We've made an offer on a house...for the second time. Same house, same offer. And it still has not been accepted or rejected. The house is a foreclosure, and evidently these things take time...a lot of time. And apparently the realtor representing the bank has his hands full. Too full to show us enough courtesy to keep us in the loop. But what is he busy doing? Certainly not presenting our offer(s) to the bank. Certainly not informing us the house was up for auction. Certainly not telling us whether the house had sold at auction. Certainly not telling us whether our second, revamped offer was accepted or rejected. With so many foreclosures out there and so few houses in general being sold, I don't understand what's taking so long. Don't the banks want to unload these houses and recoup at least part of their money?
More below.
We moved to Massachusetts two years ago and began renting a home. It took more than a year to sell our home in Montreal. We have now spent a year (more) looking for one to purchase. With market prices dropping, it seemed inevitable we would find something we could almost afford. By afford, I mean that the market in Mass. was 40% higher than that in Montreal. And the market in Montreal two years earlier was 40% higher than central Virginia. Unfortunately, our income level didn't increase the same percentage as the housing costs.
I had seen a listing for "the house" last summer and drove past even though it was out of our range. "Prices will come down" my husband kept saying, so I kept in on the back burner. Then, it was taken off the market this fall. I first noticed it again in early spring with a drastically reduced price. The listing stated it would be sold "AS IS" with no changes or addendums to the P and S. "It's a foreclosure", our realtor surmised. I waited a month or so before I broached the subject with my husband. Might as well take a look. I won't call it a handyman special, so much as an antique that needs updating...like a modern kitchen, and bathrooms.
I was immediately turned off. It is a great bones house, very solid, and the barn is great, too. But we already did our 10 year renovation in Virginia, and I didn't want another one. I'll only do it if we pay to have it done. Weeks went by with nothing else close to what we wanted. Over the next few weeks we looked at it 3 more times.
Then, on the day we had the contractor meet us there so she could get info to make an estimate, there was a "For Sale by Auction" sign in the front yard. Why didn't the bank's realtor mention that when our realtor called to make the appointment? We decided to make an offer so we could perhaps stop the auction. The auction was in two weeks and we didn't want to go the auction route.
We waited and waited and our agent called and called, but we received no response to our offer. Then, the auction day came and went with still no response. During this period, my husband sent me an e-mail referencing a Mr. Mortgage article dated 13 May 2008 discusses the April housing market in California.
the home sales numbers - bank REO sales are counted in existing home sales numbers. Thus if a home that has been foreclosed on and fails to sell at auction, the bank must buy the home back from the auction (from itself), and this counts as a "existing home sold".
97.75% of the homes failed to sell at auction so the banks bought the rest back. That percentage was in line with last month. Bank REO is quickly becoming ‘The Real Estate Market’.
That seemed very disturbing on two levels:
- If the bank didn't get the low bid it wanted, it could decline to sell it at auction. Then, it could buy it back.
- Such sales back to the bank count as "existing homes sold".
I wondered, how much the bank had to pay to buy the house back from the auction house?
After another week of no response, we finally were told, the house didn't sell at auction and they would entertain bids. That, too, was met with silence. After two weeks, we're finally told that the contact at the bank has changed (to the department that rebought the house?) and our offer is being convey to them. We should hear back in a couple days.
Another note is that our realtor checked out the bank's realtor and he has 56 listings ... all forclosures, all over the state. When he finally responded to her, he said he had six houses in the same situation as ours (transferred to another dept in the bank).
Our mortgage lender told me that the banks do not authorize anyone to make these types of decisions and that the offer has to go before the board. I have a friend in another city who said it took them 6 months from the time they submitted their offer to the time they closed.
If time is money, why do the banks allow things to drag on so long? My husband says it's because they are in the banking business and not the real estate business.
Your thoughts?