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.

No businessman walks around looking for a financial colonic, but the very real potential for having his inner sanctum legally hollowed out exists in each and every transaction he undertakes. As such, it has become customary for many to simply ward off as much exposure as possible by abstaining from any form of guidance that can later be labeled malfeasance or conflict of interest. Heaven knows, if the contractor you recommend for repairs screws the electrical pooch, any rabid attorney worth his salt will gleefully encourage the client to pursue the deep pocketed brokerage (and agent by proxy) as well as the contractor for damages. Why put yourself on the line by recommending a home inspector when the potential for blow-back on a balky A/C unit can put you directly in the cross hairs? For that matter, why even bother to attend the inspection if the due diligence can be misconstrued for interference? Why attend closings if your review of the documents places increased responsibility upon your shoulders for their accuracy?

Because risk deflection is not my job.

My job is to fulfill my fiduciary obligations to my clients to the very best of my ability. That means recommending pros who have proven their worth to me countless times in the past, rather than crossing my fingers and hoping my clients receive competent service. That means attending inspections to physically see any defects, so as to better advise my clients and argue their cases. That means attending the closing to ensure that the settlement statement jives with the negotiated terms of the contract.

Doing the eeny-meeny-miney-mo thing with a referral does not serve the client, and neither does calling in “neutral” to the appointments that demand an ally. Such laissez faire Real Estating is designed only to mitigate the agent‘s risk. While it is understandable, given the litigious nature of our culture, it’s just not how I roll. You need a lender, I give you the name of the best lender I know. You need a home inspector, I give you the name of the most thorough one in the rolodex.

I would argue that recusing oneself from the crucial junctures and decisions of a transaction is not only negligent, but self-defeating. As the surest invitation for catastrophe is to stand aside and watch the transaction happen, the best defense is, and always will be, a good offense. Fixing potential problems, rather than hiding from them, has kept my clients happy, and me out of legal hot water to date. Active involvement serves the interests of all parties.

I wear my big boy pants to work every day. I put them on with the knowledge that certain forces will always be beyond my control. Secure in that understanding, I’d much rather stand behind the repercussions of my actions than my inactions. Standing on the sideline, not attending inspections & closings, carefully avoiding opinions … seems to me that ascribing to the Caspar Milquetoast model of risk avoidance is, ironically, the surest route to the ruin that one would desparately scramble to avoid. Decreasing the standard of care for the client is akin to an RSVP for trouble.

And trouble never sends its regrets.

Need a Referral to a Local Professional? Give me a ring. I’m not afraid of my own recommendations.

You’ve landed on the right blog. Let’s take a quick look at a few critical components of an offer through a seller’s eyes to find out exactly what is keeping that elusive new home out of your reach.

• Pre-Qualification

This is a big one, particularly in a competitive situation in which the seller is entertaining multiple offers at the same time. Back in the day, virtually anyone with a pulse was a good bet to secure the necessary financing to complete a transaction due to lax qualifying standards. These days, the banks want a faxed copy of your baby as a pre-funding condition. As such, you are banging your head against the wall if you don’t have an iron-clad pre-qualification letter from your lender to present with your offer. And I’m not talking about a bare bones letter in which the qualification is based solely upon a conversation, you’re going to want to have the boxes checked that indicate your pre-qual (pre-approval is even better) is at minimum based upon a tri-merged credit report and review of recent bank statements. Got two years of tax returns and recent pay stubs to your lender already? Even better.

Don’t save the pre-qualification step for the last minute when you’re frantically trying to submit an offer on a hot, new listing. Taking the time to prepare a rock solid pre-qual in advance can be the difference between being a buyer and being a shopper.

• Financing Type

Most buyers are somewhat hamstrung on their financing options these days as down payment options tend to dictate the ultimate vehicle chosen. That said, it is important for you to know what the seller sees as a limitation of each loan type so as to find a way to overcome the likely objection(s) within the framework of your program.

FHA Loans - Dormant, by and large, during the boom when low (and even no) down payment options were plentiful in conventional financing, FHA loans have made a comeback in a big way in the Scottsdale market. Sellers will have two major concerns with your FHA offer.

