Sunday, April 27, 2008

More on bank arrogance

I don't know if this is bank or agent arrogance, but here are selected "instructions" from Keller Williams website of bank owned properties about "offer instructions" to buyer agents:

1. Buyer to be pre-approved by lender acceptable to seller. Call .... Buyer is under no obligation to use this lender. SELLER WILL NOT ACCEPT OFFERS WITHOUT THIS PRE-APPROVAL. We will not be following up with this Lender for you . Please have pre-qualification with the offer at time of submitting.

2. In addition to item 1 above, if the buyer chooses to use their own lender, then buyer is to submit a conditional loan approval letter with their offer and prequalify as instructed above. If the buyer is using 100% LTV financing, the approval letter needs to stat e the type of loan product that is being used and discuss it’s current availability and future availability as many 100% loan products are currently being fazed out.

3. If you have questions about availability of property please check MLS as we pride
ourselves in keeping it current. These type of calls are not returned due to volume!!

4. If you're wanting to know if there are offers on a property, please be advised that we
cannot return those calls due to the volume of contracts!! Please write offers as if there
are offers in; write your best offer!

5. If the property is currently winterized, it is the buyer’s responsibility at their expense to have the property “De- Winterized” for their home inspection and then “Re-Winterized” immediately after their inspections. You must contact Doug McKay at (916) 792-7751 to complete the de-winter/re-winter process. The cost is approx. $50 to de-winterize and $100 to rewinterize
and is payable to the vendor at the time the service is rendered. Any freeze/water damage incurred to the property during the De-Winterized time period for buyer’s inspection will
be at the buyer’s and buyer’s agent’s expense to correct.



Max said...

These people are jackasses. Rather than admit to the fact that the bank REO departments are overwhelmed, they make it your fault that calls aren't returned, offers aren't responded to, and property descriptions are out of date. This is a way for the listing agent to bluff you into a position of weakness in a negotiation: "if they're not returning my calls, they must not need me as a buyer. I'd better increase my offer."

Don't believe any of this crap. The banks need buyers a lot more than we need them. If they don't want to deal, walk away. There's 15,000 other listings to choose from. Never agree to be treated like crap by a seller! They don't have any standing in this market, and any attempt to convince you otherwise is a complete bluff!!

Max said...

Oh, and don't be fooled by the "volume of contracts" nonsense. Sales are at their lowest levels in 20 years, and trust me, there are too many agents sitting around twiddling their thumbs these days for you not to expect an immediate return call when you have a question. If they don't return your call promptly, or if they try and make you feel like your question is silly, let them know you'll be looking elsewhere to buy. I guarantee you'll get a call back.

Mike said...

I've made five offers on REO homes this year and 2 of the listing agents were extremely unresponsive and arrogant.

Making offers on these REO homes require very specific requirements and instructions. However, if you call to get the details, they never return calls. AND forget about getting a phone call returned about status of offers.

Also, one agent we called to ask about specific details on the home, he basically said "I got more than 10 offers on the homes therefore, if you want to make an offer go ahead but I don't have time to go get the info for you."

Some Real Estates agents are acting like idiots due to sales of homes picking up of late. When this "dead cat bounce" ends (later this year) I hope they starve again for a LONG TIME !!! said...

Just as a disclaimer, I am a Realtor, and I do not list REO properties (nor do I want to). I will brace myself for the likely attack I will face for this comment, but this is not bank arrogance. Most big REO agents have this sort of stuff on their websites, or agent notes in MLS referring to these policies.

What we are facing here is a glut of REO property that grew exponentially in a very short time period. Many agents who list REO properties have 150-200 listings. There is just no way humanly possible for them to return every phone call or follow up on incoming offers, and if offer packages are incomplete, banks just won't consider them at all.

Conspiracy theories aside, I think banks need to diversify and list their properties in a different manner or with more agents.

I personally get overwhelmed when I have 8-10 listings at the same time - the incoming call volume and work load is insane at that level. Couple that with the buyer transactions I represent and I could work 8 days a week if I let myself or had that much energy.

