Yesterday, the Arizona Republic ran a story about Real Estate "Flopping" in Arizona. Basically, the story relayed that "flopping" is when a buyer purchases a foreclosed or short sale property and then immediately lines up another buyer to purchase the property at a higher price. Apparently, it is big news because banks are crying "Foul!" Banks are saying that if they knew that another buyer would pay a higher price, they would have sold directly to that party...or would they?
Banks call this flopping. I call it capitalism. Show me a business that does not have a middleman that gets paid for his knowledge and service. If the buyer of the foreclosed home is cunning enough to line up another buyer who is willing to pay more, so what? Personally, I would never go to the court house steps to purchase a foreclosed property because I don't know all of the intricacies of purchasing a foreclosed property. I am too afraid that I would purchase a house with a huge tax lien or structural or environmental defects. Would I purchase a house from an experienced court house step buyer? Yes. And I realize I would have to pay more for the house for utilizing his expertise.
Some buyers right now want to purchase properties but cannot get financing using traditional lending companies because of increased loan requirements. Are these buyers willing to pay more for a home that offers seller financing? Absolutely. Should those sellers who are carrying the note and the financial risk receive more for these homes? Yes!
The lenders are crying Foul. But is the average Joe feeling sorry for the lenders? Please note that if a house forecloses or is short saled and has a loan that is government insured, the lender is handsomely financially rewarded after the transaction closes. This is where the billions of dollars to solve the housing crisis is going. It is not going directly into the hands of any homeowners. Ultimately, we will all contribute to these billions by paying taxes. So, in the end, the banks win again...and again...and again.
No comments:
Post a Comment