First will be closing costs. As most people opt for FHA because it opens up the door to a 3.5% down payment, it is not uncommon for these buyers to have a little less saved up for the closing costs that piggyback a home purchase. If you are loading 1-3% of your costs onto the seller, be mindful that you are not actually offering the price you put on the first page of the contract. All that matters to the seller is the net. If you are trying to get your closing costs covered, you might have to boost your offer price commensurately.

For example, your 150k offer on a 150k listing is not truly full price if you are asking the seller to pay 5k in closing costs. To make your offer reflect an effective net full price, you’ll need to offer 155k.

And hope the appraisal can justify that amount.

Which leads us to the second major financing concern, the appraisal itself. Not only do FHA loans require FHA-certified appraisers who scrutinize the condition of the property for inhabitability (no exposed wires, utilities must be on and functional, etc), but sellers and their agents will expect the appraiser to be far more conservative with the ultimate evaluation due to the high loan to value ratio. The lower the down payment, the higher the risk to the bank. That tends to bring a little more heat down on the appraiser to bring in a value that will survive heightened scrutiny from a constipated underwriter.

VA Loans - VA loans are like their FHA cousins on steroids, at least from a seller’s perspective. We all love our troops … until they try to buy our homes. A seller sees your 100% financed loan and does not see an army of one, he sees an even more anal retentive appraiser and underwriter who would like nothing better than to blow up the sale of his home.

Peeling paint in a home built before 1978 (subject to lead)? He’s gonna have to scrape it and repaint.

Last good round of sales comps older than six months old? That’s bad enough on a conventional loan in which the bank is only investing 80% of the home’s value, but at 100%?

Shoot …

Sellers also expect to get stuck with buyer closing costs (sellers MUST pay certain costs with a VA loan), so it’s not the favored financing type for many.

Let us not forget about the time factor. Most lenders will want about 40-45 days to process both FHA and VA loans, due in large part to the red tape created by the government backed programs. For the seller who wants a more standard 30 day close, this is not as appealing. You might have to build in some additional incentive for the seller to select your offer with the longer close, such as additional earnest money at the midway point, slightly higher purchase price, etc.

Conventional Financing - Conforming to Fannie Mae guidelines, conventional loan programs typically require higher down payments (5-20%) than their kin. Sellers like this because it means you have more ‘skin in the game’. The appraisal is less of a white-knuckle experience given the lower LTV (loan to value ratio), and the seller expects you will be much more likely to ultimately secure the loan and close escrow. While certainly not outside the realm of possibility, a 20% down conventional buyer is less likely to ask a seller for closing cost assistance.

Outside of the cash offer, the granddaddy of them all, conventional financing is looked upon most favorably by most sellers.

• Down Payment 

Touched on this above, but bears isolating for repeat. The more money you are showing as a down payment in your offer, the stronger I, as a seller, think you are and more likely to close. Your lender will not be as hypercritical in approving a loan with 60% LTV versus 95%. The appraisal will be less of a hurdle, and failing to hit the sales price won’t be insurmountable (you have the resources to pony up cash to bridge the shortfall). Further, I expect you have some leeway on potential inspection issues if you have deeper pockets. The guy putting everything he has in the world together to complete the purchase won’t have much room to make improvements/repairs after closing.

That scares me as I expect you are going to try to kick my ass for every loose screw and squeaky hinge in the inspection report.

Cha-ching.

• Earnest Money

One of the easiest places to score points with the seller is the bolstering of the ‘good faith’ money you place in escrow upon contract ratification. In our market, 1-3% would be considered a typical earnest deposit. The more you can put down, the more appealing to the seller. With several ‘outs’ along the way to reclaim this money in the event of a poor home inspection, loan denial, low appraisal, etc, the shrewd buyer will offer to place an eye-catching deposit in escrow. If the deal goes south, provided that it is not due to your own breach of contract, this money is recoverable. If the deal goes through to closing, it is applied to the total due at closing. It IS NOT an additional fee.

If you can afford to do so, go outside the box a little with your earnest deposit when you know you are competing against other buyers. It doesn’t end up costing you anything more unless you breach the terms of the deal.

Don’t do that.

