If I had a donut for every time I have been asked this question over the past quarter century, my whole family tree would have diabetes.

In the pantheon of real estate inquiries, it remains unrivaled. All other frequently asked questions flow from its headwaters. You never get to is this a good area, or how are the schools without first fielding the pre-requisite question that begets all others.

No one cares about the specifics until satisfied that buying a home at this (or any) particular time is a good idea in general.

Over the years, I’ve had different responses to that question based on current market forces, prognostications, etc. Sometimes it’s a no-brainer, like when the foreclosure and short sale market started to clear out on the back side of the great recession of the late aughts. It didn’t take much foresight to realize that prices had reached a nadir and were about to slingshot the other way.

Indeed, over a decade of value gains catapulted those fortuitous buyers to equity piggy banks larger than even the most optimistic predictions could have anticipated.

Similarly, there were clear signs in 2005-2006 that an impossibly hot market was bound to cool. Once again, it wasn’t too challenging to see a slowdown and potential value dip looming, even if the full scope of the crash was far beyond what anyone saw coming.

Beyond those times where there are bright flashing warning signs, however, what I have learned more than anything in this business is that the prognostication game is a fool’s errand. Things change too rapidly, and factors too numerous to account for and predict tend to upend forecast models with alarming regularity.

I have been expecting a dip in values since about 2018, convinced that price points have become unsustainable, particularly for entry level buyers. No entry level buyers means no move up buyers. And so on and so forth. It seemed the inexorable march of rising prices was fueled by artificially low interest rates. As soon as rates crept up in response to inflation, I just knew values would suffer as a result.

And I was dead wrong.

Sure, the market cooled when rates first shot up, and prices did see a modest dip. Not nearly as sharp of a decline as I expected, however, and it came much later than I expected.

If you listened to me and sold in 2019, you likely lost out on some additional gain. If you purchased despite my warnings, you realized additional gain.

Why didn’t it go the way I expected? Because homeowners that locked in 2.5 – 3% interest rates in the last five years are now refusing to move.

Why would they?

Those who would like to sell to upsize, downsize, move out of state, or whatever, will have to move somewhere. If they require financing to make the move, as many do, they can look forward to an interest rate that is, at minimum, double their current one.

Kinda kills the vibe.

Fewer sellers, means fewer options for today’s buyers. High demand and low supply has kept home prices high, despite affordability concerns.

The point being that the market is always as likely to zig as it is to zag, because the thing you think is gonna be the thing, turns out not to be the thing at all.

So when people come to me today, in 2024, asking if it’s a good time to buy, what do I tell them?

I answer the question with two of my own:

1. Are you financially able to purchase a house?
2. Does the security of being a homeowner outweigh the freedom from attachment that renting offers?

If you answer ‘yes’ to both of these questions, it’s a good time to buy a house. If you answer ‘no’ to either of them, it’s not.

Stop listening to the talking heads with red faces and halitosis who shout their investment/financial strategies at you via cable TV. They don’t know you or your goals. If they want to watch the price of yak milk in southern Sri Lanka to determine whether the Swiss Franc will hold up to the deflationary pressure in the Argentinian gold bullion market, thus spiking land values in the least of the Lesser Antilles, creating a flood of American ex-pat migration, leading to a glut in the US housing supply that crashes the national median sales price by $5000, let them. Doesn’t mean you need to join them on that hamster wheel.

Need a house?

Can you afford to buy one?

Want to put some roots down?

Great.

It’s a good time to buy.

Sure enough, it was the lovely couple I had sold the home to a few years back and had only recently visited over the holidays.  My mind raced.

What did I do wrong? Are they upset with me? Did I fail to keep in touch? Did I keep in touch too much? Is it because I mangled their son’s name that time we ran into each other at the coffee shop?

After letting my stomach churn over the myriad ways I could have potentially brought this upon myself, I finally picked up the phone. After two rings, a familiar voice answered.  Mindful to make sure that I did not say anything that could be construed as tampering with another agent’s listing, I simply blurted out, “What happened?”

