One of the most frequently asked questions to me by potential buyers is whether or not the property in question is being sold by a bank. The question is asked because the buyer may feel that a bank may accept less than a traditional voluntary seller because they may want to get the debt off their balance sheet. They may also feel that if a bank is selling, it may take an inordinately long time to get a response to an offer. Finally, as a cash buyer, they may feel that a bank may be more amenable to selling to someone who does not have recourse to mortgage finance.
Like the Curate’s egg, there is an element of truth in each of the reasons. There are certainly properties on the market that are being sold by banks, but not as many as people think. Banks will not accept a bad offer just to get the problem off their balance sheet, that is why they employ professionals to sell the properties. Finally, the banks are often very interested in lending money to good prospective buyers – remember, that is how they make their money!
The casualties in this process are individuals who are voluntarily selling their first or second homes. These are not fire sales but they are people who are selling for a myriad of genuine reasons – downsizing, upsizing, moving, separating, marrying, etc. etc… Offering these individuals bad or low offers is a bloodsport and it is not fair!
So, what is the solution? Let’s have an efficient, orderly and timely disposal of distressed property. That means that we, property professionals, can get on with our business, selling property and tying to get the best price for our clients, the sellers. That’s our job almost 90% of cases, sometimes we are retained by buyers to act for them. We cannot act for both the buyers and the sellers in the same transaction, that is called a conflict of interest.
I look forward to seeing you call into my office during July and August. Don’t be afraid to ask me a hard question!