by Paul Slaybaugh | Dec 20, 2014 | Home Buying
Greetings, Winter Visitors!
On behalf of the fine city of Scottsdale, I’d like to welcome you to the land of short sleeves and flip flops. Whether you are visiting us for the first time or have been making the annual pilgrimage for many years now, you are warmly welcomed. Literally.
There is no shortage of activities and attractions to enjoy during your stay. If I may be so bold as to offer a few suggestions, follow this link to read up on stuff to do in Scottsdale from a local’s perspective.
Now, if you are like me, you can’t help but toy with the idea of a second home purchase during the course of virtually every vacation you take. While those whims often fall by the wayside shortly upon returning home, they can make a lot of sense in Scottsdale’s case. I can only imagine how much you are spending per night in one of our five star resorts or furnished vacation rentals. If you plan on making an annual reprieve from the ice and snow a semi-normal thing, buying your own spot can be much more appealing than paying the hefty hotel tabs.
You can afford to stay longer, rent the place out when it’s not in use, and you get to sleep in your own bed.
Enough with the sales pitch, though. You wouldn’t have landed on this page if you weren’t already trolling vacation homes online. So without further ado, here are a few listing feeds created specifically with you in mind.
Low maintenance patio homes, gated condo / townhouse communities, homes near Old Town Scottsdale, homes near shopping centers, golf community homes, homes near attractions like Westworld and the Ice Den … it’s all just a bit further down the page.
See one you like? Call me and I’ll show it to you in five minutes. Okay, it might take slightly longer than that to set it up, but there is a message behind the hyperbole. I get very little rest during the high season. On call virtually 24/7 from January to May, I am here to help turn your pipe dream into reality.
Patio Homes
Townhouses
Condos
Golf Communities
Old Town Scottsdale Homes
Homes Near Shopping Centers
Homes Near Salt River Fields
Homes Near Westworld
Homes Near the Ice Den
Not seeing what you’re looking for? Create your own custom home search here!
by Paul Slaybaugh | Dec 18, 2014 | Home Buying
“Alright, alright. Mickey’s a mouse, Donald’s a duck, Pluto’s a dog. What’s Goofy?”
– Gordie, Stand By Me
Patio homes: what are they?
If you have been in Scottsdale for any period of time, or have been shopping for a home from afar, you have undoubtedly encountered the term patio home more than once.
You know what a single-family home is. You know what a condo is. You even know what a townhouse is.
But what the hell is Goofy?
The term, patio home, is not a legal descriptor. It does not describe a style of ownership. It is really more of an idea than a legal thing.
For brevity’s sake, we’ll define a patio here in accordance with prevailing wisdom. Most consider a patio home to be a cross between a townhouse and a single-family home; a hybrid, if you will. Patio homes bridge the divide between traditional housing types. You can think of a patio home like a single-family home that has been plopped onto a townhouse sized lot. That’s a gross oversimplification, of course, as patio homes come in all shapes and sizes, but this post is to serve as a handy crib sheet, not a thesis.
The idea is to provide housing with relatively low outdoor maintenance without sacrificing the size of the home itself. In other words, patio homes are tailored to those who still want the privacy and comforts of a single-family home, just not all of the headaches and expenses that come with the standard single-family lot.
The typical patio home may be attached to a neighboring property by one or two common adjoining walls (like most townhouses), or be free-standing (like most single-family homes). Many patio homes are single level, but they can have multiple levels, too. Patio homes typically do not have neighbors above or below them, as is common with apartment style condos.
Patio home ownership varies from development to development. Some entail fee simple ownership (you own the lot in addition to the structure). Some entail condo ownership (you do not own the lot, just a fractional interest in the common area).
Responsibility for property maintenance varies as well. Some communities have very active homeowner associations that provide for front landscaping maintenance as well as select exterior structural maintenance of the homes themselves. Other patio home communities more closely reflect single-family ownership, in which homeowners are fully responsible for all maintenance associated with their properties. You need to check community CCRs to determine exactly what is and what is not covered by the HOA in a patio home development.