If you reflected, say, $500-1000 in earnest money on your last stab at a $200,000 house, you limped in with your offer, regardless of the accompanying terms. Show weakness in the good faith money you show me, and I think you are either a) not committed to the deal, b) broke or c) both.

• Terms

Believe it or not, sellers pay attention to those little throwaway items in the contract outside of price and ability to close.

That home warranty policy you want the seller to pay? That’s $350-550 off the bottom line. While a typical buyer request, you need to be cognizant of circumstance before automatically checking the ‘seller’ box in the contract. Is it a bank property? Are there other offers on the table (or likely to be due to the great value, time on market, etc)? Might want to rethink its inclusion in some cases.

Likewise, don’t check the boxes in the HOA addendum (if applicable) loading all transfer cost onto the seller without some thought. If it comes down to you and another comparable offer, don’t be the guy that sabotages himself over a couple hundred bucks.

The inclusion of personal property in your offer can be a mistake in a competitive market. Sure, those Maytag Neptunes are great, but do you really want to scuttle your chances of getting the house over the washer and dryer? You can ask for the fridge if there are no other offers at play. Deal?

Writing your offer subject to the sale of a current residence? That’s a huge no-no in a competitive situation. As a listing agent, I tell my seller that there is still a property that needs to sell for the deal to work, so you are no closer to the closing table. Worse, you now have no control over the property being sold. Banks and short sale sellers feel the same way. Get your home sold before approaching sellers if you want to stand a chance in a competitive arena.

Give the seller his/her preferred title company. This one is easy. As long as the company is reputable, it’s easy to score points with the other party by acquiescing on items that don’t cost you anything. A pre-requisite of purchasing a bank property to accept the seller’s choice of title company, it’s not a bad idea to include the question of “Does the seller have a title preference?” in the conversation with the listing agent that precedes your offer on a mom & pop resale, too. You know, the same conversation in which you ask about preferred closing dates and such?

Purchasing ‘As Is’ is fairly common in the current market as few sellers have the equitable wherewithal to actually make repairs. If you are looking at short sales and foreclosures, it is a given. You can sweeten the deal for a resale seller and differentiate your offer from competing ones by making your offer ‘As Is’ for his property as well. If framed properly, you will still maintain your full rights to a property inspection, with the ability to cancel the transaction if the home’s deficiencies are too numerous/costly. You alleviate the seller’s obligation to repair broken items, but you are not obligated to complete the transaction if you are dissatisfied. Offering to purchase ‘As Is’ can be a good tie-breaker in a multiple offer scenario, but employ with caution.

And for Pete’s sake, don’t let your agent write a short story’s worth of verbiage into the constructive language section of the contract. Not only do agent’s get themselves and their clients into trouble by unwittingly practicing law through the amateur construction of legal terms, but filling this page up is the antithesis of a ‘clean’ offer. Keep it simple, and don’t scare the seller off with Perry Masonesque flair. Half the stuff that shows up here with regularity is already covered (more adequately at that) in the boilerplate.

Remember: The AAR contract is nine pages (plus addenda) of carefully crafted legal verbiage that was composed by attorneys smarter than you and your agent.

• Price

I saved this one for way down the page because it should be the most self-evident truth this side of pain hurts. You lose the privilege of complaining about non-accepted offers if you keep trying to negotiate more off the asking price than the market permits.

• The Listng Agent Never Received Your Offer

Your offer was good. Your offer was clean. The home will be yours by Halloween.

Or it would have been had the listing agent ever received it.

Sad but true fact, I have received numerous offers over the years without so much as a headsup call that one was on the way, let alone a followup call from the buyer’s agent to confirm that it actually arrived. For all you know, the offer you spent a day or two considering and several hours drafting might have ended up in a spam folder or faxed to Sri Lanka if that simple precautionary step is not taken.

Inconceivable? It happens all the time.

Further, if you don’t let the listing agent know an offer is en route, you risk the possibility of the seller accepting another offer in the interim.

Don’t let your agent be lax. Make sure your offer gets where it’s going.

Sidenote: When I receive an emailed/faxed offer that is not preceded by so much as a phone call from the buyer’s agent, I know it’s going to suck. Food for thought.