Long story short: The wife’s hairdresser had recently gotten her Real Estate license to use on the side.  Now, in my opinion, the words “hairdresser” and “Realtor” should never collide in the same sentence, but apparently not everyone agrees.  No one would ever in a million years sit down at a chair and let me go to town with a pair of clippers and #2 attachment, but my highly educated clients made the decision to help her out by listing a $500,000 asset for sale and purchasing a million dollar property with her.

Now, I will not pretend that I did not first take the news personally and selfishly. That is a big chunk of business to lose to a hobbyist, and it stung. The value proposition of hiring a full-time, active agent did not outweigh the desire to help a friend get started in the industry. That is not an easy pill to swallow. What’s worse and ultimately paramount, however, is the disservice such a choice can do to the consumer him or herself. When you don’t engage in the practice of selling Real Estate but once or twice a year, if it all, you put the people you represent at an immediate disadvantage. You simply don’t know what you don’t know.

And sadly, in this case, my former clients … ultimately got a bad haircut. 

It serves as a reminder that it doesn’t go without saying to the general public that all agents are not interchangeable. The effect of the misconception that we are can have a monumental effect on your bottom line and long-term satisfaction. As such, I try to use such experiences as teachable moments.

Remember, folks. We all want to help our friends and family members when and where we can, but think carefully before employing someone to guide you through a home sale or purchase if it is just their “side hustle.” This is not a profession that requires an advanced degree or special skill set over and above modest intelligence, tenacity, and a willingness to leverage your knowledge and experience for the benefit of your clients, but it does require practice. Experience. Repetition. Like any other human endeavor performed exceptionally, if never perfectly.

I don’t begrudge anyone the opportunity to make a little extra money in their spare time, but I firmly believe there is value to hiring someone who is working in their primary field of expertise. Hire your neighbor’s kid to pull your weeds. Hire your nephew’s girlfriend to walk your dog.

But when you have a major service need, I would advise the following:

• Need roof work done? Hire a roofer.
• Need your transmission serviced? Hire a mechanic.
• Need a haircut? Hire a barber.
• Need to buy or sell a home? Hire a Realtor.

And not a moonlighter. An active, full-time Real Estate professional who has been there, done that, and won the cheesy t-shirt in a home tour group raffle. 

After all, if you don’t want me fixing your fade after spending my evenings learning the craft via YouTube, you probably don’t want your hair stylist selling your house. 

Paul has been selling the greater Phoenix area as a full-time Realtor for over 20 years now. For all of your Scottsdale AZ Real Estate needs, please visit him at www.scottsdalepropertyshop.com

On behalf of the fine city of Scottsdale, I’d like to welcome you to the land of short sleeves and flip flops. Whether you are visiting us for the first time or have been making the annual pilgrimage for many years now, you are warmly welcomed. Literally.

There is no shortage of activities and attractions to enjoy during your stay. If I may be so bold as to offer a few suggestions, follow this link to read up on stuff to do in Scottsdale from a local’s perspective.

Now, if you are like me, you can’t help but toy with the idea of a second home purchase during the course of virtually every vacation you take. While those whims often fall by the wayside shortly upon returning home, they can make a lot of sense in Scottsdale’s case. I can only imagine how much you are spending per night in one of our five star resorts or furnished vacation rentals. If you plan on making an annual reprieve from the ice and snow a semi-normal thing, buying your own spot can be much more appealing than paying the hefty hotel tabs.

You can afford to stay longer, rent the place out when it’s not in use, and you get to sleep in your own bed.

Enough with the sales pitch, though. You wouldn’t have landed on this page if you weren’t already trolling vacation homes online. So without further ado, here are a few listing feeds created specifically with you in mind.

Low maintenance patio homes, gated condo / townhouse communities, homes near Old Town Scottsdale, homes near shopping centers, golf community homes, homes near attractions like Westworld and the Ice Den … it’s all just a bit further down the page.

See one you like? Call me and I’ll show it to you in five minutes. Okay, it might take slightly longer than that to set it up, but there is a message behind the hyperbole. I get very little rest during the high season. On call virtually 24/7 from January to May, I am here to help turn your pipe dream into reality.

