Countering Your Way Into A Corner: "Bank Style" Real Estate

Real Estate Broker/Owner with Mint Properties, Lic. #01871795 Lic. #01871795

Countering Your Way Into A Corner:
 "Bank Style" Real Estate

About a month or so ago, I attended a Broker's Meeting at our local Association of REALTORS®.  Our (awesome) Board President had just returned from the California Association of REALTORS® Conference in Anaheim.  Part of her remarks were that those mystical entities known as "the banks" don't think "the REALTORS®" are doing their job well with short sales because they don't see enough "back and forth" with buyers in the offers presented to the bank for approval.  It was a good thing I had to leave early because I felt my blood starting to boil, and there was no one there from "the banks" to yell at anyway. 

Now I know this is what "the banks" are feeding us, but I'm sure it has its origins in that other secret society:  "the investors."  You know the people that invested in loans where the borrowers didn't have to provide ANY paperwork?  Well, apparently they now think paperwork is a good thing, so much so that they are requesting useless pieces of it.  So, instead of turning back the clock and asking for a few pay stubs from the people they gave half million dollar loans to like it was candy, they now want to cut their teeth on paperwork they think that "the REALTORS®" need in their transaction.  But last I checked the lack or overabundance of counter offers was not cited as a major factor in the housing bubble.  Using a cell phone photo of a borrower standing in front of a commercial vehicle as verification of the existence of an actual business WAS a major part of it - and I believe it was their underwriter that stamped "approved" on that loan, not a REALTOR®. 

So, apparently, in addition to spoon feeding market data to their overworked and underpaid staff and assembling short sale packages the size of "War and Peace," we now need to start countering every short sale offer that we get.  Just the other day an agent called me with this suggestion, so I guess the word is out on this preferred "technique."  But my question is, do "the banks" know ANYONE that does real estate?  This is not some corporate merger paid for with other people's money; we are dealing with real people who are spending their real money - many times it is their life savings.  We're talking about first time buyers who are being hammered by daily news reports about the housing market, cash investors who have a set price point from which they won't budge, and move up buyers who just took a major hit on the home they sold and expect to return the favor.  That may not be everybody's market, but it's a lot of people's market right now.  Now, I understand if they don't want to take my word for it, but how about putting a few out of work REALTORS® on staff, so that "the bank" can better explain to "the investors" that counters can be deal killers.

Besides, last I check "the banks" don't use the offered price as a measure of market price anyway.  In order to determine market value on a $500,000 asset they order a $20 drive by BPO with a half hour turn around.  So, they have that whole valuation thing down anyway, right?   So, I propose that instead of driving away every buyer in town with a series of deal-killing counters, I be allowed to submit a skit which a couple of negotiators can re-enact in front of "the investors" so that they can understand why the contract price is what it is for that particular piece of property:

Buyer: I'll give you $550,000.

Seller:   No, I want $600,000.

Buyer:   But, that was the price you asked.

Seller:   I know but this has to look fresh for the bank.  Now give me $595,000 or you can forget it.

Buyer:   Well I'm not paying more than $550,000, after all that's the asking price.

Seller:   Well, I might consider $590,000.

Buyer:   Do you have any other offers?

Seller:   Well not right now, but that's not the point.  Look, $585,000 is a steal, you don't want to know what I paid for this house!

Buyer:   I don't care what you paid for this house. I'm paying $550,000 or I don't want it.  Look, there is a foreclosure down the street that just sold for $525,000 last week.

Seller:   Right, but I'm still watering my lawn.

Buyer:   Right, and that's why I'm giving you $550,000.

Seller:  Ok, Ok, $575,000 it is, but you're breaking my heart.

Buyer:   Not $575,000!  $550,000 or I'm gonna walk, this is a buyer's market!

Seller:   Dang it, alright list price it is, you know you have me over a barrel here. 
By the way, this is a CHASE short sale so I'm going to need like 5 or 6 months to get this thing approved...


