Are Banks Harming Themselves by Being in The Real Estate Market? Or, more importantly, are they harming the Real Estate Market?
At last week's sales meeting I announced an upcoming listing I have. It is located in an newer subdivision just outside of Ann Arbor. The sub has some homes on the market but not an overabundance. There are a few homes that are either bank owned or short sales. A couple of them even have SOLD signs on them that have been there since Fall but have not closed yet.
One of my colleagues contacted me about my upcoming listing. She has clients looking specifically in that subdivision, however, they are not interested in any bank owned or short-sale situations. Thankfully, mine is neither. It is a real seller who is not in distress - imagine that - remember those days? Anyway, we set up a showing. The buyers like the house and are going to write an offer. The story is that they have an offer in on another house in this subdivision that happens to be a bank owned foreclosure. They have not gotten a response to their offer in 3 months. My listing happens to be the exact same floor plan and priced approximately $33,000.00 more. The buyers know that the Seller will not consider an offer as low as the bank owned property. Ultimately, my listing will get more money on the sale because the Buyers are now paying for time and convenience not having to deal with a bank.
I recently experienced a situation that I was representing a Buyer and we put an offer in on a short-sale listing. We waited and waited and waited, for nothing. After 2 1/2 months of silence, no response from bank, the property came up sold/closed on the MLS for $5,000.00 LESS than what my buyer offered. So, not only did my Buyer not yet buy a property the Bank got $5000.00 less for a property they are already taking a loss on. I don't understand the logic???
Both of these scenarios are really putting a negative spin on the already struggling real estate market. And, those are just two examples. I know around the Ann Arbor area these are all too common situations.
Are the banks harming themselves by being in the real estate market?