The Scottsdale Real Estate Files

Without reasonable question, banks are in charge of the current Real Estate market here in Scottsdale and the greater Phoenix area.  Patently absurd low pricing of an overwhelming abundance of foreclosure and short sale listings dictates that financial institutions remain the bully of our local pulpit.  While we may lament this eventuality, we certainly cannot deny it without yielding hard-earned credibility.  Dominance in the marketplace, however, should not be mistaken for carte blanche to operate in a manner independent of obligation.

Consumers, and by the transitive property their chosen agents, put up with a great deal when pursuing a distressed (be it physical or financial) property.  Selling institutions call the shots on the choice of title company, manufacture from afar their own addenda that often flies in the face of local custom or … gulp … law.  All too aware that these catacombs house the buried Real Estate treasure they seek, buyers eagerly agree to any and all provisions the banks and their lawyers concoct.  For the most part, after scrutinizing the often arcane verbiage of said addenda and verifying that an actual, legitimate escrow company has been selected to perform the title work (as opposed to some flunky sister company on the other side of the country in which the seller has a financial stake), we swallow hard on the arrogance and proceed under the bank’s terms.  The values on their properties are just too good to be dissuaded by negotiable minutia. 

But that’s where it ends.

Perhaps a happenstance created by a bank that has become accustomed to proffering any mandate it wishes upon a transaction, many asset managers at said institutions and the lackeys charged with listing and selling their portfolios seem to have gained the mistaken notion that they can dictate deviations from the written purchase agreement based on the whims of internal policy.  Case in point, I am currently embroiled in a transaction that is going along swimmingly aside from the seller’s constant refusal to execute documents that were agreed to and made part of the original purchase contract.  I have heard numerous explanations for the contractual breaches, and some of them even make sense.  None of them, though, absolve the seller of their contractual obligations.

The learned attorneys who advise their clients (banks) not to sign certain documents would do well to advise their clients to address such matters at the time, if not before, the contract is negotiated.  I am not an attorney, but surely they understand that unilateral, after-the-fact contract revision and/or breach is far more likely to result in litigation for their clients than the terms of the documents found to be objectionable for one reason or another. 

Then again, perhaps deterrence from future litigation is not in the best financial interest of that crack legal staff.

I call on buyers and their representative agents to stand up for the rights and protections you are afforded by the purchase contracts you execute.  Fear of losing the bargain of a lifetime has led too many to cow-tow to the internal policies of the banks on the other side of the country table.  Yes, there are certain stipulations you must live with if you wish to purchase a bank controlled property, but at the end of the day, they are just sellers who must abide by the same rules and regulations as everyone else.  Assuming you didn't forget to pack heat on your way to a bank-owned gunfight, stick to your guns and do not suffer any shirking of the selling party’s obligations or infringement upon your contractual rights lightly.  And make sure you grab the glock, not the air rifle.  The pea shooter of polite request will just get your hair touseled and cheeks pinched.

It's big boy time when dealing with a corporate monolith.