by Paul Slaybaugh | Nov 9, 2010 | This & That
“I’m not going to GIVE my house away!”
Blaine leaned back in his seat, laced his fingers behind his head and closed his eyes. This appointment was over. It was over before it started, in fact. A humorless smile played at the corners of his mouth.
“Something funny,” the would-be seller demanded.
“No, Mr. Davis, nothing funny. It’s just been awhile since I’ve heard that one,” Blaine replied.
Opening his eyes, he was surprised to find his red-faced counterpart had gone an even angrier shade of crimson. The lone stop remaining in the color palette of denial was purple. He’d only seen purple once, and that poor bugger had stroked out right in front of him while discussing the merits of a leaky faucet in an inspection report. One more comparable sale placed upon the glass top of the breakfast table between them and he’d be calling Mr. Davis an ambulance.
“Goddamn Realtors. I was dealing with guys like you before you were born. You just want to slap the lowest price you can on a house so it sells fast,” the now twitching homeowner spat.
“I’m just showing you the data, Mr. Davis. Do you want to see the rest of it,” Blaine asked.
“Waste of time, I can see where you’re going. You want me to list my house at the same price that all of those bank and short sale properties sold for, but my home IS NOT DISTRESSED, you nitwit,” Mr. Davis railed.
“It’s awfully hard to propose an opinion of value without first presenting the background data, Mr. Davis,” Blaine countered. “I put two days into the analysis, but if you want me to cut straight to the chase, I will.”
“About time,” the seller scolded. Even his hair looked pissed.
“Five hundred thousand.”
“FIVE HUNDRED THOUSAND?! I paid five fifty for it!”
“Yes, you did. Two years ago. In a declining market,” Blaine finished.
“But, but …,” Mr. Davis sputtered, “but then I have to pay commissions and closing costs on top of that?”
“Yes, sir.”
Blaine looked at his watch and fiddled with his briefcase. He knew exactly what was coming.
“Well, I’m not paying you to sell my house at a loss! Your commission will be whatever we get over five hundred,” Mr. Davis decreed.
“You don’t understand, Mr. Davis. Five hundred thousand is my recommended list price. I anticipate you will actually sell closer to four seventy five,” Blaine answered.
That did it. Mr. Davis turned purple.
“FOUR SEVEN- you want me to sell seventy five k below what I paid, and to pay you for the f&%$ing privilege,” Mr. Davis bellowed.
The sudden rise in octave caused a stirring behind one of the barnyard-themed curtains in the adjoining bay window. A black form exploded past Mr. Davis’s shoulder, leaving a tornado of paperwork in its wake as it shot across the table and out of the room.
“What the hell …,” Blaine mustered, absently pawing his face for blood.
“I guess Mordor doesn’t like your price, either,” Mr. Davis opined, cracking his first smile as he gestured in the direction the previously unseen cat had fled. His face receded to an animated pink, and the whites of his eyes returned, liberating the inquisitive green irises that had first greeted Blaine at the door. A deep sigh punctuated the sudden shift in disposition, and resignation washed across his creased features.
“List at five and sell for four seventy five, you say,” Mr. Davis asked.
“Yes, sir. That’s the best we can possibly hope for.”
“I suppose you have something for me to sign?”
“I do,” Blaine confirmed and withdrew the listing forms from his briefcase. He stooped to gather up his strewn paperwork while the seller signed the agreement, but was stifled by a light palm across his chest.
“It’s my mess, son. I’ll clean it up.”
———— <BEEP> <BEEP> <BEEP> <BEEP> <BEEP> <BEEP> ———–
Blaine blindly groped the nightstand for the shrieking alarm. Finding it, he pressed random buttons until the dark room returned to silence. Once fully immersed in the wakeful world, dread began forming in the pit of his stomach. Yet another day of unlistable listing appointments. A quick shower and quicker breakfast, and he was out the door, for once hoping to cross paths with a few black cats.
by Paul Slaybaugh | Nov 6, 2010 | Scottsdale Real Estate
… but too long to label someone as such within 30 seconds of making their acquaintance.
