Investors

Phoenix area housing statistics

Here are a few charts from the Cromford Report website that show the most current statistics on the Phoenix-area housing market. All figures are for metro Phoenix Arizona through the first 10 days or so of November 2011, and all types of housing (condo, detached home, patio/town home) are included.

These are charts for Days on Market and total dollar Volume of home Sales.

 

[caption id="attachment_9649" align="alignnone" width="300" caption="Days on Market, metro Phoenix AZ, Nov 2011"][/caption]

 

[caption id="attachment_9650" align="alignnone" width="300" caption="Total Volume of Sales, metro Phoenix AZ, Nov 2011"][/caption]

On the top graphic, you can see that time on market -- an indicator of both sellers picking the right price and buyers wanting to buy -- is dropping. That's generally a good thing, and it's watched as an overall indicator of market health. Three to six months on the market is considered about "normal"; more is a buyer's market, less is a seller's market.

The red line chart on the bottom graphic shows the typical bump in sales activity in the summer. But the blue line chart to the right shows that sales volume is higher year-over-year than this time last year. In other words, our summer sales growth left us at a higher point that this time last year, selling more homes overall.

Our buyers are writing multiple offers before getting one accepted, but sellers are still generally willing to pay closing costs.  What have you been seeing when you're shopping for homes? How many offers are you writing on homes before you get one accepted? Are sellers still willing to pay buyer's closing costs? We'd like to hear your feedback, please leave a comment.

 

Email Question – How much fixing up is too much?

Question:

Is it worth putting in some work on the houses or should I just run away? How much fix up is too much?

Answer:

There isn't an exact science about how much is too much.  It's all very personal and very dependent on the ability (financial, emotional, and hammer-swinging) of the person doing the work.

The only obvious truth is that the cost of the home plus the cost to improve it should be less than the value of the home after it's improved.  In other words, if you can buy a different home in the neighborhood for less than the cost to buy & fix up this one, you should just buy the already fixed up one instead.  Unless (and there seems to always be a caveat), the home you want to fix up is perfect in some other way and can't be match by any other - lot size/location is the most common reason.

Another thing to consider is capital.  You can spend $50,000 more on a home and only have to come out of pocket with a couple thousand dollars for the additional down payment; the remainder can be financed (assuming you qualify for the increased mortgage).  However, your fix-up costs will most likely need to be paid for with cash.

Ideally you can find a home that looks a little run down, which keeps the home on the market longer and depresses its list price, but which only needs inexpensive, cosmetic fixing up.  Flooring, paint, and fixtures fall into this category, as well as giving the landscaping some TLC without having to entirely re-landscape the yard.

Countertops and cabinetry go a long way towards freshening up the kitchen and bathrooms.  But this can sometimes cause a domino effect - your vision for the right cabinets will be best complimented with new appliances, countertops, flooring, and an update to the ceiling - now we're talking real dollars!

That's a long answer.  The short answer to your short question is:  it depends.  You can get a great deal on a home if you're willing to do the work, and the harder the work the better the deal.  But you need to be able to do the work as inexpensively as possible (the goal after all was to save money), and you need to have the cash available to do it.

Does that help at all?

Sincerely,

Your looking for value Realtor

Chris Butterworth

Phoenix foreclosure bargains #1

Metro Phoenix can be a real estate investor’s wonderland, or your worst nightmare. It’s all in whether you choose your residential investment property carefully. Or not.

From time to time, we here at The Phoenix Agents @ Thompson’s Realty like to point out those too-good-to-pass-up houses. Here’s one…it’s a complete fixer-upper but priced about $30,000 below area comparable sold properties!

1737highlandEF

THE SPECS

  • $45,800 -- bank owned

  • 4 beds, 2 baths, 1450 square feet, built 1955

  • 1 car carport -- 7,500 square foot lot

  • Area comps are $75,000-ish and about $950/month as a rental


Near 19th Avenue and Camelback Road in near-West Phoenix, this home is like a time capsule. It literally has not been touched since 1955: you can see the original curtains in the living room and kitchen.

1737highlandKIT

This isn’t a house for the feint of heart or novice investors! It needs significant work – new roof, probably a new HVAC unit, tear down the back porch enclosure, re-tile the master shower, needs all the appliances, remove and replace window coverings, consider replacing the cabinets throughout the house and/or the linoleum floors.


