The argument put forward by the ASSet managers and their listing agents is that they are so overwhelmed by volume that to have to sign every offer and counteroffer would completely grind them to a stop. Perhaps there is merit in this argument, but where is the basic fairness to the Buyer? Until a contract is signed the ASSet manager is free to accept any other offers on the property. Indeed, in Nevadathe listing agent is required by statute to present offers until instructed otherwise by the Seller. This verbal negotiation and delays in obtaining a signed contract sets up a scenario where an unscrupulous ASSet manager or listing agent can see your offer, call up a friend or investor in the market for a home, and miraculously slip in another, better offer before the ASSet manager signs the final contract with your Buyer. The ASSet manager doesn’t care, their income is based upon the amount they are able to obtain for properties. Who loses? How about the first buyer, who, based upon verbal assurances, has ordered inspections, an appraisal, and has perhaps made moving plans? Sorry, they are out the money.

 

Does this scenario play out in a majority of cases? Of course not! But the lack of transparency in the process and the rules being set all for the convenience of the ASSet manager makes it hard to support.  The real problem with ASSet managers, however, is that by their very existence they create extra costs for the investors in the original loans who actually are stuck owning property worth far less than the initial loan amount, while at the same time causing additional costs for the buyers wishing to own that property.

 

Further, because they are unregulated, ASSet managers can, and sometimes will, act in an outrageous manner. For instance in the last two weeks I have had a situation in which my Buyer made an offer on a FNMA-owned foreclosure, priced at $89,000. The home had no water heater and was missing a bathroom sink, so clearly the home would not allow for either FHA or VA financing. Do you think the ASSet manager would allow for those two repairs to be completed, thus allowing more buyers to purchase? Nope, the ASSet manager knew that either a cash investor would take up the property or some buyer would make the water heater and sink appear prior to the appraisal, thus allowing the home to qualify! Back to my client, who made an offer of $92,000, asking for assistance with closing costs totaling $5000. After some hemming and hawing, the ASSet manager agreed. Here’s another interesting sidebar, FNMA& FHLMC have taken the position that since they are quasi-governmental they fall under the waiver we have here in Clark County that exempts such entities from paying the property transfer tax. This particular aASSet manager takes the further position that other than commissions, the Seller (FNMA) needs to pay NO closing costs. This means that this so-called allowance for Buyer closing costs goes first to pay costs the Seller would normally pay in a transaction. This is really fair for Buyers, don’t you think?

 

So, when the property actually appraised for $85,000, the ASSet manager had the temerity to say “Well, I’ve just lost $7,000, so I am only going to pay $1000 in closing costs.” Finally, the listing agent managed to convince the ASSet manager to agree to pay $2500 in closing costs, which just about paid the normal seller closing costs. My Buyer had to negotiate a higher interest rate on the loan, in order to build most of her costs into the loan, and thereby have the cash reserves required to close. Some help for a first-time buyer!!