A common theme across the Real Estate net is a gleeful willingness to drop a potential client like they’re hot if deep levels of compatibility with the affronted agent do not reveal themselves within five seconds of introduction. Talk down to me in our initial correspondence? Adios, muchacho! Dare to erect contact limitations or dictate a preferred method of communication? Bon voyage, bubba! Unilaterally impose any restrictions whatsoever upon our future relationship? Sayonara, sucka!
For a line of work that requires a teflon-coated epidermis, we Realtors can be a squishy bunch. In what other field would a business person refrain from taking on bill-paying work because the tone of an email seems mildly strident? A message from a complete stranger who is taking a leap of faith by merely initiating first contact via a spam-inviting contact form, mind you. No wonder so many in our ranks are crying the blues about the current state of the economy, as we appear slow to receive the memo that most no longer have the luxury of turning business away simply because a client lead has an annoying voice, a face reminiscent of the junior high bully, responds to painstakingly crafted emails in terse staccato bursts, or … heaven forbid, is just plain mean.
The horror … the horror …
There are, and there always will be, people I refuse to put in my car – pedophiles, overt racists/sexists/anything ‘ists. I will not tolerate personal abuse. Or Justin Bieber fans. Those rare sociopathic encounters notwithstanding, prematurely casting aside difficult personalities because I’d rather my job be stressless than profitable is not a winning formula for a career I’d like to see advance through another decade.
Business is hard if you are actually doing business. It is only easy if you are broke.
So give me your tired, your wary, your befuddled masses with whom you refuse to work because they have the audacity to treat you like the business you are, and not their best friend. I’ll sell them a house and go home to delouse.
The next five years in this business ain’t for sissies. If you think you can survive them by ignoring the tough customers, be grateful there are always job openings in La La Land.
by Paul Slaybaugh | Nov 4, 2010 | Home Selling
Open houses were how I made my initial bones in the Real Estate business. One of the tried and true methods for encountering the home buying public in its natural environment, it proved to be the old school prospecting technique that was the best fit for my sensibilities as a rookie agent. Why sit in a hermetically sealed cubicle, cold calling non-receptive “leads,” when those with an interest in a product type, if not the actual product I was hawking, would willingly walk through the front door and engage me in non-abusive conversation? Actual face time with actual consumers, you can’t beat it.
Lacking a single stalwart in my empty stable of listings at that nascent stage of my career, it wasn’t unusual for me to sit open the listings of colleagues. One in particular still stands out. A gorgeous semi-custom Spanish style home in McCormick Ranch, I couldn’t wait to throw my directional signs all over the neighborhood and wait for the inevitable human deluge. A planned community that is one of the few pockets that produces enough traffic to make the exercise worthwhile, chances were good that I would pick up a few decent buyer leads, if not sell the property on the spot.
The day before the scheduled open house, I met the owner at the property to introduce myself and assure him I was not a kleptomaniacal serial killer. Satisfied I wasn’t there to steal the toaster, he proceeded to give me the tour. I’d already previewed the home prior to selecting it as a viable open house candidate, but I was happy to oblige the owner’s turn as proud tour guide.
Until we got to the fun bubble.
A property that featured newer construction and more modern architecture than neighboring subdivisions, granite countertops, porcelain tile flooring and additional hot button features too numerous to count, and the poor, misguided soul had it in his mind that demonstrating the “fun bubble” feature in the swimming pool would sway potential buyers to slap their cash down on the barrel. Now, I like fun, and I like bubbles, but frankly, this bubble was apathetic at best. As I have yet to encounter the buyer who includes a fun bubble amongst his/her criteria, however, the fun factor is largely irrelevant. Your pool could turn into a cauldron of unmitigated mirth at the turn of a rheostat, and I am still not demonstrating it to every buyer who walks through the front door. That’s not salesmanship. That’s “What do I have to do to get you in this house today?”
The oft overlooked component of selling is the ability to discern what is of material import to a prospective customer, and what is … well … a fun bubble.