1737highlandPAT

This property needs a lot of TLC, but look at those comps! You can do the basic fundamentals and a few cosmetic remodels and re-sell it (fix and flip) or do the same and turn the home into a cash-flowing rental property.


Use our Foreclosure Search to browse all Phoenix-area foreclosure homes.


If you’re looking for something like this home to invest in, please contact me. I work frequently with novice and experienced investors. In addition to all of Phoenix, I cover territories from Tempe to Surprise, from Glendale to Goodyear. Colleagues in my office cover all of the East and Southeast Valley (Gilbert, Mesa, Chandler, and points east). We’ll all be happy to assist you with your real estate investing goals.


Standard Disclaimer – the property described in this article may not still be available when you read the article. The pricing and value advice offered in this article is meant as a guide only, and does not in any way create a guarantee or a client relationship with the Realtor author. In other words, I am a Realtor but I am not your Realtor… yet, and as such you are responsible for your own due diligence, investigations and negotiations, unless/until you hire me to assist you with same.

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.

What happens at a foreclosure auction?

A frequent question we're asked here at The Phoenix Agents is about the process a home goes through when it transitions from being a short sale to a foreclosure.  Here's the skinny.

Typically, banks and mortgage companies will allow a homeowner many months to attempt a short sale. Sellers hire a Realtor who lists the property in the regional MLS database. Showings happen. A buyer makes an offer. For whatever ridiculously silly reason, the seller's lender denies the short sale. Unless the seller can find a backup buyer in time to satisfy their lender(s), the home goes to foreclosure auction.

What happens at the foreclosure auction?

As you can see, most homes are not "sold on the court house steps" to an investor. They're taken back by the mortgage lender/bank who held the former homeowner's original first mortgage, and the home is now an REO, or Real Estate, Owned. The mortgage lender/bank then hires a Realtor to list the property for sale in the regional MLS.

This information applies only to metro Phoenix, Arizona where we work as residential realtors. This article was published in May 2011. If you're reading this from another state or long after publication, please consult a professional in your town or contact us for updated information.

Buy Phoenix foreclosures 30% below market!

Riffing off what Chris posted yesterday

In Phoenix, the winter tourist season is here. Every year this means a new wave of newbie real estate investors who are convinced that you can buy investment property in metro Phoenix for 20% or 30% below market value. Here’s the real deal…

I’ve been helping investors in the metro Phoenix real estate market since before the boom of 2005-06. This is my fulltime gig and I’m a happy workaholic, so I feel reasonably sure you can trust me on this. Don’t trust me? Trust my clients, who talk about me behind my back.

As of 2009 through 2011, there is no way to purchase property on the open market for 20% or 30% below market value. It simply cannot be done.*

Why? By my count of the last 12 months, banks were involved in 64% of metro Phoenix property sales.  One national estimate puts Fannie Mae and Freddie Mac in charge of 80% of American real estate.

**Metro PHX homes sold, Feb 2010 to Feb 2011:

































# of Sales% of total sales
Total Sales91,425100%
REO sales38,08341.65%
Short Sale or other pre-foreclosure19,36521.18%
HUD homes6570.72%
Total sales involving banks58,10563.55%

With 6 of every 10 Phoenix-area homes sold involving banks at some level on the seller side, the banks are so huge they move the market. In fact, in metro Phoenix right now, the banks are the market. Whatever prices banks let their homes sell for is the new market value.

This is just Econ 101 from your freshman year of high school.


  • Thousands of buyers + thousands of sellers = happy, healthy, free market economy. Market values float up&down according to supply and demand.


  • Thousands of buyers + handful of sellers = lopsided marketplace where sellers rule and the price they want is the price they get.


Banks aren’t colluding to fix home prices. At least I don’t see any evidence of that (finding evidence of that would be waaay above my pay grade). But banks do have a bottom line on every home they sell and they stick to it without fail. I’ve seen banks turn away an offer for $61,000 when their bottom line was $62,000.

Sometimes, a few investors get lucky and find homes that need paint, carpet and a few handyman repairs and are then worth 15% or 20% more than the purchase value (but closing costs eat up as much as 12% of that ‘profit’). Almost without exception, these buyers go directly the foreclosure auctions and pay cash. The auctions aren’t designed for rookies. I hear they’re literally throwing elbows down there. Our brokerage has an agent who will go to the auctions with you. Contact me for his info.