• You Are Competing for the Wrong Properties

Allow me to move from the seller’s side of the table back to yours, doffing my cap as your friendly buyer’s agent. If you keep losing properties despite gussying your offers up in accordance with the advice herein to make them as attractive as possible to unimpressed sellers, it is quite likely that you have simply set your self up for failure by targeting the wrong homes. This phenomenon is most prevalent in the lower price ranges where investors and second home buyers make it difficult for cash-strapped, first-time buyer to compete. Competing against cash or high down payment conventional financing, the poor SOB writing clean, full-price FHA offers doesn’t stand much of a chance.

Stop throwing your hat in the ring on properties you won’t get unless you really don’t care for your hat. Cause it’s gonna get trampled.

You will have much better chances for success by targeting homes priced a little higher and negotiating down rather than starting at the basement where the Daddy Warbucks of the world are busy chasing the prices up.

Go find the lonely seller who is priced just above the scrum.

Getting drubbed in the bidding wars at 150k? Look at the inventory for comparable properties at 175k. Odds are, despite the discrepancy in list prices, the ultimate selling prices won’t end up that far apart.

Bolster the weak points in your offers, isolate the right properties and you, too, can have success in this market.

Now get back out there and make someone an offer they can’t refuse.

No doubt, the dilemma of which cap to doff first has vexed many a consumer. Selecting the correct course of action is dependent, like most things, on a variety of factors. For the sake of clarity, we will keep things simple.

If you have a boatload of equity in your current home, have flexibility with the ultimate selling price and have the financial wherewithal (cash in hand or the ability to obtain a new loan that is not conditional upon the sale of your home) to purchase a new home prior to selling your existing one, then you are the rare individual in the enviable position to call your shot. To eliminate the prospects of a double move and the fear of obligating yourself to the sale of your home without clear knowledge of where you are heading, you will likely opt to buy first. Especially if you are not convinced that the home of your dreams is lurking in the market at present, it makes sense to locate the next property before committing yourself to the rest of the process.

As most buyers are reliant upon the proceeds from their current house to purchase a new home, however, the above scenario is a pipe dream for the less well-heeled. Most will face the stark reality that they are simply hamstrung on a purchase until they sell their existing house.

So how does one combat the fear of committing to destinations unknown when putting a home on the market?

The ideal method is to negotiate a purchase that is conditioned upon the ultimate sale of your home, but few and far between are the sellers who will entertain straight contingent offers of that ilk. The preponderance of bank owned properties and short sales in the present market makes the task even more arduous as contingent offers are simply not entertained by the banks. Only the most patient seller will take a flyer on an offer from someone who has to sell a property to make the deal work. And if you happen to find such a rare bird, you’ll likely have to overpay for the home due to the weakness of your position.

When purchasing first or conditionally is not an option, the best compromise is to make your offers after you have accepted a contract on the home you are selling, but before it has closed escrow. With a buyer in hand, it is considerably easier to approach another seller with an offer. More attractive than a straight contingency in which you still have to line up a willing buyer, you can structure your offer to be subject to the successful close of escrow of the contract currently in place. This is not only more appealing to the seller, but if you have negotiated a longer close of escrow on the home you are selling, you can build in a little time to locate a property and negotiate a contract, thus avoiding a dreaded double move. Timing the closings can be tricky, but if done correctly, you can move directly from one home to the other without having to put your gear in storage while you, the kids, your dog Sadie, and the goldfish check into the Holiday Inn for a few weeks.

Naturally, to make this scenario work perfectly, you have to do your homework in advance. Even prior to listing your home for sale, start looking online at the available inventory. Get in the car with your agent to look at homes that fit your parameters. Get preapproved with your lender so that you are ready to pounce at a moment’s notice, as the right home for you is often right for someone else, too. Wasting time getting your preapproval in place after you find the property opens the door to not only unrealistic window shopping, but losing an ideal candidate to a buyer who is one step ahead. Do your due diligence up front and you’ll be ready to enter the scrum as soon as your home attracts a buyer.

To be sure, coordinating the near simultaneous buying and selling of homes is a stressful undertaking. You will experience Exorcist moments in which your head spins around a full 360 degrees. Understanding the process and the steps you can take to increase your chances of success will limit the projectile vomiting, however.

So which comes first, the chicken or the egg?

