ALL PHOENIX REAL ESTATE

Posted on March 10th, 2010 by Jonathan Dalton

Do you crave power but loathe the idea of accountability? Do you enjoy finding reasons for something not to work rather than taking the time to see why they should? Enjoy wielding arcane and illogical guidelines regardless of how they were intended?

Become an underwriter!

As an underwriter, you have the opportunity to quash the dreams of home buyers and sellers nationwide. And we’re not talking about those dodgy folks using no-doc, zero down loans from yesteryear. No, in 2010 you have the opportunity to screw with people with 800-plus credit scores and large down payments not to mention those FHA buyers for whom there’s always a reason not to lend.

It doesn’t matter whether the guidance provided by the government since a guideline was passed says you’re wrong. You’re the underwriter, which means you’re right! You’re just like Moses coming down from Sinai, except you get to delete, amend and rewrite the tablets on which the Ten Commandments are written however you like. God himself can’t question what you’re doing (though if you have a first born son or aversion to locusts, you may want to show a little restraint, just in case.)

These aren’t the halcyon days when underwriters simply rubber stamped loans no matter how ridiculous the documentation and terms because, hey, everyone was doing it. This is much more fun! Armed with a stack of paper and Google, a good underwriter these days can find almost any reason not to approve a loan.

And why would they approve a loan? It’s not as if lenders are supposed to lend. You see how well that worked for them in the past (though there was less restraint shown than at a Vegas bachelorette party.)

Come on and release the inner curmudgeon within. Once you’ve got the reins, no one can slow you down - not the government, not the loan officers and real estate agents, and certainly not the dupes buyers and sellers counting on you to do your job according to its description, assess risk and make an appropriate decision (one that sometimes, despite it all, should end in an approved loan.)

Want to apply? Call 1-800-FUBUYERS today!

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Posted on March 9th, 2010 by Jonathan Dalton

When last we checked in at the end of January, inventory was sitting at just over 23,000 homes and there were around 4,000 sales over the preceding 30 days. Fast forward to today and there’s still just over 23,000 single family detached homes in the Phoenix real estate market and there were just over 5,100 sales the past 30 days.

The more precise numbers - 23,429 active homes for sale in Maricopa County as of this morning, 5,182 sales over the past 30 days - which means we have 4.52 months of inventory at this moment in time, still in the range of a sellers’ market but closer to balanced than we’d seen.

Here’s where the numbers get fun, though …

Of those 5,182 sales, 2,019 were of bank owned homes and 1,970 were of the non-bank owned, non-short sale variety. In other words, traditional sales are taking place just about as often as bank owned sales, which should come as quite a surprise who believe the only homes selling here are bank owned.

Most of the activity remains at the lower price points, though aggressively priced homes in most price ranges will sell. It’s all about the perception of value. Push the market, choose a higher price in hopes of negotiating down, and you’ll get nowhere right now.

As always, the details for the various cities and towns in the Phoenix real estate market are listed as below. And also as always, all data is provided by the Arizona Regional MLS and is deemed reliable but not guaranteed.

Phoenix Real Estate Inventory: March 9

	Sold	Active	Absorption
City	2/7/10-3/9/10	3/9/10	Rate	Change
Anthem	64	157	2.45	N/A
Avondale	152	381	2.51	N/A
Buckeye	196	638	3.26	N/A
Carefree	13	114	8.77	N/A
Cave Creek	55	367	6.67	N/A
Chandler	271	1,315	4.85	N/A
Desert Hills	7	11	1.57	N/A
El Mirage	78	181	2.32	N/A
Fountain Hills	36	350	9.72	N/A
Gilbert	339	1,403	4.14	N/A
Glendale	336	1,143	3.40	N/A
Goodyear	155	595	3.84	N/A
Laveen	109	415	3.81	N/A
Litchfield Park	36	188	5.22	N/A
Maricopa	210	687	3.27	N/A
Mesa	473	2,220	4.69	N/A
Paradise Valley	27	457	16.93	N/A
Peoria	235	1,130	4.81	N/A
Phoenix	1,356	5,642	4.16	N/A
Queen Creek	228	664	2.91	N/A
Scottsdale	338	2,966	8.78	N/A
Sun City	89	899	10.10	N/A
Sun City West	81	461	5.69	N/A
Surprise	365	1,109	3.04	N/A
Tempe	84	434	5.17	N/A
Tolleson	75	206	25.75	N/A
Waddell	17	93	5.47	N/A
Total	5,182	23,429	4.52	N/A