If you’re an investor who still insists that a “good” Realtor can find you a property for 30% less than market value, please don’t call me. I’m a very good Realtor, but I’m not a magician.

Funny things in the MLS

This is one of the funniest things I’ve seen in the Arizona Regional MLS in a long while. It’s in the Realtor-to-Realtor “private remarks” data field.

Promise of response within 12 hours with a full price non-contingent offer.

Okayfine…   How random. Am I supposed to think that’s a good thing? Cranky me, I feel like testing them with a full price offer at 2 o’clock in the morning just to see if they can really reply that quickly.

The listing is a condo in a North Phoenix resort community that shall remain nameless.  <cough PointeTapatio cough>  I might be just a little touchy about this because I live in the Pointe, but what really grabbed my attention in the first place was the price – $75,000 for a one-thousand square foot condo. Nothing wrong with that, it’s a decent price compared to the rest of the North Phoenix area.

My problem with this price: the owners bought it on February 3, 2011 for $55,125. They relisted it yesterday, the 17th of February 2011 for $75,000. Know what the new owners did in the intervening 14 days? They painted.

Man, that had to have been some expensive paint!

Head’s up, fix and flippers… nobody’s paint job is worth $20,000. That’s a big “duh” and most of you will figure it out on your own. What you’re likely to miss because you see visions of $20,000 overnight profits dancing in your head is this: no buyer in their right mind is going to give you $75,000 for this condo when 14 days ago you paid $55,125. Plus there’s another bank-owned REO condo for sale 1 building over, in the same general condition for $53,000. Finally, your price point puts you squarely in cash purchaser land, and anybody who’s got $75k sitting around in cash had to be pretty dollar-savvy or they wouldn’t have accumulated that much. They’re smart, so they’re not going to be stupid enough to give you $20,000 extra just because you asked for it and promised to answer their offer within 12 hours.

Landlords: IRS says send a 1099 to vendors

Hat tip to Scottsdale colleague Dru Bloomfield: the IRS is changing their rules for landlords. Not a huge change, but one you absolutely want to know about ahead of time. It always stinks to have to go back and create a paper trail for the IRS!



New IRS 1099 Requirements for Landlords

Starting in 2011, there is a new tax requirements for landlords. All landlords who receive $600 or more in rent for the year must send a 1099 to all service providers that the landlord paid $600 or more during the year, such as plumbers, carpenters, yard services, and repair people.

The new requirement applies to owners of both residential and commercial property. Prior to 2011, this requirement had only applied to those involved in full-time property management, but now the requirement covers all types of landlords. Landlords will need to gather federal tax ID numbers from service providers in order to file the 1099s. Failure to file the 1099s with the IRS can result in fines of $50 per 1099 not filed with the IRS. In 2012, these requirements will expand to cover providers of good to landlords.

You’ll want to ask for a completed W-9 from each of your vendors (when they do the work!) so you can issue the 1099 at the end of the year.

Not paying your mortgage? Don’t worry, banks making money off you anyhow.

Image ID 1290133, money4 by svilen001Clients always ask me, “WHY are banks so SLOW in agreeing to short sales??”

There’s a ton of reasons; almost none of them make sense. But for about 2-3 years I’ve been adding this opinion to my list of reasons banks are slow to OK short sales.

Mind you, this is my opinion. I have nothing to back up this idea other than a rudimentary understanding of Accounting 101:


  • accounts receivable = assets


  • accounts payable = liabilities


I believe that one of the many reasons banks are so slow to approve short sales is that while they stall, they can book the mortgage payments as an accounts receivable item, whether the homeowner is actually making the payments or not. The second the bank OKs a short sale, they have to book a giant loss. Again, only my opinion, but it passes the common sense test with everybody I’ve mentioned it to.

Now, a story at Forbes magazine backs me up, sort of. (hat tip to Mish’s Global Economic Analysis blog for the story link)

Robert Lenzner at Forbes writes US Banks Reporting Phantom Income on $1.4 Trillion Delinquent Mortgages
[Due to loose accounting rules, banks are] allowed to accrue interest on non-performing mortgages” until the actual foreclosure takes place, which on average takes about 16 months.

