Blog of Craig's Arizona

10 questions to ask the neighbors before buying

Craig — Sun, 05 Feb 2012 19:14:05 +0000

An easy post for Super Bowl Sunday. 10 questions you should ask your potential neighbors before buying a home in Phoenix:

1. How is the neighborhood association; strict, crazy or what?

2. Are there any assessments coming in the future?

3. How is the construction on the homes in the neighborhood?

4. Is there any crime in the neighborhood?

5. Is the neighborhood social?

6. How are the amenities?

7. Why are the neighbors (house you are looking at) moving?

8. Have they had any trouble with their house that you know of?

9. Is there anything that would prevent you from buying your own home again?

10. And anything else you want to know.

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Another Twist on Statistics…

Craig — Sun, 05 Feb 2012 04:49:14 +0000

Sometimes I laugh at the statistics we come up with in the Real Estate Industry, usually the funny part is when we try to figure out what the numbers mean. Today, I’m going to contribute to this. ARMLS added a new statistic last April (2011) that I really like:

I like this because it gives me a basic feel for how active a week as agents have. Today, it dawned on me that the number or the trend means absolutely nothing without another key piece of information. That key piece of information is number of active listings out there. As of the moment I wrote this post, that number is 17,046. Last week there were 36,104 lockbox opens. Let’s ponder where I’m going to go with this. On average (average, you know what they means right, some are higher and some are lower), each listing was open just over twice this week. The reason I bring this to your attention is because at 17,046 active listings within ARMLS, this is pretty low for us. It’s a seller’s market right now. Add to that a report from ARMLS that last year 47% of the purchases where cash (YES, cash purchases). And that last year we had the second highest volume of sales by count.

So there are two points, first, if you are thinking of selling, nows a good time to sell. Second, if you are shopping for a home, I’m pretty confident that prices are going to be going up quickly.

And my ARMLS staff readers, would you add Average Active listing to the Weekly Lockbox Activity Report? I think it would add another dimension to the data.

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Real Estate and Wedding Registry

Craig — Wed, 01 Feb 2012 19:19:02 +0000

I was reading a post over at the Get Rich Slowly blog about alternatives to the traditional Wedding Registry and I was reminded of a story I was told about a young Tucson couple that wanted more than anything to own a home. The bride’s mother knew a very bright agent (in this story, it’s not me), who knew a lot about this type of gifting. The mother’s agent became the couple’s agent and helped transverse all of the IRS and Mortgage company challenges with this type of financing. She knew the Title Agents that knew exactly how to set-up the bank account and track the funds so the IRS would be happy and leave the young couple alone. The Title Agent explained that they had to use the funds given to them within 18 months of setting up the account and that their wedding guests had to be informed that this is a monetary gift that they will use towards a home purchase (IRS gifting requirements).

The wedding day came, and the young couple were very happy and enjoyed a modest honeymoon. When they returned, they had a nice little nest egg that could be used towards a home. While it wasn’t enough to buy a home out-right, it was enough for a good size down-payment in their price range.

The knowledgable agent showed them several homes that met their criteria and helped them to negotiate favorable contract to purchase the home. The Title Agent worked with the Mortgage Officer to make sure the lender was happy and the IRS continued to be happy.

The young couple moved into their new home thanks to the help of their friends and family and the great news was that they didn’t have to move all the toasters that they would normally get from wedding gifts.

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Home prices post Steep Decline, but not in Phoenix..

Craig — Wed, 01 Feb 2012 02:21:56 +0000

I love this article, they talk about all the homes prices in 19 of the 20 cities monitored by the S&P/Case-Shiller report had a steep decline for the month of November (as recently reported), they talk about all the negativity. But then they hit the footnote, Phoenix was the only one that didn’t decline. Yea, been there, said that. And now I’m telling you December will see a bit higher increase as will January. Why, because I’m writing offers and getting outbid when those offers are above list price. We’re smack dab in the middle of a Seller’s Market that is turning hot.

If you were waiting to hit bottom to buy, so sad, too late! It’s true, you missed the boat, but if you get in now, you’ll catch the wave at the beginning. Of course this is just my opinion and I’m not much compared to the big media groups out there saying otherwise, but of course they are pretty slow to acknowledge and report when the market has changed, and since I’m out in the field with this stuff all the time, I really don’t have much knowledge on what I’m talking about, so go ahead, ignore me at your own risk.

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Can I put in Multiple Offers?

Craig — Tue, 31 Jan 2012 02:02:23 +0000

I’m a regular contributor to Murphy’s Law Book, this one comes up very often, I’ll work with a buyer and eventually after looking at many homes, we’ll not only find one good option, but two. This is common in the Phoenix area because we have tracks of homes that have similar floor plan. Usually when that happens the question comes up, can I put an offer on both and see which one takes? The idea is a reverse bidding idea, where you try to get one of the sellers to tip their hand and just take the offer to be first.

Well, the problem is that you have to disclose you are doing a multiple offers to all parties and you have to put a clause in the offer that states it’s not a binding contract until the buyer re-accepts the terms after you’ve accepted them. Typically what happens is your offer is held in a lower consideration because you are not truly committed to the purchase of a property. When it looks like an investor purchase, it’s called shot gunning, you make 10 offers and hope to keep one, problem is you waste a lot of other people’s time doing that.

