REAL ESTATE: Lenders outplay traditional sellers

Lenders are doing better than individuals in pricing houses for
quick sales; however, lenders can be difficult to deal with once
buyers have started negotiations, said real estate agents and real
estate website Redfin.

Between Jan. 1, 2010, and March 31, 2011, in San Diego, final
sales of distressed houses went for an average of 99.7 percent of
their list price, 3.1 percentage points better than the average for
traditional sellers, Redfin said Tuesday. Lenders ?- which
include banks, credit unions and private investors ?- sell houses
for more than their list price 40 percent of the time, almost three
times as often as typical sellers.

Traditional sellers, whose homes are usually better maintained,
want more profit, and they often price their houses too high in the
beginning, agents said. By the time they lower the price, interest
has waned and they?re more desperate.

In San Diego, 50.2 percent of the houses sold are ?distressed,?
meaning they?re foreclosures or short sales, in which they?re being
sold for less than borrowers owe on them. Lenders make the final
selling decisions on these properties, and they usually put the
price on the low end of the market to move the houses fast, and to
avoid making repairs on poorly maintained properties. But some
agents and buyers say that lenders can be difficult to deal
with.

Muhammed Thaha, a software engineer, just bought a 4-bedroom
bank-owned house in Carmel Valley for $920,000, though it was
listed at $899,000.

?Because it was priced attractively, it could attract multiple
offers,? said Thaha. ?Now you have only one chance to make the
final and last, best bid. You don?t know what to do. The house was
in a nice locality, so I bid high.?

Lenders sometimes insist on two-week waiting periods before
they?ll accept any offer, in order to attract multiple bids, real
estate agents said. Oceanside Redfin agent Anna Nevares, who
represented Thaha, said lenders make buyers submit bids on
?multiple offer addendums,? whether or not they are multiple
offers.

?There?s no negotiating games buyers can play,? Nevares said.
?They have one shot to give highest and best. It?s a blind auction
situation.?

But aside from pricing, dealing with lenders can be very
difficult. Thaha said his seller took weeks to answer simple
questions, then billed him when he needed to delay the closing.

Lenders are often disorganized and make inscrutable decisions
when bringing houses to market, said Carlsbad real estate agent Jim
Klinge.

?The only strategy that could be in play is the intentional
fumbling and bumbling of these REOs,? he said, referring to
foreclosures. REO stands for Real Estate-Owned. ?It couldn?t be any
more mismanaged.?

Klinge said he recently had a lender send the same property to
an auction twice, costing the seller $12,000, and another time he
had an Oceanside house in which the seller flip-flopped between
making repairs and selling the property as is.

Dealing with traditional, individual lenders can mean avoiding
these problems, but they set higher prices.

?I?ve seen sellers price high, buyers bid low, seller rejects
it, and then comes back a few weeks later to see if buyer is still
interested,? Nevares said. ?I?ve seen that happen five, six times
lately.?

Klinge agreed that lenders? tactics of pricing lower are more
successful.

?You sell for more by having a sharper price on it,? he said.
?Buyers get more excited about the deals, and want to penalize the
greedy.?

Call staff writer Eric Wolff at 760-303-1927.

Article source: http://www.signonsandiego.com/news/2010/sep/10/long-fruitful-shelf-life/

Source: http://salcefalu.com/blog/real-estate-lenders-outplay-traditional-sellers/

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