Foreclosure in 78586>Question Details

Richie, Home Buyer in San Francisco, CA

Would someone please tell me what is going on with the banks! Why are they not releasing the vast amounts of?

Asked by Richie, San Francisco, CA Sat May 2, 2009

homes available? Several of my co-workers and friends are just walking around with pre approvals in vain. Everyone is being shown the same crummy homes and the banks are actually holding off for top dollar. For example, a friend and I both put in an offer for the same property unaware of the other person offer. Her offer was around ten thousand higher then mine, but even her offer was not accepted. Or you have a situation where the greedy investors and banks are just accepting cash offers inspite of them being somewhat lower then asking at times. Did not the president tell the banks to start releasing the home?

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Wait another year to buy, save another 20% on the price. Good Luck
0 votes Thank Flag Link Tue May 5, 2009
There are two different issues in your question. First why are the banks not accepting offers and two what are the banks doing with the money they were given to improve their captial ratios.

The first question depends on the value of the property and the offer. Just because you have made a offer does not mean the bank needs to accept it. They would have an opinion of value that they would use for a guide and during the first 90 days they are going to try to get near to that value. After that period they may entertain other offers that are lower. The one thing they have to look at is the likely hood of the deal closing with the financing in the offer. Hopefully your working with a buyers agent that can assist you in your local market to better understand what is happening their.

The second thing is what is happening with the funds the government gave to the banks. This is a much bigger question. It appears from my perspective that the banks are using the money to beef up their balance sheets and are having a difficult time understanding the rules and incentives in the new government programs. This planning period to understand the programs seems to be taking a long time and longer for the banks to implement. In particular, modifications have hit a real wall.

Keith Manson
First Weber Group
Certified Distress Property Expert
Greenfield, Wisconsin
0 votes Thank Flag Link Tue May 5, 2009
The bank can hold out for higher offers if they wish.
Many are getting bombarded with low-ball offers.
0 votes Thank Flag Link Mon May 4, 2009
It all depends on what your offer is, and how low the offers are. Pre-approval letters aren't worth too much right now, as we are seeing more and more loans be rejected right before closing, hence the banks going with cash offers a lot of the time. You need to understand the process a bank goes through prior to listing and prior to any price reduction. The bank has an appraisal done on the property, and normally 2 BPO's (Broker Price Opinions - (1 from the listing agent, and 1 from an outside agent) done on the property to give them the value of the property in it's current condition, and how long they can realistically anticipate a home to be on the market. If your offers are way too low, they will hold out for higher offers. In our market in Houston, we are seeing a ton of Multiple Offer Situations, which normally brings the price up a bit, as buyers are notified that they are to bring their Highest/Best/Final offers in. The banks are right to hold steady to a certain price, because the more they lose on these homes, the worse the banks financial situation gets.
0 votes Thank Flag Link Sat May 2, 2009
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