Is This The New Normal in Real Estate?

Written by Posted On Wednesday, 11 June 2014 05:06


Is the real estate process (at least in this area) totally screwed up or is this just the new normal? I’m not saying the market is screwed up, although it is very unusual right now, with an extremely tight inventory and faster than historically normal appreciation. What I’m talking about is the process itself – the stuff that has to go on to make a sale happen. This involves all of the players that have a role in the process in addition to the Realtors involved – the home inspectors and appraisers, the mortgage people and the title companies, plus the secondary players like the PMI companies and home insurance companies.

The process, pre-recession, was not always perfect but it usually worked fairly well. After the recent recession every deal seems to be a struggle to get through the people and companies and process. Every company in the chain downsized and now they find themselves shorthanded, but reluctant to put on more staff. The result is that the process itself has become grindingly slow and error prone. There are too few people trying to handle the suddenly larger workload that the end of the recession has caused.

In addition, new rules and laws passed by well-meaning, but totally clueless lawmakers in Washington have added immensely to the work involved and caused the companies involved to become super cautious and conservative. All of that adds time and effort to the process. Deals that used to close in an average of 30 days now take 45 – 60 days, if they close at all. It is almost impossible to get the closing paperwork to the clients with less than 24 hours to go before closing and many clients see the closing docs the day of closing. There are mad scrambles to get the information to the buyers about what money they need to bring to closing and way too many delayed closings due to errors in the closing docs or docs that are too late.

This insanity is made worse by the new rules for mortgages which have driven mortgage companies to make getting a mortgage a Herculean effort on the part of the clients and the mortgage reps. We live in the age of the “underwriter”; that mysterious man behind the curtain who keeps making ridiculous demands in his relentless pursuit of taking zero risk. I have seen closings delayed when an underwriter demanded bank documentation on the source of bank a deposit of well less than $100. The inmates are truly running that asylum.

Of course those in Washington who said “I’m here to help” made things worse with all of their new laws and rules, some of them still unfolding from the Frank-Dodd nightmare. The lawmakers put some teeth in the penalties of the new laws, but I suspect that they had no idea who would end up getting bitten – the poor, would-be homebuyer who is facing a mortgage industry that would rather do nothing than take any risk of making a mistake. The dust that rose out of Congress turned out to be more Indians and not the Calvary coming to our rescue.

For the Realtors involved this means a lot more time educating the clients to set the correct expectations of what they will have to go through to buy a house. It means resetting the timetable that we use to add the extra time that the current process involves; and it means having to spend more time checking the work of the other players in the chain who can no longer be counted upon to do a professional job. It also means spending a lot more time pushing and cajoling and begging others to get their jobs done, so that the process can proceed. There are no straightforward or easy sales any more. Even cash sales can be screwed up or delayed by people in the process chain that have no motivation or sense of urgency.

So, is this the new normal? I certainly hope not. There were bound to be problems implementing all of the new laws and rules; but those were exacerbated by the staffing issues that most of the companies in the chain brought upon themselves. Hopefully that will be fixed as soon as a few of these companies decide that the recession is over and start hiring and training again. In the meantime patience and perseverance are the key traits that would-be homebuyers need to exercise.


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Norm Werner

Norm Werner is a Realtor at the Milford office of Real Estate One serving the southeastern Michigan area of Oakland and Livingston Counties. Norm specializes in residential real estate. Norm lives and works in Milford Michigan and is married to Carolyn Werner. Norm and Carolyn live in a historic home just three blocks from downtown Milford, with their two dogs - Sadie and Skippy. Norm specializes in the historic homes of Milford and the surrounding area and is on the Board of Directors of the Milford Historical Society. Norm especially enjoys working with first time buyers and those at the other end of the real estate spectrum who are downsizing into their retirement home. 

In addition to his web site, Norm also owns and m,aintains web site, the web site. He is also the webmaster for and the web site and the MilfordCar web site, as well as his church web site - In addition to blogging about real eastate, Norm has a personal blog - - on which he shares inspirational messages and the occasions personal observation about life.

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