When this occurs, I work with the buyer and try to figure out which property they like just a little bit more than the other, a little pro/con analysis. Then I look at which price would you feel really good about the purchase? From there I can help with the selection and offer that should make everyone happy and I set a tight deadline if things don’t pan out as expected, we pull out and start work on the other property. This is where your agent comes in and helps out with a great plan to get you the home you want.

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Another Bad Agent..

Craig — Mon, 30 Jan 2012 22:44:51 +0000

So I’ve been working on an offer with my client for 3 days with this Phoenix Real Estate agent. When I call on the property, all is great, some interest but no offers. So we write an offer for full list price and I deliver it. ”Well, another full price offer just came in a couple of hours before, so my client will accept that one instead of yours, but if you want to modify your offer I’ll present it soon.” Well, timing doesn’t matter, it’s the terms and condition of the contract and we were offering a large Earnest Deposit and Down Payment as well as quick close, so I felt we had a strong offer, and was ready to present it personally. The kicker was that he forwarded an email from another agent that was withdrawing their offer. So we were left to question if there was in fact another offer or he was just trying to play us. I disclosed the email and concerns with my clients who felt it was better to walk away than to continue. And several notes were added to this agent’s record in my CRM. Not all agents in Phoenix are ethical and this one looks like he is not.

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When an Active Listing is not Available

Craig — Sun, 29 Jan 2012 18:24:28 +0000

Another entry in my “You might have a bad agent” file, a client contacted me about a listing that he saw that lined up with what he was looking for. I stopped in yesterday and previewed and agreed, it was a match. I contacted the agent and told him that I was going to take a client through his property soon. His response, oh, I have a contract on that listing. So my typical question was when did you get it, his response took me a minute to comprehend, a couple of weeks ago.

So after some back and forth, he felt it was a weak offer and that he should continue to list it on the MLS just in case it fell apart. What is sad is that this is not the only case that I’ve found of this practice, so I patiently went over the MLS rules with him and he promptly ignored me. Now most agents in my shoes would have just hit the report an error button and turned him, which is what I should do, but I try to educate and be educated. That didn’t work, knowing his broker as well as I do, I sent the email thread to him and asked him to look into it before this becomes a PR problem for their brokerage.

The Phoenix Real Estate market is starting to take off again and I’m starting to see some bad behavior again, so it just means more work for the rest of us to keep up with those doing bad things and as the client, just be aware, not every agent plays by the rules and we do the best to overcome the challenges that they present.

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Got a Cell Phone, want to be alerted by 911?

Craig — Sat, 28 Jan 2012 05:46:35 +0000

Maricopa County has started a program where you can register your cell phone and your home address and if any Emergencies that cause the Reverse 911 system to be in-acted will page your cell phone. The program is really meant for those that don’t use a landline anymore and keeps the public safe. You can currently only register one address, I’m hoping to expand that so I can register my work address as well as my daughter’s school so if anything happens in those areas I can be notified as well. I like the idea and recommend that you should register your cell phone as well.

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You may have more time with Interest Rates…

Craig — Fri, 27 Jan 2012 02:23:42 +0000

For the past couple of days, there have been lots of talk about interest rates and for the most part, everyone agrees that interest rates will remain low throughout 2012. Based on this press release sent to me by one of the Mortgage Companies:

Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth. While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the Committee’s dual mandate.

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate.

Which is in line with this CNN report on the Federal Reserve report.

Here comes my big beware clause, just because rates will remain low (which does make me happy), that doesn’t mean prices will remain low and from experience for the last couple of months, prices are going up and inventory is coming down. If you are waiting to hear that we hit bottom, well in the Phoenix Real Estate market, we done hit bottom and we’re starting to see prices creep up, especially in the under $200,000 price range.

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Apple and the iMenu

Craig — Thu, 26 Jan 2012 05:21:35 +0000

On the heals of Apple announcing quite the incredible earnings seen in technology history and the market’s response by making it the most valuable company, I have another prediction of how Apple is going to change the future, specifically the restaurant industry now…

While I doubt Apple will actually enter this industry, I do think they will impact it. This is what I’m seeing for a visit in the near future to my favorite restaurant. I walk in and seated by a hostess at a table and each person is handed a menu, actually an iPad. The specials are first most with not only beautiful pictures, but interactive ingredient lists and nutritional information, a video by the chef talking about the dish and an easy interaction where I can select the item, make some additions or changes and the order is already sent to the kitchen.

The iPad will also allow me to send me order to my phone so I can keep track of my nutritional intake for the day and record the bill on my financial program as well as twitter, 4square and facebook about it.

My daughter will be entertained by the interactive activities just for kids and the adults can return to conversation quickly. The wait staff can be called over easily with a simple call button, not having to wait until they come by to check in and the bill can be handled with the table is ready, no waiting for someone to take your credit card and return.

From the restaurant side, this means more customers are served because there is another level of efficiency in serving, less wait staff as they can work with more tables making sure there is human interaction where it is needed but doesn’t interrupt the experience without reason.

So what does this have to do with Phoenix Real Estate, well, not much, but can you imagine the creative ordering you can do in your search for a home that this can lead to? Look for a home without an agent until you find the ones you are most interested in, than you hit the call agent button to arrange the showings and boom, your set.

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