It varies from coup to coup, but in the end, it’s all protein.

Sure, I’ll “like” your fanpage! And maybe later we can head over to Dr. Evil’s office for a superfluous tightening!

While following another’s social exploits is comparatively painless, it is often every bit as pointless. Today’s consumer is besieged with invitations to like, follow, connect, kneel and kiss the rings of businesses across the myriad social platforms. It’s not enough that you subscribe to the blog or sign up for the newsletter, they must own you everywhere their online profile intersects with the public.

But to what end?

Why must you “follow” someone here if you already “like” them there? What additional benefit do you gain from this demand for universal allegiance?

Social media efforts tend to be a cross-pollinated mess. Good little worker bee that I am, my own marketing “campaigns” in this forum are no exception, having devolved into a black hole of pithy renduncy. A blurb on twitter, a joke on Facebook, links to new listings and blog posts on each … I have really provided no compelling reason to follow me or my business across multiple venues.

Until now.

Henceforth, I will be using the Scottsdale Property Shop page on Facebook to exclusively promote the “Scottsdale Foreclosure Value of the Day” and other daily property bargains that catch my eye. Not really blog fodder, it’s more at home on our fan page than within the confines of this site. While you, the consumer, can continue to perform your own home searches and sign up for listing alerts here, you’ll want to fan up our page to follow along with these pre-screened daily property selections.

You can continue to comb through the MLS for the best values yourself, or you can let us do it for you. Your choice.

Sure, there will still be a little of the humor and observation that tinges everything we do, but the page itself will be purposeful, not just another outlet for promoting this site.

So what are you waiting for? Now that there is an actual reason to do so, go ahead and “like” us on Facebook. You won’t feel a thing.

Oh, but the Twitter handle? @PaulSlaybaugh is still reserved for nonsensical shenanigans. Follow at your own intellectual peril.

While the purchase of a bank owned home or a short sale tends to be fraught with a little more risk than a traditional resale transaction, it is important to note that buyers typically maintain inspection rights on distressed properties. While the various “As Is” clauses and addenda dictate that the seller is not responsible for making repairs on these properties, most purchases involving bank properties do allow for an inspection period (though the time frame may be shrunk from the typical 10 days allowed under the boilerplate of the standard Arizona Association of Realtors contract).

*In short, the bank won’t likely fix anything, but you are allowed to verify condition before deciding whether or not to continue with the transaction.

During the course of your inspections, it is always prudent to spend a little extra time on a bank property as there are no disclosures of prior defects. The institution that now owns the property never occupied it, and knows nothing about its history other than the pertinent fact that the previous owner defaulted on his/her deed of trust.

It’s all about the Benjamins to the bank.

The purpose of this lengthy preamble? To add a little context to the freak hail storm that struck large pockets across the Valley last (2010) fall. If you have been watching all of the new roofs going up over the past six months, you know that the McCormick Ranch area was hit hard. With insurance companies passing out full roof replacements like they were candy, it is not uncommon to see streets where virtually every home features a brand new roof. Foam and asphalt shingle roofs, in particular, took wicked beatings.

So while most owner-occupied properties in the area that sustained damage have been repaired or replaced, the bank-owned properties that have been sitting vacant for over a year are likely to leak like a sieve when the monsoons roll around this July. The price points of such properties are often attractive enough to offset the 10-20k many will need, but it can be tough to swallow when it is not an anticipated cost.

Before plunking down money on inspections and appraisals, I’d recommend having a professional walk the roof of that bank owned steal to help you determine the true out of pocket price of ownership.

Oh, and if you are buying a resale property in McCormick Ranch? Make sure to find out if the seller had any repair work performed in the aftermath of said storm. While one of our selling clients was able to obtain full roof replacement on a claim from that storm as recently as this past month, the likelihood of that happening on another property dwindles the further removed we get from the event. The insurance companies aren’t going to be in the roof replacement business much longer.

Happy hunting,

Ray & Paul

Buying or selling a home in the McCormick Ranch area? Give us a call. Online data and pictures can give you 90% of the picture. We’ll fill in the remaining 10%.

