If you have your heart set on buying a foreclosure and expect to get a great deal from a bank by taking one of their “assets” off their hands, you should erase just about any romantic notion from your thought process that it will be fast, easy and painless.
With the ease and speed of the Internet came the ability for banks to remove the balance of reasoning and accountability for how they do or don’t peddle their assets.
The system has been streamlined so that everyone can effectively communicate to ensure that no condo gets left behind. Those assets need protected and besides a paper trail, there now are digital footprints.
There are more than a few institutions out there that utilize online systems to organize the liquidation of foreclosed real estate inventory.
The perception that a contract gets faxed anywhere or that there is a human being to call to rationalize market value or anything else that affects the property or parties involved in the transaction is a mirage.
Contracts are submitted electronically and when accepted become accompanied by a mountain of addenda.
Getting an accepted contract is worlds away from getting a property closed. Most of the time, getting the contract isn’t much different than volunteering to be a hostage to an electronic system that may or may not be tended to in a timely fashion by the asset manager or whomever else is supposed to be using it.
Imagine running the produce department at the local grocery store where all communication is online. It’s not that much of a stretch since we’ve got a hoard of foreclosures hanging on the vine and more on the way.
Picture a produce asset manager asking the store clerk why he hasn’t sold the bananas yet.
The clerk says: “We sent you the buyers’ signed closing paperwork for the bananas two days ago and we never got a reply.”
Two days later the asset manager asks: “Is the money for the bananas cash? Is it in escrow?”
The clerk says: “Cash. One hundred percent of the funds have been in your escrow account since you accepted the contract eight weeks ago. The bananas are ripe and now they’re starting to get spots. We really should sell them before the buyers change their mind.”
The asset manager asks after a long weekend: “Can you describe these spots to me?”
The clerk replies: “The bananas are now more black than yellow and there are some small flies hovering around.”
Days later the asset manager asks: “Are they fruit flies or house flies and do you think they add any value to the product?”
The clerk asks: “The buyer is frustrated. Are you going to sell them the bananas or not?”
The asset manager replies: “Well, we only service the bananas and look out for their best interests. An investor actually owns the bananas. Let me check with the investor and get back with you. We may have someone estimate the value of the bananas again since they’ve been on the market for so long without selling.”
That’s only a sliver of the minutiae of foreclosure liquidation. It would probably be amusing if there weren’t real people who lost homes and real people who are struggling to maintain their patience long enough to get expelled from the system as a home owner.