If you like the idea of a smaller, low-maintenance lot, but aren’t quite ready to step all the way down to a townhouse or condo, a patio home might be just the thing for you. Popular with seasonal residents as well as full-time residents who frequently travel or simply prefer a little less upkeep, patio homes exemplify the lock-and-leave lifestyle that many Scottsdale home buyers seek.
So there you go. Not so Goofy after all, is it?
Ready to start your Scottsdale patio home search? Follow the new listing feed below for the very latest active listings, updated daily!
by Paul Slaybaugh | Dec 14, 2014 | Home Buying, Scottsdale Real Estate
Earnest money.
You’ve heard about it, been asked for it; you may have even written a check for it. What exactly is earnest money, though, and why do you need it when you buy a house?
Earnest Money FAQ
When buying (or leasing) a home in Scottsdale, you will be asked to put up a good faith deposit to secure your position in the transaction. This consideration is known as an earnest deposit.
Earnest deposit amounts are negotiable. The amount of the deposit is one of the terms of the purchase agreement over which buyers and sellers may haggle. In my experience, a typical earnest deposit on a resale transaction is approximately 1-2% of the total sales price. Builders may require higher deposit amounts for brand new construction (largely due to the costs incurred to build your home). Banks may also require more on REO/foreclosure properties (because they are the spawn of Satan).
If you are following the standard boilerplate terms of the current AAR (Arizona Association of Realtors) purchase agreement, your earnest deposit is due upon the agreement being accepted and signed by all parties.
In nearly all cases, your earnest funds will be held by an escrow company, the neutral third party responsible for transferring ownership from the seller to the buyer. The company employed to hold these funds is another term of the purchase agreement that you negotiate with the seller. Earnest money can also be held in the trust account of one of the Real Estate brokers involved in the transaction, but this eventuality is primarily restricted to the rental arena these days. If you are buying a house, you can pretty much take it to the bank that you will be dealing with an escrow company.
- Is This Extra Money That I Have to Pay in Addition to My Down Payment and Closing Costs?
This is a common misconception. The answer is no, this is not “extra money” that you are being charged. It is a portion of your total closing funds that is simply due up front. Upon closing, your earnest deposit will be applied towards your down payment and/or closing fees.
Typically, a personal check made payable to the chosen escrow company will suffice, though some opt to wire funds to the escrow company instead.
- Can I Get My Earnest Deposit Back?
This is a loaded question, but yes, there are scenarios in which you can typically retrieve your earnest deposit. Assuming you negotiated the sale using the current AAR purchase agreement, you do have a few outs. First, you have an inspection period (usually 10 days, but negotiable). If you are not satisfied with the condition of the property, or the seller refuses your repair demands, you can withdraw from the transaction and have your earnest money refunded. Of course, this presumes that you have not agreed to any changes in the standard terms of the contract (such as purchasing “as is”, agreeing to non-refundable earnest money, etc).
Under the standard provisions of the contract, you can also get your earnest money back if your loan is declined (after your diligent effort to obtain one under the stated terms) or the home doesn’t appraise for the purchase price (unless you are paying cash as there is no appraisal/financing contingencies to fall back on). Once again, though, and I can’t stress this enough, the terms you negotiate with the seller can alter these provisions.
- What If My Deposit Turns Out to Be More Than I Owe at Closing?
Let’s say that you are employing a 100% financing vehicle, like a VA loan. Let’s also say the seller has agreed to pay for the majority of your closing costs. If the remaining costs owed by you at closing are exceeded by your initial earnest deposit, you are entitled to a refund of the excess deposit.
- Can I Lose My Earnest Deposit
Yes, you most certainly can forfeit your earnest deposit. As the purpose of this deposit is to demonstrate good faith to the seller and invest you in the successful completion of the transaction, your deposit can be forfeited to the seller as damages if you breach the agreement. Failure to close escrow, or backing out of the deal for any reason other than allowed for by a contingency to the agreement, is a surefire way to kiss your deposit goodbye. In the event that you wish to cancel a transaction, be sure to carefully review the terms of your contract with an attorney.
