One of the more confounding logistical quandaries that can arise in Real Estate is the classic chicken or the egg paradigm: Does one sell a house before knowing where he is moving, or does one buy a new house without having his current one sold?

No doubt, the dilemma of which cap to doff first has vexed many a consumer. Selecting the correct course of action is dependent, like most things, on a variety of factors. For the sake of clarity, we will keep things simple.

If you have a boatload of equity in your current home, have flexibility with the ultimate selling price and have the financial wherewithal (cash in hand or the ability to obtain a new loan that is not conditional upon the sale of your home) to purchase a new home prior to selling your existing one, then you are the rare individual in the enviable position to call your shot. To eliminate the prospects of a double move and the fear of obligating yourself to the sale of your home without clear knowledge of where you are heading, you will likely opt to buy first. Especially if you are not convinced that the home of your dreams is lurking in the market at present, it makes sense to locate the next property before committing yourself to the rest of the process.

As most buyers are reliant upon the proceeds from their current house to purchase a new home, however, the above scenario is a pipe dream for the less well-heeled. Most will face the stark reality that they are simply hamstrung on a purchase until they sell their existing house.

So how does one combat the fear of committing to destinations unknown when putting a home on the market?

The ideal method is to negotiate a purchase that is conditioned upon the ultimate sale of your home, but few and far between are the sellers who will entertain straight contingent offers of that ilk. The preponderance of bank owned properties and short sales in the present market makes the task even more arduous as contingent offers are simply not entertained by the banks. Only the most patient seller will take a flyer on an offer from someone who has to sell a property to make the deal work. And if you happen to find such a rare bird, you’ll likely have to overpay for the home due to the weakness of your position.

When purchasing first or conditionally is not an option, the best compromise is to make your offers after you have accepted a contract on the home you are selling, but before it has closed escrow. With a buyer in hand, it is considerably easier to approach another seller with an offer. More attractive than a straight contingency in which you still have to line up a willing buyer, you can structure your offer to be subject to the successful close of escrow of the contract currently in place. This is not only more appealing to the seller, but if you have negotiated a longer close of escrow on the home you are selling, you can build in a little time to locate a property and negotiate a contract, thus avoiding a dreaded double move. Timing the closings can be tricky, but if done correctly, you can move directly from one home to the other without having to put your gear in storage while you, the kids, your dog Sadie, and the goldfish check into the Holiday Inn for a few weeks.

Naturally, to make this scenario work perfectly, you have to do your homework in advance. Even prior to listing your home for sale, start looking online at the available inventory. Get in the car with your agent to look at homes that fit your parameters. Get preapproved with your lender so that you are ready to pounce at a moment’s notice, as the right home for you is often right for someone else, too. Wasting time getting your preapproval in place after you find the property opens the door to not only unrealistic window shopping, but losing an ideal candidate to a buyer who is one step ahead. Do your due diligence up front and you’ll be ready to enter the scrum as soon as your home attracts a buyer.

To be sure, coordinating the near simultaneous buying and selling of homes is a stressful undertaking. You will experience Exorcist moments in which your head spins around a full 360 degrees. Understanding the process and the steps you can take to increase your chances of success will limit the projectile vomiting, however.

So which comes first, the chicken or the egg?

It varies from coup to coup, but in the end, it’s all protein.

“Three fifty? Are you out of your freaking skull,” the rotund, little man bellowed beneath a reddening bald pate.

“You disagree with my analysis,” Maxwell Listers surmised. He was not unaccustomed to the question, though twenty six years of patient rebuttal had him rethinking the answer some days.

“You call that an analysis,” Ollie Meanders dismissed. “Even my senile mother in law could tell you this house is worth five hundred grand, and she thinks you can still buy a ticket to a picture show for a nickel.”

“I see,” Max replied, organizing the stack of comparable sales he had spent the past half hour explaining in excruciating detail. “Your mother in law would no doubt be swayed by the thirty two hundred square feet you claim to possess.”

“Damn straight,” Ollie confirmed, puffing his hirsute chest beneath an overmatched, crumpled white undershirt.

“Why, that three thousand square foot house one block over just sold for four eighty after all, and it didn’t even have a fireplace, did it,” Max agreed, leafing through his stack to the appropriate property listing.

Ollie stared at the agent with suspicion roiling in his beady eyes. He knew he was being taken for a ride, he just didn’t know where.

“Of course,” Max continued, “that was all original square footage …”

“So,” Ollie challenged.

