Blog of Craig's Arizona

What do Home Buyers want in their New Home

Craig — Fri, 19 Apr 2013 04:14:00 +0000

Every year this topic comes up, and it’s always a little different from year to year. This year is no exception. The top spot goes to Energy Efficiency. Buyers want to be a little more green and have a bit smaller utility bill than in the past. I’ve also noticed a desire for kitchen items like walk in pantry and gas stoves. Pool isn’t as desirable as in the past, unless it is a community pool. Granite and stainless steel are important but not as much as used to be. I’ve also noticed buyers are more interested in move in ready homes, very few buyers are willing to be patient with contractors to get the home ready.

Reference: What Home Buyers Want Most in Their New Homes

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Picking a Mortgage Agent and Product before looking for a home

Craig — Wed, 10 Apr 2013 19:27:36 +0000

New buyers often start looking for a home before consulting with a Mortgage Agent and in the current fast paced Phoenix Real Estate Market, that would be a mistake. I’ve seen this happen to so many of my clients that started with another agent. They found the home they wanted and started to put an offer together, than they were side swiped by the work to get pre-qualified. Even the most qualified buyer still takes time to work through the process to get a pre-qualification form and can and often does miss the opportunity because they weren’t prepared.

Speaking to a Mortgage Agent should be the first item to do before starting to shop so you have it out-of-the-way and ready to make a strong offer once the opportunity presents itself.

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What is Title Insurance?

Craig — Mon, 08 Apr 2013 14:24:55 +0000

This comes up during the closing process almost every time. When you are buying a property, you want to own it without any liens or encumbrances from previous owners. The title company will spend time researching public records to find any such notes against the property. When they are done they work to clear any of those notes or make sure you are aware of any. Right before you take ownership of the property they will issue an insurance policy that will cover any mistakes that they make in delivering clear title to you. With the cost of a home, having a policy to cover you in the event of problems later on, like when you go to sell the home, is a very good idea. Ask your title agent to explain it to you, I’ve seen some very good methods in explaining how it works.

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Listing Photos, oh how important are you?

Craig — Sat, 06 Apr 2013 14:43:45 +0000

This is another one of my rants, inspired by the post Why You Need to Add More Photos to Your Listing NOW. As usual Melissa does a great job of talking through the topic and quoting experts on the topic as well as studies and the like. I on the other hand just speak from experience. I show lots of homes to buyers who start the process on-line, looking at photos. It will often turn to discussions of those very same photos that brought us to the home. Comments like “Well that’s not what it looked like in the pictures” or “This should be interesting since there was only one photo”. Some of my favorite comments are the postage stamp is bigger than the photos on-line and I was really impressed by that photo of the wall.

I consider photos like resumes, they are designed to get the interview, entice the buyer to want to see it in person. Yet it is often overlooked or cut from the listing agents attention to detail. Listing agents are so excited to get the listing contract signed that they will whip out their pocket camera and take pictures right there often coming up with horrible shots of the home.

Here is another fact that I find interesting, the top producing agents, the top 20% that do 80% of the transactions, all hire a professional photographer to take pictures for their listings. Want to know if you have a top producing agent, ask them about the photos they use in the MLS, if they say they take a bunch of pictures and use the best one, you’re not getting a top producer.

I recently lost a listing to another agent that took her own photos and put them on the MLS, yes, she sold that listing, but for 10% less than what I would have listed it for (that’s $30,000 difference), think about the cost of photos (and professionalism) that the seller’s missed out on.

In short, I agree with Melissa, you need good photos to succeed.

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Days on Market, what is that about?

Craig — Sat, 30 Mar 2013 15:11:27 +0000

In the Multiple Listing Service (MLS) there is generally a spot called Days on Market. In our system, we have Cumulative Days on Market and Agent Days on Market. This is a time measurement for how long the owner has been trying to sell their home (Cumulative Days on Market). So I know of a particular hard home that has been trying to sell for over 900 days on market (CDOM), they get frustrated with the agent that is currently working with them after a couple of months so they have been through over a dozen agents now. Each time a new agent gets a shot at selling the property, the Agent Days on Market starts at 0 while the Cumulative Days on Market continues to grow.

So how do you get a reset of Cumulative Days on Market, you have to take the home off the market for no less than 90 days (think 91 days) in order to see 0 CDOM on market.

So what do all these numbers mean, well, the higher the CDOM the more likely the seller is motivated to make an offer into reality. If that number is below 14 in today’s market, chances are they are going to be pretty firm on the terms, think Seller’s Market. On the other hand, if the CDOM is high and the ADOM is low, than the agent may be resistant to taking anything but list price or may be hard at pushing stronger offers for their clients. All this is just one set of numbers to consider, price history is very important in the discussion as well.

