by Paul Slaybaugh | Jan 7, 2011 | Home Selling, This & That
To whom it may concern,
I am drafting this explanation of hardship in attempt to effect a short sale of my property located at 88 W. Tantalus Lane, Scottsdale, AZ 85258.
When I purchased the property on 1/16/2005, I was under the impression that Real Estate values never declined. That’s what the guy doing the seminar behind the Benihana on 12th said, at least. Granted, I wasn’t thinking clearly because I skipped dinner and the aroma of szechuan beef was driving me half mad with hunger, but I decided right then and there that I was going to put all sixty two of my dollars into Real Estate investing. If he could buy 764 properties for no money down, why the hell couldn’t I? Figured I could finally hang up my plunger for good.
Do you have any idea what it’s like to swab out a stall after the sponsored little league team comes through and crushes fifty happy meals in four minutes flat?
So I bought a place. And another. And another. Before long, I had both shift managers leasing houses from me. It was awesome. One time, Steve, the ball-buster who managed nights, told me I overcooked the fries. My shift ended two hours before his. I threw all his shit out in the front yard and changed the locks. Nobody complained about my fries after that.
Anywho, after my brother in law flew down from Sacramento and got his Real Estate license in like six minutes, he hooked me up with this appraiser guy. Got all the houses refi’ed for 200% of purchase price and bought this here spread for cash. I only put the mortgage on it with you guys so I could cash myself out to fund the hotel in Fiji.
Somewhere in the middle of all this, I lost my job. Got laid off right after telling the regional manager that his fat $%&^ of a wife better start watering my hibiscus or they’d be on the street faster than she could cram a number eight combo down that feed trough she called a throat.
Downsized, I couldn’t believe it. With values beginning to sag, the double whammy of losing the $5.75/hour and a solid tenant was the start of a downward spiral that I couldn’t escape.
The Internal Revenue Service started coming around about this time and asking stupid questions like, “Exactly how many primary residences do you have,” and “Did you really think you could complete a 1031 exchange into a Peruvian brothel?” They seized my liquid assets. Communists.
After I got out of prison, I spent 16 months in Tijuana clearing my head. I took some part time custodial work in the entertainment industry, but as fate would have it, the goddamn donkey got the drop on me one night. Kicked me right in the lower bicuspids as I was bending down to hose off the astroturf. As medical coverage wasn’t provided by this particular employer, I was pushed further into debt by the street vendor who fashioned my new teeth out of cardboard and chicklets. Now every time I smile, I provide free advertising for “Beto’s Baja Fish Tacos.”
Despondent, I returned home to find my brother in law (who had since given up on Real Estate and was now selling Tang on Craigslist full time) had let my properties go completely to pot. Broken windows, four foot high weeds in the yard, missing air conditioning units … all of my tenants were long gone. Except for the dead guy we found in a barcalounger at the Clarendon duplex (I think you have the loan on that one, too?). That episode put me in counseling for a year. That’s when the whole drug thing really got out of hand.
So anyway, do you really want this piece of &*%^ back or what? We smoked the drapes.
Best,
Hugh Joversite
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 | Dec 19, 2010 | Scottsdale Real Estate, This & That
Somewhere in 2008 …
“Yeah, and if Abe Lincoln wore a skirt, he’d a been the bearded lady,” Ramiro scoffed. “Look, I don’t care how it got there, all I’m telling you is it wasn’t there on Tuesday.”
The three flannel clad men stood shoulder to shoulder around a five by eight foot depression in the Spanish colonial’s front courtyard. Remnants of the displaced cobblestone pavers lay at their feet, mixed in with the ring of loose dirt that lined the hole’s perimeter.
“Maybe it’s part of an old Russian satellite,” Gerry offered. “Decommissioned after the Cold War, no funding to maintain it? The news is always talking about those pieces of junk falling out of the sky.”
“That’s no satellite,” Blum replied, rubbing two day’s worth of stubble on his Popeye chin. “Where’s the hammer and the whatsamacallit?”