All the phantom interest that is not actually collected is booked as income until the actual act of foreclosure. As a result, many bank financial statements actually look much better than they actually are. At foreclosure all the phantom income comes off the books of the banks.

This means that Bank of America, Citigroup, JP Morgan and Wells Fargo, among hundreds of other smaller institutions, can report interest due them, but not paid, on an estimated $1.4 trillion of face value mortgages on the 7 million homes that are in the process of being foreclosed.

Ultimately, these banks face a potential loss of $1 trillion on nonperforming loans, suggests Madeleine Schnapp, director of macro-economic research at Trim-Tabs, an economic consulting firm 24.5% owned by Goldman Sachs.

Astounding! The extent to which our entire financial system is built on castles in the air is staggering. Banks make money because they say they do. Our dollar bills have value because we all agree they do.

I’m gonna go sit down now. My head hurts.

Lease Purchase, Rent to Own

Rent to own and lease-purchase agreements are cropping up in the Greater Phoenix real estate world these days. They’re a natural result of the continuing tight credit market.

Lease-purchase and rent to own are essentially the same things.  A lease with a purchase option is almost the same, just with more complicated legalese thrown in there.

We don’t typically assist folks with leases that turn into purchases, no matter what the terms. We feel strongly that you really should hire a lawyer if you’re going to do anything that involves renting a house now and buying it in the future.

Here’s some brief thoughts on the situation; I took these from a quick email I sent out earlier today to some friends of ours.

Rent to owns (lease-purchase and lease-purchase options) are usually a little tricky --

  • does tenant pay a little extra each month towards down payment?
  • or does the tenant pay a lump sum amount now? (usually several thousand dollars!)
  • if so, who's bank account “gets” the deposit(s)? does that money earn interest? for whom?
  • under what circumstances are extra payments refundable?
  • what happens to that extra deposits/payments if the rent is late a day or two? if it’s late several weeks?
  • do you value the purchase price of the home now or in several years when the purchase happens?
  • do you get an appraiser? who pays for the appraiser?
  • what if the appraisal comes in lower than the agreed-on purchase price?
  • what if either side changes their mind between now and the purchase?

As you can see, there are a lot of questions. We recommend you hire a real estate attorney to help you figure out the answers. Call or email us, we know several excellent Greater Phoenix attorneys!

Renting? Food for thought here.

Some thoughts I’ve had lately about being a renter in today’s real estate market.


Landlords usually do a credit check and sometimes even a background check on prospective tenants. If I was a prospective tenant, I think I’d ask the landlord for a credit check on him/her in return. You probably don't need (and won't get) a credit check on your landlord, but some information is worth asking for.


Why? Many, many landlords are renting their home because they couldn’t sell it. It’s possible that the rent paid by the tenant doesn’t cover the landlord’s mortgage. If I’m a tenant, I want to know that the landlord is covering that gap, and doing so comfortably. That way, I don’t get a Notice taped to “my” front door one day telling me I have to move out because the house is going to the foreclosure auctions.


I think I’d also ask them if this is their first time being a landlord. If it is, I might want to spend some time talking about hypotheticals:





  • what is the fair thing to do if the A/C breaks in July?


  • what is the fair thing to do if the water has to be shut off for a day? for two days? three days?


  • is there a home warranty in place? if so, who pays for the service call fee when the home warranty is used to fix minor broken things around the house?


  • how often does the landlord plan on coming over to inspect things? will s/he give notice before hand? If so, how much notice?


  • Who’s supposed to change the A/C filters inside the house and how often?


  • Does the landlord keep a key to the house while I’m living in it?


I’m not sure there’s a standard, “right” answer to any of those questions. But – particularly me, as a woman living alone – I’d want to know if my landlord lived in town and kept a key to the house I was planning to live in. I’d probably want to know that too, if I was a parent with small children in the house.


Many tenants work with Realtors to find their next rental home. If you’re looking to rent, I’d recommend it. Personally, Chris and I don’t usually handle rentals. But our broker Thompson’s Realty has a Realtor on-staff that handles rentals all the time, both landlord-side and tenant-side.