*Do not rely on any general statements herein as legal advice. We are not attorneys, nor do our statements pertain to a specific transaction. Rights and restrictions within a transaction vary depending upon the documents used, attendant verbiage, alterations, etc.  Long disclaimer short: I ain’t talking about your deal, homie.

———————————————————————————————-

New Homes in Scottsdale

Showing properties 1 - 5 of 103. See more New Construction Homes in Scottsdale.
(all data current as of 5/13/2013)

1. $439,900 : 18650 N Thompson Peak Parkway, Unit 2084, Scottsdale
   
   2 beds, 2.00 baths

   Home size: 1,565 sq ft

   Lot size: 1,524 sqft

   Year built: 2011

   Parking spots: 2

   Days on market: 6

   Walk Score®: 18
   
2. $1,950,000 : 7595 E Whisper Rock Trail, Scottsdale
   
   3 beds, 3.50 baths

   Home size: 4,700 sq ft

   Lot size: 1.47 ac

   Year built: 2012

   Parking spots: 3

   Days on market: 9

   Walk Score®: 34
   
3. $475,000 : 12411 N 57th Street, Scottsdale
   
   3 beds, 2.50 baths

   Home size: 2,563 sq ft

   Lot size: 14,833 sqft

   Year built: 2011

   Parking spots: 4

   Days on market: 11

   Walk Score®: 34
   
4. $1,795,000 : 9985 E Palo Brea Drive, Scottsdale
   
   4 beds, 4.50 baths

   Home size: 4,660 sq ft

   Lot size: 38,664 sqft

   Year built: 2013

   Parking spots: 3

   Days on market: 12

   Walk Score®: 3
   
5. $997,000 : 20499 N 98th Place, Scottsdale
   
   3 beds, 2.00 baths

   Home size: 2,400 sq ft

   Lot size: 6,036 sqft

   Year built: 2011

   Parking spots: 2

   Days on market: 14

   Walk Score®: 6
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

New Homes in Paradise Valley

Showing properties 1 - 5 of 33. See more New Construction Homes in Paradise Valley.
(all data current as of 5/13/2013)

New Homes in Cave Creek

Showing properties 1 - 5 of 17. See more new Construction Homes in Cave Creek.
(all data current as of 5/13/2013)

1. $280,000 : 36600 N Cave Creek Road, Unit 14 B, Cave Creek
   
   3 beds, 2.00 baths

   Home size: 1,573 sq ft

   Lot size: 1,457 sqft

   Year built: 2013

   Parking spots: 2

   Days on market: 8

   Walk Score®: 15
   
2. $449,000 : 5609 E Lonesome Trail, Cave Creek
   
   4 beds, 2.50 baths

   Home size: 2,636 sq ft

   Lot size: 9,027 sqft

   Year built: 2012

   Parking spots: 2

   Days on market: 11

   Walk Score®: 6
   
3. $691,470 : 5306 E Windstone Trail, Cave Creek
   
   4 beds, 3.50 baths

   Home size: 3,774 sq ft

   Lot size: 11,946 sqft

   Year built: 2013

   Parking spots: 6

   Days on market: 22

   Walk Score®: 8
   
4. $538,692 : 30227 N 52nd Place, Cave Creek
   
   3 beds, 2.50 baths

   Home size: 2,332 sq ft

   Lot size: 10,150 sqft

   Year built: 2013

   Parking spots: 5

   Days on market: 24

   Walk Score®: 14
   
5. $1,950,000 : 4880 E Lone Mountain Road, Cave Creek
   
   6 beds, 5.00 baths

   Home size: 8,894 sq ft

   Lot size: 4.38 ac

   Year built: 2013

   Parking spots: 7

   Days on market: 28

   Walk Score®: 6
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

New Homes in Fountain Hills

Showing properties 1 - 5 of 9. See more New Construction Homes in Fountain Hills.
(all data current as of 5/13/2013)

