by Paul Slaybaugh | Jan 11, 2011 | Home Buying, Scottsdale Real Estate
January 11th, 2011 … do you know where your tank tops are?
It’s time to talk Scottsdale vacation homes, people.
You see, while you are buried under two feet of snow, I’m mowing my lawn. In flip flops. As today is a bit nippy by Scottsdale standards, I went a little crazy and skipped the zinc oxide on my nose.
Now, I wouldn’t dream of poking fun at you poor buggers who are currently caught within exhale radius of Mr. Snow Miser’s arctic morning breath. Nope, I have no intentions of gloating or doing the verbal Ickey Shuffle all over that frozen tundra you call home. I’m certainly not going to ask you to hand deliver a message to one of the polar bears in the Coke commercials or wonder aloud about your local animal ordinances, and whether or not they allow for emperor penguin adoption.
Summer will roll around soon enough, and the mercury-bending shoe will be on the other foot.
In the meantime, however, I thought I might offer a few examples of that which a Scottsdale winter does not consist. You know, to help spread some vicarious warmth to those unfortunate souls trapped in the ice tray of nature’s Frigidaire. I’m all about paying it forward this year.
Things I Am Not Doing Right Now:
- Shoveling My Driveway
- Scraping Ice From My Frozen Windshield
- Winterizing My Cactus
- Spreading Salt Anywhere Other Than the Rim of My Margarita Glass
- Ordering Heating Oil – Might Restock On Banana Boat Deep Tanning Oil, However
- Dressing Like the Michelin Man On His Way to a Potato Sack Race
- Turning the Ignition Over In My Car In Case I Might Use It in April
- Getting My Tongue Stuck To a Pole
- Dodging Porch Stalactites
- Commanding Any of My Pets to “Mush”
- Battling Seasonal Affective Disorder
- Wearing a Thermal Speedo
- Driving a Zamboni to Work
- Opening Another Window On My Summer Solstice Advent Calendar
- Eating Comfort Food By the Cubic Ton
- Chewing Seal Blubber
- Climbing Inside the Belly of a Dead Tauntaun to Ward Off Hypothermia
- Cursing the Inebriated Snow Plow Driver
- Empathizing With the Donner Party
- Pretending to Puff Smoke With Each Visible Breath
- Hibernating
- Seeing Russia From My House
- Ice Skating On My Swimming Pool
- Remodeling My Mid-Century Modern Igloo
- Being Rescued From My Mailbox By a Whiskey-Laden Saint Bernard
- Employing a Sherpa For My Trek to the Grocery Store
- Joining a Polar Bear Club
- Getting Ready For My Neighborhood Yeti Watch Shift
Fun as all that sounds, I’ve got a full afternoon of driving around in my convertible after squeezing in a quick round of golf. Depending on my motivation, I might go lay out on top of Camelback Mountain for a spell. This epidermis ain’t gonna tan itself, you know.
Want to secure your own life of leisure? We can always accommodate one more Scottsdale vacation home owner. Contact us today, or jump to our Scottsdale home search page to find your own little slice of Southwestern paradise.
*Mukluks not required.
by Paul Slaybaugh | Jan 3, 2011 | Home Buying, Home Selling, Scottsdale Real Estate
Maricopa County property tax valuation notices go out in another month or so, and the reverberation of a couple million jaws dropping will once again shake the Valley of the Sun. Whether a new homeowner’s first tax valuation experience or a case of seasonal amnesia in longer-tenured residents, many succumb to reverse sticker shock upon first glance at the meager value the county has assigned to his/her Scottsdale home.
“My house is worth WHAT?!!!“
Rest assured, values have declined in the greater Scottsdale and Phoenix area, but the paltry figure on the wadded up piece of paper in the clenched fist of an aghast homeowner seldom represents an accurate indication of current market value. I repeat, the county’s assessed value does not represent the home’s current value.
Our property valuation schedules are a convoluted mess here in Scottsdale. Rather than a simple statement of what your property is worth and the taxes associated with it, your notice will reflect myriad seemingly incongruous figures. Limited values, full values, cash values, secondary values … and a partridge in a pear tree. To simplify (somewhat), let’s just break the tax notice down to what really matters to you.
The Assessed Value of a home is derived by the following formula:
Full Cash Value x Assessed Value Ratio = Assessed Value
The Full Cash Value figure is the closest thing to a current market value determination by the county, and it represents the value of the land plus (supposedly) any and all improvements (structures) to the property. Bear in mind, however, that this figure is arrived at exclusively through public record search. No appraiser comes to your house to value recent improvements, verify square footage, etc. Unless permitted, that computerized formula for value assignment is unlikely to take into consideration your recent kitchen remodel, new hardwood flooring, plantation shutters, A/C, etc. I have encountered far too many discrepancies between the information found in the tax records and reality to take even the assessor’s rudimentary information with anything less than a periodic table-shattering grain of salt. Non-accounted for additions, wildly inaccurate square footages and omission of swimming pools are public record bugaboos that immediately come to mind as repeat offenders.