Patio Homes

Townhouses

Condos

Golf Communities

Old Town Scottsdale Homes

Homes Near Shopping Centers

Homes Near Salt River Fields

Homes Near Westworld

Homes Near the Ice Den

Not seeing what you’re looking for? Create your own custom home search here!

“Alright, alright. Mickey’s a mouse, Donald’s a duck, Pluto’s a dog. What’s Goofy?”

– Gordie, Stand By Me

Patio homes: what are they?

If you have been in Scottsdale for any period of time, or have been shopping for a home from afar, you have undoubtedly encountered the term patio home more than once.

You know what a single-family home is. You know what a condo is. You even know what a townhouse is.

But what the hell is Goofy?

The term, patio home, is not a legal descriptor. It does not describe a style of ownership. It is really more of an idea than a legal thing.

For brevity’s sake, we’ll define a patio here in accordance with prevailing wisdom. Most consider a patio home to be a cross between a townhouse and a single-family home; a hybrid, if you will. Patio homes bridge the divide between traditional housing types. You can think of a patio home like a single-family home that has been plopped onto a townhouse sized lot. That’s a gross oversimplification, of course, as patio homes come in all shapes and sizes, but this post is to serve as a handy crib sheet, not a thesis.

The idea is to provide housing with relatively low outdoor maintenance without sacrificing the size of the home itself. In other words, patio homes are tailored to those who still want the privacy and comforts of a single-family home, just not all of  the headaches and expenses that come with the standard single-family lot.

The typical patio home may be attached to a neighboring property by one or two common adjoining walls (like most townhouses), or be free-standing (like most single-family homes). Many patio homes are single level, but they can have multiple levels, too. Patio homes typically do not have neighbors above or below them, as is common with apartment style condos.

Patio home ownership varies from development to development. Some entail fee simple ownership (you own the lot in addition to the structure). Some entail condo ownership (you do not own the lot, just a fractional interest in the common area).

Responsibility for property maintenance varies as well. Some communities have very active homeowner associations that provide for front landscaping maintenance as well as select exterior structural maintenance of the homes themselves. Other patio home communities more closely reflect single-family ownership, in which homeowners are fully responsible for all maintenance associated with their properties. You need to check community CCRs to determine exactly what is and what is not covered by the HOA in a patio home development.

If you like the idea of a smaller, low-maintenance lot, but aren’t quite ready to step all the way down to a townhouse or condo, a patio home might be just the thing for you. Popular with seasonal residents as well as full-time residents who frequently travel or simply prefer a little less upkeep, patio homes exemplify the lock-and-leave lifestyle that many Scottsdale home buyers seek.

So there you go. Not so Goofy after all, is it?

Ready to start your Scottsdale patio home search? Follow the new listing feed below for the very latest active listings, updated daily!

You’ve heard about it, been asked for it; you may have even written a check for it. What exactly is earnest money, though, and why do you need it when you buy a house?

Earnest Money FAQ 

• What Is Earnest Money?

When buying (or leasing) a home in Scottsdale, you will be asked to put up a good faith deposit to secure your position in the transaction. This consideration is known as an earnest deposit.

• How Much Is It?

Earnest deposit amounts are negotiable. The amount of the deposit is one of the terms of the purchase agreement over which buyers and sellers may haggle. In my experience, a typical earnest deposit on a resale transaction is approximately 1-2% of the total sales price. Builders may require higher deposit amounts for brand new construction (largely due to the costs incurred to build your home). Banks may also require more on REO/foreclosure properties (because they are the spawn of Satan).

• When Do I Pay It?

If you are following the standard boilerplate terms of the current AAR (Arizona Association of Realtors) purchase agreement, your earnest deposit is due upon the agreement being accepted and signed by all parties.

• Who Holds My Deposit?

In nearly all cases, your earnest funds will be held by an escrow company, the neutral third party responsible for transferring ownership from the seller to the buyer. The company employed to hold these funds is another term of the purchase agreement that you negotiate with the seller. Earnest money can also be held in the trust account of one of the Real Estate brokers involved in the transaction, but this eventuality is primarily restricted to the rental arena these days. If you are buying a house, you can pretty much take it to the bank that you will be dealing with an escrow company.

