Piggybacking on Claudia Newcorn's Jan. 4 column regarding the heartlessness of banks and the greed in the current housing market, I'd like to share my experiences.
My adult children have been attempting to purchase their first homes. They've shopped in the price range of $100,000 to $155,000, looking mostly in northeast Modesto. Imagine their frustration as they find that perfect home, submit an offer at the asking price only to discover that they've been bumped by someone who has come in at a slightly lower price, but with cash.
Those someones are usually investors who are buying up the low priced houses, throwing in some cheap flooring, a quick paint job, maybe a new countertop and putting them back on the market in less than 30 days, asking price $30,000 to $40,000 over what they paid.
Talk about greedy! This exact thing happened to my daughter twice before she was able to buy a home. However, I am convinced that she paid more and bought a house that had been so flipped, with fresh painted and new flooring.
My son is on his fifth attempt at a house, this one owned by Bank of America. Luckily his offer's been accepted. However, we've been told there is a cash offer just beneath us.
How about requiring bank-owned properties be on the market for 30 days before investors can swoop them up? We've seen seven houses hit the market for one to five days, then immediately sell to a cash buyer. Who's feeding the info to investors? Stands to reason that Realtors could get twice the commission on the same house if it sells once to the cash buyer and then that buyer sells it again in a month or so. That doesn't happen if the house is sold initially to someone who wants to live in it.
I know of six other people attempting to purchase homes; all are experiencing the same phenomenon. Try telling these young people there's a flood of available houses!
I understand investors are out to make money. Flipping houses is nothing new. But how much do you need to profit? There's no way they put that much into the home to pretty them up.
First-time home buyers are not able to get into the housing market. Many of the lowest priced homes are being snatched up by cash paying investors and then thrown back into the market at inflated prices — more than the first-timers can afford.
Furthermore, banks aren't interested in making a deal with first-time buyers. The banks are just as rigid and unfriendly to buyers as they are with people trying to get loan modifications.
Buyers are waved away if they so much as ask the selling bank to repair or replace anything as a part of the purchase deal, regardless of whether it's a broken appliance or leaking roof. Everything is "as-is." The bank will gladly move on to a cash buyer waiting in the wings.
If you are looking to purchase a home, take the time to find out who owns it. If the property is owned by a corporation that just recently bought it, then walk away and leave them holding the bag for awhile. If we quit agreeing to pay the inflated price on the "flipped" houses, maybe, just maybe it will send a message that we're tired of being taken advantage of and want nothing more than to pay a fair price for a decent house without feeling duped.
Vidauri is a Modesto resident. Contact her at columns@modbee.com.
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