- Who Decides If the Buyer or Seller Gets the Earnest Money if There is a Dispute?
The escrow company that holds the deposit is charged with interpreting the terms of the contract, and has the authority to release the deposit to the party deemed NOT to be in breach of the agreement. Say you, as the buyer, decide that you aren’t comfortable with the neighborhood’s governing covenant’s, codes and restrictions (CCRs). You inform the escrow company (in writing) of your wish to cancel the transaction. The seller objects, claiming that you did not exercise your right to cancel in a timely fashion. You had 5 days from the receipt of those documents to withdraw from the purchase contract, but did not inform the escrow company of your intentions until day 7. Therefore, the escrow company decides in the seller’s favor, and releases the earnest money to him/her as liquidated damages for your breach of the agreement.
Have any additional questions regarding the role of earnest money in a Real Estate transaction? Ask away in the comment section below (or shoot me a private message if you prefer) and I will do my best to address them.
Disclaimer
* It should go without saying that the above is not intended as legal advice. The general explanations may not directly apply to you. As every purchase contract is unique, the internet is not a reliable source for answers to questions regarding your specific agreement. Consult with your agent and/or attorney PRIOR to the execution of your purchase contract to fully understand the terms and protections afforded you.
by Paul Slaybaugh | Feb 21, 2012 | Home Buying
Have you been searching for a home for six months? A year? Longer?
If you have not found the home of your dreams (or, at least, the home of your needs) despite a protracted hunt, it’s time to come to grips with this stark reality: you are dreaming too big.
The home buying process is not a one-size-fits all proposition by any stretch, but there is a core truth that is applicable across the board. If you have been actively searching for a home for longer than 90 days and written nary an offer, you have set your sights too high, and it’s time to start paring back your wish list. While it’s true that you need to give the market a chance to bear that which you covet, it’s simply a pipe dream if a full quarter of a year has elapsed with no sign of your white whale breaching the active inventory.
When the market was in full free-fall, those with time on their hands had the luxury of waiting it out. Sooner or later, the 3000 square foot, 4 bedroom, custom home on an acre in North Scottsdale would dip into their price range. Alas, with the suddenly resurgent market sending prices the other way and the inventory shrinking, the opposite is potentially true. The longer you wait on a ship that is not coming in, the further out to sea the fleet gets.
So what’s a 2012 Scottsdale home buyer to do? Adapt to the market and adjust your criteria. Maybe 2800 square feet will suffice instead of the 3000 upon which you had your heart set. Could you live with 3 bedrooms and a den as opposed to 4 true bedrooms? How about half an acre instead of a full 43,560 sq ft?
Or bump up your price threshold until you break into the kind of inventory that fits the bill. In an ascending market (which, by all appearances, the Scottsdale Real Estate market has entered into after a steep and lengthy decline), time is decidedly not on your side.
Does this mean I advocate rushing out and purchasing the nearest approximation of what you want? Certainly not. The rash of purchases made out of blind fear that prices were running away from buyers forever made for a willing accomplice to the 2005-2006 bubble. It’s never a good idea to make any crucial decision from a position of fear. What I do advocate is approaching your house hunt with a little more urgency than has been necessary these past five years. In a competitive environment which has reintroduced agents and consumers to bidding wars and a limited volume of quality homes from which to choose, the laconic wait-and-see approach will hamper your ultimate chances for success.
We are early enough in our fledgling recovery that prices are still within shouting distance of their low points and 30 year interest rates continue to be reigned in on a short leash. It remains an excellent time to purchase a home for those in the market, it simply has become more difficult than saying “eenie, meanie, miney, mo” to the myriad available options that were once scattered about in abundance.
For years, we’ve counseled sellers to reassess their pricing after “x” days on the market without an offer. Now it’s the buyer’s turn.