• Is This Extra Money That I Have to Pay in Addition to My Down Payment and Closing Costs?

This is a common misconception. The answer is no, this is not “extra money” that you are being charged. It is a portion of your total closing funds that is simply due up front. Upon closing, your earnest deposit will be applied towards your down payment and/or closing fees.

• What Form Is It Paid In?

Typically, a personal check made payable to the chosen escrow company will suffice, though some opt to wire funds to the escrow company instead.

• Can I Get My Earnest Deposit Back?

This is a loaded question, but yes, there are scenarios in which you can typically retrieve your earnest deposit. Assuming you negotiated the sale using the current AAR purchase agreement, you do have a few outs. First, you have an inspection period (usually 10 days, but negotiable). If you are not satisfied with the condition of the property, or the seller refuses your repair demands, you can withdraw from the transaction and have your earnest money refunded. Of course, this presumes that you have not agreed to any changes in the standard terms of the  contract (such as purchasing “as is”,  agreeing to non-refundable earnest money, etc).

Under the standard provisions of the contract, you can also get your earnest money back if your loan is declined (after your diligent effort to obtain one under the stated terms) or the home doesn’t appraise for the purchase price (unless you are paying cash as there is no appraisal/financing contingencies to fall back on). Once again, though, and I can’t stress this enough, the terms you negotiate with the seller can alter these provisions.

•  What If My Deposit Turns Out to Be More Than I Owe at Closing?

Let’s say that you are employing a 100% financing vehicle, like a VA loan. Let’s also say the seller has agreed to pay for the majority of your closing costs. If the remaining costs owed by you at closing are exceeded by your initial earnest deposit, you are entitled to a refund of the excess deposit.

• Can I Lose My Earnest Deposit 

Yes, you most certainly can forfeit your earnest deposit. As the purpose of this deposit is to demonstrate good faith to the seller and invest you in the successful completion of the transaction, your deposit can be forfeited to the seller as damages if you breach the agreement. Failure to close escrow, or backing out of the deal for any reason other than allowed for by a contingency to the agreement, is a surefire way to kiss your deposit goodbye. In the event that you wish to cancel a transaction, be sure to carefully review the terms of your contract with an attorney.

• Who Decides If the Buyer or Seller Gets the Earnest Money if There is a Dispute?

The escrow company that holds the deposit is charged with interpreting the terms of the contract, and has the authority to release the deposit to the party deemed NOT to be in breach of the agreement. Say you, as the buyer, decide that you aren’t comfortable with the neighborhood’s governing covenant’s, codes and restrictions (CCRs). You inform the escrow company (in writing) of your wish to cancel the transaction. The seller objects, claiming that you did not exercise your right to cancel in a timely fashion. You had 5 days from the receipt of those documents to withdraw from the purchase contract, but did not inform the escrow company of your intentions until day 7. Therefore, the escrow company decides in the seller’s favor, and releases the earnest money to him/her as liquidated damages for your breach of the agreement.

Have any additional questions regarding the role of earnest money in a Real Estate transaction? Ask away in the comment section below (or shoot me a private message if you prefer) and I will do my best to address them.

Disclaimer

* It should go without saying that the above is not intended as legal advice. The general explanations may not directly apply to you. As every purchase contract is unique, the internet is not a reliable source for answers to questions regarding your specific agreement. Consult with your agent and/or attorney PRIOR to the execution of your purchase contract to fully understand the terms and protections afforded you. 

If you have not found the home of your dreams (or, at least, the home of your needs) despite a protracted hunt, it’s time to come to grips with this stark reality: you are dreaming too big.

The home buying process is not a one-size-fits all proposition by any stretch, but there is a core truth that is applicable across the board. If you have been actively searching for a home for longer than 90 days and written nary an offer, you have set your sights too high, and it’s time to start paring back your wish list. While it’s true that you need to give the market a chance to bear that which you covet, it’s simply a pipe dream if a full quarter of a year has elapsed with no sign of your white whale breaching the active inventory.

