I never cease to be amazed at the number of foreclosure properties in Southern New Hampshire that bounce back and forth between being under contract and back on the market with regularity. Some of us affectionately refer to them as "yoyo properties". On a number of occasions I've had a conversation with the listing agent that went something like this:
ME: "Hey, LA, I noticed that your beauty (and I say that with the utmost love and respect) on Main Street is back on the market. What's the scoop?"
LA: "Well, the buyers couldn't get their financing because the house wouldn't go FHA."
ME: "No Sh*t Sherlock!!! Have you seen the house???"
Okay, I never actually said that.... but I wanted to.
So, how does this happen. Why would an Asset Manager accept an offer contingent upon FHA financing on a property that clearly does not meet FHA appraisal guidelines and why would a listing agent advise their client to do so. (We won't even discuss why the selling agent would fail to give the buyer a hint that maybe this might not work.)
As far as I can see the problem on the listing side is that we have Asset Managers with (probably) 500 files on their desk so they have neither the time nor the inclination to go rifling through the file to figure out what the condition is and we have listing agents that subscribe to the "let's through it against the wall and see what sticks method of selling real estate".
Many of these agents are just playing the numbers. They do not visit the properties themselves, they have someone else go and take pictures for them. They do not visit town hall and talk to the building department because even here in "Cow Hampshire" most of the assessor's information is available on line so they just pull the property card (or more likely have someone else pull it for them) and throw it in the file. They hide behind the "it's a foreclosure and is being sold without representation as to condition" statement like children hiding behind their mother's skirt. (It will be interesting to see how defensible a position that really is when some buyer brings suit - but that's a subject for a later post.) When offers come in, do they actually perform the duties of a listing agent and review them and advise their client as to the various pros and cons of any given offer? Of course not...they flip it over to an assistant who handles it like an administrative task dutifully filling in the blanks on the offer management system with likely no comments at all let alone advice. Add all of that together, shake... and voila...yoyo properties!
Now, there are some good REO listing agents out there who take their fiduciary obligation to their client seriously but the number of agents who don't is appalling and, unfortunately, I think it casts a black cloud over us all.
If you are looking to purchase real estate in Southern New Hampshire (including Salem, NH), what can you do to prevent wasting time and money entering into contracts on properties that are not financeable? Step One is to find a good, knowledgeable real estate agent you trust to work with you on the buying side.
For more information about buying or selling real estate (including foreclosures and short sales) in Southern New Hampshire, contact me at (603) 490-5344