If you’re looking to rent, shoot us an email and we’ll hook you up with the Thompson’s Realty landlord & tenant Realtor professional. Or visit them online at SpectrumGroupAZ.com

The Shiny

Real life observation: women who go to the gym in a full face of makeup with their hair done just so. . . . they crack me up.


This has nothing at all to do with real estate.


Or. . . does it?


Many of the buyers we've worked with in the past 2 years or so are shopping in the lower price ranges. Single family homes with 3 bedrooms and 1 or 2 baths. Price range is about $70,000 to $100,000.


Inevitably the selection of houses we see includes something just like the two homes below.



Home Number One


The Realtor’s description reads like this -

A/C replaced 2 years ago, new roof in 2009 with transferable warranty, water heater only 5 years old. Exterior painted last month. Seller will buy 2-year home warranty. This home has been well cared for by original owner. Price reduced to $105,000!



This house has pictures like these:

the shiny, old KIT

the shiny, old BA

. . . and it looks like this from the front:

the shiny, old ext, good curb appeal

.

Then there’s the other option. . .

Home Number Two


Inside, it looks like this:

the shiny, new KIT

the shiny, new BA

But it looks like this on the outside:

the shiny, shiny house bad EF

. . . and the Realtor description on this house says something like this:
Complete remodel! Travertine floors, maple cabinets, stainless steel appliances. New carpet, new paint. Seller will not issue Disclosure Statement about condition or provide CLUE insurance history. Ready to move in at $97,900.

Home number one has all the fundamentals dealt with. The big-ticket, expensive items to replace have all been replaced. The cosmetics are, well, to be kind: dated.


Home number two is an obvious investor fix and flip. The investor just completed a total overhaul of the house but refuses to provide a disclosure statement listing what he or she knows about it. Nice! Plus, that chain link fence in the front makes me reach for the eye bleach. I guess the seller’s message here is “we don’t really like our neighbors much” ?



It’s the curse of The Shiny


Guess which house the majority of buyers make an offer on? Home number 2.


Buyers get stars in their eyes over the fancy, shiny interior remodel and forget that they’re buying a home they know nothing about that could possibly need a roof, A/C unit and water heater in the first couple years of ownership. Plus miscellaneous plumbing &/or electrical problems as yet unknown, because even the best home inspection can’t possibly uncover everything.


Sure, the interior cosmetics of home number 1 are dated. It looks like the Brady Bunch just moved out. I get that. I do, I really do. I don’t want to live in the Brady house anymore than my buyers do.


I just can’t help feeling that I’m not really doing my job 100% when I can’t convince the average buyer to consider for more than a few fleeting moments the incalculable value of a house with the big-ticket stuff already paid for. Even if it’s an extra $7,000 in purchase price and has 15 year old cabinets and counters… The value of having a new roof, A/C and water heater are nearly priceless to cash-strapped first time homebuyers.


Too many home buyers act like the star-struck middle-aged men at the gym: so blinded by The Shiny of a middle-aged woman in Kabuki makeup and a fancy hairstyle they can’t focus on anything else. Not even their own good.


edited to add links below


What is a Seller's Disclosure Statement?


What is a CLUE insurance report? (scroll down a bit in the article linked here, to about 1/3 of the way through the article)

Thinking about being a landlord?

If you’re thinking about becoming a landlord, The Landlord Protection Agency website is a great resource for you. Besides offering a chat forum, advice and free legal forms, they even have a funny Excuse of The Day feature where website members post their tenants’ most ridiculous excuses for not paying the rent on time.


RentingAuthority.com is another site that was recommended to me by a friend who’s used it over the years to run credit checks on prospective tenants.


Disclaimer: Both LPA.com and RentingAuthority.com offer free legal forms. I don’t and can’t vouch for the accuracy or legality of their forms. Please consult with an attorney or Realtor in your own state.

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.

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.