Once Full Cash Value is assigned, dubious as it may be, that figure is multiplied by the Assessed Value Ratio to arrive at the Assessed Value (the number that causes fainting spells across the Valley). For residential properties (with completed homes), the Assessed Value Ratio is 10%. For vacant parcels, it is 16%.
Once Assessed Value is determined through that formula, it is in turn multiplied by the current tax rate to determine the total taxes owed for the upcoming cycle. To further complicate matters, there is a primary and a secondary tax rate to consider, but we’ll save that stimulating bit of minutia for another day.
Maricopa County Property Tax FAQ
Confused yet? So is nearly every homeowner and buyer in Scottsdale. Let’s apply it to a real world scenario.
Take a residential property assigned a Full Cash Value of $300,000. For the sake of clarity, we’ll combine the primary and secondary tax rates at a not completely arbitrary 6.5% (roughly the combined rate for my tax district in 2010). Using the formula outlined above:
300000 x .10 = 30,000 x .065 = 1950
With total tax liability established at $1950, it is divided into semi-annual bills of $975. First half taxes are due on October 1st (delinquent on November 1), and second half taxes are due March 1st (delinquent on May 1) of the following year.
Mathematical gyrations aside, as that was not the original intent of this piece, my advice to homeowners and prospective homeowners alike is not to look to the tax rolls in pursuit of an authoritative decree of a property’s current worth. Even if you know which figures to look at, the full cash value determination is not the ultimate purpose of the assessment, and therefore renders its application to any one specific property an unreliable measure.
A system designed for county-wide revenue collection is not a great gauge of what Mr. and Mrs. Smith would be willing to pay for Mr. Jones’s house on 1/3/10.
If a specific property’s value is one needle in the market’s haystack, the assessor is using a forklift to find it.
Or, to satisfy my personal quota for no fewer than 2 gratuitous metaphors per post, the county assessor is stalking the nimble prey of current market value in a bazooka-wielding dump truck.
The tax rolls are full of good stuff that can be exploited in negotiation. Total lien encumbrances, dates and price of purchases, taxable square footage, zoning, parcel size, etc can all be utilized by a savvy consumer to secure the tactical advantage that accompanies such intelligence gathering. Just don’t look to this cumbersome evaluation method to derive your unshakable opinion of the property’s worth.
Recent comps, current competition, pending sales … this is how you triangulate current market value. Property tax assessments, online evaluation algorithms, Carnac impersonations … amusing broad stroke guesstimations, but nothing more than jumping off points.
Want to determine what a home is worth? Get an appraisal or contact a local Scottsdale Real Estate agent for an opinion of value via comparable market analysis.
Want to give yourself a stroke? Base your price expectations around the assessed value notice that hits your mailbox in February.
by Paul Slaybaugh | Oct 25, 2010 | Home Buying
You have Scottsdale Real Estate questions.
We have answers.
Q: Is now a good time to buy a house in Scottsdale?
A: Forgive me for answering a question with a question. Do you need a house? The best time to buy a house is when you need one. Conditions are advantageous for buyers who can scrape up the requisite down payments and qualify for financing due to low interest rates and home values, but such external factors are irrelevant if you are not in the market for a new home. It’s probably a great time to buy a car right now, too, but are you going to rush right out and get one if your current vehicle serves your present needs? We agent types like to drum up business by urging consumers to act before a window of opportunity closes forever, but don’t let outside forces push you into a purchase based on fear or avarice. Likewise, don’t let extraneous market “noise” prohibit you from making the right purchase for your current needs. Obsessive market watching tends to lead to the dreaded “analysis paralysis,” which shackles a would-be buyer to indecisiveness. We all want to buy when the market is most conducive to securing a bargain, but such considerations must be in concert with, not mutually exclusive of, present need. Good and bad purchases are made every day.
Q: How much off the listing price should I offer?
A: Seeing that every sale involves a different seller, it’s a losing proposition to think in terms of a standard percentage of offer price to list price. Not only is the financial position of every seller unique, there is little with more emotional attachment than a home. Carve off an unrealistic amount in an initial offering, and you risk alienating the seller. You torpedo the negotiation before it even begins. Even when you remove emotion from the equation, such as with bank-owned property or short sales, the offer should be based upon value, not an arbitrary formula. For instance, if a bank-owned property is 100k undervalued in the list price, you can forget about knocking 10% off an already solid bargain. Consider yourself lucky if multiple suitors don’t show up to bid it up well over asking price. On the other hand, if a home is overpriced by 100k, offering 90% of list price likely means you would be overpaying considerably. Each property and its owner are unique, as should be the consideration that goes into the crafting of your offer.
