With foreclosures and short sales becoming more than just a passing foot-note in the Twin Cities housing market, lenders and banks are being forced to dip their toes in waters they'd likely rather avoid.
Whether they like it or not, they're being forced to sell real estate.
This is causing some growing pains, naturally. Financial institutions haven't structured their day-to-day operations to sell real estate, nor is that a business they've typically shown any sustained interest in. Marketing, staging, luring buyers, negotiating the purchase and handling the legal minutiae of title transfer are not exactly in their wheelhouse. In a perfect world, they'd likely be content with just sticking to their bread and butter -- lending and receiving money.
So what happens when organizations not well-equipped to perform a crucial task are asked to perform that crucial task with increasing frequency? Everyone gets a little testy, of course.
The common refrain from the Realtor community is that dealing with banks who represent foreclosures and short sales is far more difficult than working with a traditional seller. The litany of complaints typically centers around the bureaucratic delays, the interminably long waits, the indifference, the unwillingness to negotiate, etc. Local real estate blogger Teresa Boardman explains her own sob story:
"Recently while dealing with a bank on a short sale I could not reach the employee in charge of the file. I was told that he was the only one that I could talk to about the particular property. His voice mail box would not accept messages, because it was full. He was on vacation, but I had no way of knowing that."
These are common and legitimate gripes, or "beefs."
The resounding response from the lender community is that foreclosures and short sales are sticky, expensive situations which require due diligence and thorough research and review—thus necessitating a longer wait time and a little bit of patience. Over at the Calculated Risk blog, they're firing back:
"Is it the job of the Loss Mitigation Department to care about clearing your local RE market? No. Is it their job to care about keeping your buyer wiggling on the hook long enough to get papers signed? No. Is a short sale supposed to be a painless alternative to foreclosure for anyone involved? No. There are no painless alternatives. There shouldn't be. There cannot be."
This too, is a legitimate beef.
Yes, purchasing foreclosures and short sales can be a time and labor-intensive process, prone to longer waits and confusion. Yes, this does introduce another element of uncertainty to the local market that it doesn't need.
But no, it's likely not going away anytime soon. And banks and lenders, like everyone touched by foreclosure, are honestly trying to stop the bleeding any way they can. The only real elixirs to this mess are time, patience and some empathy. Here's to hoping that both sides can meet halfway on the first two and actively engage in the third.