“So original square footage is more valuable than added square footage,” Max concluded on cue, his silver hair lending more credence to the proclamation than the dirty blonde it had crowded out a decade earlier.

“What the hell is the difference,” Ollie pressed. “Thirty two hundred feet is thirty two hundred feet!”

The cords in Ollie’s sausage forearms rearranged themselves into angry knots beneath his taut, freckled skin.

“Think so,” Max asked, his arched eyebrows issuing a direct challenge.

“Well, sure,” Ollie sputtered. “Who cares … I mean, what does it, uh, matter if it, um …”

“Remind me, how many bedrooms do you have, Ollie?”

“Four,” the homeowner boasted, jutting his chin at the listing in Max’s hand. “Same as that one!”

“And did I miss the formal dining room somewhere when you were showing me around?”

“No,” Ollie said with slightly less confidence. “That’s where I added the fourth bedroom.”

“And how many baths?”

“Well … still just the one and a half,” Ollie admitted.

“How about parking,” Max asked.

“I, um, enclosed the garage to make the game room.”

“And this kitchen,” Max continued, looking about the small galley.

“Installed the granite counter tops myself,” Ollie crowed.

“And they are stunning,” Max allowed. “But does this room strike you as the hub of a thirty two hundred square foot home, or would you agree that it more closely embodies your home’s former life as a seventeen hundred square footer?”

“It might be a bit on the small side,” Ollie acknowledged. “But I converted the laundry room to a pantry for extra storage.”

Max scribbled something on a manilla folder marked “Meanders, Ollie.”

“These low ceilings ….”

“No, I don’t have the big, fancy vaults that some of my neighbors do,” Ollie ceded. “But do you have any idea how much it costs to cool that extra space?”

“And the back patio … wait. Where is the back patio,” Max asked, craning his sinewy neck to look past the homeowner.

“I enclosed that, too,” Ollie replied, slowly being sapped of his pugnacity.

“Ah yes, I see,” Max nodded. “That would explain the step-down and the funky slope to the roof line. A shame how it darkens the family room and eats up the backyard.”

“Should I put in some skylights?”

Max shook his head.

“You’d just be throwing good money after bad,” Max advised the crestfallen homeowner. “I’m afraid you have a Frankenstein house, Ollie.”

“Frankenstein house?”

“A Frankenstein house,” Max confirmed. “You took a perfectly good little home and created a monster – a big, sprawling octopus of a property, one incongruous addition at a time.”

“But the bigger, the better, right?”

“No, Ollie. Not necessarily,” Max corrected. “Your house doesn’t fit the needs or expectations of a larger family despite the raw square footage, nor does the new layout fit the single or couple to whom it would have originally appealed. You are stuck between buyer demographics. Homeseller Purgatory, if you will.”

Ollie buried his head in his hands.

“You just can’t juice a little house into something it isn’t,” Max added for good measure.

“All that work,” Ollie moaned. “All those trips to Lowes.”

“Wish you’d called me in sooner,” Max lamented. “Would have aborted Rosemary’s Baby here before it was ever conceived.”

“Hey!”

“My apologies,” Max offered.

“Well,” Ollie breathed with a heavy sigh. “I need to move, but I’ve put way too much into it to sell it for three fifty. What do I do?”

Max took a moment to ponder their options.

“How’s your insurance,” he wondered.

“Insurance,” Ollie parroted with evident confusion. “Full replacement cost, why?”

“Fire bad,” Max suggested with a conspiratory wink.

The agent stood and lumbered out of the cramped kitchen with arms extended out in front of him like the monster fleeing an angry mob of torch-bearing villagers.

Selling a tenant occupied home … how do I put this delicately … kind of sucks. That’s right, selling a home with a tenant sucks.

Why, you ask?

Because there is little to no motivation on the part of the occupant to participate in the process. Think about it. With zero financial stake in the sale of a property, why would anyone care to have their daily lives disturbed by pushy Real Estate agents and their snooping clients? As such, tenants tend to make home showings more difficult than owner occupants.

You want to show the home in an hour? No, today is impossible.

Tomorrow? No, tomorrow doesn’t look real good either.

Given that a landlord or an agent of the landlord cannot legally enter the premises in cases of non-emergency without permission or 48 hours written notice (under the AZ Landlord-Tenant Act), it is not uncommon to come across such tenant-occupied listings that require 2 days minimum notice prior to showings. These constraints cost owners more than a few showings, particularly those of the spur of the moment, I’m in town to buy a house today variety.