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Posted on March 7th, 2010 by Jonathan Dalton

It’s a not uncommon question that usually comes in one of two forms: “has there been any activity on this home” or “what other offers have the sellers received?”

And the answer, more often than not, is I don’t have the slightest idea. As a listing agent, it’s not always beneficial to reveal what other offers might have been accepted on a property; knowing a lowball offer previously has been rejected might help save a buyer some time in writing an offer, but that’s not necessarily my sellers’ concern. And, to be honest, price isn’t the only factor most sellers consider.

If there are multiple offers it might be beneficial, but perhaps not as it could conceivable scare off some buyers who might bid higher faced with a multiple counter offer. Again, as the listing agent, my concern is my sellers and not really what the buyers are facing.

Ultimately, though, it’s not my decision as a listing agent whether to disclose the presence of other offers. It’s solely up the sellers. I usually have some input but it’s their call.

This doesn’t discourage some buyers from asking though apparently others don’t want the information to be disclosed. From Trulia Voices:

We don’t receive any disclosure that our offer may be revealed in negotiating in any of the disclosure statements.Our first offer is used to drive up the price of the second one and etc. It’s a secret little bidding war that starts with the second offer presented and highly unethical. Of course you have a fiduciary duty to get the best offer for the seller but favoring secret insider information to some to drive up the price is cheating the ones that made the initial bid. …

What I really want to ask is if the same frustration would be there had this buyer been told what the highest offer was, topped it, and then bought the house they want. It begs an answer, no?

A purchase offer isn’t inside information by any stretch. In fact, there’s a very brief paragraph on page 8 of the AAR Residential Real Estate contract that says the public will be advised of this contract. I’m not a lawyer. Looking at it, and realizing this clause serves a different purpose, it doesn’t seem to be much of a stretch that it also would cover the ability to disclose an offer.

Not to mention, as a listing agent, my fiduciary responsibility of confidentiality only applies to my seller and not to the buyers I don’t represent.

One other theme of note from today’s screed:

The banks are choking a faster real estate recovery with their greedy practices and by late summer 2010 there will be a scarcity of any kind of buyers. Selling bank foreclosures has changed the practice of selling real estate and soured many consumers that feel mistreated

Funny, but I heard many of the same sentiments in 2005 and 2006. The real estate industry - not buyers, not investors, not sellers, just the agents - had driven up the market and it was unfair that ordinary people couldn’t buy.

Except they did. And they are. And they will continue to do so. Sour grapes tend to grow in individual batches only.

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Posted on March 5th, 2010 by Jonathan Dalton

Truth be told, there are some moments when it feels everything’s been said. And sometimes when that happens, it’s best to go back to the beginning and start the story anew. Chazak chazak v’nitchazeik.

More often that not I find prospective buyers in the Phoenix real estate market are looking less for information than affirmation. The wide world of the Internet has provides a wealth of information for those looking to buy a home and some of it even turns out to be useful now and again, assuming you can sift through conflicting data.

For those wanting affirmation of what they’re reading online, seeing on the national news or hearing at a cocktail party, this isn’t the place to be. Because it’s just as likely that what you believe to be the state of the Phoenix market isn’t really the market.

