I went to a mortgage industry luncheon recently, but certainly not for the yucky rubber chicken.
The real bait on the hook was the chance to sit at the feet of a panel of three of the Phoenix area's most high-powered residential real estate brokers as they showered us with their wisdom on the state of the local market (including Scottsdale).
The panel of bigwigs were Dominic Scappaticci, president and designated broker of Realty Executives, Martha Appel, VP and designated broker of Coldwell Banker Residential Brokerage, and Deems Dickinson, president and designated broker of Russ Lyon Sotheby's International Realty.
The meeting was hosted by the Arizona Mortgage Lenders Association (AMLS) and the Arizona Association of Mortgage Brokers (AAMB).
The panel pretty much punted on their prediction for pricing and sales activity levels for the near term, saying that the remainder of 2010 will turn out to be essentially a clone of 2009. That prognostication was, well, very predictable. The safest forecast is always a continuation of the status quo.
So far, boring! Things got a little more interesting though when the subject turned to short sales.
Dominic Scappaticci reported that in a move to avoid lawsuits he has advised his agents not to obtain either the Certified Distressed Property Expert (CDPE) or Certified Short Sale Negotiator (CSSN) designation. It appears that a REALTOR® with either of these "expert" designations can be held to a higher standard. Yet perversely, in our litigious society if anything goes wrong in a short sale transaction these REALTORS® may as well paint a neon sign on themselves advertising their availability as a defendant in a lawsuit.
But the greatest interest by far was generated when the discussion veered to appraisals and the panel lamented a case in which a foreclosed property, owned by an unnamed but apparently large bank, went under contract and the bank informed the buyer he would be required to waive the appraisal contingency unless he elected to obtain his loan from the bank-owner. Many listeners were clearly aghast at hearing this, at which point a man in the audience stood up to comment.
He identified himself as employed by a large bank, stating first that his firm would never do that, and then gave a scenario showing how polluted this arena can easily become.
Using round numbers, a bank offers a home for sale at $100,000 and gets a cash offer for $110,000. Another offer then comes in for $120,000 requiring a loan. The problem is that the person making the last offer doubts that the property will appraise for $120,000. They are making the offer simply to obtain the contract so that when the appraisal fails they will be in position to re-negotiate the sales price, thus acing out the $110,000 cash offer.
Wow. You have to admit that real estate is an ever-changing field with unending complications. And that human nature will always seek, and find, the cracks in any system.