In a market choked with inventory, especially in the lower price points where rental properties typically live, few will bother looking at the homes that are difficult to view. There are simply too many readily accessible options to make special plans to see one nondescript investment property.

So how does the owner of such a home counter the tenant malaise that is killing his/her ability to sell prior to the expiration of the lease (inviting the holding costs and desperate pricing decisions that can accompany a vacancy)? By incentivizing the tenant to participate in the process.

It frankly amazes me that tenant-occupied properties are often so difficult to show when the remedy is so readily apparent: money.

Offer your tenant a discounted rate on the rent or nominal alternative compensation ($500 is a lot of money for the average tenant) if the home sells while they occupy it. By doing so, you will not only encourage your tenant to eagerly agree to the showings that were formerly abhorred, but will provide the requisite motivation for showing the home in its best condition as well. Get the tenant on your side by offering a stake in the outcome and watch the beds make themselves, the dirty socks disappear from the living room floor, the food-caked plates on the kitchen counter find their way into the dishwasher.

When you empower the powerless, everyone benefits. From the only perspective that matters in a Real Estate transaction – yours – that means minimized holding costs and maximized sales price. Cool beans.

Selling a home is not rocket science, just an exercise in the practical study and application of human motivation. For your own sake, you have to step outside of your head every once in a while to learn how to help others help you.

This is your Jerry Maguire moment. Don’t blow it.

The Steadfasts barged through the garage door as the familial octopus they’d become, arms and legs of varying sizes jostling to cross the threshold first.

“Gently, Blaine! Put it down gently,” Alexis bellowed after the seven year old victor who approached the kitchen counter at breakneck speed.

“Mom, Blaine pushed me,” five year old Daniella squealed, already back in hot pursuit of her brother.

The second bag landed with a satisfying crash mere seconds after the first. Alexis had long suspected that Jason insisted on paper for that very reason. She didn’t buy the environmental angle, not when the trip to and from the store was made in an Escalade.

“I won! I won,” the elder child trumpeted.

“Cheater,” his sister shrieked.

“What did I say about slamming groceries,” Alexis admonished. “And, Blaine, don’t push your sister.”

Jason propped the door open for her with his backside as he held two bags of his own.

She scooched past him with the sleeping Anne Marie in her arms.  Already stocked up on groceries for the week, the colicky six month old was the ostensible reason for the redundant trip. It was the rhythm of the road they’d been after.

Tip-toeing past the carnage in the kitchen, careful to give wide berth to the flyers that were strewn all over the floor, Alexis disappeared into the deeper regions of the house.

“How many times do I have to tell you to leave the flyer stand on the coffee table,” Jason moaned, the door slamming shut behind him.

“Not that anyone’s taking them anyway,” he mumbled as he deposited his bags on the counter and began retrieving the forty nine scattered reams of high gloss photo paper. There had been fifty originally, but he’d taken one in to the office to hang on the bulletin board exactly twelve months ago to the day.

“Hey, hon,” he said as he finished up and followed her into the family room clutching one of the flyers. “I was thinking, maybe we could hold some kind of auction or something to increase the demand. Maybe raffle off tickets or …”

The thought died as he turned the corner to find a group of people seated around the sunken conversation pit at the base of the fireplace, staring at him with a tense mixture of anticipation and dread.

“Mom? Carl? What’s going on here,” he demanded.

“Hello, Jason. Please come have a seat. There’s something we’d like to discuss with you,” a stranger sitting slightly apart from the rest of the group invited, his incessant blinking exacerbated by an ill-fitting pair of bifocals. His bald head looked hot in the glow of the 1980′s vintage canned halogen lights.

“Not that I don’t appreciate the invitation to sit down in my own house, but I think I’d rather stand, thank you. What’s this all about, Gerry,” he asked, turning towards the well-groomed man in the grey slacks and pullover sitting closest to the de facto master of ceremonies.

“Just hear the man out, Jason,” Gerry answered.

“Hear him out about what? What is this?”

“This is just a group of your friends and family that cares about you, Jason. Very much,” the stranger responded.

“Oh my God. I’ve seen this on TV. This is an intervention, right,” he asked, panning each face as if he were polling the jury after a guilty verdict.

“If you want to stand on formalities, yes, this is an intervention. Really, though, it’s just a chance for those who care about you most to share their concerns and offer their support,” the stranger replied.

