REAL ESTATE
by Jim Coleman, REALTOR®
CURRENT MARKET DEMANDS PRACTICLE REALISM
Readers have inquired as to the Buyer Representation Summit reported last week. A few observations and reflections are appropriate.
It is interesting to note some facts which may help clarify our current conditions and distinguish us from the dismal national scene. In doing so, honestly also demands admission that even here in "Happy Valley," there are some tough times being experienced and foreclosures occurring. But in the overall analysis, we are still seeing business, and yes, it may be "business as usual," rather than the unreal run-away of the past couple of years. In other words, reality suggests we are having pricing of real estate and the issuing of loans operating more like we have known in the past; that is, pricing back to a couple of years ago and loans being made to borrowers with down payments, with incomes verified and with credit scores making the lending risks congruent with borrower desires and investor/lender expectations.
Mr. Mark Steinagel, Utah Division of Real Estate Director recited recent national stories of foreclosure rates growing, the Subprime ARMS and the melt down mess and that the late payment data shows the rates will continue to increase for a while, and that there is the credit crunch on the big picture.
But he then explained a few of Utah's positives. "Utah has a high population growth rate most from natural increase with the median age 27.1 (versus 32 and above). We never became as over-heated; median income compared to median home value. Unemployment rates (3.3% versus 4.9%) and economic growth rates (3X national average in January: 1% versus almost 3%) the envy of the nation. It will change some, but not go as bad as nation. State Government #1 managed state, reflected in all areas."
He recited the efforts being made to find and punish the "bad actors" and help the honest, ethical professionals to grow their business and promote productive enterprises. The new Mortgage Fraud Act does four things: "Defines the criminal act of mortgage fraud, sets penalties for the criminal act of mortgage fraud, automatically revokes the license of someone convicted of mortgage fraud, if licensed, funds a prosecutor in the Attorney General's office to focus solely on mortgage fraud." He then cited language that is very important to Buyer's Agents, quoting from the Act and identifying and defining Mortgage Fraud: "knowingly uses or facilitates the use of any material misstatement, representation, or omission, during the mortgage lending process intending that it be relied upon by a mortgage lender, borrower, or any other party to the mortgage lending process…"
It was important to note that the most common types of fraud being seen from a real estate licensee standpoint are the following, each of which comes from an ability to allow criminals to manipulate agents or brokers, but especially new agents who are hungry for business: "(1) The doctoring of the Real Estate Purchase Contract, (2) Seller Carryback or owner financing, (3) Fraudulent Documents to Create Value, and (4) Placing a Notice of Interest on Property." He strongly admonished the attendees to "always clarify. If an offer is vague, send back [an] addendum clarifying."
Licensees were reminded of the list of some 19 items which serve as "Grounds for Disciplinary Action." These areas of behavior or conduct may be cause for loss of license of the practitioner.
There is strong insight and oversight being waged in the regulation of the industry presently. But while there have been a bunch of crooks wielding a huge cut in the market, there are still good people out there in the market place, both consumers and practitioners. But it behooves the best, to bring out the best, in the best, and to act with prudence, professionalism and exercise the highest of integrity with extreme vigilance to not be a victim in this recovery process. This moment shall pass.
St. George REALTOR® Jim Coleman is Associate Broker and Partner/Owner of ERA Brokers Consolidated. He Specializes in Residential, Investment and Commercial Real Estate, holding National Designations of Accredited Buyers Representative (ABR), Certified Residential Specialist (CRS), Resort and Second Home Property Specialist (RSPS) and Seniors Real Estate Specialist (SRES). You can contact him by e-mail at Jim@RealtorJimC.com. Call: (435) 674-0600; or write: Jim Coleman, 201 East St. George Boulevard, St. George, Utah 84770. This and other columns are available at www.RealtorJimC.com/articles.