From the Trenches

Phoenix not in Top 10, but investors still buying here

Inman News reports on "The 10 Best Markets for Real Estate Investors" and here's some takeaways from that report:




  • Tucson is in the Inman "top ten" best real estate markets for investors, but Phoenix is not.

  • Investors usually pay cash for homes (61% compared to just 20% of owner-occupant buyers who pay cash

  • Most investors plan to own their investment home for about 10 years, and 52% say it's likely they'll buy another property soon

  • Investors are optimistic about the future of housing: 77% say "now is a good time to purchase real estate."


You can view Inman's full report here: http://www.inman.com/reports/10-markets-invest/



Real estate is local, so let's see what's going on in metro Phoenix...


Valleywide MLS statistics show that investors are buying in metro Phoenix, and they're buying a lot of homes. The Cromford Report shows investors are purchasing 24% to 26% of Valley homes sold so far in 2011.



Nationwide, Inman says distressed properties account for 40% of existing home sales, but you can see in the chart above that metro Phoenix area stats are much higher: investors bought 64% of all metro Phoenix area homes sold in May. (6,316 distressed sales out of a total 9,845 homes sold in May 2011).



How's buyer demand in metro Phoenix?


In a word: healthy. Check out this chart, also from the authoritative Mike Orr at the Cromford Report which shows that February 2011 was the third highest buyer demand month since January 2001. Only June and August 2005 -- the peak of the peak of the market -- had more homes sold.




[caption id="attachment_9173" align="alignleft" width="300" caption="Feb 2011 second-highest sales volume for Metro Phoenix since Jan 2001"][/caption]


Are you thinking about buying a home? Either for yourself or as an investment? Contact us before you do anything! We've been helping buyers and sellers in metro Phoenix since 2004, before the boom and bust brought our market to it's knees.


We know how to find and negotiate the best possible deal for you, and our customer service is top notch. Check out what our clients say behind our backs and give us a shout when you're ready to chat with a professional Realtor.

Buy a home for 1% cash down

Stock Exchange Image ID 164990 by user daimon057

Although most of the low-down and no-down payment purchase programs are long gone with the financial crash of 2008, we do have 1 lender who has 1 loan program that’s a 1% cash down payment program.

Here’s an example of a recent client of mine who used this program.


  • Home purchase price – $85,500


  • Seller contribution to buyer’s closing costs – $2,700


  • 1% Down Program’s contribution to buyer’s down payment – $2,137


  • Buyer’s cash out of pocket for home inspections, appraisals, utility company deposits, etc., – $500


  • Buyer’s cash out of pocket on closing day, all-in – $1,033


The program is good in most of Metro Phoenix, AZ as of January, 2011. Among other things, buyers must meet a minimum credit score, and must have stable and verifiable employment income. Buyers must take a homeowners’ education class which takes about 1-2 hours of studying and about 15-20 minutes in exam time. The program can be used to buy a foreclosure (REO) home. The seller is not required to contribute to the buyer’s closing costs, but may.

Not all buyers qualify, and not all homes qualify. But it could be a viable option for you if you’re a little low on cash but want to be a homeowner.

Contact me for more details.

Heather Barr, Realtor
The Phoenix Agents at Thompson’s Realty
602-999-8831 or Heather@ThePhoenixAgents.com

photo credit: user daimon057 at the online photo sharing site StockExchange
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How long does a short sale take? Part 2

First, read this recent post with an eye-catching visual about how long short sales really take.


For even more commentary about how long short sales take, see the comments in this blog post about short sale processing time on the weblog REO Insider. Most comments written by Realtors, and other industry insiders.


In short, (as of 9/19/2010), over 60% of short sales were taking 6+ months, and more than 80% are taking more than 4 months.

Got Lead Based Paint?

IMG00015-20100722-1112


We stumbled across this beauty the other day – it’s a bank-owned REO listing, built in the early 1970s, and it doesn’t look like the prior owners had updated anything since the first few years they were there!


But here’s the catch:  most buyers (almost all buyers) in this price range are going to either pay cash (investors) or use an FHA mortgage (low income &/or first-time buyers).


This house is priced way too high to interest an investor, yet the peeling paint and other deferred maintenance items are going to stop any FHA loan from getting approved.