Following a buyer around a home like the security guard at Ross is more likely to result in a restraining order than a ratified purchase contract. Selling the brushed nickel doorknobs, blood red curtains, pewter towel racks and five-bladed ceiling fan to the prospect who is only interested in the room dimensions is a losing proposition. You run the risk of chasing away a perfectly good buyer before reaching an item of any import to him, and/or missing a chance at the other prospect wandering down the opposite hallway unescorted while you yammer on about the Pella windows on a home that is $200,000 out of mark number one’s price range.
Enthusiasm and pride of ownership is commendable, but leave some mystery for the second showing. Gotta make sure the hook is firmly set before we can encapsulate your buyer in a bubble of home buying fun.
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 | Oct 9, 2010 | Home Selling, Scottsdale Real Estate
With the latest scuttlebutt in the housing industry centering around a rising political push for a large scale foreclosure moratorium by leading lending institutions, most are aware that Bank of America became the first to issue a temporary nationwide pause in foreclosures this past week. Though B of A is the first to stay their executions across all fifty states, JP Morgan Chase and GMAC agreed to halt foreclosures in the 23 states where foreclosure is a judicial process. The pressure to do so originated over procedural impropriety in several specific locales, and has snowballed into wholesale questioning of the internal processes of the major banks. Mounting concern over erroneous foreclosures spawned the voluntary cessation (expected to last several weeks). While Wells Fargo has spurned calls to do the same, it would not be surprising to see more institutions yield to the rising pressure and follow suit.
What does this mean? Plenty has already been written about this with homeowners facing foreclosure and prospective buyers in mind, so I won’t belabor those perspectives here. Suffice it to say that while any additional quality control that can prevent people from wrongly losing their homes to foreclosure would be a good thing, the upshot in terms of market reaction is likely to be a collective shrug of the shoulders. Not content to simply halt the actual act of foreclosure, B of A is temporarily taking their inventory off the market while the review is ongoing. It’s been posited that fewer listings will translate to a possible surge in prices, but this is pure mularky. The market simply does not react in a matter of a few weeks to any stimulus, as it takes time for consumers to make heads or tails out of new developments and how they translate to negotiable strength. On the contrary, I think this will make buyers who are already non-harried take even more of a wait and see approach. Rather than buying what is left, those who are not under a time crunch to get into a new house will probably just wait for the moratorium to end and for the withheld inventory to flood the market. In essence, we could be looking at an unintentional buying moratorium as well.
Though it would be foolish to anticipate a surge in values, the one segment of the consumptive spectrum that stands to gain from this turn of events is the non-distressed homeowner. With a small window opening for mom & pop home sellers to compete with significantly fewer bank homes for buyers, I would not be shocked at all to see a percentage gain of resale home sales while overall sales volume remains flat, or even declines slightly, in the coming weeks. I expect many buyers will choose to wait it out, but there are those who do not have the luxury of time. Be it a job relocation, family circumstances, etc, there are always buyers who need to buy now. With fewer distressed properties on the market, and likely buyer uncertainty over how this will translate to the short sale arena (will B of A process short sales while foreclosures are in limbo, or pause all such decisions? Will short sale sellers temporarily remove their homes from the market in anticipation of a reprieve?), this could be the traditional seller’s best opportunity to vie for buyers in quite some time.
Again, don’t misconstrue the knee-jerk hypothesis. The value of your home is not going to spike due to this temporary phenomenon, nor are you suddenly in the catbird’s seat. For those in an equitable position to sell, this window merely represents the best possibility to attract a buyer in months.
No screwing around – price your home right and get it sold while there are fewer alternatives for buyers. As a regular seller, with the tax credit gone as a buyer incentive and microscopically low interest rates and low prices not translating to appreciable gains in sales/values, you have to leverage every conceivable strength in this market to accomplish your goals.
Ready to sell your Scottsdale home? Contact us today to schedule a no-obligation consultation, but do it fast. When the moratorium ends and the holidays are fast approaching, it will be time to hunker down for another long, cold winter.
