Holy Cow! You would think the market was still red hot the way Sellers are (still) behaving! Either they have no patience with the new (difficult) paradigm of mortgage financing or they still think their homes are worth $42Million!!!
Really, of late I’m seeing this ridiculous attitude from Sellers threatening to kill deals and hold the Purchasers’ downpayments all because the process of obtaining financing is more difficult and thus slower than it has been in recent years.
What part of: THE BOOM WAS AN ANOMALY or HELLO? IT WAS A FANTASY don’t these people understand???
I hired a new loan officer this week. He related a story of a Seller who legally threatened to cancel the transaction (serving a “Time Is Of The Essence” letter on the Purchaser) after only 4 weeks. The Purchaser was in the process of obtaining a gift from a relative for the extra $5,000 they needed to close. This can be a rather delicate process of asking your family for help to buy a home, so it can take a couple days.
When the Purchaser got the news about the cancellation threat—the TOE—they were so infuriated, the let the gift go and ultimately were denied for the mortgage because of insufficient assets to close. Stupid Seller lost a qualified Purchaser through lack of patience. I’m sure there are four other Purchasers lurking in the wings ready to step in and pay full price and close in 36 hours, NOT!
I have a loan closing this Friday where the poor Purchaser went to two other mortgage companies before finding his way to us. We got the loan done in a fairly timely manner (six weeks), but not without much travail and anxiety. Meanwhile my telephone blew up everyday as I had Realtors, Attorneys, the Purchaser and the Seller calling me with one question: “When are we closing?”
Fortunately my background is in customer service, so I know how to field such calls. But ultimately, I can’t answer the question, literally, until the closing date is set.
Two and a half weeks ago, the Seller served a TOE (Time is of the Essence) letter on the Purchaser. We got the loan cleared in time and scheduled a closing for the day after the TOE date. Pressure relieved, everyone got into place to attend the closing.
But then we discovered the Seller wasn’t even truly ready to close! Apparently there were documents needed from the condominium association that had never even been requested by the Seller’s attorney! So, even if the Buyer had shown up on the TOE date with cash in hand, there would have been no closing! How did they have the nerve to threaten to cancel and they were not truly ready to close?
Where do these people find the gumption to be so impatient and arrogant? Do they even READ the newspapers?
Then there are the stories I’m still hearing from Buyers about prices.
Granted there are some crazy Buyers out there who think EVERY house is in foreclosure and can be bought up for fire-sale prices; those Buyers are not serious at all.
The serious Buyers, on the other hand, the ones who truly want to own a home, are making offers on homes, and discounting from the asking price by what I would say are reasonable percentages. For example, a list price was $485,000 for a 2 family home, and the Buyer offered $460,000. That’s not ridiculous, nor is it insulting. The Seller wouldn’t even counter-offer!
A Realtor yesterday showed me a listing he just took. We all know the home isn’t worth a penny more than $575,000 and will probably sell for around $550k-560. The Seller insisted at the listing meeting that the Realtor take the listing at $629,000. Absurd. Do you want to sell or not Mr. Homeowner?
These Sellers are still thinking there are fourteen Buyers for every home wandering the streets willing to pay top price and carrying wads of cash in their pockets so they can close in ten days. Wake up call for Mr. and Mrs. Seller: THOSE DAYS ARE OVER!
I want to send a package containing a GIANT CHILL PILL to each of these Sellers with a note that says, “Hey Seller, CHILL OUT!”
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