by Paul Slaybaugh | Sep 11, 2010 | Home Buying
Interested in foreclosure homes? You’ve come to the right place. The Scottsdale Foreclosure Hotsheet brings you the latest bank owned property listings to hit the market. Follow the link below for daily updates of the latest Scottsdale bank owned foreclosure home listings.
New Scottsdale Foreclosure Real Estate Listings
While there are deals to be had in the foreclosure arena, buying a Scottsdale bank owned home can be a tricky business. With scores of investors lined up to bid against you for the best bargains, an absence of property disclosures, “As Is” purchase requirements and the financing challenges inherent in the current economy, locating a suitable candidate is less than half the battle.
Don’t go it alone.
Call on Ray & Paul to guide you through the entire process. With nearly 50 years combined years selling Scottsdale Real Estate, let us bring that hard-earned experience to bear for you.
Ray and Paul Slaybaugh
(480) 220-2337
paul@scottsdalepropertyshop.com
by Paul Slaybaugh | Sep 4, 2010 | Home Buying, Scottsdale Real Estate
Is that Scottsdale home really for sale?
It sure looks like it is. There’s a sign in the yard, property information on the internet, an asking price and everything. The comings and goings of Real Estatey type people with wide eyed gawkers in tow confirms that the quaint Spanish hacienda is looking for a new owner.
Or is it?
There is a disturbing new trend in the Scottsdale Real Estate scene: the fictitious listing.
By now, anyone who is not somewhat up to speed on the short sale market should be stoned to death with the rock under which he has been sleeping. Get used to them, people, as they are not going anywhere anytime soon. Though we all know the uncertainties and complexities involved in a short sale transaction mean that the listed price is not necessarily the real price, we generally take for granted that a seller is actually interested in selling.
Given the rise in anecdotal reports of would be sellers who haven’t made payments in two years while attempting to consummate short sales, you can imagine what the more entrepreneurial freeloaders in our midst have concluded: going through the motions of a short sale for the sake of appearance can keep the bank off one’s back while he lives rent free for as long as the ruse will allow.
Financial institutions are not so naive to believe such subterfuge never happens, so it typically takes a viable offer on a property to postpone a trustee’s sale (Arizona’s version of a foreclosure). That’s where you, the buyer, come in. For the “seller” interested in staying in the payment-free property for as long as possible, the facade entails the procurement of an offer for submission to the bank. Whether the seller intends to actually complete the sale or not.
In essence, the prospective buyer could get strung along for months by a seller who is just buying time. Or stealing time, I should say.
Perhaps his credit is already damaged beyond repair. Perhaps he doesn’t want to bring any of the money to the table that the bank demands. Perhaps he does not qualify for the short sale at all (yes, a seller does have to meet certain qualifications to gain bank approval). Perhaps the seller is simply bitter beyond reason and unwilling to let some buyer have his home for pennies on the dollar. Whatever the reason, there are properties on the market that aren’t really available.
How do you identify those shiftless wasters of time before embroiling yourself in a slow, emotional death? There are a few tactics that a competent buyer’s agent will employ when separating fact from fiction on a short sale offering, but none is foolproof. Short of peering into homeowner’s soul, all one can do is take basic precautions to assess the viability of a sale. Unfortunately, the determination of what the owner can do is not necessarily indicative of what he will do.
The guy could be dealing with you in good faith, or he could simply be using your offer to delay his inevitable foreclosure.
My advice? If you are going to go the short sale route, start with properties that have been through the process to the point that they have a bank approved price attached. If the seller is playing games in this instance, at least the process will resolve itself faster and allow you to move on down the road. If you fall in love with a home that has not yet been approved for a short sale by the bank, make sure the appropriate questions are answered and that the listing agent has a competent record of successful short sale transactions. The good ones are adept at separating the viable candidates from the disingenuous types as they have a vested interest in getting the transaction to the closing table as well.
At the end of the day, though, you just never know what is in store from one short sale to the next. With all of the variables to contend with in the best of circumstances, adding the integrity and intention of the seller to the list of concerns is almost comical in a tragically masochistic sense. All the more reason I recommend avoiding the short sale quagmire unless all other avenues have been exhausted.