“Sickle, Bloomer. Hammer and sickle. If you’re feeling so smart, what is it then,” Gerry challenged.
In unison, all three leaned in for a closer look at the amber light pulsing within the small, metallic orb at the bottom of the crater.
“Meteorite, maybe? Whatever it is, that wasn’t made by any man,” Blum answered.
“I don’t care if it’s a plutonium care package from Ted Kaczynski so long as someone fixes this,” Ramiro announced, toeing the dirt as he removed his faded ball cap to run a hand through the unkempt brown hair beneath it.
“I figured out the smell. Cabbage. Smells just like microwaved cabbage,” Gerry mused. “You get a hold of your agent yet?”
“Yeah. She said there’s nothing she can do since it happened after the final walk-through.” He put the cap back on his head, snugging the visor down low over his bloodshot eyes.
“Probably doesn’t want to interrupt her afternoon bridge game,” Gerry snorted. “What about the seller?”
“Suggested I call the home warranty company,” Ramiro replied.
“Did you?”
“They claim it’s a pre-existing condition. Besides, they consider the courtyard part of the landscaping, not the house. Won‘t cover it,” Ramiro lamented.
“It could be some kind of stargate,” Blum hypothesized.
“What,” he demanded in response to their withering stares.
“Stargate for who, Darby O’Gill and the six inch Klingons? Did your parents huff Reddiwhip or something,” Gerry asked.
“Screw you, Gerald,” Blum replied, resorting to disparaging his childhood friend through the use of his formal name.
“What about your home inspector,” Gerry asked, turning back to Ramiro.
“Called him five times, left three messages. Haven’t heard back yet,” said Ramiro.
“Termite guy?”
“Yeah, because the mother of all termite colonies ate my courtyard on the day of closing,” Ramiro quipped.
“Just trying to help here, man. Of course, if you don’t need me …,” Gerry trailed off as he took the last swig of cold coffee from his Styrofoam cup and made as if to leave.
“Don’t get your underoos in a bunch, Geraldo. I’m just pissed is all,” Ramiro offered by way of an apology.
“I’ve got it,” Blum announced. “It’s the fallen sun of a tiny solar system.”
“What color is the sky in your world, Bloomer,” Gerry wondered.
“Depends,” Blum responded with a Cheshire cat’s grin. “Remind me what color the walls are in your mom’s room again?”
Gerry shook his head in exasperation and turned back to Ramiro, who had retreated even further beneath his hat.
“Looks like you’ve got yourself a real hot potato here, Ram. I’m fresh out of ideas,” Gerry confessed.
“Time capsule from the future,“ Blum proposed before shrugging his massive shoulders in similar defeat.
Ramiro looked from one to the other and nodded, coming to a decision.
“One for the money …”
“Don’t do it, Ram,” Gerry warned.
“Two for the show …”
“Don’t,” Gerry warned again.
“Three to get ready,” Ramiro continued, then jumped.
“Ramiro,“ Gerry shouted.
“And four to go,” Ramiro finished from the bottom of the crater. Determination shone in the green eyes that looked up at his aghast companions.
“Crazy SOB,” Gerry muttered, shaking his head.
“If I don’t make it out of here, tell your kids their real daddy loves them,” Ramiro instructed.
Gerry smiled, unable to deny the humor in the well-played jab.
“Oh man, oh man, oh man …” Blum mumbled as he swayed from one foot to the other.
Ramiro stretched one hesitant hand towards the glowing anomaly. Everything stopped as his index finger hovered a scant two inches from its smooth surface.
“I wouldn’t touch that if I were you,” a stern voice from topside advised.
Ramiro looked up to see an unfamiliar figure sandwiched between his friends. Eight pounds of yipping terrier strained at the other end of the pink leash he held. Electrical crackling and popping drew his gaze back to the now vibrating orb. The yellow glow had morphed into a deep, angry red.
“What the hell is it,” he called to the creased face that loomed over him.
“Nasty business, that’s what. You’ve got yourself a recent sales comp there, son.”
“Sales comp,” Ramiro mouthed, reflexively withdrawing his hand. “But I just closed yesterday?”