And so it sits there…


Your feels bad for the neighbors Realtor,


Chris Butterworth


Did You Know? Federal law regarding lead based paint has changed. As of April 2010, the laws about working on older homes that might have lead based paint have gotten much more restrictive. See this article for a rundown of the law changes and how it affects you.

Fabulous, but too far out. . .

Recently a client and I exchanged emails about her housing options that reminded me of one of most enduring metro Phoenix’s real estate truisms:  fabulous is often also too far out (geographically speaking).


Since metro Phoenix has always had room to grow, geographically, it generally follows that the newer, fancier, nicer houses that many 20-something, 30-something and 40-something buyers want are miles out of town.


We had a saying during the boom years of 2004-2006 that buyers "drive until they qualify" meaning they drive out from center city until they hit a pocket where the builders have put up houses that those buyers can afford.


But really it's also true that buyers drive until they find the finishes & fixtures they desire at a price they can pay.


.


So what we often find is this . . . .



5 miles (7-12 minutes) from downtown Phoenix your budget of $150,000 buys this:


160k buys this 5miles from Phx downtown


160k buys this 5miles from Phx downtown, KIT





  • about 1,200 to 1,400 square foot


  • 2 or 3 bedrooms ; 2 bathrooms


  • 1/4 acre lot, with no pool


  • built in 1950s


  • No HOA; you could add on another bedroom fairly easily


  • linoleum floors & laminate counters


  • overall, looks like it was remodeled on the cheap in late 1980s


10 to 12 miles (20-25 minutes) from downtown Phoenix that same $150,000 buys this:


150k buys this 12miles from Phx downtown, EF





  • 1,500 to 1,800 square feet


  • often with a pool ; usually about the same 1/4 acre lot as above


  • Built in the 1970s or 1980s


  • Probably no HOA


You can choose between an older kitchen in a fairly nice neighborhood. . .


150k buys this 12miles from Phx downtown, old KIT, nice NEIGH


. . . or you can choose a completely remodeled kitchen in a neighborhood most buyers would consider a step down from the neighborhood above.


150k buys this 12miles from Phx downtown, new KIT, lesser NEIGH



20-25 miles (45-60 minutes!) from downtown Phoenix $150,000 buys this. . .


150k buys this 20miles from Phx downtown, EF


150k buys this 20miles from Phx downtown, KIT


150k buys this 20miles from Phx downtown, BA





  • 1700-1900 square feet


  • rarely with a pool ; usually a small 1/10th of an acre (5,550 square feet)


  • Brand new build house or about 3-5 years old


  • HOA controls much of what you can do to the outside of the house


What’s more important to you - ?


Granite countertops and new cabinets or a quick 5 minute commute to downtown Phoenix?


5-year old house with generally poor insulation or a well-insulated 40 to 60 year old house that probably needs a new roof in the coming 5 years?


A little elbow room in your backyard or trying to plant a hedge to hide the 2-story house looming over your tiny backyard?



Long time readers know or will guess that I’d choose the teensy 1950s house over the new build in Surprise or Avondale every time. And that’s not just because I don’t have children. I’d raise kids in that teensy house in a heartbeat. They'll have more quality time with Mommy & Daddy because my commute to work is only about 8 minutes.

What about you?

Great photo idea

bathroom mirror picture solution

This is a great solution to the perennial problem in Real Estate Photo Taking 101 – the photographer usually can’t get a good shot of the bathroom without appearing in the photo, in the mirror.


Photo credit to Sheryl & Kenneth Lloyd of Realty Executives, for the home at 3220 E Carol Avenue in Phoenix. It's a 5 bedroom, 3 bath home built in 1976 with 2838 square feet, listed for sale at $445,000. If you're not already working with another Realtor and you'd like to see more of this home, please contact Chris and Heather.

90 Day Fix and Flip Rule

You know how fix and flipping works in a cynical world, right? Basically. . . . investors buy a craptacular house at foreclosure auction or elsewhere and do no substantive repairs. They slap a thick coat of paint on everything and install cheap new carpet, then resell it as "Remodeled!" with a seriously  jacked up price.