Copyright © Tni LeBlanc 2010 *Countering Your Way Into A Corner:  "Bank Style" Real Estate*


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Posted by

Tni LeBlanc, Broker
(805) 878-9879 mobile/text
CalBRE #01871795


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John Cunningham
eXp Realty - Phoenix, AZ
Helping Phoenix Sellers and Buyers find each other

Funny how the banks think we need to work on their behalf. This TBWS video about banks will make your heart melt when you think about the poor banks: 

Dec 09, 2010 06:57 AM #12
Cynthia Larsen
Cotati, CA
Independent Broker In Sonoma County, CA

The banks don't think we are doing our job? Ya know, they have a point there. I'm not doing my job because I'm on the phone on HOLD for hours on end. I'm not doing my job because I'm FAXING documents to them 10, 20, no ... how about 30 times before they will admit they received it. That's right, I'm not doing my job because I'm having to deal with their incompetence for months on end. Thank you for letting me rant on your post, Tni!

Dec 09, 2010 07:02 AM #13
The Elise Bickel Team
ReMax Select Realty - Pittsburgh, PA
Leasing, Property Management and Sales

I laughed so hard with the "skit". I don't know your market but it isn't often that we get full price offers on the properties here (our market average is 88%). But it is a good post.

Dec 09, 2010 07:29 AM #14
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

As the banks are now simply an arm of the government they have a government worker mentality.  If there is a problem make a rule.  As long as the rule is followed and no one has to think or make a decision they are good.

Dec 09, 2010 07:46 AM #15
Jack Mossman - The Nines Team at Keller Williams in Lodi
The Nines Team at Keller Williams in Lodi - Lodi, CA
The Nines Team in Lodi

Tni - Great post and great comments as well.  The adversarial relationship that has evolved over time between real estate professionals and bank asset employees I think found its genesis in the REO driven market period.  Many of the short sale negotiators I work with now were formerly asset managers for the bank-owned properties divisions.  I feel that the "investor" argument is more often a ploy than a reality of the approval process.  BUT - to be certain who owns the loan, we'd have to have a tracking records of the loan's ownership.   

Dec 09, 2010 09:22 AM #16
Donna Paul
Keller Williams Realty Gold Coast - Dix Hills, NY
Long Island Home Specialist,All About Real Estate

Tni: I have the same problem with Chase Bank as we speak. The buyer made an offer and the bank wanted more even when the appraiser came bank with a lower number. I'm not sure if they want to close the deals or just pay more in the end to FORECLOSE on it. It's very puzzling to me. Whatever they are doing now is making the buyer Walk.

Dec 09, 2010 10:21 AM #17
Nancy Conner
Olympia, WA
Olympia/Thurston County WA

Although I was laughing all the way thru this - especially your skit - it's that laughter where it could just as well be tears because it is WAY too true!

Dec 09, 2010 11:03 AM #18
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

Karen - You said it!

Nor- Tell them that.   Not to mention that they don't have to pay for the Realtor's time unless it is a deal they want.  And it doesn't cost them a dime to have us pitch it to them.

Mike - Yes right now they hassle (or hustle) us over paltry sums and call it negotiation.

John- You know I hate them right?  LOL.

Dec 09, 2010 01:19 PM #19
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

Cynthia - Now that is what I'm talking about.  It is not my job to fax you a document 50 times.  There should be a short sale penalty at some point.  After all the government is paying them and it is in all of our interest to get out of this mess.

The Weber Team- Most listings here selling within 2% of list price.  So, I would be in the position of countering full price offers!

Gene - You got that right.  They have little to no incentive to perform and do their jobs, or at least they don't act like it.

Jack - You may be right.  I think it is a ploy to get us to perfect their files with our sweat and no additional compensation.

Donna - I personally think CHASE is one of the worst.  They waste everyone's time involved whether they close or not.  There is just no reason for a short sale to take 6 months. 

Nancy - Thanks Nancy, I'm glad you enjoyed it.  I had fun writing it.

