts in good faith, having been pre-screened usually more than once to establish their credit worthiness or have cash and ready to buy- only to be told after MANY weeks or months that they cannot purchase the home. We need to simplify the process-
What are your 2 cents?
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