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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