It’s a beautiful Scottsdale home alright, but is it really for sale?
by Paul Slaybaugh | Aug 13, 2010 | Home Buying, Site Features & Updates
A disconnect that will sometimes occur when a Scottsdale Real Estate consumer lands here on the Scottsdale Property Shop site, not all of the properties you see listed for sale here fly under the banner of Realty Executives. Matter of fact, of the forty some thousand home listings that you can trawl in our home search engine on a given day, only a handful are likely to boast a Ray and Paul Slaybaugh sign in the front yard.
So what gives?
When you land on an individual Realtor’s website, the home search results display the feed from what is referred to as an “IDX” solution. Technical aspects aside, this is essentially a streamlined version of the local MLS for public consumption. Brokers have the option of opting out of the IDX agreement, thus not allowing their listed properties to be displayed on the sites of competitors and aggregators (Zillow, Trulia, Realtor.com, etc). As such posturing would be tantamount to internet marketing suicide for a brokerage on behalf of its seller clients, however, few and far between are the active brokers who do not participate in the open proliferation of their listing feed. There are rules and prohibitions in regards to what information can be displayed, etc, but by and large, this allows the consumer to visit most any Real Estate site with a capable IDX solution to view inventory.
Where misunderstandings can crop up is at the intersection of convenience and marketing. You go to Google. Type in the street address of a property you saw (forgot the name or number on the sign) or some specific criteria such as “3 Bedroom Homes For Sale in McCormick Ranch.” If an agent has a search engine friendly IDX solution (such as yours truly), you land on his/her site. Plastered next to all of the property information you seek is the agent’s smiling mug and contact information.
This is not necessarily, and most likely not, the listing agent.
If you scroll way down to the bottom, you will find the slightest nod to the brokerage that has the home listed for sale, but all of the contact information will be directed to get you to pick up the phone and call the agent that owns the site upon which you just landed.
For some of you, this is neither here nor there. You just want the property information and don’t give a fig who provides it. If the property looks interesting, Bigfoot himself could show it to you for all you care.
Where it can become an issue is when the consumer has specific reason to approach the listing agent directly. There is typically an awkward silence, followed by a mild rebuke at a perceived misrepresentation. To this house hunter, I say you found me just in time. Why? Because if left to your own devices, you would have unwittingly blundered right into the lion’s den with no representation.
Perhaps you think the listing agent will be a more direct conduit to the seller. Perhaps you think the listing agent will have more information to provide regarding the property. Or perhaps you think the listing agent will willingly cede a portion of his commission with no other agent involved in the transaction, ultimately saving you money on the purchase.
Were I better at HTML coding, neon lights would illuminate this next sentence.
THE LISTING AGENT REPRESENTS THE SELLER.
I repeat.
THE LISTING AGENT REPRESENTS THE SELLER.
Whatever seemingly helpful information the agent provides, make no mistake that it is his fiduciary obligation to separate you from as much of your money as possible on the seller’s behalf. And he does this for a living.
When shopping for a new home in Scottsdale, it is not possible to overstate the value of the internet. In addition to the tools and resources that are more available to the consumer than ever before, it could just be the chance encounter with a local agent’s IDX search that proves most fortuitous. Contacting the floating head next to the listing that interests you might be the thing that saves you from overpaying or getting embroiled in transactional hell on your purchase.
No, the listing you are looking at is most likely not mine. For that you can thank your lucky stars. I’m quite adept at squeezing money out of buyers for my sellers. Since the shoe is on the other foot, let’s go get you that house for a price that will make the seller limp for a month.
by Paul Slaybaugh | Jul 13, 2010 | Home Buying, Scottsdale Real Estate
The current Scottsdale Real Estate market does not favor buyers. I repeat, the current Scottsdale Real Estate market does not favor buyers.