When the market was in full free-fall, those with time on their hands had the luxury of waiting it out. Sooner or later, the 3000 square foot, 4 bedroom, custom home on an acre in North Scottsdale would dip into their price range. Alas, with the suddenly resurgent market sending prices the other way and the inventory shrinking, the opposite is potentially true. The longer you wait on a ship that is not coming in, the further out to sea the fleet gets.

So what’s a 2012 Scottsdale home buyer to do? Adapt to the market and adjust your criteria. Maybe 2800 square feet will suffice instead of the 3000 upon which you had your heart set. Could you live with 3 bedrooms and a den as opposed to 4 true bedrooms? How about half an acre instead of a full 43,560 sq ft?

Or bump up your price threshold until you break into the kind of inventory that fits the bill. In an ascending market (which, by all appearances, the Scottsdale Real Estate market has entered into after a steep and lengthy decline), time is decidedly not on your side.

Does this mean I advocate rushing out and purchasing the nearest approximation of what you want? Certainly not. The rash of purchases made out of blind fear that prices were running away from buyers forever made for a willing accomplice to the 2005-2006 bubble. It’s never a good idea to make any crucial decision from a position of fear. What I do advocate is approaching your house hunt with a little more urgency than has been necessary these past five years. In a competitive environment which has reintroduced agents and consumers to bidding wars and a limited volume of quality homes from which to choose, the laconic wait-and-see approach will hamper your ultimate chances for success.

We are early enough in our fledgling recovery that prices are still within shouting distance of their low points and 30 year interest rates continue to be reigned in on a short leash. It remains an excellent time to purchase a home for those in the market, it simply has become more difficult than saying “eenie, meanie, miney, mo” to the myriad available options that were once scattered about in abundance.

For years, we’ve counseled sellers to reassess their pricing after “x” days on the market without an offer. Now it’s the buyer’s turn.

If you have been frustrated by the current inventory, or have lost out on multiple properties due to heavy competition, you have likely set your sights too high. Make adjustments to your “must have” list or increase the amount you are willing to spend if you have been actively looking for a house longer than 3 months. You are pining for something you can’t have. In a market on the upswing, the longer you wait to take corrective action, the greater the discrepancy grows between your wish list and the world around you.

You’ve got to be hip to the new rules if you want to be a player in this market.

The relationship between consumer and agent has shifted from the “customer” model to a “client” model in which a fiduciary obligation is owed to each principal in a Real Estate transaction. Unless otherwise agreed, the professional shuttling a buyer around on weekends in the hunt for a new home is no longer an agent of the seller, but is retained by that buyer to represent his/her interests in full in that pursuit. This is the age of buyer agency in which most modern markets currently operate.

While the relationships and allegiances in a transaction are more clearly defined now than ever (aside from the still-murky waters of dual agency, which is another post entirely), the proper representation of a buyer by a buyer’s agent is not as cut and dry as one might think; rather, market forces dictate that said agent be malleable in tactics.

Take the buyer’s appraisal contingency, for instance. It is a widely conceived and unchallenged notion that an appraisal is performed for the benefit of the buyer (more on the appraisal fallacy). After all, if the property does not appraise for the purchase price during the escrow period, the buyer has the ability to walk from the contract or to use the cudgel of a low valuation to re-negotiate with the seller. As such, it follows that a buyer’s agent would do well to simply stand aside and hope for the appraisal to come in low as it provides an opportunity to secure a potentially better deal for the client.

One thing about conventional wisdom? It typically applies to conventional circumstances.

What of an ascending market in which values are on the uptick and competition for properties is fierce? I, for one, posit that the laissez faire approach to the appraisal by a buyer’s agent may actually run contrary to the client’s interest. You see, appraisers are beholden to concrete data rooted in the values of the recent past. That’s all well and good, but there will not be support for current value in an appreciating market in three month old sale comps. There is a very real likelihood that your (as the buyer) appraisal is going to come in low in such circumstances.