Dec 09, 2010 01:26 PM #20
Marcy Moyer
eXp Realty of California Silicon Valley Probate, Trust, and Investment Sales - Mountain View, CA
Probate, Trust, and Investment Specialist

It sounds absurd to me, but I think it is worth asking around if this is really true.

Dec 09, 2010 02:05 PM #21
Linda Graves Arnold
Coldwell Banker Gundaker-St. Louis, MO - Chesterfield, MO
St. Louis Real Estate Pro - 314-422-2762 - Referr

Tni - Just when we have thought we had short sales figured out and how to package our clients in the best light possible and for the best chance of success, they change the game.  Short sales are hard enough.  We don't need them making the process harder for no apparent net gain for anyone. 

Dec 09, 2010 02:35 PM #22
William James Walton Sr.
WEICHERT, REALTORS® - Briotti Group - Waterbury, CT
Greater Waterbury Real Estate

Tni, indeed, indeed. The skit was hilarious, and undoubtely true in some corners of the U.S. housing market.

Dec 09, 2010 02:42 PM #23
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

Marcy - I've heard it from more than one person at this point and I would consider our Board President a good source.

Jim and Linda - EXACTLY.  We are doing enough already the ball is in their court to improve the process not in our court to provide bogus counter offers.

William - Yes, it is close to true here where properties are selling about 98% of list.  If you price the home fairly and it sells for list, why would I counter? 

Dec 09, 2010 03:00 PM #24
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

A Realtor would work wonders at a Bank. I could move their paperwork so much faster.

Dec 09, 2010 03:48 PM #25
Jackie Connelly-Fornuff
Douglas Elliman Real Estate in Babylon NY - Babylon, NY
"Moving at The Speed of YOU!"

Banks are unrealistic about the areas in relation to price. They want what they want and they want us real estate agents to cut our commission to make these short sale deals happens. It's enough to make ya nuts!

Dec 09, 2010 10:24 PM #26
Eileen Hsu
Douglas Elliman Real Estate - Manhattan, NY

Such a scandal these banks... This is why I do so much yoga and try to keep my cool when I am on the phone. Ommm....

Dec 10, 2010 03:39 PM #27
Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

I once went through three counter offers with a buyer on a short sale.  Each time they accepted it, being told that if they did, the approval letter was coming.  And each time, the deal got worse.  That was a Washington Mutual short sale with a very bad listing agent and a terrible hired hand negotiator.  Yeah, why would a listing agent want to do their own negotiating, right?  Don't get me started.

Dec 11, 2010 05:31 AM #28
Sonja Patterson
Keller Williams - BV - College Station, TX
Texas Monthly 5-Star Realtor Recipient for the Hou

I've helped an investor (CASH buyer) purchase ONE short sale, but the rest of the homes purchased were foreclosures.  We made an offer on a SS back in August to close on as soon as they could put the paperwork together.  It was a very reasonable offer considering work needing to be done.  It is still on the market now 4 months later as "ACTIVE".  I hope they are able to save the homeowner from foreclosure.

Dec 11, 2010 09:20 AM #29
Steve Baklaich
RE/MAX Results St Cloud Mn real estate - Saint Cloud, MN
Treating Buyers & Sellers to Full Service Always.

It's almost like they are trying to make these deals harder to do. Make us earn the deal and commission, since they can't force the commission down, as they once did (or attempted to do). Market time and incremental price reductions should be evidence of the value. If it didn't sell at $500,000, and you reduce to $475K, then $450K before an offer comes in; that should tell them as much as a BPO.

Dec 12, 2010 04:17 PM #30
Patricia Beck
RE/MAX Properties, Inc., GRI, CDPE - Colorado Springs, CO
Colorado Springs Realty

Banks have become a real pain to deal with lately; their requirements constantly change, it's ridiculous!

Dec 13, 2010 11:21 AM #31
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Tni LeBlanc, Realtor®, J.D.

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