Approximately five years ago, banks pushed for federal approval to enter the real estate industry.
Not satisfied with being in the mortgage lending business, they wanted to control every aspect of the housing market.
Inadvertently, banks have entered the housing market, but not in the way they wished.
Through foreclosures and short sales, they are now in the housing business as they continue to unload homes they own or have a mortgage interest in through questionable loan underwriting guidelines.
So how are banks doing?
Here are three scenarios with bank owned properties that defy common sense and business principles:
- An offer was made on a condominium, which was rejected by the bank. Subsequently, a higher purchase price was made by the same buyer, however, the buyer requested that 3 percent of the purchase price be paid by the bank toward the buyer’s closing costs.
The bank accepted the second offer, but you have to wonder whose fingers were running the calculator at the bank. The first offer presented by the buyer, while lower in price than the accepted offer, netted more money.
- Short sales are still a challenge. Some banks respond quickly to offers they receive on these properties. And then there are those that do not.
For example, I just had a bank respond to an offer in less than 48 hours.
On the other side of the coin, I sometimes wonder if anyone is home.
A cash offer was made on a property on May 14 with a closing date of June 23. The listing agent advised me my buyer might have to be patient.
Patience is frequently a virtue in short sales. The buyer received verbal notification on Aug. 22 that the bank had accepted the offer and they were prepared to close in October.
They advised the paperwork would be forthcoming — I am still waiting for the paperwork.
It is perplexing that a bank would delay a closing on a property for four months when they could have had a quick close of escrow with cash in hand.
- This third scenario has happened more than once. A purchase offer is submitted and the bank rejects the offer as too low.
Two weeks later, the bank lowers the listing price below the offer made two weeks prior.
They say truth is stranger than fiction. It’s no wonder reality TV shows are such a hit.
Ray Pugel is a designated broker with Coldwell Banker Bishop Realty. Contact him at (928) 474-2216.