If you have been frustrated by the current inventory, or have lost out on multiple properties due to heavy competition, you have likely set your sights too high. Make adjustments to your “must have” list or increase the amount you are willing to spend if you have been actively looking for a house longer than 3 months. You are pining for something you can’t have. In a market on the upswing, the longer you wait to take corrective action, the greater the discrepancy grows between your wish list and the world around you.
You’ve got to be hip to the new rules if you want to be a player in this market.
by Paul Slaybaugh | Feb 19, 2012 | Home Buying
The role of a Real Estate agent in a transaction is an ever-evolving one. Remember sub-agency? No? That is a testament to how quickly and totally the job description has changed over the past couple of decades, with every passing generation bringing more empowerment to consumers and choices in levels of service.
The relationship between consumer and agent has shifted from the “customer” model to a “client” model in which a fiduciary obligation is owed to each principal in a Real Estate transaction. Unless otherwise agreed, the professional shuttling a buyer around on weekends in the hunt for a new home is no longer an agent of the seller, but is retained by that buyer to represent his/her interests in full in that pursuit. This is the age of buyer agency in which most modern markets currently operate.
While the relationships and allegiances in a transaction are more clearly defined now than ever (aside from the still-murky waters of dual agency, which is another post entirely), the proper representation of a buyer by a buyer’s agent is not as cut and dry as one might think; rather, market forces dictate that said agent be malleable in tactics.
Take the buyer’s appraisal contingency, for instance. It is a widely conceived and unchallenged notion that an appraisal is performed for the benefit of the buyer (more on the appraisal fallacy). After all, if the property does not appraise for the purchase price during the escrow period, the buyer has the ability to walk from the contract or to use the cudgel of a low valuation to re-negotiate with the seller. As such, it follows that a buyer’s agent would do well to simply stand aside and hope for the appraisal to come in low as it provides an opportunity to secure a potentially better deal for the client.
One thing about conventional wisdom? It typically applies to conventional circumstances.
What of an ascending market in which values are on the uptick and competition for properties is fierce? I, for one, posit that the laissez faire approach to the appraisal by a buyer’s agent may actually run contrary to the client’s interest. You see, appraisers are beholden to concrete data rooted in the values of the recent past. That’s all well and good, but there will not be support for current value in an appreciating market in three month old sale comps. There is a very real likelihood that your (as the buyer) appraisal is going to come in low in such circumstances.
So what’s the problem, you ask? Why not use that happy eventuality to your advantage to secure a better price?
Because the seller has four backup offers.
In a market such as the one we are currently experiencing here in Scottsdale, with heavy buyer demand and a drastically reduced supply of homes (down to approximately 17,000 active listings across the greater Phoenix area), bidding wars tend to result. After fighting off ten other buyers for the home of your dreams, a bad appraisal is, in all reality, going to procure one of two outcomes: 1) You bringing additional cash to closing to offset the difference between appraised value and sales price, or 2) The sale tanking.
The seller is NOT going to reduce his price when he has ready and willing backup buyers waiting in the wings to give him his price.
The role of the agent changes in that rather than the listing agent sweating out the appraisal and the buyer’s agent kicking back with his feet up, the inverse is potentially true. In my current representation of buyers, I have taken to meeting appraisers at the property (with the buyer’s permission, of course) with a copy of the contract, tax record, sales comps, pending sales, active competition, market trend reports … blueberry muffins, candy hearts, etc.
Long story long, do not accept representational practices from your agent that line up more with conventional wisdom than current reality. As market dynamics are in constant flux, so too are the tactics employed to reach your goals. Don’t buy into the notion that “x” is “good” and “y” is “bad” in a Real Estate transaction. Most every facet of a purchase is merely a variable, made positive or negative by its interpretation against the broader context of an ever-shifting landscape.
The buying and selling of homes requires a nimble partnership between principal and agent to keep up with the high-paced game of musical chairs that is the Real Estate market.
Save the dogma for your momma.