Traditionally, the FHA had a rule in place stating they would not fund buyers who were purchasing a property the seller owned for less than 90 days. This was designed to protect buyers (and the government backed money they used to purchase) and discourage excess profiteering by fix and flip investors.


Some weeks back, the FHA reversed themselves in this area by announcing a new policy that's generally known in the industry as "The FHA Flipping Waiver."


FHA changed it's policy to help the market in clearing some of the excess foreclosure properties for sale which are often holding down pricing at artificially low levels. I don't know how it worked around the rest of the country, but my opinion is that Fix and Flippers are basically, usually helpful here in metro Phoenix Arizona.


Lenders reserve the right to have additional regulations, above and beyond what FHA guidelines say. It's taken some time for these lender 'overlays' to shake out into a coherent whole but it has finally happened.



What the Heck Does this Mean to Me, A Buyer?


The general rule of thumb if you're shopping for a home and you're looking at fix and flips is this:  you won't be allowed to use an FHA mortgage to buy if the seller of the home you love has




  • Owned it for less than 90 days AND

  • Has jacked up the price more than 20% over his/her purchase price

  • Also, don't have any sort of pre-existing relationship between yourself, the buyer, and the seller


If the investor has owned the home for less than 90 days and it's priced 20% or more over the investor's purchase price, you could potentially still buy the home, but you can't use an FHA mortgage to do it. That means a 'conventional' mortgage, which means a higher down payment than the FHA 3.50%. Plan on 10% to 25% cash down payment if you want that spruced up fixer flipper home.

Oh I’m SURE I Can Get a Mortgage!

I often lack words to describe to my clients exactly how mind-bogglingly fast the world of mortgage lending is changing lately. Home buyers not only need good credit, a steady income, and piles of documentation to back all that up.. . . . .   you need to be aware that loan guidelines change near-daily.


Yep. Nearly daily loan investors make changes to their rules about what they’ll lend on, what they won’t, who qualifies for a mortgage and who doesn’t, and how to properly fill out 9 inches of forms in triplicate to get the loan money.


I subscribe to a daily email that discusses changes in lending standards throughout the industry. It’s usually 2 pages long. Two pages of changes in loan guidelines per day!





Don’t assume you’re going to have zero trouble getting approved for a mortgage. If you have excellent credit you’ll probably get approved, but you’ll have to produce more paperwork than you can imagine.

Get approved. Then start shopping. Trust me. You don’t want to spend weeks looking online at this:


Nice EF, SFH in Phx, sold 325k in Feb 2010


only to be told you’re approved for a mortgage to buy this:


Shabby EF, SFH in phx sold Feb 2010 for 15k


Want to get pre-approved? Our favorite lenders, in no particular order:





  • Kevin Reiser, AmeriFirst Loans, 480-289-7635


  • Andrew Schmidt, WJ Bradley Mortgage, (602) 999-1912


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Bidding Wars and No-Brainers

In yesterday’s post I promised 1 sure-fire way to avoid the stress of getting embroiled in dealing with a so-called bidding war. It’s bonus day here at The Phoenix Agents; here’s 2 ideas.



Option One - Make your best offer right out of the gate


Are you willing to pay $176,500 for that home that could be your Dream Home? Offer it. Don’t pussyfoot around offering $158,900 and hoping the seller comes back with a counteroffer. Just make your highest and best offer right out of the gate.**


I can hear the reply now: “But I don’t pay too much!”


Easy solution here folks. First, decide what is “too much” and what is “too little” for you and for this particular house. Mentally walk backwards from “too much” in increments of $1000 or so until you get to a number that you’d be satisfied with if you were the new owner of the home. Offer that.


There are a couple of scenarios that could play out here.


1) You bid low and don’t get the house – very likely


2) You bid your best and don’t get the house – could happen and would be disappointing, but at least you’ll know you gave it your best shot. Someone else – who was willing to pay what you believe is too much – got the house. Move on.


3) You bid your best and get the house – congratulations!


4) You bid low and get the house – in a true multiple offer situation, this is about as likely as winning the lottery.



Option Two - Stop Shopping


There is one sure-fire way to avoid the stress of multiple offer situations. Take your ball and go home. Don’t buy a house now. Keep renting and come back to play the game when the stakes suit your temperament.


