There is an over saturation of properties on the market. This fact makes it much more difficult to sell your listings, the prices are going down quicker than they went up. Most of the sale are turning out to be Short Sales. The troubling part of all this is the techniques many Realtor's are taking that is hurting the market, other Realtors and most notably--the sellers.

How did I get there? Well, I've had a few properties that my clients have been interested in and we've submitted an offer. After we submitted the offer, we agreed on the specifics and entered into contract. Once under contract we were advised that we were one of three contracts submitted to the lender. To me, that hurts the market and makes this situation even worse. Not mention, this action is unethical. For a regular sale this is not allowed.

The Realtor that took our offer defended the action by saying they they needed to get the property sold because the lender was about to foreclose and she needed to raise the chances the lender would accept one of the contracts. She also confided that it would give her a better chance to collect a commission. Things are tough! Well, that might seem like a sound strategy but there are unanswered questions and there are many other people involved that makes this action compound the over saturation of the market.

In a normal market, we are not allowed to enter into multiple contracts. Why do Realtor's believe we can now? What I hear is that we are not in contract until the lender approves the sale. I think that's wrong. The lenders approval is a contingency of the contract. The contract is entered between the owner or seller and the buyer. At this point the lender is a third party. What it does is give the lender that false impression that this market is not as dire as we make it seem after all it has three contracts on this property. That cuts down out chances of getting a sale approved for market value because the lender believes they have a hot property and will wait for a higher number. Sure enough, the lender came back with an unrealistic counter offer. The Realtor had to go back and make a more convincing argument of the legitimacy of their number and how they came about that number. This caused another layer of negotiations and a longer waiting period for all.

Let's look at the other people involved. There are three contracts and those buyers bound and can't walk away without putting their deposit in jeopardy. Those are two other buyers that can put an offer on another property. Those are two more properties that are coming off the market. Then there are 4 other Realtors looking for their commission checks, not to mention the different Title Co. or lawyers holding escrow and doing their work. What about the mortgage brokers for those two buyers waiting for their client to close on a home. We haven't even touched upon the other sellers that are waiting for all those buyers tied to other properties that have no hope of winning that contest. Those sellers will get their homes foreclosed and they have no other options. It is a vicious cycle that will be looked upon in a few years and the laws will be re-written and the lawyers will argue once the lawsuits come flying. We shouldn't need lawyers telling us what is right and what is wrong.

We, as an industry need to take into consideration how these actions will hurt just about everybody involved not only today but in the long term. I've called the FAR hotline, my association and lawyers for the different Title Companies in the area. All had their opinion and most were different than the others. No road map has been established but it should be straight forward. A contract is something that should be honored and a B or PS needs to be reflected on the MLS. How many of those Active listings have several offers tied to them? How many people are being negatively affected? We shouldn't change the rules and later find out if we could. The rules need to be followed and changed if it is needed by the authorities that oversee the industry.

Have we still not learned from the hot market of the past when no one wanted to look forward. Aren't we supposed to learn from the past and try to protect the future? It seems everyone is just doing what is good for today without looking forward. Well, the more homes that are on the market, the lower the prices will go, the lower the commissions will be and more importantly--the more sellers will lose their home to foreclosure. It's too bad we haven't learned the valuable lesson brought forth by this market downturn and the reasons why were are here today. Look ahead and do the right thing.