If you are a first time home buyer or if you just start looking for a home recently, there are several new problems that you should be aware of as you beginning to look for a home. Here is a list of them:
- More short sale listings. As we getting into the third year of home financing crisis, one would think that most of distressed property phenomenon should be behind us. But if you check the multiple listing services, you will find more and more homes are short sale and REO properties. In certain zip codes, almost 50 percent of the inventory is distressed properties. At first, it doesn’t seem to make sense because as economy improves, home owners should be able to start making mortgage payments and less of them need to sell their homes. But if you look at the days on the market information, you will find that many of these homes have been on the market for 150 days or longer. This means that the bank and the realtors have not been able to sell these distressed properties quick enough to take them off the market. Hence, the short sale homes are piling up.
- Many homes that aren’t really for sale anymore. This is also a unique problem for the home buyers. For example, if you see a home listed for sale on the computer, and you want to make an appointment to see it but upon contacting the agent or the home owner, you find out that the property already has several offers. The listing agent is “collecting more offers” for the bank and ignoring the rules that every property that has an accepted offer must listed as pending sale. This practice is not only unethical and improper; it also makes the inventory of home looks much larger and wastes everyone time because you need to confirm each and every listing to make sure they are actually for sale.
- REO agents and their notorious lack of response. During the past three years since the housing crisis begin, there is a special class of realtors that begin to impact the market. They are the agents that specialize in handling REO (bank owned) properties. REO agents are notorious in their lack of response to your inquiry and your offer. Granted that they have many extra duties to perform, such as evicting the existing tenants and repairing the damaged homes, but their attitude toward buyers and other agents is simply “take it or leave it”. This is appalling. You often find homes have been sold with several offers that are still listed for sale. And the questions about the update on status of an offer are often ignored. You can call and call and send many emails but nothing happens. One realtor working out of Oakland that is particularly notorious for her lack-of-response practice that one can only wonder how they ever get anything done with their escrow.
These problems have no easy and quick solutions. As a buyer looking for homes, you need to be aware of the problems and be patient and persistent in your search and not be bug down by these market impediments. I welcome your comments and solutions to these issues. Please send me your comment and I will be happy to post them on my blog in the future.