The old man pointed at something Ramiro couldn’t see from his vantage point as his friends dropped their cups and ran for their lives.
“Cowards,” Ramiro called after them.
“The Peters place … or the Peters place before the bank took it back, I should say. Just closed this morning.”
“How much,” Ramiro asked.
“Two fifty,” the old man answered.
“Two fifty?! That’s ten thousand less than I paid!”
“Oh, cry me a river, son,” the old man stiffened, “I’ve been getting pelted with these things for the past eighteen months. Last one took out my master addition. One before that got my kitchen remodel. Too many more direct hits and my retirement goes on indefinite hiatus.”
“So what do I do with it,” Ramiro asked.
“Nothing,” the old man replied.
“Nothing?”
“Nothing. The HOA board will be by with the space suits and shovels to fill in the holes this weekend. We bury our own in these parts,” he explained.
“But it will still be here,” Ramiro objected. “Shouldn’t we dig it up and get rid of it or something? I don‘t want this thing in my neighborhood!”
Steam began rising off the shuddering orb as a high pitched warble sent the cowering dog between its master’s legs.
The old man chuckled, extending a leathery mitt into the void.
“Fool’s errand, son. Like trying to drink your way out of the ocean. Dig up one just in time for two more to hit. They’ve started hammering us so hard that all we can do is bury them as best we can and pray the appraisers don’t find’em.”
“Yeah, swell,” Ramiro replied as he was pulled out of one hole and into another. “I think they bussed in a nearsighted cyclops from Calcutta to do mine.”
by Paul Slaybaugh | Dec 9, 2010 | This & That
“Did you get a look at your attacker?”
Gertrude looked down at her bare feet before responding to the patrolman.
“I told you, it was dark. And bright,” she explained. Her matted, grey hair clung to her scalp in incongruous clumps.
“Dark and bright. Got it, ma’am,” Officer Page replied, as if it were the most normal thing in the world. He was at the tail end of a double shift, and no loony old bat was going to cost him the first five minutes of Glee. SVU was going to give him eight kinds of hell for calling this one in, but they could kiss his wide Welsh keister. She would be their problem as soon as he finished up his incident report.
“How about height? Tall, short or average?”
“How would I know what’s little for a little, green man,” Gertrude asked.
“Okay, I’m just going to put down average,” the officer noted. He did the same for weight and listed race as other.
“And you say this little, green man … he, uh … probed you?”
He regretted the question before the words were out of his mouth. Sure as the crazy in this hag’s milky, hazel eyes, he’d just forfeited the title sequence.
She stared off into the night, appearing to see nothing and everything all at once.
“Yes, that animal probed me. In all my years, I’ve never been so mistreated. Not even that weekend in Puerta Vallarta when Harold, God rest his soul, mixed up his blood pressure medication with the Spanish fly that Marvin from the bowling league gave him as a gag gift for his seventy fifth birthday.” A violent shudder wracked her entire being. “I’ll never get that smell out of my nose. Like burning tires in a snowcone factory. Cold as ice, and scalding hot.”
“Cold and hot, got it. How many times have you been abducted, Ms. Gunderson?”
“Counting this time? Once,” Gertrude said. She began fiddling with the hole in the knee of her pantyhose.
“Let’s get back to the actual abduction. You say there was a bright light and tractor beam,” the officer asked, turning to wink at the dashboard camera in his cruiser as he did so. The fellas would eat this up, especially Pennington.
“I already told you all about that. One minute I’m sitting on the sofa watching my program, then before you can say Here’s Johnny, I’m flying through the bay window. Harold, God rest his soul, was always on me about leaving it open, but it was such a pleasant evening. Now are you going to sit here and ask questions all night, or are you going to catch the monster that had me spread out on that table like a fish,” Gertrude demanded.
“And what else did this … processor, you called him? What else did this processor do to you, ma’am,” the officer asked. He hazarded another glance at the camera, crossing his eyes and twirling his index finger near his temple in the universal pantomime for crazy.
“Are you having a laugh at me, sonny?”
