Shame on the Banks

Posted by Eric Miller on Wednesday, November 4th, 2009 at 1:56pm.

I'm sorry I haven't written in while, but contrary to what the media is saying, we are busy. Our business is ahead of last year and people are buying the bargains to be had in the Fort Lauderdale area. We are working harder than ever, and it is frustrating to see how a correction in the real estate market, has caused banks to stick their heads in the sand, run for cover, and ultimately create a run on real estate and their own banks. I am not smart enough to comment on if the bailout being discussed is the right thing to do, but I have enough common sense to know executives who failed to perform should be given a ticket to Florida instead of a paycheck. We have many bargains that I am sure they can afford. Sincerely I don't blame banks solely for this current crisis, there is plenty of blame to go around but they are definitely responsible for a portion.

If you are  about to buy a home and finance it with a mortgage, you need to be prepared for a simple fact. The banks have told their appraisers exactly how they want them to perform. This in itself is a disgrace as appraisers have always had the job of estimating an independent opinion of value, well, not anymore. The banks have told them in many ways, protect your license, be conservative, don't give credit for renovations, deduct for a declining market (now they too predict the future), and basically be as pessimistic as possible. Notice I did not say as realistic as possible. Simply this creates a self fulfilling prophecy. Prices cannot stabilize, as long as banks, and their appraisers say they are still falling. From the best neighborhood in town to the worst appraisers are performing in the same fashion, if you have a massive huge bargain it may appraise at the price on your contract. In my opinion the contracted price is not even something an appraiser should see, or know about until they have completed the appraisal. How come nothing ever appraises above the contract price if this is suposed to be "an honest opinion of value". When you have five or six buyers bidding on the same property are they all dumb, this is an honest opinion of value. Value is what a property will sell for in a fair and open market.

So now I can predict this market, buyers will be limited to better than 20% down, and cash ( its still King ), many buyers will be asked to accept properties which appraise below the purchase price and need more money down, foreclosures will continue as banks continue to tighten their lending practices and people cant refinance, prices will drop until homes become very affordable, and then banks will step back in all over again and offer everyone money (once they feel safe), and most likely through a governement backed program. Something is wrong here and I know that sooner or later our leaders can find the way to stem the foreclosure market, keep people in their homes, and stop the downward spiral of real estate prices caused by an enviornment with few options,

For the time being, and until things change, the herd is heading for the door via short sales, and simply low priced properties and the smart money is buying real estate the old fashion way, location, location, location. In the Fort Lauderdale/Hollywood/Pompano area we are always here to help. See you soon its early Saturday morning and we have buyers in town ready to look for the few bargains that remain,

Eric Miller is an award winning Florida Realtor, salesperson and broker. His website, provides an up-to-date guide to Fort Lauderdale Condos for sale, and the most complete buyer, seller and investor information for the Fort Lauderdale Real Estate Market.

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