Lakes Region Real Estate Market Report - September 2012 - Keep Jobs in America

September was a good month for residential home sales in the communities covered in this Lakes Region Real Estate Market Report. There were 91 transactions at an average sales price of $318,825. That is better than the 68 sales last September at an average price of $213,838. In September 2010 there were also 91 sales at a lower average of $263,411.For the first three quarters of 2012 there have been 675 sales at an average price of $299,305 compared to 545 sales at an average price of $312,130 for the first three quarters of 2011. That’s a 24% increase in sales! So once again, total sales are up and prices are down just a bit.

Today we all hear the politicians arguing about shipping jobs overseas and the devastating affect that has had on our jobs market. I never really thought about it affecting the real estate industry until recently. I have a client that wanted to see a bank owned property several weeks ago. The home was listed with an out of state agent that had never seen the property and showings were set up using an on-line company called Hubzu. I am already concerned about where this is headed...

After looking at the home, the buyer wanted to make an offer which also had to be done on-line. The offer process was not all that difficult and required the basic info about the buyer, the buyer’s financing, and agent info. But you had to pick from terms and time frames that actually didn’t work in the real world. There was a minimum bid amount listed, but we went a little higher to show good intent. We received a response some 48 hrs later that the offer was not accepted. It said it could be for one of several reason with the main one, obviously, being the price. We increased the offer $5,000, entered all the info again and again the offer was declined. We repeated the process two more times until we got up to the asking price of the property and low and behold the offer was accepted. But the buyer is happy as this is still a good deal.



I then received an email from a lady, who I’ll call Bishakha Khan (that’s kinda close), at a company called Altisource introducing herself as the “transaction coordinator.” Altisource apparently farms out this portion of their business to a call center in India. Their website states “Altisource improves the performance and profitability of its clients by leveraging a global workforce, integrated technologies, and decision models.” But, they didn’t mention anything about ease of use and the fact that they really don’t make decisions, they read from a script. Anyway, Bishnu sends me the standard 32 page boiler plate purchase and sales agreement with terms that really weren’t realistic. I emailed her that the time frame of two weeks for receiving a financing commitment with a closing in 30 days was impossible to meet. I provided a letter from the lender as supporting documentation. The contract also said they would not turn the water so that we could do inspections. They wanted us to do an “air pressure test.” That might work fine in India but the oil fired hot water heating system here requires water to run and it must be operational for the inspection and appraisal process. I asked if we could turn the water on. She didn’t know. Bishakha said to put the changes of terms and request in an addendum and send it in along with the signed contract. Done.

The next email I received said “The seller will not turn on the water at the property. I strive to provide excellent customer service.” I tried in vain over the next three days to explain why we needed to have the water on. Emails went back and forth as she would say on an “Urgent Basis.” I asked "what it is you don't understand? No water, no loan." Their replay was always “The seller will not turn on the water at the property. I strive to provide excellent customer service..." There were numerous phone calls to and from people that I could not even remotely understand and who could not grasp what I was telling them with regard to the inspection, appraisal, and financing process.



Finally, I removed the request to turn on the water from the addendum and resent it. I figured that we could handle this the old fashioned Yankee way; on our own. The next email from Bishakha thanked me but informed me that we were out of contract because we had not provided our title company with a the good faith deposit check yet. She said we had a 24 hour grace period to do so or we would be in default. In my book, until we received the signed addendum back from India there was no contract and therefore no deposit required yet.

Luckily, in one of the emails there was a reference to the closing company representing the seller. This company was located in good old New Jersey. They might speak with an accent in Jersey, but I can understand it. After all, I watched all of the Sopranos episodes and am now engrossed in the Boardwalk Empire series. One call to Cheryl down in Jersey pretty much straightened everything out. I got my addendum within 15 minutes and we are working our way through the process. We’ll see how it goes.

Buying a bank owned property is difficult enough without having to deal with these kinds of issues and farming foreclosure management overseas makes a bad situation even worse. Let's keep things in America folks...