“No, ma’am,” he replied, stiffening and turning back to find the galactic traveler eying him with evident suspicion.
“You look here, young man,” she began, wagging a crooked finger at the officer, “that thing is getting away while you have yourself a gay old time at my expense, and I won’t stand for it.”
“We need to make sure we get the right one is all, ma’am,” Page responded, suppressing a grin.
She continued to scrutinize him under a furrowed brow.
“He took my blood,” Gertrude said at last.
“You mean he drew some blood, like a sample?”
“No, I mean he took it. All of it.”
Page stared at the translucent face in front of him and suddenly felt pity. Nutter or not, this was someone’s mother, someone’s grandmother. The panicked family was probably canvassing the streets right now, wondering where she had wandered off to this time. He thought of his late Uncle JJ.
“How about we get you a cup of soup back at the station,” he suggested. He grasped the radio on his belt to call off the special victims unit. The lark had gone far enough.
“There’s no time,” Gertrude objected. “It could be violating somebody else right now! You have to stop it!”
“I understand, ma’am,” the officer began before she cut him off.
“You don’t believe me. Here, I’ll show you,” she interjected.
Before he could stop her, she withdrew a plastic spork from her purple, zebra-patterned handbag and plunged it deep into her forearm.
“Christ,” the officer shrieked, lunging for the makeshift shank.
He yanked it out by the white plastic handle, the beefy fingers of his left hand disappearing into the spongy folds of her triceps.
“Told you,” Gertrude boasted, extending her arm into the pale moonlight for him to see. Not a single crimson drop of blood arose from the fresh wound.
“What the hell,” Page exclaimed, directing the beam of his maglight to the mottled appendage. Three holes connected by a semi-circular gash, completely free of gore.
“It took my identity,” she informed the incredulous officer. “Poked me, prodded me. Stole my DNA and credit information.”
“Hold on,” Page objected, willing the jumbled thoughts in his head to coalesce. “Credit information? What would an ET want with your credit information?”
“I can’t rightly say, but it made me provide my social security number, date of birth and proof of employment on three separate forms. It also demanded bank statements for the past three months.”
The officer stood in slack-jawed silence. His eyes remained fixated on the bloodless wound.
“That’s the only reason it let me go, you know,” she continued. “I’m supposed to fax all of my documents by the end of the week.”
The patrolman’s radio squawked to life, startling him.
“Dispatch to one thirty eight,” a non-inflected voice croaked.
“One thirty eight, go, dispatch,” the officer responded.
“Are you still with the 13-1202, Page?”
“Affirmative. And look, this is going to sound crazy, but,” Page began.
“Hold fast, officer, a black and white is on its way to your location,” the voice interrupted.
“Copy,” Page responded, holstering the radio as a pair of headlights swung around the corner, bathing the pair in halogen light.
“It’s back! Oh, lord help us, it’s back,” the woman squealed.
Page had to physically restrain her as the driver side door opened.
“Got a guy in the back who thinks your lady might belong to him,” the approaching officer announced. “He’s been out looking for her all night. Found him talking to a cat over on twelfth.”
The rear door of the squad car swung open. All six eyes squinted against the glare at the form that stepped out.
“Gertrude,” an uncertain voice called.
“Harold?”
An old man shuffled forward with a hurried, laborious gait. Page released his hold on the woman, who lurched to meet the newcomer. The couple cast an enigmatic two-story shadow on the warehouse behind them as they shared a fierce hug, the officers looking on from just outside the glow of the headlights.
“What’s your guy’s story,” Page asked his colleague, checking the name on the badge.
“He’s not much help,” Officer Davies confessed. “Until dispatch put it together with your call, I figured the old coot was just confused.”
The two watched the couple in silence for a moment.
“Only thing he said that made any sense was that they were signing papers on a house this afternoon. From the sound of it, they haven’t taken out a new loan in damn near forty years,” Davies continued.
Page let out a low whistle.
“Poor bastards,” he acknowledged. “They wouldn’t have known what hit’em.”