New Listing, Golf Course Getaway

27617 N Makena Place
Peoria AZ 85382
Located in the Active Adult Community of
Trilogy at Vistancia


Offered At $449,000



Specification, Features and Finishes



  • 2 beds, 2 baths, plus den

  • 2,193 square feet on a golf course lot

  • Sits at the top of the 16th tee: beautiful course views, no golf balls in the yard

  • Great Room layout

  • Large open Kitchen with Solid Stone Counters, Breakfast Bar, Eat-In Dining

  • 18" Diagonal Tile in Light Beige throughout, except bedrooms

  • Upgraded Medium Beige Carpet in Bedrooms

  • Plantation Shutters on all Windows

  • Stainless Steel Appliances (electric)

  • Guest Bedroom has two doors for entry, allowing guests to use as an en-suite for maximum privacy

  • Master Bedroom and Guest Suite located on opposite sides of the home

  • Click here to view a Web Based Flyer for the Home


View a Virtual Tour of the Home



View a Virtual Tour of the Community



Additional Pictures


27617 KIT 2

27617 Mstr BA 2 27617 MBA1

Back Yard for Blog

IMG_0474

A back patio closeup, smaller

If you’d like to view this home in person, please contact either


Heather@ThePhoenixAgents.com or 602-999-8831

OR

ChrisB@ThePhoenixAgents.com or cell 623-570-9940

Wrong On So Many Levels

Another example of REO lunacy, about which I’ve written before.


Our first time home buyer is being required to sign a document containing the following clauses. She must sign before the bank that owns the house will even look at her offer, which is one among many offers they received. These are the most heinous of the terms they’re demanding:





  • Earnest money must be at least 1.50% of the purchase price or $2,500, whichever is greater.


  • Once Seller accepts Offer, Buyers’ earnest money is non-refundable for any reason.


  • Buyer has “twenty-one (14) days from the date of Seller’s acceptance of Offer to” obtain final loan approval. (my comment – Welcome to the Homer Simpson School of Contract Law, Doh! 21? 14?  Ah, who cares?)


  • Buyer “agrees that any & all home inspections shall be made prior to contract acceptance


  • By signing [the document] Buyer agrees that she has either (1) completed all inspections and removes any inspection contingency and/or (2) waives inspections and removes any inspection contingency.”


  • Any access to the Property is prohibited unless accompanied by the Seller or Seller’s Agent.


  • Seller will not pay any real estate transfer, stamp or recording taxes/fees.


  • Seller will not pay for a Home Warranty.


  • “Buyer must pay Seller a $325 title clearance and document processing fee at time of closing…”


  • “Financing is not a contingency to this contract.” (my comment – if it’s not a contingency, why do you care whether Buyer takes 14 or 21 days to obtain final written loan approval?!?! If Buyer doesn’t get the loan, they either pay cash or forfeit the earnest money.)


This? Ought to be illegal.


Huntington National Bank owns the home in question. Avoid them or hire an attorney to review their contracts before you sign them.


.

Needless to say, our client rescinded her offer in writing, immediately. I included my own little note:
Dear Sirs,

I suggest you may have better luck getting a signature on this document if you approach the village idiot. Many of them are in Washington, D.C. at this time. Best of luck,

Heather Barr

More Thoughts on REDC Auctions

This is a follow up to yesterday’s post about the upcoming June 13-14 REDC auction of bank owned foreclosure homes.

Most auction houses don’t use the Arizona Association of Realtors’ (AAR) purchase contract form. They’re national corporations; they use their own forms.


REDC doesn’t publish their purchase contract online. However, I’ve seen other auction companies’ purchase contracts, and noticed that many of the buyer’s rights under the AAR contract are not in the auction contracts.


Most importantly, the AAR purchase contract gives buyers the right to cancel the purchase and receive a full earnest money refund if:





  1. the property doesn’t appraise for at least the purchase price


  2. the buyer isn’t approved for financing


  3. the buyer doesn’t like what s/he found during the home inspection period


Most auction houses don’t allow buyers these rights, known as “contingencies”.


Simply put, if the house doesn’t appraise for the winning bid amount, you must buy it anyway or forfeit your earnest money. Your mortgage lender denied you a loan? Oh that’s too bad. Will that be cash or cashier’s check? Oh, you don’t have the cash to buy the house? Ooooh. Well, we’re just gonna have to take your earnest money.  Better luck next time.



A Great Deal?


Two tips if you’re considering attending the REDC auction on June 13:



1) Consider the cost of the marketing fee the auction house adds to your purchase price.

At the REDC auction on June 13, a 5% marketing fee is added to the winning bid. That means the house must be at least 5% below prevailing market prices before it’s worth it to have bought at the auction.


