The Bank (Screw) Job

April 8th, 2009 Chris

It has been a crazy last couple of weeks here in South Beach. We’re coming to the end of our 3 months here and have loved it so much that we’ve been trying to buy a little place so that we can have our own pad and won’t have to pay rent. I say trying to buy because despite the one zillion places available including a host of foreclosure properties, we have failed to close.

Why you ask? Surely, there are many motivated sellers given the glut of properties and the hard-asset-starved financial institutions sitting on these worthless mortgages. Surely, in such a buyers market, those with the most to gain from the sale (ie. the banks) would be bending over backwards to move these properties.

Well, sadly, the only ones bending over are the buyers…

In the last two weeks, we have tried to buy three foreclosure properties and each time have been met with  unresponsiveness and a general screw-you attitude.

You’d think that with a mountain of these condos, the banks would go the extra mile to provide the buyer with information to ensure there were no objections in moving the sale forward. Instead the bankers are radio silent. Ask a question and you get crickets chirping… Request to see a piece of information and you hear the echo of your own voice.

There is no question that in this process, you are marching to the bankers’ drum-beat. I remember in the military there was an expression, hurry up and wait. Well this is alive and well in the real-estate market here. Submit a bid and you hear nothing for days and days (and days). Then, all of a sudden, you have hours to provide some info or respond to a request for a new bid. Ask any questions about the process, again with the crickets.
Finally, you really are left with the impression that you are being screwed. Submit your bid and several days later, you’re told that you have only a few hours to submit your best and final bid with no indication of what the bidding was currently at. Then a few days later, another request to submit your final best and final bid. And then you never hear anything again…

One of the big horror stories was a place we were bidding on that had been stripped down to the studs. Not a big deal – for the right price you can remodel just the way you like. The contract said you were buying it “as-is” and the seller had no knowledge of anything bad (mold, asbestos, etc…). Well, I did a little digging with the condo board and it turns out that when the previous owner was booted out by the bank, he turned on the hot water tap and left. Fast forward several days later – the mold was  bad, the drywall was black from floor to ceiling. So the entire Sargeant Shultz (I know nothing!) routine was BS. Oh yeah, and there’s a huge bill for the clean-up that the buyer will have to foot.

So we leave in a few days without a property and a thorough bad taste in our mouth from the whole experience. And with the knowledge that next year there will still be lots of properties ’cause the way the banks operate, they won’t be selling many.

What the heck does this have to do with a microbusiness? Not much – but it did remind me that I need to hug our banker when I get back to Ottawa. We have the world’s best business banking rep (Barb) at the Royal Bank. She’s responsive and always is acting in our best interest. If you don’t have a great banker, then switch. There are great ones out there…

C.

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