“Apparently, the missus went outside to grab some air around the time they were redoing the affidavit statement because the signatures were outside of the margins. She never came back in,” Davies concluded.
“Ah, I get it now,” Page said.
“Come again,” asked Davies.
“When I first found her, she was mumbling weird numbers and trying to snatch something out of the air. Four point three five, two points. Four point eight, no origination … must have been the terms that finally made her snap.”
“You wanna deal with this, or should I,” Davies asked, taking a half step back from the scene.
“Ah hell, I’ll do it,” Page answered. “I already missed the Cardinals’ tip-off.”
“You mean the Suns?”
“Yeah, the Suns,” he acknowledged, feeling his face flush. “Besides, I’m refi’ing my house right now.”
“So?”
“So I want to see where they put the microchip.”
by Paul Slaybaugh | Nov 25, 2010 | Home Selling, Scottsdale Real Estate
If only it were that simple. I’ve had this pearl lobbed across the kitchen table by a would-be Scottsdale home seller in denial more times than I can count, and I can count all the way to eleven, thank you very much. After all, it’s self-evident that the single most effective way to combat the potential deal-killing reality of a third party evaluation is not to have one. Thus, it never comes as a surprise when a homeowner objects to the recent sales data by flipping the script on my argument that there is no way on God’s green earth that the home would appraise for the lofty number in his/her head, even if some foolhardy buyer would prove willing to plunk down greenbacks well in excess of true market value.
“You need to find us a cash buyer so there won’t be an appraisal, then.”
While rummaging through my briefcase for the ready supply of cash buyers I keep on hand in case of emergency, I’m dismayed to find that there appears to be a hole in the bottom. All those investor whales who bleed money from their blowholes must have fallen out as their portfolios shrank to guppy size over the past few years.
There are cash buyers out there, but times have changed, people. This is not 2005-2006 where many “cash” buyers were actually relying on draining a HELOC to close. Or those others who have been bounced from the pool by decimated 401k’s and suddenly nonexistent pensions. The cash buyers who are still around in 2010 are genuine Daddy Warbucks types and professional investment syndicates.
Genuine. Cash. Buyers.
And you know what? Those with the coin to be players in the current market are not interested in overpaying for your, or any other, property. The only people buying homes at present, regardless of whether the property is a need or a want, are those intent on a modern day train robbery. When even the value-priced properties linger on the market as the slap-your-momma-value-priced properties are the ones being snapped up, the game plan is to grossly overprice your home in hopes of landing one of these cash buying makos? Seriously? Because they are so darned cute and cuddly, I gather?
As strategies go, I’d sooner advise trick or treating at Dick Cheney’s house as a pheasant hunter.
Happening upon a cash buyer is one of those fun eventualities that is largely determined by price point and fate. Those fortunate enough to have such a creature fall in their laps quickly learn that the cash comes with a steep price: negotiating disadvantage. If you are overpriced, your home won’t even be a blip on Mr. Moneybags’s radar. If you are priced in line with values, he will lowball you. If you are priced significantly under market, he still might attempt to haggle a little. After all, he has cash, and cash is king, right? You aren’t the only one who knows it.
While a cash offer may represent the panacea to the appraisal conundrum, the actual cash buyer is not a willing participant in the “I’m willing to spend whatever it takes, because I simply must have THIS HOUSE” game. He goes across the street and buys the ugly one for 100k less.
Don’t believe me? Let’s try a quick role-playing exercise.
You are a homebuyer in 2010. Through shrewd investment strategy, you have managed to not only hang on to your capital, but to actually amass a larger fortune during these lean economic times. Sensing that opportunities abound in Scottsdale Real Estate at present, you are in the market for a house or two. You might even live in one when you are not at the penthouse in Manhattan, the chalet in Brussels or the flat in London. You’ve studied the market, read all of the stories and spoken with your most trusted advisors. Putting to work the analytical mind that has served you so well in critical financial decision-making to this point … what are you going to buy?
Are you going to spend all day making doe eyes at some overpriced turkey playing hard to get, or are you going to fill your tag by blasting the one with a limp?
Thought so.