Again, I can hear the reply already: “But I want to buy a house!”


You’ve got a choice to make.


Determine that you’re going to get over your fear of bidding wars by employing one of the strategies I’ve outlined here and yesterday. Or stop shopping for houses. Or at least stop shopping for houses that have bidding wars.


Hopefully this is helpful information. Still worried? Call or email me or Chris and we’ll talk you through it.


Heather Barr


**In metro Phoenix, in 2010, in prices under about $400,000 or so, bagain priced bank owned homes (a.k.a. forclosures or REOs) dominate the market. Remember Economics 101? Low price = high demand. If you’re shopping in this segment, expect bidding wars and bid accordingly. Not shopping in this segment? You might have a little more leverage in a multiple offer situation.



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Bidding Wars and Balls


Don't know whether this is a memory from real life or a movie**, but go with me on this. Imagine a scene with a politician at a podium taking questions  from reporters. Let's call one of the reporters James and pretend he's a notorious philanderer, because it makes my story better.




Reporter James lobs a stinger: "Senator, what about these rumors that you've been having an affair? Will you level with the American people about your private life?" Being a movie, everyone pretends this is unexpected, and there's an audible gasp from the audience.


The politician pauses, then returns fire, "Gosh Jimmy. I will if you will."


Bam! Tension diffused, politician gets off the hook. (this is fiction, after all)



What in Hades does this have to do with bidding wars?


It's all about balls. And not even the kind you're thinking about right now. Sellers who say “we have multiple offers” expect buyers to have the knee-jerk reaction of “Oh! I better offer more money.” Here’s a tip:




Just because somebody throws a ball at you, does not mean you have to catch it.



You’ll be given several hours or overnight to make your decision. Let the ball the seller just tossed at you drop. Take your time to decide whether you want to pick it up. Or not.


Does paying more make sense? For you? For the market? Sometimes paying a teensy bit more than you planned, for a home you’ll live in for 10-20 years isn’t such a horrible idea. What do the comparable sales tell you and your Realtor? Remember that tinkering with the terms of the offer can make it more attractive without spending additional money. Consider letting your offer stand as written – in other words, do nothing.


Whatever you do, remember you have the power to pick up the ball, let it lie there, or walk away.


Still not convinced that you can live through the stress of a bidding war? Check back tomorrow for a sure-fire, can’t lose, stress-free way to deal with bidding wars.



.


**the political scenario above might even have been Hillary Clinton fielding questions about her wayward husband. I just can't recall for sure. But if it was Hillary, then the story really is about balls, and Hillary's got a brass pair.

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More on the new GFE

This is a pile-on to Chris’ recent post explaining the new Good Faith Estimate form . . . .  I just received an email from a Loan Officer (“LO”) friend reviewing some rule clarifications issued by HUD after a February 18, 2010 meeting with a bunch of FHA mortgage investors.


LO Question: “When are consumers entitled to receive a Good Faith Estimate (GFE)?”


HUD Answer: If a consumer has an executed purchase contract, a GFE is required. Until that point, LOs can issue “worksheets” which are “useful for generic rate quotes.”


HUD guidelines for “worksheets” - -





  • Worksheets should not look like GFEs,


  • A worksheet should never should be used "in lieu of" a GFE,


  • Consumers do not have to show an “intent to move forward” with a mortgage in order to obtain a GFE.


I’m assuming the Loan Status Report (LSR) in use in metro Phoenix which must be submitted along with any purchase offer falls under HUD’s “worksheet” rules.



What’s It Mean for Home Buyers?


Loan Officers can still give you a rate quote that’s not binding. However, once you have an executed purchase contract on a specific home, Loan Officers must issue you a GFE and per HUD’s new GFE rules, those numbers can’t change very much.


Buyer, if you got an LSR/worksheet that said 5.00 interest rate and $1,200 in closing costs. . . but when you got your signed purchase contract on your Dream Home you got a GFE that showed closing costs of $5,300 on a 5.375% rate. . .  you can cancel your purchase without penalty.