1. $599,000 : 15807 E Cholla Drive, Fountain Hills
   
   3 beds, 2.50 baths

   Lot size: 10,006 sqft

   Year built: 2013

   Parking spots: 4

   Days on market: 11

   Walk Score®: 17
   
2. $884,900 : 15239 N Zapata Drive, Fountain Hills
   
   3 beds, 3.50 baths

   Home size: 3,209 sq ft

   Lot size: 36,682 sqft

   Year built: 2011

   Parking spots: 3

   Days on market: 20

   Walk Score®: 3
   
3. $649,000 : 16138 E Thistle Drive, Fountain Hills
   
   3 beds, 2.50 baths

   Home size: 2,717 sq ft

   Lot size: 1.41 ac

   Year built: 2013

   Parking spots: 4

   Days on market: 42

   Walk Score®: 31
   
4. $539,900 : 15411 E Wrangler Court, Fountain Hills
   
   3 beds, 2.00 baths

   Home size: 2,289 sq ft

   Lot size: 16,640 sqft

   Year built: 2013

   Parking spots: 2

   Days on market: 45

   Walk Score®: 9
   
5. $389,000 : 11023 N Regency Place N, Fountain Hills
   
   3 beds, 2.00 baths

   Home size: 2,032 sq ft

   Lot size: 16,483 sqft

   Year built: 2012

   Parking spots: 3

   Days on market: 61

   Walk Score®: 29
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

New Homes in Chandler

Showing properties 1 - 5 of 28. See more New Construction Homes in Chandler.
(all data current as of 5/13/2013)

1. $725,000 : 825 E Prescott Place, Chandler
   
   5 beds, 3.25 baths

   Home size: 3,715 sq ft

   Lot size: 17,135 sqft

   Year built: 2011

   Parking spots: 4

   Days on market: 9

   Walk Score®: 20
   
2. $430,000 : 1241 E Yellowstone Place, Chandler
   
   4 beds, 2.50 baths

   Home size: 2,862 sq ft

   Lot size: 9,536 sqft

   Year built: 2011

   Parking spots: 3

   Days on market: 10

   Walk Score®: 23
   
3. $384,883 : 4640 S Amethyst Drive, Chandler
   
   4 beds, 3.50 baths

   Home size: 3,100 sq ft

   Lot size: 12,050 sqft

   Year built: 2013

   Parking spots: 3

   Days on market: 10

   Walk Score®: 2
   
4. $240,937 : 3670 S Arizona Place, Chandler
   
   3 beds, 2.00 baths

   Home size: 1,613 sq ft

   Lot size: 4,787 sqft

   Year built: 2013

   Parking spots: 2

   Days on market: 16

   Walk Score®: 46
   
5. $245,507 : 3660 S Arizona Place, Chandler
   
   3 beds, 2.00 baths

   Home size: 1,697 sq ft

   Lot size: 4,623 sqft

   Year built: 2013

   Parking spots: 2

   Days on market: 16

   Walk Score®: 46
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

New Homes in Gilbert

Showing properties 1 - 5 of 94. See more New Construction Homes in Gilbert.
(all data current as of 5/13/2013)

1. $229,900 : 2091 S Martingale Road, Gilbert
   
   3 beds, 2.50 baths

   Home size: 1,956 sq ft

   Lot size: 5,938 sqft

   Year built: 2012

   Parking spots: 2

   Days on market: 3

   Walk Score®: 38
   
2. $446,274 : 1503 E Canary Drive, Gilbert
   
   4 beds, 2.00 baths

   Home size: 3,687 sq ft

   Lot size: 7,200 sqft

   Year built: 2013

   Parking spots: 2

   Days on market: 5

   Walk Score®: 23
   
3. $209,900 : 1172 S Osborn Lane, Unit lot 841, Gilbert
   
   3 beds, 2.00 baths

   Home size: 1,802 sq ft

   Lot size: 4,775 sqft

   Year built: 2010

   Parking spots: 2

   Days on market: 6

   Walk Score®: 12
   
4. $899,900 : 3098 E Bellflower Drive, Gilbert
   
   5 beds, 5.50 baths

   Home size: 5,359 sq ft

   Lot size: 20,461 sqft

   Year built: 2013

   Parking spots: 4

   Days on market: 7

   Walk Score®: 8
   
5. $479,000 : 3470 E Fandango Drive, Gilbert
   
   4 beds, 3.00 baths

   Home size: 3,379 sq ft

   Lot size: 8,395 sqft

   Year built: 2010

   Parking spots: 3

   Days on market: 7

   Walk Score®: 23
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

New Homes in Glendale / Peoria

Showing properties 1 - 5 of 56. See more New Construction Homes in Glendale / Peoria.
(all data current as of 5/13/2013)

