Paul Slaybaugh, Scottsdale AZ Real Estate

In theory, an appraisal is an independent evaluation of a property by a neutral third party to determine its likely worth in the open market.

In practice, it has become the de facto final word on a property’s worth, overriding the agreement between a willing buyer and seller.

How is it that the guestimation of value has supplanted the actual sale as the ultimate arbiter of worth? That the tail has come to wag the dog? Thank your friendly financial institution.

You see, appraisals are rarely ordered for cash transactions. Why? Because the buyer has already reviewed the recent sales comparables and negotiated the best terms he/she could with the seller before arriving at the final sales price. Appraisals are requirements of (most) financed transactions because they are really not for the benefit of the buyer. They are an added layer of protection for the lender that is putting up the bulk of the purchase money.

Certainly an understandable requirement from an institution that is taking on the risk of lending money against a property that may or may not represent suitable collateral, depending on the drooling-idiocy factor of the buyer. The bank demands an appraisal to validate the purchase price before ponying up the cash; makes perfect sense.

Where things have gotten a bit off-kilter as of late is in the bank’s internal review process of the appraisal. Times were, the appraisal came back at value, and you were good to go. Your shrewd purchase was confirmed by a non-biased review by a licensed professional. After the housing meltdown, however, banks have taken to assigning the bulk of the blame for the whole fiasco to unscrupulous loan originators and appraisers for falsifying loan applications and willfully inflating values, respectively; ignoring their own ridiculous loan products that were offered to people who never should have been candidates for stated income, interest-only financing vehicles, they are determined to stamp out any potential for fraudulent dealings that exposes them to similar risk in the future.

Tightened appraisal standards came to pass, including restrictions placed upon direct selection of appraisers (most orders go to faceless appraisal management companies now, who in turn select the appraiser). Loan originators and Realtors have limited access to appraisers these days, lest we corrupt their sensibilities and bend them to our devious aims.

The appraiser is now free to perform his evaluation in an ivory tower, unencumbered by the incentive-laden hands that would pull at him to bring in a value reflective of the sales price.

Or is he?

While charges of fraud and artificial inflation of value have been heaped upon the working stiffs from up high, I posit that the exact opposite is now occurring.

With the current barriers in place, the banks themselves are the only ones with unfettered access to the appraiser during the course of a transaction. Beholden only to those banks, appraisers have been put in the impossible position of providing fair evaluations of properties for institutions that have a vested interest in suppressing value/risk.

Bluntly, banks are actively pressuring appraisers to devalue properties.

By using the veto power of the underwriter review, they may demand that an appraisal which came in at value be reworked to use different comps or adjustments made to the physical attributes of the house that they dispute (square footage adjustments, etc). They may demand that adjustments (downgrades) be made for market trends, etc.

In short, some bean counter in an office in South Dakota is using his position to dictate the final version of the appraisal to the licensed professional who has actually physically viewed, measured, photographed and evaluated the property.

This is how appraisals initially come in at $400,000, only to get knocked down to $350,000 upon underwriter review. And when that happens? You get to appeal the appraisal … to the very institution responsible for the final disparity in value.

Akin to taking one’s death sentence appeal to the hangman himself.

Appraisers have little choice but to comply if they want to keep their accounts with the big banks in good standing. Further, until the underwriter signs off on the appraisal, it really doesn’t matter what value is reflected in it. He decides the house isn’t worth what you are paying for it, your loan is scuttled. Unless the seller agrees to sell the property to you at the reduced price (unlikely in a market that is now generating bidding wars) or you have additional cash to plunk down to make up the difference, you are out the cost of the appraisal, inspections and emotional investment in the property.

The big banks are artificially suppressing our values, and they are charging you $350-400 a pop to do it.

What’s the best way to ensure that you are working with an institution that is actually interested in helping you purchase the home of your dreams? Think local. Many small, local banks not only work with select appraisers who actually know the areas they cover (as opposed to trucking them in from Tuba City on the luck of the draw), but are more likely to keep your loan in their portfolio. One of the primary drivers of a big bank’s decision to take on your loan is how sellable it is on the secondary market. Any quirks with the property, such as it being recently “flipped” by an investor, and the loan becomes less attractive to them. Out come the knives.

Add the suppression of value and subsequent hindrance to the market’s recovery to the list of charges I wouldn’t mind seeing in a financial perp-walk. Such manipulation of the market and coercive impact on property values does not merely effect buyers, but it robs sellers at large of what little equity they may have left. Of course, I suppose it is only fitting that the very institutions that spawned the ponzi schemes that led to housing’s demise are the same that would stand in the way of its nascent resurrection.

Such practices are an affront to us all, and must be stopped.

The home you didn't think existed in McCormick Ranch not only exists, but is now for sale. Decadently remodeled and expanded, this is the rarest of creatures for these parts. A Scottsdale Real Estate unicorn, if you will. Now remain quiet and try not to make any sudden movements. You don't want to scare it away.

Got your lasso at the ready?