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Lenders Behaving Madly

An illustration of just how ridiculous lender requirements have become, direct from an email written by a loan officer and sent to loan specialist Rob Chrisman:




"Rob - The following is an actual underwriting condition from a large wholesale lender which is known for having the best wholesale pricing for conforming loans. (As background, the borrower is a staff attorney for the Federal Reserve Bank of NY.) 'Please provide a signed letter from CPA stating if [client's first name] has 25% or more ownership in Federal Reserve Bank. If 'yes' he should be run as self employed.'"



For readers not fluent in lender-speak –




  • An attorney who works for the Federal Reserve applied for a home loan

  • The loan underwriter (the bean counter who gives the final blessing on the mortgage) asked the home buyer to prove he doesn't own 25% of the Federal Reserve, his employer


Prove you don't own the Federal Reserve Bank? Ownership of the Fed is a complicated thing**. But no one person owns 25% of it, for sure.  And in any case, asking someone to prove they don't own something is  sort of moronic.



If you’re home shopping, I really can’t stress enough how vitally important it is that you get a loan approval long before you even think of looking at houses in person. The rules have changed. Drastically. And in too many cases, the new rules are being deployed by people who don't think very hard before asking silly questions.


Get the silly out of the way early, so you can focus on falling in love with a new house, and not waste your time trying to prove you don't personally own 25% of the nation's central bank.


March 5, 2010 - this post has been edited after author did a bunch of research into the ownership of the Federal Reserve. I was mistaken: the Federal Reserve is not owned by Congress, although it was created through an Act of Congress in 1913. The Federal Reserve System is a part-private, part-government collection of Member Banks, with oversight provided by the Federal Government through the Fed's Board of Governors.


If you've been inclined to believe any of the crap being peddled by books or websites that claim the Fed is a for-profit conspiracy controlled by a few ultra-rich, mostly European banking families like the Warburgs, Rothschilds, Lazards, the Kuhn Loebs and Moses Seif, read this short summary of the Federal Reserve Banking System prepared by the Congressional Research Service for the Library of Congress.

Banks Pull More Nonsense

This doesn't top some of the other nonsense we've discovered banks pulling, but it's pretty nasty.


The bank selling the house our buyer fell in love with requires that the buyer's Realtor reduce their commission (i.e. take a pay cut) if the buyer wants the seller to help pay his/her closing costs or make repairs on the house.


Lots of first time buyers (nearly all, in our experience) have saved money for their down payment but take the opportunity offered by our current market to ask the seller to cover the cost of their closing costs. And lots of bank owned homes need minor repairs before their FHA loan will be approved.


So essentially, if our buyer makes a request made by most home buyers in the field today, the bank will decrease our paycheck? Great. Just great.


*edited to add - after talking w/ my partner Chris this morning about this, I realized my post needed some clarification on 3 points:



First, the Realtors' Ethics Code says agents can't ever allow potential commission  earnings affect what they advise their clients to do.  If our buyer loves a house whose seller is noodling around with our paycheck because they can, and it's a good house & deal for our client, we have to take the pay cut without comment.

Second, the bank buried this commission information deep within a set of forms buyer is required to submit with his/her purchase offer. The paycheck reduction information isn't clearly and transparently displayed in the typical spot on the MLS data sheet like everybody else's commission information.



Third, at the price point our buyer is shopping the bank's savings via this method is about $125. Bottom line - the bank is being shifty to save a buck and a quarter.

I’m here to serve you (but not if “you” is another agent)

I received an email from an agent last night which I want to share.  But first a quick set up of the scenario (I’m keeping the percentages & relationships the same, but changing the actual numbers.)

We put a new listing into MLS last week:

  • The agent in question submitted an offer on behalf of her buyers for $444,000 - 88.8% of the asking price – with a response time of 5:00 pm today, meaning our sellers have until 5:00 pm today to respond to the offer.
  • Homes in the neighborhood have been selling at 95% – 99% of listing price.
  • Comps in the neighborhood show our listing should be priced at $471,000 to $500,000.
  • After viewing the competition, I’m confident our listing will be considered very desirable by the majority of buyers – it’s a terrific house, very clean and tastefully decorated.
  • Based on the above, our listing is priced at $499,000.
  • We’ve had a lot of activity on this house (not that the agent in question knows this for sure, but nice homes in this neighborhood in this price are selling quickly, so it might be assumed.)

