Monday, April 6, 2009

Buyer Fatigue and Short Sales

Buyer Fatigue - when a buyer is fed up with the media telling the consumer to go out an buy a home at the bargain rate of 20% to 50% of market value and is unable to do so, the buyer refuses to look at any more short sales or foreclosures to buy.

I have a wonderful buyer client who is looking for a home for his family. Today, I have 2 new homes that just came on the market but both are a short sales. I emailed the listings to the client and they emailed me back and said "no thank you, we will wait for a regular sale." This is becoming the norm. I have heard this now 4 different times. I have heard from other realtors who are buyer's broker that if they knew it was a short sale they would not show it.

Usually, the buyer's broker doesn't want to show because of the unknown length of time the bank will take to response to the short sale request. Listing realtors if not aggressive with the bank are unable to get timely responses back.

So what is happening is that buyers aren't getting what they are told is out in the market, and realtors are frustrated with listing realtors for lack of communication.

Buyers are tired of the waiting and the banks are using contracts to play against one another. Agents don't want to show short sales and buyers don't want to buy short sales. What are banks to do???

Okay, I have a suggestion. First, if I were a bank I would hire and train intelligent time sensitive individuals. This is not a job for a temp as this is what I encounter most of the time. Second, why does this process take such a long time to make a decision. We are dealing with numbers or better yet Dollars. Banks know that if the value is not there they can't sell the home for more than what an appraisal shows. Banks order appraisals or BPO's (Broker Price Opinion) before making a final decision. Once that information is in the the decision should be simple? Not for the banks. There are still weeks that lag on until they finally get back to us.

Everyone in the industry knows the costs associated with the foreclosure process. It's not just the lost money from the sale but the costs involved with hiring the attorney to do the foreclosure, the cost of hiring the asset manager, the clean up if there is an actual foreclosure, etc.

I believe that what Congress has to do is make these banks accountable. I mean really accountable. They need to have logical people making decisions not pencil pushers. They had no problem accepting our tax dollars. They take our tax dollars but have no accountability or sense of urgency to no one but themselves.