Q: What’s all the fuss I keep hearing about appraisals?
A: Appraisals, and financing in general, comprise the soft underbelly of our slow-motion Real Estate recovery. The challenges start with the professional who is tasked with performance of the appraisal. New regulations were enacted to prevent fraudulent evaluations from artificially inflating home values, but we’ve traded one set of problems for another. These days the appraiser is essentially picked from a hat to prevent conflicts of interest. Unfortunately, this means that out of area appraisers of varying degrees of competence are often charged with evaluating homes in neighborhoods they have never previously worked. Further, as a designated “declining market,” even the home that closed across the street just last month is subject to a markdown in value to allow for depreciation in that short period of time since it closed escrow. Until we can overcome this stigma, home values will continue to be adjusted downward from the recent sales comps. Factor in the multiple appraisals that are often required for FHA financing on “flipped home” purchases (homes that sold within 90-120 days of the current transaction), and loan underwriters with the authority to review and reject the appraiser’s findings, and you get the minefield we have today.
Q: Should I pay off my credit cards to qualify for a loan?
A: Don’t even break wind without consulting your lender first. While I would hope that it is obvious that major purchases are off limits during loan qualification/processing (can affect debt to income ratios, credit scores, cash reserves, etc), many a home purchase has been derailed by the misguided good samaritanism of the borrower. You may need the good credit associated with the line that you aim to shut down or deplete required cash reserves that are necessary to gain full loan approval. Never assume that paying something down or off is beneficial to your unique financial profile without first consulting your mortgage professional.
Q: Should I bother with an inspection and final walk-through on an “as is” transaction?
A: The nature of an “as is” sale is one of the most fundamentally misunderstood concepts in Real Estate. Assuming that the purchase is made utilizing the standard Arizona Association of Realtors “As Is” addendum and the boiler plate language is not contradicted anywhere in the contract, all you are really agreeing to is the dismissal of seller warranties as to the condition of the property. You maintain full inspection rights with the option to walk away from the sale if condition is unsatisfactory. There is nothing that precludes you from requesting repairs at that point as well, the seller is simply not contractually bound to make any. As to the walk-through, it is important that you verify the property is still in substantially the same condition at closing as it was when the contract was signed. “As is” reflects the condition of the property at the time of the agreement. Any subsequent damage to the property is the responsibility of the seller. If the A/C has stopped working, or a tree fell on the roof, you likely have a case to demand repair or walk away from the sale.
Q: What am I actually looking for in a title report?
A: In short, you want to make sure the seller’s Uncle Willy from Topeka, who hasn’t been seen or heard from in forty years, doesn’t pop up after closing to claim an ownership interest in the property. Tax liens, mechanic’s liens, encroachments, easements, back HOA dues … you are basically looking for anything that can preclude your full rights to ownership and use of the property. I always pay special attention to the “Schedule B” of the preliminary title report that is furnished during the escrow period by the title company as it lists those items that will be exceptions to the title insurance policy. Gremlins that might pop up after closing, and will be outside of the scope of your title insurance coverage, typically hide here. With the abundance of short sales, foreclosures, tax sales, etc in our midst, the transference of clean title to a buyer has never been more rife with potential sabotage. If you are purchasing a bank-owned property, or really any property with recent changes in ownership, you want to make sure all encumbrances on the property have been or will be resolved in advance of settlement. Short sale buyers will need to know that the seller’s lienholders have, in fact, agreed to release the lien(s) on the property at closing. While these are functions of the chosen title company, they are not matters that can be taken for granted in 2010. All of those documents supplied by the title company during the escrow process that nobody used to read? Read them. If you aren’t sure which items are cause for concern, ask your agent. If your agent doesn’t know (or instill confidence in you that he does), contact a Real Estate attorney to review and advise.
Prevailing wisdom may label this a “buyer’s market,” but there are things roaming around out there in the haze. Biting things. Make sure you know what you are doing before stumbling out of the house, armed only with a pre-qual letter.
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Ray and Paul Slaybaugh are NOT attorneys. None of the opinions herein should be construed as legal advice. Should you have specific legal questions regarding the purchase or sale of Real property, contact a Real Estate Attorney.
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Have Scottsdale Real Estate questions? Send them to us through the contact form below. We’ll do our best to answer all in a timely fashion, and will use our favorites for future posts.
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by Paul Slaybaugh | Sep 23, 2010 | Promotions, Scottsdale Real Estate
Times were a buyer could reasonably anticipate that a seller would provide a one year home warranty policy with the sale of a home. Given the equity crunch that many are experiencing, and the prevalence of short sales and bank owned homes in the current market (which typically do not provide such policies), home warranties have gone the way of the buffalo as a throw-in to a Scottsdale home sale. With the lack of disclosures and repairs that accompany distressed property sales, however, such protection has never been more important. With that in mind, we are offering the following October promotions in addition to our always competitive rates.