$569,000 - Majestic McCormick Ranch Home for Sale! Location: Scottsdale, AZ Love McCormick Ranch, but the typical 1970s style homes of the community ... not so much? Wish you could marry the ideal central location and abundant amenities with architecture and cosmetics a little more in keeping with today's standards? Then this home is for you. Boasting well over 3000 square feet of remodeled excellence, the original floor plan of this Camelot home in the Palo Viento 2 subdivision of McCormick Ranch is barely recognizable. Expanded to include a bonus game room, relocated front door, expanded living room, expanded master, kitchen opened up to family room, newer roof and A/C(s), remodeled pebble-tec pool, stone and tile flooring, granite counter tops, recessed lighting throughout, stereo surround sound, plantation shutters, dual pane windows, front courtyard with water feature, rear yard with built-in BBQ and fountain, stacked stone fireplaces added to master bedroom and living room (in addition to existing fireplace in family room), additional closet added to master, popcorn ceilings scraped and retextured, pavers added in front and back yards, smooth stucco exterior ... this elegant home simply represents potential realized. Nestled in a golf course subdivision and flanked by the community lakes and multi-use path (Camelback Walk), you are near everything you love about McCormick Ranch living. Contact us today for a private viewing of this magnificent home. Contact Information Ray & Paul Slaybaugh (480) 220-2337 Pricing Price: $569,000 Flexibility: Negotiable Property Location 8070 E Via Bonita Scottsdale, AZ 85258 View Map Features Bedrooms: 4 Bathrooms: 2.5 Year Built: 1977 Subdivision: Palo Viento 2 (McCormick Ranch) Lot Size: 11,995 Sq Ft Garage Size: 2 Car School District: Scottsdale Unified Square Footage: 3171 Agent Name: Ray & Paul Slaybaugh Broker: Realty Executives MLS #: 4569616 Attributes Appliances Range/Oven Full Refrigerator Dishwasher Sink Disposal Microwave Interior Amenities Fireplace Vaulted Ceilings Surround Sound Bonus / Game Room Granite Counter Tops Stone Flooring Recessed Lighting Dual Pane Windows Walk-In Closet(s) Jacuzzi Tub Pantry Exterior Amenities Patio Fenced Yard Swimming Pool Grass Lawn Courtyard Water Feature Built-In BBQ Powered by vFlyer.com Equal Housing Opportunity VFLYER ID: 19673001 Photo Gallery 8070 E Via Bonita Street View Front Courtyard Living Room Family Room Kitchen / Family Room Master Game Room Back Yard / Pool Powered by vFlyer.com Equal Housing Opportunity VFLYER ID: 19673001 All information in this site is deemed reliable but is not guaranteed and is subject to change

Ever think your Scottsdale Real Estate agent is speaking Klingon when parsing out those cryptic acronyms and assorted colloquialisms of nonsensical industry jargon?

You are not alone.

Typical of the human condition, we Realtor types tend to assume everyone knows what we are talking about even though most consumers only think about Real Estate when it's time to buy, sell or refinance a house. In other words, maybe once every five to seven years on average.

As such, it is not surprising that there is often a disconnect between the shop-talking industry insider and the consumer who doesn't know a RESPA from a Vespa, an ARM from a leg. Thus, a project that was long overdue for our clients and soon-to-be-clients (it's easier if you don't fight), we at the Scottsdale Property Shop give to you the more or less complete glossary of local AZ Real Estate terminology.

As you wouldn't expect any less (or more) of me, I've managed to slip in a few bogus definitions amongst the legitimate ones. I owe the first person who picks out all the ringers (leave your guesses in the comment section of the post, not here) a beer.

Scottsdale Real Estate Terms and Definitions

Feb 9, 2013 09:45 AM

Disassociative Press

______________________________________________________________________________________________________

SCOTTSDALE (DP) – A four year federal wildlife program to rehabilitate the sagging numbers of a local animal population has proven to be a rousing success, according to Slade Winders of the Department of Herpetology. Non-indigenous to the Sonoran Desert, Realtus Serpentes is believed to have first been introduced to Arizona shortly after the Gadsden Purchase in 1853 by a traveling circus on tour out of Toledo, OH. An aggressive reptilian known commonly as “REALTOR,” Realtus Serpentes wasted little time overrunning the desert terrain, specifically the densely populated metro areas, earning the apex predator a fast reputation as a nuisance species.

Read the full report at the Scottsdale Property Shop

In the market for a McCormick Ranch home? Intrigued by the bargains everyone keeps telling you about in the foreclosure / bank owned property arena?

Follow me to the Scottsdale Property Shop for the daily McCormick Ranch Foreclosure Home Hotsheet!

Contrary to other segments of the current Scottsdale Real Estate market, the low-priced foreclosure arena is teeming with demand, and the best values come and go in the blink of an eye. Stay on top of new McCormick Ranch foreclosure listings as soon as they hit the market so you don't miss another one!

Follow the link below and bookmark the page to come back as frequently as you like to see the most recent arrivals. No site registration is required, so you can peruse each new batch in peace. Should you locate a property that you wish to pursue, or learn more information about, you are in luck. Ray & Paul Slaybaugh, the agents behind both McCormick Ranch Home and The Scottsdale Property Shop, have nearly 50 combined years of experience specializing in the McCormick Ranch Real Estate market.

Whether it's a foreclosure property or a typical mom & pop resale home you are after, no one know McCormick Ranch Real Estate like Ray & Paul. No one.

Browse the McCormick Ranch Foreclosure Home Hotsheet Now!