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Bank takes too long to Sign, Purchaser finds another House

By
Real Estate Agent with RE/MAX Regency and Staged Homes VA

Bank paperwork
I haven’t quite figured this one out, but, so far my dealings with bank-owned properties have gone like this:

1.  We (the Bank) verbally accept your offer.

2.  Purchaser ,please HURRY UP and sign all the bank addendum or we will move onto the next offer.

3.  We (the Bank) will sign off on everything and fully ratify the contract WHEN WE FEEL LIKE IT or when the documentation finally makes it to the right person.

My clients have been in a verbal contract with a Bank for over 4 weeks with nothing signed by the Bank, so technically speaking there is no contract.  Needless to say, my clients are having second thoughts about purchasing this property and think they need to look elsewhere.  They are pulling their offer and I am showing them properties once again.

If the Bank had just signed all the documents, my clients would be in a legally binding contract and would be going to settlement in two weeks.  But now the bank has to find another Purchaser while I find them another house to buy, all because of a few signatures.

Side note: I spoke with the listing agent this morning and she is frustrated at how many deals that have been lost because the bank she is working with takes too much time to get everything signed off....hmmm, I wonder when the banks will catch a clue? 

Comments(16)

Royal Goodman
Royalty Home Solutions - Madera, CA
"We Treat You Like a King"
I have seen the same exact thing. They will be in a hurry, then stop when it comes to signatures. I can't explain it. Thanks for sharing. Royal...
Mar 17, 2008 02:57 AM
Renae Bolton
Marketing 4 Realtors - Garfield Heights, OH
I'm your Professional Real Estate Marketing VA!

Same thing happened with us.  We were pre-approved, had all of the apropriate documentation in to the mortgage consultant - we were ready!  Found our house and it took over 7 weeks before we finally got all the necessary paperwork from the bank.  It was horrific.  I feel your pain.  Sorry you're going through this!

~Renae

Mar 17, 2008 02:59 AM
Holly Galligan
Coldwell Banker Sky Ridge Realty - Lake Arrowhead, CA
That is so frustrating! I just had buyers pull out of a house (for their own reasons) I went to my broker and asked if I had to even treat it as a sale fail since they a) didn't fully execute the contract and b) after stating they didn't care which escrow company named a new escrow company therefore the check came back to me as void. So no contract AND no money?! Doesn't look like a deal to me, but broker said yes, we will keep it for 3 years. Go figure.
Mar 17, 2008 03:01 AM
Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Chelle,

It is our responsibility to make buyers aware that buying a bank owned property is not like a conventional purchase. If they are in a hurry, they should not be looking at these properties. There is ALWAYS a trade-off between price and convenience, and the purchaser needs to know that ahead of time.

Mar 17, 2008 03:13 AM
Tony Grego, 317-663-4173 #1 Trade Association for Alternative Inv
REISA - 317-663-4173 - Indianapolis, IN

Get use to it. While they should banks act like they have no financial interest. The bottom has turned. Clients need to move fast or lose the home/price they want

Tony

Mar 17, 2008 03:14 AM
Joe Adams
Major Mortgage USA/Branch Manager - Montrose, CO
One up side to them taking so long (CW) that my borrowers actually  got a 9K price deduction because it took them so long to get the reduction processed and the higher price kept other borrowers away
Mar 17, 2008 03:55 AM
Chelle Gassan
RE/MAX Regency and Staged Homes VA - Bristow, VA
NOVA Realtor and Stager

Royal-seems like you have had the same experience

Renae-that story sounds familiar

Holly-I was thinking the same for this file.

Richard-my buyers were well aware of the issues involved in making a REO purchase, but the delays gave them time to re-think their purchase, despite the fact that they were getting an awesome deal.

Tony-it doesn't seem to be changing, so I guess I will get use to it.

Joe-how did you manage that? 

Mar 17, 2008 04:09 AM
Kirk Williams
Private Venture Capital - Everett, WA

Your experience is a sample of your future as the regulation and the banking lobby continues the squeeze play in the lending industry wielding their influence upon Congress and in the state of VA plus the other 49. The correlation here is indifference and solidifying their (Bank) position of being the big dog driving the bus or calling the shots while congress watches and the consumer (your clients) in your case continues to be abused and burned.

When I started in the business over 20 years ago the banks dominated and they were as cavalier about the origination process as they are with your situation. A 60 day closing was the normal course of business and indifference as to whether the loan should be approved or not and the stingy loan programs offered  because they were the most profitable for the bank. It had nothing to do with the consumer. A balance was required. That's why the mortgage broker and mortgage banker became so prevalent and dominate originations even today.