For Buyers:
Free Home Warranty Policy – Register to utilize Paul Slaybaugh’s services as your buyer’s agent prior to 10/31/10 and receive a complimentary one year home warranty policy with your purchase at the close of escrow. See below for additional terms and limitations.
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For Sellers:
Free Home Warranty Policy For Your Buyer – Want to stand out from the competition by offering a home warranty policy to potential buyers? I understand the equity pinch may not make such overtures possible. Let me do it on your behalf. Register to list your home for sale with Paul Slaybaugh prior to 10/31/10, and I will provide your buyer with a complimentary one year home warranty policy at the close of escrow. See below for additional terms and limitations.
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Additional Terms: Promotion valid with website registrations prior to October 31, 2010 only. Close of escrow must occur prior to 10/1/11 for offer to remain valid. Promotion is offered exclusively and may not be combined with any other offer. Maximum value of $325 per policy. Not responsible for cost of additional coverage over and above $325. Not redeemable for cash value. Utilize registration form below to qualify.
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by Paul Slaybaugh | Sep 18, 2010 | Home Buying, Scottsdale Real Estate
That is the G rated version.
The working title was initially more along the lines of:
“What the &^%$ Do You Mean the &^%$#&^ House Is Under &^%$^&# Contract? The &^%$#$@ Listing Says It Is &^%^&#%$ Active!”
There is little more frustrating to the do-it-yourself consumer than outdated data. It’s hard enough to navigate unfamiliar territory with an accurate map, but it’s downright infuriating when that map is hopelessly obsolete. Like punching in the street address to the nearest Starbucks and being warned that there be dragons beyond the intersection of Hayden and Shea. A modern expedition requires modern cartography.
And yet, with the technological onslaught that has shifted the landscape of Real Estate practice, we still suffer from the “garbage in, garbage out” axiom that stifles growth in all human endeavors. All too often, an online home shopper comes across that perfect home that is everything he or she has ever wanted in a house … or rather, it would be if it were actually available.
Son of a &^%$!!!!!!!!!!!!!!!
Before converting your Nissan Murano into a makeshift scud missile and driving it through the listing brokerage’s plate glass window, humor me for a moment.
Once a buyer and seller successfully negotiate a purchase contract here in Scottsdale, with all terms and conditions agreed to and ratified by each party, the listing agent has two choices: change the listing status to “Active With Contingency” or “Pending.” Whether the home remains visible to the consuming public depends on which selection is chosen.
If the home is updated to reflect “Active With Contingency” status, the home remains on the market while the transaction is shepherded through the escrow process. Whether the contract is subject to the buyer’s financing, inspection, ability to sell another property, etc, there are certain contingencies in place that must be satisfied prior to closing. During this time, the seller can market the home for backup offers if he or she so desires. By essentially keeping the home in active status, but disclosing the presence of an existing contract, a seller does exactly that.
If the home is listed as “Pending” once an offer is accepted, it is removed from the market while the escrow is processed. In essence, the seller and listing agent are telling the Real Estate community to cease showing the home and that backup offers are not being solicited at this point.
With those two primary options serving as the choices for listing agents and their clients, you can imagine why many opt to go with the former. With the challenges buyers face in obtaining financing, in addition to typical inspection and appraisal concerns, some consider keeping the home available for possible backup offers the biggest no-brainer since all-you-can-eat ribs.
I actually prefer to utilize the “Pending” status as it shuts down the Days On Market accumulation that can stigmatize a property in the event that the transaction explodes, but that is another post altogether.
The truly baffling thing is that the public is not generally privy to the “With Contingency” part of “Active With Contingency” status. Take your pick amongst several possibilities and/or conspiracy theories as to why the listings displayed to consumers online will show up with no differentiation between the two entirely different categories, but the upshot is that you often stumble upon interesting properties that haven’t really been available for weeks, if not months. Just be aware that it’s no trickery being undertaken by the agent whose site search you are utilizing. While some industrious types might theoretically thrive on creating such confusion to create their own clarifying need, most of us are just as annoyed by the data disconnect as you are. We’d much rather the information that is disseminated be 100% correct and up to date than to field calls that lead to inevitably frustrated consumers. It’s simply a limitation of the information that is parsed out by the local MLS.
So there you go. Every home you come across online is available to purchase. Except those that aren’t.
On behalf of the industry, my apologies for rewarding your self-directed internet search for new construction in Scottsdale with a map of Pangaea.
Give me a call or shoot me an email if you want to request current availability on any and all “active” listings you come across online.