So what’s the problem, you ask? Why not use that happy eventuality to your advantage to secure a better price?

Because the seller has four backup offers.

In a market such as the one we are currently experiencing here in Scottsdale, with heavy buyer demand and a drastically reduced supply of homes (down to approximately 17,000 active listings across the greater Phoenix area), bidding wars tend to result. After fighting off ten other buyers for the home of your dreams, a bad appraisal is, in all reality, going to procure one of two outcomes: 1) You bringing additional cash to closing to offset the difference between appraised value and sales price, or 2) The sale tanking.

The seller is NOT going to reduce his price when he has ready and willing backup buyers waiting in the wings to give him his price.

The role of the agent changes in that rather than the listing agent sweating out the appraisal and the buyer’s agent kicking back with his feet up, the inverse is potentially true. In my current representation of buyers, I have taken to meeting appraisers at the property (with the buyer’s permission, of course) with a copy of the contract, tax record, sales comps, pending sales, active competition, market trend reports … blueberry muffins, candy hearts, etc.

Long story long, do not accept representational practices from your agent that line up more with conventional wisdom than current reality. As market dynamics are in constant flux, so too are the tactics employed to reach your goals. Don’t buy into the notion that “x” is “good” and “y” is “bad” in a Real Estate transaction. Most every facet of a purchase is merely a variable, made positive or negative by its interpretation against the broader context of an ever-shifting landscape.

The buying and selling of homes requires a nimble partnership between principal and agent to keep up with the high-paced game of musical chairs that is the Real Estate market.

Save the dogma for your momma.

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.

Short sales take time. Like most astute 2012 home buyers, you are all too aware that the offer you submit on an upside-down property will likely take a minimum of 60 days for a response from the seller’s lender. You are also aware that the list price of the home is not necessarily reflective of the price that the lender will ultimately be willing to accept. If you are like many buyers I encounter, the cumulative uncertainty of a short sale transaction is likely what ultimately convinced you to first trawl the regular resale and/or foreclosure market for a home before turning your attention to short sale candidates. Fact is, unless you are an investor or in no hurry to move out of your month-to-month lease, you likely don’t have the luxury of waiting on an uncertain outcome.

With the pace that the good homes are selling in early 2012 due to a heightened demand and greatly reduced inventory (approximately 18,250 active property listings in the Arizona Regional MLS at the time of this post), it is also likely that you have either lost out on a property or five to competing buyers or become disenfranchised with the lack of choices.

Enter the Placeholder House.

Or not.

You see, in recent years it has become en vogue for buyers and their agents to tie up a short sale while continuing to look for a more expedient and/or desirable option. Utilizing a standard AAR (Arizona Association of Realtors) short sale addendum, you don’t have to deposit earnest funds, complete inspections, pay for an appraisal or otherwise commit yourself to the transaction until you get the yea or nay from the seller’s lender.

In essence, you get to tie the property up for free. If something better pops up while the bank is going through its laborious machinations, you can bounce at a moment’s notice. Sounds like the perfect backstop, right?

Not so fast, my friend.

Wising up to the ploy, short sale sellers and their capable agents have taken to adding penalties to such indiscriminate escrow hopping. The shrinking inventory means that there is more competition from your fellow buyers on short sale properties, too. No longer do the better opportunities lie all over the market, waiting for an indifferent buyer to pick them. They are sought after commodities. As such, you can expect to encounter terms such as non-refundable earnest money placed in escrow upon seller acceptance of your offer (before it is submitted to the bank for approval) for the first 60 days (or until bank response, whichever comes first). Some short sale list agents have taken to demanding that the inspection period begin upon seller acceptance as well.

These are measures undertaken to tie you into the deal; they provide you with a vested interest in sticking around for an approval rather than discarding them for the first best alternative that comes down the pike.

If you enter a short sale transaction in 2012, it’s best you leave the placeholder mentality where it belongs: 2010.

Time to abandon the contractual hedging of bets and get back to entering a purchase agreement with the intention of buying a house, lest you get stuck in a purchase you only sort of want to make.

Short sales: they aren’t just for Real Estate philanderers anymore.