OK, here is the email I received:

Hi there,

Are we going to be hearing from you by tomorrow. I have quite a few contracts going and need to schedule time accordingly.

And here are some potential responses:

* Hi there, We didn’t realize how busy you were.  Sorry to keep you waiting.  We’ll respond right away.

* Hi there, Yes you’ll hear from us tomorrow.  Please let me know if your buyers decide to make a better offer in the meantime.

* Hi there, Maybe you wouldn’t be so busy writing offers if you wrote offers high enough to get accepted.

* Hi there, Seriously?

Your shaking his head Realtor,

Chris Butterworth

Personality goes a long way

A conversation between Jules Winnfield and Vincent Vega, from the movie Pulp Fiction:

Jules: Pigs are filthy animals.  I don’t eat filthy animals.

Vincent: Yeah, but bacon tastes good.  Pork chops taste good.

Jules:  Hey, sewer rat may taste like pumpkin pie, but I’d never know ‘cause I wouldn’t eat the filthy mother-fu**ers.  Pigs sleep and root in sh**.  That’s a filthy animal.  I ain’t eating nothin that ain’t got sense enough to disregard his own feces.

Vincent:  How ‘bout a dog?  Dog eats his own feces.

Jules: I don’t eat dog either.

Vincent:  Yeah, but do you consider a dog to be a filthy animal?

Jules: I wouldn’t go so far as to call a dog filthy, but they definitely dirty.  But, dog’s got personality; personality goes a long way.

Vincent:  Ah, so by that rationale, if a pig had a better personality, he would cease to be a filthy animal.  Is that true?

Jules:  Well, we’d have to be talking one charming mother fu**ing pig.  I mean he’d have to be ten times more charmin’ than that Arnold on Green Acres, you know what I’m sayin’?

We had a neighborhood-wide garage sale last month, where the HOA provided advertising and signage.  We participated, and had a garage-full of stuff to sell.  One of the things I had set out for sale was a computer monitor.  I had it tagged at $40, and was expecting to sell it for $30.

Personality Minus.  The very first guy to stop by our house was a jerk (or at the very least, not friendly).  He showed up an hour before the sale started; I had just started setting things up & was pulling tables out of the garage.  This guy didn’t say much of a hello, and proceeded to wander through my garage while I was setting up.  He picked through our stuff (even the stuff I wasn’t selling) with an attitude and body language that said he was slumming and didn’t like other people’s junk.  He made the hair on the back of my neck stand up.

Eventually he offered me $20 for the monitor. I declined, thinking to myself that I wouldn’t sell it to him for $40!  He then offered $25, and then $30, telling me I had to be willing to negotiate or I wouldn’t sell anything today.  I said flatly, “The sale hasn’t even started yet.  If you want it for $40 you can have it.”  He huffed at me and walked away.

Personality Plus.  A couple hours later a woman asked about the same monitor.  She had been in our driveway for 20 minutes already, chatting us up about the sale, the neighborhood, the weather, the holidays.  She was genuinely friendly, and we enjoyed her company.  Finally she got to the monitor, and asked if I would take $25 for it.  My response - “you can have it for $20.”

Personality counts when negotiating your home, too.  That buyer or seller you’re negotiating with is a person, and people pay attention to how they’re treated.

Another example?  I wrote A Tale of Two Buyers almost 3 years ago.  The story holds true today.

Your was always the “but he’s got a great personality” guy Realtor,

Chris Butterworth

FHA and Fix 'n Flip Do Not Mix

This is a phrase you're seeing a lot lately in the MLS listings on entry-level housing in metro Phoenix:



This is a property acquired at trustee sale in the past 30 days and will not qualify for FHA due to the cure period requirements. Will qualify for VA or conventional.

Well, actually what you typically see is something a lot more cryptic, like "This is an acquired property" which kills me because, well... aren't they all? Digressions aside...


These homes are called Fix and Flips.* And my point is that the fact they are Fix and Flips usually goes in the private, Realtors-only Remarks data field. Consumers can't see that data field. And many buyers need to know, because FHA mortgage rules do not allow buyers to purchase homes that the seller has not owned for at least 90 days.