I know that ya'll probably will not believe me, but the market for well priced homes in nice areas under about $300k in Sacramento County is white hot right now. I have several clients who have been in bidding wars and multiple offer situations. These are coming from both investors and owner-occupant buyers. Much of what you hear in the media pertains to NEW home sales which have fallen to the lowest levels in many years. Resale home sales in Sacramento County in certain areas and price brackets are on fire.

FYI - some real estate agents act like jerks under any market conditions, and for that reason there will always be animosity toward agents.

I now will face the firing squad.

Buying Time said...

Erin, your insight is appreciated, but enough with the drama already.

Most of the folks that read this blog are not doom and gloomers....we are just average folks looking for our piece of the american dream.

Max said...

I know that ya'll probably will not believe me, but the market for well priced homes in nice areas under about $300k in Sacramento County is white hot right now.

No doubt that activity has picked up, but "white hot" isn't the term I would use.

There seems to be a fundamental disconnect, Erin, and maybe you can help explain it. Why, with this "glut" of REO, are agents behaving this way? "Incomplete offer packages" isn't a good enough reason: It's your job to help the transaction through.

Is there a scarcity of agents, perhaps, that handle REOs? If so, what the buyer is competing for is not the REO house itself, but the attention of the agent selling it! If buyers wait just a little bit longer, won't a few more selling agents show up and solve this problem?

I'm no conspiracy theorist; there has to be a logical explanation for this disconnect...

Mystere said...

What are y'all getting worked up about? Seller arrogance? Who cares?

If your objective is to purchase a property, then stay focused and let the rest roll off your back. While certain people take offense or get flustered at the seeming indifference and/or array of hoops to jump through, you'll be the one getting a leg up by making it *easier* for the seller to do a deal with you. But, my gosh, mean I should try to make it *easier* for the seller when the seller is treating me with such disdain?? Of course, you silly sock puppet. Keep your eye on the prize. Deal with the perceived snub(s) by reminding yourself that once you get the property you want and close the deal these people are out of your life forever. From that point on, you'll be enjoying the fruit of your effort. *That* is what matters in the grand scheme of things, not the relative insignificance of 'bank arrogance.'

alba said...

I don't think its arrogance by anyone in this marketplace. The homes for sale are owned in some sort mortgaged-back security, with a "servicer" acting as the middleman. The actual owners of the loans are on a different wave length than people in the housing industry, and have much bigger issues to deal with. Exposure to bad debt. The servicers probably don't care either about the actual value of the loan, or home. They're just passing information with no benefit to themselves. They're not in the real estate business, so I can understand why they don't try to manage an army of RE agents, trying to settle bad debts (REO homes). This is clearly not an efficient market, and must be the most expensive way for a bank to offload a home.

I may just wait until they begin bypassing this whole messy and expensive process, and return to selling them "as-is" on the courthouse steps. said...

Drama? Sorry, but I post on lots of forums and most of the time I am ripped a new one for having a different perspective - so I brace myself for attack.

Max - I am not exaggerating when I describe certain segments of the market as "white hot." If you sample certain price ranges and zip codes, you will see 2 months of inventory there - sorry but those are seller markets, REO or otherwise. I am not making generalizations about the entire market, nor am I saying it has been like that forever, or it will stay like that forever. I am speaking in the now.

Not listing REO's myself, I can not explain where those guys come from. I can only say that they are really overloaded by their asset managers / banks. For example, John Brophy (another KW agent) has about 200 listings right now. He has a small army of assistants and still can not manage to return calls. I went to show one of his new listings about 3 weeks ago, and there was no lockbox on the house. We left the house, looked at other properties, and still a few hours and MANY calls later I did not get an answer or call back. I did a transaction with him back in December, and spoke to him once on the day he called with the bank's verbal counter offer. His assistant did the rest of the communicating.

For buyers, I know you guys are frustrated. It is frustrating for agents too. It is no picnic dealing with someone who will not call you back. It is a big inconvenience to have your clients pre-qual with another lender (I see this mainly with Countrywide and Wells Fargo REOs) before you can make an offer. It is annoying that you don't receive written purchase agreements for a couple weeks sometimes. It is lame having to deal with a title company that is in Southern CA that won't generate a preliminary title report for a couple weeks. Having said all that, I don't so much fault the agents themselves, as I do a broken system of selling REO's.