THE PHOENIX REAL ESTATE MARKET IS NOT STAGNANT

Over the past 30 days, nearly 5,000 homes have closed escrow - that’s just under 170 homes a day changing hands. Inventory of single-family detached homes remains around the 23,000 mark, which means there’s less than five months of inventory of homes for sale here in Phoenix.

Well-priced homes, whether bank owned or traditional sales, are selling every day here. Last week I sent to one buyer a list of homes under $175,000 that should pull at least $1,000 in rent. Several of these homes were under $150,000 and all of these have gone under contract since the e-mail was sent.

THE PHOENIX REAL ESTATE MARKET IS BOTTOMING

This has been the case for nearly a year now … there’s no definitive bottom with a sharp uptick, rather there’s this consistent churning and activity at current levels. Some areas have continued down, others are rising slightly. It all depends on the price range and area in which you happen to be looking.

Homes are not available for pennies on the dollar, unless you’re looking at a dollar in 2006 before the bottom fell out of the market. Low priced homes continue to sell quickly at list price or above. That’s the simple reality.

LOWBALL OFFERS ARE A DIME A DOZEN

It’s quite possible you can find a seller willing to sell for 70 cents on the dollar. It’s also quite possible a meteor might fall on your head and you can end up on Meteorite Men.

The statistics show homes are selling at 90 to 95 percent of list price. Forget the original list price you may see, as all that tells you is the owner’s gotten serious along the way.

Odds are you’re not the only one looking at a given home at any time. And in many cases, investors who spend their days sending letters of intent with stupid-low offer prices (in the 60 to 70 percent range) already have tried to purchase the house. You’re not going to be the first to try and you likely won’t be the last.

THE DEALS ARE IN FRONT OF YOU

In some areas, homes are selling for prices from the early 2000’s. Sometimes there’s even more room the prices can be pushed down for those who are somewhat reasonable in their approach. The so-called smoking deals, homes priced well below list, either sell quickly for list price or more or are the ultimate bait-and-switch, short sales without bank approval.

Want a deal? Roll up your sleeves, get some help and create your own. The base already is there in the decline, the rest is up to you.

THERE’S A REASON THE MEDIAN IN THE MEDIAN

If the median price for a property is $100,000, what do you really think a $40,000 home might look like? I assure you, it’s not going to be a $150,000 home at a near 75 percent markdown. It’s going to be a home that either needs work, is in the outskirts, or both. In short, that home is selling for $40,000 because that’s what it’s worth.

If you’re shopping below the median price point, you need to realize you’re going to be getting below-average quality as well. The price is the price for a reason.

These are just the basics of what’s happening here more. Market stats and more to follow as I get those going again.

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Posted on March 2nd, 2010 by Jonathan Dalton

One of the most common things I hear when discussing the pros and cons and cons and cons of purchasing short sales is the idea that “we’re in no hurry, we have time to wait.”

Which is absolutely fine as long as you’re prepared for the bank to say “no” at the end of the weeks and months you wait, or to give no answer at all.

Except that’s not the only risk that comes with waiting because, much as we might prefer otherwise, the world keeps on turning and the real estate business keeps changing while you’re in limbo. To whit:

1) The interest rate you were quoted by your lender when you wrote the offer may not still be the rate when the approval comes. Yes, you can try to lock the rate but it gets expensive when you’re trying to lock for more than a month … and keep in mind, you don’t really know when your closing date will be

2) For those north of the border, exchange rates continue to change. There’s a decided difference between 97 and 93 cents when you’re looking to exchange more than $100,000.

3) Home values continue to change. Will the home still be worth what it was when you made the offer a couple of months down the line? If you’re expecting the bank to move to your appraisal value down the line, you’re likely in for a shock.

4) Other offers might be submitted to the bank. There are ways to avoid this but not all agents use them all the time (and not always by their choice … exclusivity sometimes comes with a price.)

So many unknowns yet so many continue to chase these “bargains” … list prices based in mythology, logistics planted in purgatory …

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