The fate of the lending industry isn't in the scope of focus for you but is relevant in terms of why you are getting nowhere. The cause for the angst in your transaction comes from the same place (the banks) and will have an even more frustrating impact on your income and the consumer will bear more cost as we move forward.

As congress in its feeble attempt to push lenders/banks by trying to "shame" them into cooperation (it's not working) experiences such as yours continue to be the problem all over the country. If it were important financially to the bank your deal would be closed wouldn't it?

As everyone cries for more regulation and a cry for more "transparency" the banks will once again get a pass. They (the banks) do not have to disclose their profit margins per loan (Yield Spread for brokers) and it is not well known they had record earnings for NSF, ATM and other MISC fees but the regulators featuring Barney ( I just woke up from a long nappy time) Frank (D) of MA and friends, the current administration and the candidates are nowhere and in the end will be of no help to you or your client. I am sorry for that.

Your situation will come to a painful resolve one way or another with no help from the bank. Remember to vote for the person that is not in bed with the banks. (good luck on that!) I have listened to many hearings about many aspects of the "credit crisis" and it is painful to listen to most of the representation (including mine) we have as a nation and the ignorance they display. Just listen to their questions and comments and you will understand my point.

As I sit here today commenting, I am in a holding pattern myself waiting for my clients purchase and sale to be "approved" by the "loss mitigation" department before we can make a move while in a rocky interest rate environment one day riding a bull the next a bear.

Sorry about my response but I think the Real Estate community should have this put into context. Your experiences, what you hear and what is really going on behind the story you hear. Get engaged with your representation and let them know your experience AND encourage your colleagues to do the same (BEFORE the election).

Good luck and I hope you have a great year.

 

Mar 17, 2008 04:20 AM
Cynthia Tilghman, Realtor® Onslow County NC Home Specialist
Kingsbridge Realty, Inc - Hubert, NC
Chelle,
Too much red tape and too many chiefs that papers must go through.  Sigh!  What a tangled web!
Mar 17, 2008 11:29 PM
Chelle Gassan
RE/MAX Regency and Staged Homes VA - Bristow, VA
NOVA Realtor and Stager

Kirk-A very long but informative comment.  We do need to remember to have our voices heard and represented in this next election.

Cynthia-It is a crazy web that is becoming more tangled as the year goes by. 

Mar 18, 2008 08:02 AM
Guy E. Gimenez
The PowerHouse Group - Austin, TX
ABR, CRS, GRI - Broker & Investor (512-731-5613)

Banks will catch on shortly after you know what freezes over.  It they were paid only on closings, you can bet they'd be much more aggressive, but that's no the business model they work under.  I started working short-sales in 1999 and I can tell you it's no better today than it was back then.  Patience and perseverance is the name of the game on these and you'd better have plenty of each.

Mar 18, 2008 08:06 AM
DeAndrea "Dee Dee" Jones
Samson Properties - Manassas, VA
DMVRealEstateChick

You would think they would have revamped their system.  Its a shame to make people wait so long.

Mar 18, 2008 08:16 AM
Karen Kruschka
RE/MAX Executives - Woodbridge, VA
- "My Experience Isn't Expensive - It's PRICELESS"
Chelle,  You would think they would repond quicker to get the home sold, but they have so many of them and they are trying to work with a reduced staff,  Karen
Mar 18, 2008 10:58 AM
Chelle Gassan
RE/MAX Regency and Staged Homes VA - Bristow, VA
NOVA Realtor and Stager

Guy-If short sales haven't improved since the 90's then there appears to be no hope, except patience and more patience.

Dee Dee-You think they would!

Karen-I would think with the current mortgage/lender crisis, that banks would do anything to get these homes off their books...but what do I know? 

Mar 19, 2008 07:37 AM
Anonymous
Big Rob

My wife I are purchasing our new home which is banked owned, well we put in a bid and then they told us what they would take so we agreed and sign the papers, well it is going on two weeks and the bank has not signed the contract and this was not a short sale but a forclosure. Keep in mind we agreed to what they wanted. How long does it take to sign off on your own deal.

Sep 05, 2008 08:18 AM
#15
Chelle Gassan
RE/MAX Regency and Staged Homes VA - Bristow, VA
NOVA Realtor and Stager

Big Rob- Be patient, the majority of bank owned deals do work out, they just work at their own pace.  Unfortunatley, the waiting game can be the down side to getting a great deal on a property.  Hang in there, it will probably work out just fine.

Sep 06, 2008 07:14 AM