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Defending Against a Cure Notice

Craig — Tue, 12 Feb 2013 17:19:41 +0000

Sometimes a real estate transaction isn’t as smooth as you intended, there might be a person that is part of the deal that is causing issues, just because that is part of their nature. At some point you may receive a Cure Notice, a statement from another party that they feel you are not performing per the agreement of the contract. Well, the first and best defense of a Cure Notice is to not receive one. This can be done by understanding and performing per your contract. But even that defense isn’t full proof. The next best step is to communicate with all parties regularly and clearly about what is going on, a little understanding goes a long way.

Okay, so you think you are performing and you are communicating and you still get one. Well, I’ve been called into many cases were a Cure notice was sent without a basis, so my next recommendation is to completely understand the notice and ask clarifying questions. Each cure notice so refer to a specific portion of the contract, and by specific I mean line number or clause. Read these and understand what they are saying. Next, if you didn’t what they are asking for, you have 3 days to correct that, and communicate that you understand and what steps you are going to do to perform as requested. If you felt you did perform per the clause of the contract, tell them that and provide documentation of the nature. Hopefully that will clarify the situation and help you move forward. If you both disagree on the nature and situation, you can both agree to go to mediation to help clarify the situation, or you may be left with calling a real estate attorney to help you remedy the situation.

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February 2013 Market Watch

Craig — Thu, 07 Feb 2013 17:02:50 +0000

December’s statistics followed a very typical pattern for the last month of the year, showcasing a decline in inventory and new listings, and an uptick in sales. Metrics that had been performing slowly but steadily all year in the right direction, e.g., pricing, DOM, MSI and foreclosures pending, continued on the same positive trend lines.

The Quarterly Stat Plus report is out and it shows that homes priced below $500,000 are in a seller’s market and those above are in a buyer’s market. It is showing a trend that the price point is shifting toward the $750,000 line, indicating a market that continues to heal.

Clear Title of Arizona Report produces a nice graphical interpretation for those that like visuals.

The big news for Real Estate during the Fiscal Cliff solution was the extension of the IRS Mortgage Forgiveness Debt Relief Act and Debt Cancellation. This will allow homeowners that owe more than their home is worth to sell their homes without a big tax bill. Without this extension, our inventory shortage will have escalated. Good opportunities will continue to be available for those that are willing to be patient and bear some risk of buying a short sale.

Realtors Expect All States to Post Price Gains in Next 12 Months and Arizona is expected to have a 2.9 to 5.6% increase, which is a healthy growth without over doing it.

More news on the national level, pending home sales increased in November for the third straight month and reached the highest level in two-and-a-half years, according to the National Association of Realtors®.

If you are interested in learning what the Market Value is for your home, drop me an email with your address and I’d be happy to send you a report.

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When to search for a Sex Offender

Craig — Thu, 31 Jan 2013 16:44:53 +0000

We all know that there are on-line databases to search for sex offenders based on location, these are often used when buying a house. Now the question is when should a potential home buyer look this information up? The latest you want to do that is the last day of your inspection period. Ideally you would check before going through the process of writing, signing and presenting an offer to the seller. This isn’t the typical time it happens. I know that most buyers look when the Buyer Advisor is sent to them after a contract is accepted, if they do the search at all. If this is an important element to you, research it before you make the offer.

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January 2013 Market Watch

Craig — Tue, 01 Jan 2013 18:21:20 +0000

The latest report from Clear Title of Arizona and the Cromford Report forecast supply has been increasing since June but that has mostly taken the form of normal owner-occupiers, rather than distressed homes. Despite that increase, we still have a long term supply shortage for residential homes. Now that the summer lull is well behind us, prices have been moving sharply higher again across most sectors and currently there is sign of any change in that direction. Comparison using the average price per sq. ft. between October 2011 and October 2012 give us an increase of 25.8% for single family homes (24.5% for Maricopa County and 31.9% for Pinal). For townhouse/condos we are measuring a 30.7% increase.

This month STAT reports positive gains which, while not monumental, kept the pace of the Valley’s recovery alive and steady. While total Sales declined, inventory rose 2.3%. Although new list prices remained static, the median Sales price rose 3.3%, and the average Sales price declined only slightly (0.9%). Overall, all four pricing metrics continued on their upward trend line. Foreclosures pending continued their downward trend to 11,973, a level not seen since November/December 2007. Also notable is the continued decline of distressed properties as a percentage of total Sales, to 36.1%, the lowest level since STAT began tracking this metric in January 2010.

In addition, some articles of interest for the beginning of 2013, Buyer Urgency Expected to Drive 2013 and More Real Estate Pros Optimistic About Home Values.

The bottom line is that I foresee a very active first 6 months of the new year as the market continues to correct. I’m starting to see some limits to what buyers are willing to do and that’s the first sign of what I predict for the second half of 2013, a decrease in demand and rising supply as the market recovers from too much of a bounce.

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Season’s Greetings

Craig — Sat, 22 Dec 2012 17:25:49 +0000

Merry Christmas

Happy Hanukkah
Joyous Kwanzaa
Season’s Greetings
and Happy Holidays

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