Allow me to explain. For months, if not years, you have been told that the glut of housing inventory here in the greater Phoenix area makes for a buyer’s market of epic proportions. Why, the ancient Greeks themselves would write songs about the opportunities that abound for any would-be hero with a hankering for a house. The only problem with this suggestion? It’s just not true.
What is a buyer’s market? Most would define it as a preponderance of available supply and an accompanying dearth of demand. Let’s take a look at both aspects of that equation.
In a perfect financial world, a buyer waits for the market stars to align in just such a manner before swooping in to claim a nest at a fraction of the “normal” cost. It all works great in theory, but real world application necessitates that the prospective buyer be subjected to the same set of variables that has drawn down the pool of demand at large. It’s a buyer’s market when few have the wherewithal to actually buy.
Appraisal difficulties and tightened lending regulations are contributing to a somewhat artificial suppression of demand. The “want” is present in the market. Consumers want to buy houses. They want to take advantage of the greatly reduced pricing and sublimely low interest rates. Homeowners want to refinance their houses so that they can stay in them, thus contributing to the lowering of the overall supply.
Want has nothing to do with it. Without ability, all of the consumer confidence and desire does not translate to actionable demand.
So to clarify the lead-in to this post, the current Scottsdale Real Estate market does not favor ALL prospective buyers, as the “buyer’s market” connotation suggests.
Further, the favorable conditions for those who are in positions to purchase do not necessarily translate to negotiable strength. Well-heeled cash buyers, W2 employees with verifiable income, solid credit history/scores, etc will find that they do not call the shots to the extent that they were led to believe. The bargain bin of bank-owned foreclosures is incredibly crowded. You are elbow to elbow with competing consumers when a new shipment arrives. The mom & pop resellers, by and large, do not have the equitable flexibility to negotiate the 30-50% off of list price that many buyers envision. The short sale properties with the absurdly low price tags are, more often than not, pie-in-the-sky figments of the listing agent’s imagination. You submit an offer 10% off list price to the bank, which in turn proves to be 40% off the BPO (Broker’s Price Opinion) that is performed three months later. The bank tells you they will gladly approve the sale – for 75k more than you offered.
While the inflated inventory levels in the housing sector are cited often enough, it is not widely reported that the number of unencumbered properties available for purchase is far less. In a market that is most assuredly not of the “see house, buy house” variety, the redaction of readily purchasable properties (due to competition in the low end, and lien encumbrances across the full pricing spectrum) tilts the negotiation playing field back towards center. Neither party has a clear cut advantage when facing each other at the negotiating table.
The truth of the matter is that most of the savings that you can expect to uncover have already been factored into the asking price by the time a listing is brought to market. Sure, there will be those that require substantial negotiation, and plenty others still that simply fail to sell. Never underestimate one’s ability to overprice a house. These aren’t the homes you are most likely looking at, though. The ones that buyers are flocking to in droves are those that present the best value opportunities. And why not? Just be prepared for the competition that you did not think existed in this ballyhooed “buyer’s market.”
Trying to cobble “x” percent off the list price in circumstances in which others are offering “x” above the list price will only lead to frustration. Don’t get greedy. Do what it takes to lock up the lowest pricing the Valley has seen for seven to eight years (longer in some areas) while interest rates continue to hover around 5%, and you are well ahead of the game.
And lastly … smile. You are the guy that so many lament not being right now. You know, the hypothetical guy who spurs such proclamations at office parties and cocktail hours all across Scottsdale:
“If I had two nickels to rub together right now, I’d buy every house on my block for less than I paid for this albatross back in ‘05.”
by Paul Slaybaugh | Jun 22, 2010 | Home Buying, Home Selling, Scottsdale Real Estate
So you have 20% to put down for a single family home in Scottsdale AZ. Your FICO scores are higher than Willie Nelson on Bob Marley Day in Montego Bay. You have been gainfully employed in the same W2 position with the same company for years. The American Express card with a $124 balance and the $112 payment on your 2002 Honda Accord make up the sum total of your earthly debt. Congratulations, you are one of the few buyers in today’s market in a position to call your own shots.
Surely the right play is to go the conventional financing route, right?