2) Do a thorough home inspection before the auction, including a contractor’s estimate for repairs and a Realtor’s or appraiser’s estimation of value.


Know exactly what you’re buying. Does the roof leak? Does the A/C work? How about the water heater? Does the house have termites? Foundation damage? Slab leaks?


The old saying “you get what you pay for” has been around long enough to get old because it’s often true.


I’ll be attending the June 14 auction. If you’d like to attend with me, call or email.


602-999-8831 or Heather@ThePhoenixAgents.com

REDC Auction

REDC is one of the biggest home auction houses in the country and they’re advertising their upcoming June 13-14 Phoenix area auction heavily on local cable TV channels.


Here’s a few things you should know if you’re thinking about attending.



Access and Inspections




  • You can tour the homes and do inspections before the auction but not after


  • Open House dates for the Phoenix area are May 30, June 6 and June 7


  • Heather’s note: it’s nearly 100% certain that Realtors will be holding these open houses, fishing for unrepresented buyers, so be ready to say No or bring your own Realtor to the open house


  • It probably goes without saying that REDC probably won’t be happy if you do your home inspection during the Open House (but many homes are on Realtor's lockboxes so you can hire a Realtor to get you into the homes at time other than the Open House)


Attending The Auction




  • You have to bring $5,000 cash or cashier’s check to enter


  • You can bring your own Realtor to the auction and REDC will pay him/her a 1% commission


  • If you win a property at auction you must put down a 5% earnest money deposit that day


  • You cannot attend the auction for someone else (no assigning winning bids)


The Money




  • You can finance your home purchase


  • REDC’s lenders are on site but you don’t have to use them


  • If you use your own lender, you must purchase the home even if you’re turned down for a mortgage (no financing contingency)


  • You must close on the purchase within 30 days of the auction


  • Heather’s Note: Lenders a swamped with buyers lately so you might not be able to close within 30 days; start working with a lender before the auction


The Fine Print




  • REDC adds 5% to your winning bid to cover their marketing expenses (if you win a house for $200,000, they’ll add 5% - or $10,000 – to make total purchase price $210,000)


  • The 5% fee is added to your purchase price whether you use your own Realtor or not


  • REDC’s website says they usually auction 25 to 30 properties per hour (i.e. you’ll have 2 minutes, total, to decide whether you want to bid on each home, and how much


  • If you “win” the house at the auction your purchase is non-cancellable


If you want to read the complete FAQ for this auction you can find it on REDC's website. A few more thoughts on auctions tomorrow…




I’ll be attending the June 14 auction. If you’d like to attend with me, call or email.


602-999-8831 or Heather@ThePhoenixAgents.com

Homes for Under $25,000 ??

Buy a Valley home for under $25,000?


Sold Since 3 15 09, listed 25k and Under(map courtesy of FlexMLS. Click to enlarge, use browser’s back button to return)


The map above shows the homes (single family detached only) in the greater Phoenix area, with list prices of $25,000 or less, that sold between March 25 and April 25 of this year. Each blue marker is a sold home.


There were 190 of them. One hundred ninety houses that were listed for $25,000 or less sold in the past 30 days!


Only 2% were not lender-owned. Two-thirds of these homes sold above list price.


I thought it might be interesting to see the pattern of homes sold in this price range over the past few months. It was.



December 2008 – 37 homes sold w/ list prices under $25,000
January 2009 – 48 sales
February 2009 – 87 sales
March 2009 – 168 sales

Seems like a pretty clear upward trend. I can hardly wait to see the April month-end numbers.



Meanwhile, at the other end of the price spectrum …


 


 Listed for 1M or more, 4-25-09 (Map courtesy of FlexMLS. Click to enlarge; use browser's back button to return)


Here’s a map of the homes (again, single family detached only) currently for sale with list prices of $1,000,000 or more. There are 3,107 of them. Only 52 are lender owned. In other words, almost 98% of these homes are not lender owned.


Number sold in past 30 days? One.


In the previous 30 days, 63 homes with a list price of $1M or more were sold. The month before that? Fifty-four sales in this price range.


That’s a microcosm of the Valley’s real estate market this spring. Bank owned homes at the low end of the price range are selling, and fast. The luxury market is dead on it’s feet. Homes in the middle are muddling through. I promise to find and post some stats on the muddling middle very soon.