Over the last 6 or so months, I have seen several new REO agents enter that marketplace...not sure at what point in time it will be enough to dilute the big agents' REO inventory though.

BT - don't get discouraged. You could wait a long time for a response from the bank, and unfortunately there is nothing you, your agent, or the listing agent can really do about it.

Deflationary Jane said...


That pretty much explains why we gave up already. If the agents and asset managers can't be bother to return calls or deal with any portion of the transaction in a timely manner, then I can't be bother to buy.

Secondary is the itch to get out of CA. We do not want to raise a family here. Mr. DJ has put down his foot on this.

Patient Renter said...

I am not exaggerating when I describe certain segments of the market as "white hot." If you sample certain price ranges and zip codes

Throw out some zips...

sacramentia said...

Seller arrogance is lame, but I think the best revenge when you get treated like crap is to work even harder to take their money.

If a seller treats people poorly, everyone who gives up leaves a better deal for the person that will put up with it.

The asset managers are a bunch of paper pushers detached from the reality of how homes sell. People buy from people, but excel doesn't have a formula for that so the asset managers will never get it.

Jacob said...

you will see 2 months of inventory there - sorry but those are seller markets

If the homes selling are all distressed then it isnt a sellers market imo.

If agents have 200 listins then they need to either take on less work or hire more assistants to handle it properly.

And now I have to get a loan from a lender the seller approves of, lmao.

You want my money, show me some coutessy, answer all my questions truthfully and promptly, and maybe you will get the sale.

Just another reason to wait for another year.

And with all the REOs selling, I am still wondering if there are more sales than new foreclosures?

If you are selling 1000 and taking back 1500 then it doesnt matter how fast you sell, you are still losing ground. said...

Patient Renter - I put a Trendgraphix chart up on my blog last night...

alba said...

erin, what does that graph tell you?

For me, the macroeconomic conditions for lower income areas will continue to be hit hard by many factors. The market needs speculators all the way down. Our economy has a ways to go before it stabilizes, and I would expect the lower economic end to continue to bear the brunt of the impact. Bottom line, each of those zip codes will contain larger, newer homes (if they exist) in the under-$300K range. There's still no chance of a home purchased today in those zip codes to maintain their value over the next 18 months. said...

Alba - Do you consider those zips lower income areas?

alba said...

whether they are, or not, how do you interpret the graph?

When the sellers are lending institutions trying to limit their losses, and the timing of their exposure to bad debt (its not a loss unless you sell), don't you think leverage for a seller should include the notion of an advantage? Anybody making money selling those homes, besides the RE agents? said...

I think I made my interpretation pretty clear - those areas under $300k are hot right now.

Can you elaborate on your second question?

Anyone making money on the homes? Sure there are plenty of regular sellers in this price range too, although admittedly most are REO's.

alba said...

Its not really a sellers market if most all of the homes in that group are selling at a loss.

Implying that its a good time to buy, or even sell, by showing a downward trend in inventory is a misrepresentation. It only shows that RE agents are making money. Its not a good time to sell, nor to buy. You're allowing the graph and some arbitrary comments to entice folks to make a deal now. You won't say its a good time to make a deal. You don't trust the graph, and the trend its showing, any more than I do.

Its just business; and if works, good for you. said...

Blah blah blah. You will refute whatever I say and put words in my mouth. I am showing you FACT of what is going on in those zips. When did I say it was a great time to buy or sell? I didn't. Quite frankly, now is a really crappy time to have to sell in most areas. However - some people do have to sell for whatever reason (death, divorce, birth, relocation, financial doom). Is it a good time to buy? It might be depending on your individual circumstances.

We have two different perspectives, and that's ok. But don't insult me by manipulating my comments.

Patient Renter said...

Anyone making money on the homes? Sure there are plenty of regular sellers in this price range too

I think the point being made was that they're selling at a loss, which is about what you'd expect following the HELOC craze that just took place. Given this, sales may be "white hot", but that's nothing to celebrate unless you're a broker or Realtor.

As a buyer, celebrating low(er) prices is a bit preliminary since they'll be lower still in near time.