Here were the requirements when I first started working with my latest clients, whom I’ll call Joe and Lori just for the fun of it all:
3 bedrooms. 2 baths. A larger back yard. No HOA. Single-family detached. 2-car garage. Fix-up okay. $85,000 or less.
This, of course, doesn’t really exist in the Phoenix real estate market. There was one home in Phoenix that met the requirements but was missing a few things – a ceiling, all of the plumbing fixtures, appliances, etc.
Joe and Lori moved the price to $100,000 and we found four homes to tour. One went under contract before we went. Another was less than 600 square feet. That left two.
The first of the two was in downtown Glendale and by my estimate was one of the first homes built in the city – 1937 was the date on the tax records. There was a raised concrete slab for the foundation at the front and at the back but nothing we could find in between. Many, many cats apparently had lived in the home as well. It was eliminated quickly.
House number two on the first tour had a workable floor plan. There were some windows missing, which is almost a given on some of the older vacant homes, and it looked as if the previous owners had tried removing the cabinets and (surprise) granite counters.
If not for the location – well south of Lori’s family and too far away from Luke Air Force Base, this one would have been in the running.
Changing locations required another adjustment in price, this time to $150,000. We had five homes to view – three short sales, one lender owned and one actual by-G-d home with a real owner and a real list price.
I’ll skip the details on all of the homes but the actual by-G-d home with a real owner and a real list price was the clear winner. Good curb appeal. A huge kitchen with new cabinets. Ceiling fans throughout. A swimming pool. Mostly cosmetic work to be done (anything in the $150s in Phoenix still will be a fixer-upper to some degree.)
The home was priced similarly to the short sale listings but was in better condition than all. And best of all, rather than having to wait weeks for an answer as is typical with a short sale where the lender has to swallow a loss, we had a response within an hour.
This isn’t a fait accompli at this point. We still have a home and termite inspection to complete to make sure there aren’t issues beyond the cosmetic. And the home has to appraise for the sales price as well.
But if anything the experience proved what I’ve said for some time: the best opportunities in the Phoenix real estate market are not in the short sale realm. They’re in the homes with real owners and some equity with which to negotiate, where answers and results are possible in reasonable time frames.
How many other opportunities do buyers miss because they’re waiting weeks and/or months to hear from a lender on a short sale? Too many, me thinks.
[tags]Phoenix real estate, short sales[/tags]