If this tale of bank ineptitude in California is typical of what’s going on around the country, the real estate market is in for a rough ride. Banks can’t get their act together to accept short sales – sales that are less than what is owed – and end up letting the property going to foreclosure and then selling for less than was offered originally. Everyone loses: the home owner has a bigger liability, the bank has a greater loss and housing inventory remains on the market far longer than is necessary. Will the situation improve? Not as long as people like this banker are in charge:
The investor asked for $24,000 credit for the repairs, essentially making the offer $401,000. Countrywide said no dice.
The house went through foreclosure in late August. The owners and a tenant in the second unit had to move. The bank put the home on the market a couple of weeks ago, after spending $7,500 for painting and new carpets, according to the new listing agent, George DeSalvo, a Realtor with Frank Howard Allen in Greenbrae.
The new price? $374,900 – about 6 percent less than the rejected short sale offer.
“I wish I could say this was unique, but I had three other properties with the same situation,” Harris said.
A Countrywide representative said it followed due process in weighing the short sale offer.
“At the time the offer was considered, the market value of that property was shown to be somewhere closer to $425,000,” said Rick Simon, a spokesman for Countrywide, which is owned by Bank of America. “The value is determined by appraisal.”
Unlike most of Marin County, Novato is an area where foreclosures are increasing and prices are on a downward spiral. Did Countrywide consider that the property’s value might be falling by $10,000 or more every month?
“We don’t try to engage in speculation as to where the market is going when considering the offers,” Simon said.
Maybe they should.