No private mortgage insurance, the lowest possible rate, less red tape than government sponsored financing vehicles.
From a strictly cost-based approach, all signs point to a nice, vanilla 30 year fixed conventional loan at a microscopic rate as the biggest no-brainer in the history of money.
Of course, as we have learned all too well, there is more to your choice in financing than today’s consideration. In fact, there is more to your choice in financing than even the total cost to you over the life of the loan. While we may not know where the market and its attendant values are heading, one fact is indisputable:
Interest rates will rise.
Maybe not today, maybe not tomorrow, but soon. Inflationary pressure makes it inevitable that rates will take off at some point. All of the warning signs are there. It will happen. Rather than banging the tired gavel of “buy today, rates on the way up,” let’s steer the discussion in a less self-serving direction.
Q: What is today’s buyer?
A: Tomorrow’s seller.
If you are buying a home in 2010, you need to consider the market forces that may shape 2015 or 2020. When we agents prognosticate, we tend to focus exclusively on home values. This is a fool’s errand. What we really should be thinking about is the buyer pool’s (in)ability to buy.
If interest rates manage to climb into the double digits in several years’ time, the difficulty of selling the property you are buying today may be compounded by a further contraction of able buyers. How does one counteract the specter of such a looming boogeyman? By going back to the future for familiar, but forgotten solutions to a similar problem.
What saved home sellers in the era of 18-20% interest in the ‘70s and ‘80s? Owner financing and assumable loans. For the purpose of this post, I wish to focus on the latter.
With the low to zero down conventional financing options in the market for my first decade in the business, it was a rarity to consummate a transaction with anything other than non-assumable financing. Now that FHA loans have forcefully elbowed their way back into the marketplace, however, assumable financing has returned. Most borrowers are not considering this aspect of the financing in the least, mind you. They simply jump on whatever they can qualify for that provides the least cost and lowest rates. I maintain that the assumable nature of a loan will be incredibly important moving forward.
While a new buyer would have to qualify for the loan to assume it, imagine how much wider your future buyer pool will be with such an option in place. Your 30 year fixed at 4.75% may not look quite as good to you if you find yourself in a position in which you have to sell your home in the midst of 12% interest rates. Not to sound the bell of an alarmist, but it’s not difficult to foresee a future in which many buyers who have migrated to the security of 30 year fixed conventional mortgages in the wake of the mess spawned by more creative financing find themselves imprisoned within those non-assumable safety nets.
Moving forward, your mortgage might not just be your mortgage. It could potentially be your future buyer’s. As such, when shopping for financing, there is more to consider than just the nuts and bolts of your own cost. Your mortgage could eventually prove either an enticement or a hurdle to a sale.
Heady stuff.
I will close with that which should have served as a preface: I am not a mortgage professional. DO NOT rely on my speculation in any manner when making a choice in financing. The nuances and new rules/regulations in the financial world are changing so fast that even those who wade in those murky waters on a daily basis are having a hard time keeping their raft of sanity afloat. For some, the internal debate is academic anyway, as there are qualification constraints on all financing types. Only your lender, with a full view of your financial picture can provide competent advice as to which programs you may ultimately qualify for, and which is the best fit for you. I do, however, want you to add this question to the typical inquiries about rates, fees, penalties, etc when speaking with your chosen loan officer:
“Is this loan assumable?”
I expect it will matter more than the attention it is currently being afforded in most Real Estate circles.
by Paul Slaybaugh | Jun 18, 2010 | Home Buying, Scottsdale Real Estate
“What’s the deal with this house? Why so cheap?”
I field some derivation of this inquiry on a fairly routine basis from buyer clients. Typically, they have stumbled across a property listing online, or possibly in the ARMLS portal I have set up for them (provides for user log in and review of all homes currently for sale that fit their specific criteria, rating of the available homes, notes, price adjustment tracking, etc), that appears to be just the anomaly for which they have been hunting. That one desperate seller who has become so fed up with the Real Estate market that he is willing to hand over the keys to his castle for little more than a kind word and enough pocket change to cover the U-Haul.