If you're using an FHA mortgage, there's no point looking at a house the owner just bought 25 days ago, because he can't sell it to you. By the time he can sell it to you, it will likely be gone, sold to someone else.

As a buyer, how do you know if you're looking at a fix and flip? Usually you can't tell.**


The Internet is chock-full of information but you still need a professional to help filter the good from the useless. Contact a Realtor, begin creating a relationship now, so that when you're ready to actually buy you've got someone you know and trust who's already on board with your purchase plans.



*Sadly, what I often end up calling these homes is "an essentially crappy house with a thick coat of fresh paint and some new light fixtures."

**The tax records are publicly available and sometimes a good clue to how long the seller has owned the home. But the tax records are anywhere from a couple of weeks to a couple of months behind the pace of home sales.

Buyers Overcome Adversity

*** Quick side note – I wrote about feedreaders yesterday.  If you’re seeing this post on our site but did not see it in your feedreader, please take a minute to re-subscribe.  Thanks! ***

Adversity

We’re inching our way towards the end, possibly, of the $8,000 tax credit later this month.  Once the credit expires we’ll get a chance to look at the sales data to see how much of an effect the credit had on the overall market activity.  Part of me thinks it didn’t have much of an impact at all.  If it was a major driver for behavioral change, we would have been insanely busy showing homes over the last couple of weeks, but instead our buyer-business has been slower than the last few months.  But that’s only half the story..


The last 6 months have been insanely busy, with a number of buyers qualifying for, and looking forward to receiving, their $8,000 next spring.  It hasn’t been easy, for anybody involved.


We’ve had buyers:




  • Go out to look at homes multiple times per week over the course of several months, just to get one house under contract.

  • Spend an afternoon seeing homes in 117 degree heat, only to find out the home they liked best changed to Pending status while we were looking at it.

  • Wait patiently, or at least as patiently as possible, for the bureaucracy at the bank which had approved our offer on a short sale, to come back 4 months later and tell us they had gone in a different direction.  Sorry.

  • Write offers to purchase on more than a dozen homes, at or above the list price, before finally getting an offer accepted.  (multiple buyers on this one, actually.)

  • Take sellers’ (banks’) verbal word on parts of the negotiation, since we weren’t able to get what was agreed to in writing in a timely fashion.  (yes, we discussed the risks, and covered ourselves as best as we could with emails & voicemails, and fortunately nothing went wrong.  This was stressful for everybody, a true sign of the times.)

  • Find out they didn’t have the internal constitution to make six-figure decisions at a moment’s notice, and realized they would need to wait for a more ‘normalized’ market

  • Find flaws during the inspection period which would, in a normal market, be enough to walk away from the home and make an offer on another home in the same neighborhood.  Instead, buyers are more likely to consult with a contractor (or 2) regarding the required “fix”.


Happy Homeowner

In the end, however, our buyers this year as a whole have been more happy with their new homes than any other year we can remember.  It’s been a challenging year, but it’s been a rewarding year.  And there’s still 2 months left!



Your enjoyed the short break, but now ready to finish 2009 with a flurry Realtor,

Chris Butterworth

Loans Are Hard


If you're thinking about buying a home, this might be a useful warning. Not to warn you off buying a home of course, but just because "forewarned is forearmed". It might prepare you for what's likely to happen to slow down the approval of your loan.


If you're currently buying a home and having trouble with your loan approval, this might just be a comfort to you. No, you're not alone.


See loan officer's Justin McHood's blog post on our broker's blog about how hard it is to get a loan approved and funded lately. Excerpt:



There’s a ton of stupid walking around <insert company name>… But I’m not sure if it’s different anywhere else.”

“What are the chances that my deal can fund on Tuesday? No, wait – don’t tell me — I know what you are going to say… 50/50.”

The underwriter is asking for things that make zero sense. It makes me question their general ability to function.”

Justin McHood is a mortgage broker with VanDyk Mortgage Corporation. You can find him at Arizona Mortgage Team, on the Zillow’s Mortgages Unzipped Blog, and at most East Valley Friday Nights gatherings (Twitter @evfn). He’s the one in the blue shirt.