1. $649,990 : 30654 N 120th Avenue, Peoria
   
   4 beds, 3.00 baths

   Home size: 3,534 sq ft

   Lot size: 16,737 sqft

   Year built: 2012

   Parking spots: 3

   Days on market: 6

   Walk Score®: 0
   
2. $352,793 : 29304 N 70th Lane, Peoria
   
   4 beds, 3.00 baths

   Home size: 3,027 sq ft

   Lot size: 7,200 sqft

   Year built: 2013

   Parking spots: 3

   Days on market: 7

   Walk Score®: 6
   
3. $315,793 : 29296 N 70th Avenue, Peoria
   
   4 beds, 3.00 baths

   Home size: 2,167 sq ft

   Lot size: 8,141 sqft

   Year built: 2013

   Parking spots: 3

   Days on market: 7

   Walk Score®: 3
   
4. $475,000 : 12860 W Via Caballo Blanco Drive, Peoria
   
   4 beds, 3.50 baths

   Home size: 3,597 sq ft

   Lot size: 12,228 sqft

   Year built: 2012

   Parking spots: 3

   Days on market: 7

   Walk Score®: 12
   
5. $224,900 : 7619 W Charter Oak Road, Peoria
   
   4 beds, 2.50 baths

   Home size: 2,050 sq ft

   Lot size: 3,827 sqft

   Year built: 2010

   Parking spots: 2

   Days on market: 9

   Walk Score®: 51
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

New Homes in Mesa

Showing properties 1 - 5 of 67. See more New Construction Homes in Mesa.
(all data current as of 5/13/2013)

1. $329,000 : 4250 S Hassett --, Mesa
   
   5 beds, 3.00 baths

   Home size: 3,120 sq ft

   Lot size: 9,450 sqft

   Year built: 2010

   Parking spots: 3

   Days on market: 3

   Walk Score®: 5
   
2. $232,705 : 3353 E Roland Street, Mesa
   
   4 beds, 2.00 baths

   Home size: 1,561 sq ft

   Lot size: 4,750 sqft

   Year built: 2013

   Parking spots: 2

   Days on market: 8

   Walk Score®: 3
   
3. $241,025 : 3353 E Rochelle Street, Mesa
   
   3 beds, 2.00 baths

   Home size: 1,700 sq ft

   Lot size: 4,750 sqft

   Year built: 2013

   Parking spots: 2

   Days on market: 8

   Walk Score®: 3
   
4. $385,000 : 1709 N Channing --, Mesa
   
   4 beds, 3.00 baths

   Home size: 2,008 sq ft

   Lot size: 7,503 sqft

   Year built: 2010

   Parking spots: 4

   Days on market: 8

   Walk Score®: 6
   
5. $299,000 : 1927 N Ashland Circle, Mesa
   
   4 beds, 3.00 baths

   Home size: 2,490 sq ft

   Lot size: 6,098 sqft

   Year built: 2013

   Parking spots: 4

   Days on market: 8

   Walk Score®: 51
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

New Homes in Tempe

Showing properties 1 - 3 of 3. See more New Construction Homes in Tempe.
(all data current as of 5/13/2013)

1. $990,000 : 519 E Pecan Place, Tempe
   
   4 beds, 5.00 baths

   Home size: 4,300 sq ft

   Lot size: 1.38 ac

   Year built: 2013

   Parking spots: 3

   Days on market: 7

   Walk Score®: 34
   
2. $1,100,000 : 520 E Pecan Place, Tempe
   
   4 beds, 5.00 baths

   Home size: 4,300 sq ft

   Lot size: 1.38 ac

   Year built: 2013

   Parking spots: 4

   Days on market: 9

   Walk Score®: 34
   
3. $300,000 : 1300 W 5th Street, Unit 1004, Tempe
   
   2 beds, 2.00 baths

   Home size: 1,495 sq ft

   Lot size: 1,957 sqft

   Year built: 2010

   Parking spots: 2

   Days on market: 35

   Walk Score®: 63
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.