“Paul, we HAVE to go see this house! It’s 2500 square feet, right in the McCormick Ranch area where we’ve been looking, and get this, only $299,000!”
“Wow,” I respond, though not I’m not really thinking, “wow.”
Truth of the matter is that my cynical little REALTOR mind is already trying to unravel the scam. You see, that property simply does not exist. Not now, nor even in the foreclosure jungle that was the tail end of the prior decade for that matter. Unless it is a typo, an opening bid at an auction, a money pit of epic proportions that would make Tom Hanks blanch, or …
“The name of the subdivision wouldn’t happen to be Briarwood, would it?”
“Yeah! How did you know? Whatever, it doesn’t matter. Can we go see this right now before somebody else snaps it up? I can stop by the house to grab the checkbook.”
Next comes the part where I break the bargain hunter’s heart. Built in the shadows of Gainey Ranch, McCormick Ranch, Palo Viento and Paradise Valley Farms, Briarwood is a picturesque little enclave of tile roof homes. Designed and built by local favorite Malouf, the architecture, front elevations, green lawns and killer location make for an outward appearance of grand larceny at the indescribably low prices they command.
So what’s the deal? Poor construction quality? Lawsuits? Was the community built upon ancient burial ground?
None of the above. Briarwood is nothing shy of Pleasantville on the Scottsdale map. The only element lying beneath the surface of this otherwise pleasing neighborhood that some buyers will find sinister is the unanticipated leasehold ownership. Essentially, Briarwood (there are actually several phases scattered throughout Scottsdale) and the neighboring Santo Tomas subdivisions are single-family residences with legal ownership rights that more closely resemble condominiums. It is a rare bird in these parts. While relatively common in some states where land is limited and owners are reluctant to part with it (Hawaii, for example), land lease subdivisions are uncommon to the greater Phoenix area.
With many land lease subdivisions controlled by local Real Estate magnate, the Herberger family, or smaller trusts, homeowners own the private residence and pay monthly rent for the dirt upon which they stand. The lease terms vary slightly from phase to phase. In Briarwood VI (the phase nearest McCormick Ranch in the 85258 zip code), the monthly land lease fee is 1/10th of 1% of the sales price. So that 400k house comes with a $400/month fee. The dues can run higher in other phases. This in addition to the monthly HOA fees.
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Homes For Sale in Briarwood of Scottsdale
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One thing that may be disconcerting to a potential home buyer is the uncertainty regarding someone else owning the land under his/her home. It can be a very large mental hurdle to overcome, as the premise runs somewhat contrary to what most find attractive in single-family fee-simple home ownership. Some trepidation is to be expected, even if not entirely rational, as to whether the lease will be extended at the time of expiration, or if terms will become untenable upon renegotiation. The fact that most have decades before such concerns come into play should not be discounted, but buyers don’t need much to fret about when making a decision so critical as the choice of housing.
When looking at properties that sit upon leased land, a buyer will have to weigh the potential cost savings of the home against the additional fees to see if it actually pencils as a bargain. Financial determinations aside, you have to ask yourself if you are truly okay with your lot having a landlord. This is a personal decision that supercedes the advice of your agent. If you are not comfortable with the setup, the financial consideration is moot. Lastly, financing options will be somewhat limited on leasehold properties. As challenging as the mortgage steeplechase has become, expect a few more tar pits and flaming hoops when shopping non-traditional ownership styles.
A property in a leased land subdivision might very well be a good fit for your particular needs, but I find most people only become hip to the presence of the land lease AFTER they have found the home of their dreams. The unwelcome news often pushes the property out of their price range, breaking hearts in the process.
So if you see something online that looks too good to be true, it very likely is. That doesn’t make a property with a land lease evil incarnate. It just means that more dollars are being extracted from your wallet than originally meets the eye.
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Curious if the home you saw online is in a leased land subdivision? Drop me a line. I’d be happy to let you know, whether you are working with me or not.
(480) 220-2337 | paul@scottsdalepropertyshop.com
