My mind is off on a tangent. Maybe it's an uprising. Maybe the frustration level has reached its breaking point. Maybe the straw on the proverbial camel's back has been placed and the camel's back is broken? Maybe it's not really a trend at all, just a fluke.
Regardless of whether it's a trend or fluke, it's unusual to request showings and get a response saying the agent is cancelling the listing. One agent's response to me regarding the cancellation was that the lender/owner of the property has not given a response to her 18 phone calls and 3 offers that were submitted for lender approval three months ago. She's unwilling to work with someone who is unwilling to work with her in return! (I think I agree with that one!). Two other bank owned listings in my tour of 10 were also canceled by the agent. It's hard not to combine these cancellations with comments over the water cooler: "That lender is so frustrating. They still haven't made a decision and the offers have been in for 4 months." "Don't the mortgage companies know this is a good offer? What are they waiting for?" "I'm never going to list a short sale again." "The lender got an appraisal for $190,000 on this house and it will be lucky to sell for $125!", etc.
Is it possible that these St. Paul real estate agents have had enough of the stalling? Is it possible the amount of work put into a short sale is being weighed against the reduced commission the lender requires? Is it possible they're following through on their threats never to list a short sale again? The lenders , and buyers, need not worry because there are always agents willing to take up the slack. The short sales will continue to be listed for sale. From my perspective, though, my mind can't help but wonder why so many cancellations from one small tour.
LOL! I'm picturing the magic helicopter bursting at the seams with green backs!
I don't know how many times I've been told of a lender taking much less after foreclosure than they could have gotten during the short sale time line. That, too, boggles a rational person's mind!
Posted by: Bonnie Erickson | June 16, 2008 at 11:06 PM
The lenders are simply stalling the inevitable. If they can kepp the house just one more quarter as non-performing, maybe Ben Bernanke will fly over with a magic helicopter and toss enough capital out to keep the CEO in his job for another quarter. 3 months pay for those guys is millions. They know their time as chief executive is limited. The board will have to fire them, eventually.
If the bank takes the house in foreclosure, the asset impairs their capital and prevents additional lending. So, they stall. And, if the house has 2 liens on it like and 80-20 or 1st lien w/ HELOC, forget about getting 2 lenders on the phone. I had my B of A assigned workout person's phone extension changed into a fax line over night. If the buyer really wants the house, sell the house when the bank owns it, just don't give them a dime more than what they would have paid as a short sale.
I think the same appraisers that over valued the house the last time are getting the foreclosure work and they are afraid of recourse from the lenders. It will take a while for foreclosure prices to hit reality pricing.
Posted by: Thomas Johnson | June 16, 2008 at 10:17 PM