“You’ve gotta be kidding me. Is it about the coffee? I mean, I know I probably drink more than the next guy, but-”

“It’s not about the coffee, Jason,” his wife said from off to his left. He hadn’t seen her reenter the room.

“You’re in on this,” he asked in horror.

“I invited them, Jason.”

He stared at his wife with mouth agape, trying to wrap his mind around the scope of the betrayal.

“Judas,” he hissed.

“Your wife asked us here today because she loves you, Jason. No one is here to attack you. We are here to help. Now, are you willing to listen to what your friends have to say,” the stranger asked, his fleshy Adam’s apple bobbing beneath his double chin with each syllable.

“Not until someone tells me what this is all about,” he answered. “And where are the kids?”

“The kids are in good hands, Jason,” the stranger assured him.

The room fell into a pronounced moment of uncomfortable silence. The assembled guests looked back and forth at each other, willing one another to break the seal.

“It’s your price, Jason,” Gerry finally informed him to the room’s relief. “We are concerned about your list price.” He started to run a soft hand through his slick-backed, black hair before thinking better of it and smoothing the disturbed follicles back into place.

“What about my list price,” Jason challenged his Realtor, crossing his arms in defiance.

“It’s, um, well it’s … it’s high, Jason. It’s just too damn high,” Gerry spilled, punctuating his words with a year’s worth of frustration.

“Too high, huh? Like the Crawford’s place down the street was too high,” Jason countered.

“We’ve discussed this, Jason,” Gerry reminded him. “That comp is three years old.”

“I know what this house is worth. We just need the right buyer,” Jason said.

“No, Jason,” Gerry retorted. “You know what this house WAS worth. Lotta market fallout under the bridge since oh seven.  Besides, that home was fully remodeled from the ground up. Yours … could stand a little work.” His eyes darted to the imitation crystal behemoth masquerading as a chandelier in the adjoining dining room.

“That’s not what you said when you took the listing, Gerry,” Jason accused. “I seem to remember you going on and on about our indoor-outdoor carpeting when you were trying to get my signature.”

Gerry hung his head in shame. The reflection in his brilliantly polished black shoes captured an enabler’s remorse.

“He’s a Realtor, Jay. What’d you expect,” the man sitting to Gerry’s right asked. “Look, there’s no excuse for him shining you on in the beginning like that, but he wanted the business. He’s trying to atone for it now.”

“I’d expect this from him,” Jason replied, jerking a thumb towards his despondent agent, “but not you, Carl. I mean, my own flesh and blood …”

“Come off it, Jay. I’ve been telling you all along that your price is stupid, but would you listen to your big brother? Nooooooooo.”

“What do you know about housing values, Carl? You’re in pharmaceutical sales, for crissakes!”

“Doesn’t take an economist to know your house isn’t worth a hundred grand more than you paid for it back in the boom years. Gerry showed me the last round of comps. It’s ugly, Jay.”

“You can’t stand to see your kid brother do better than you, can you, Gerry? It’s just like that time with the bike. I get a new ten-speed when you were still tooling around on a hand-me-down Schwinn, and you manage to accidentally crash it into the Flanders’ queen palm. How convenient.”

“Jesus, not the bike again. It was an accident!”

“Sure it was, Gerry,” Jason snipped. “Sure it was.”

His big brother shook his considerable head and looked to the couple on his immediate right to pick up the baton.

“Bruce? Maggie? What are you doing here,” Jason wondered, taking in their presence for the first time.

“The Maguires are here as concerned neighbors, Jason,” the ringleader interjected, his glowing dome now verging on spontaneous combustion.

The elderly couple eyed each other in evident discomfort, hoping the other would take the lead. Finally, Maggie spoke.

“It’s just that Bruce is getting ready to retire, Jason,” she began. “Now that the kids are gone, we’re thinking about putting the house up for sale in the spring. It’s more than we need, and we’d really like to do some traveling.”

Gerry perked up at that, reaching into his wallet for a business card.

“That’s great, but what does it have to do with me,” Jason asked.

“We’re worried about the effect your home is having on values,” Bruce answered. “You’ve been on the market so long that people are going to start wondering if there’s something wrong with the neighborhood.”

“That’s absurd,” Jason boomed. “You’re coming down on ME when everyone else on the block is just giving their homes away? You should be thanking me! The Smiths or the Gundersons are who you ought’a be talking to right now, not me.”

“I’ll admit that I was happy to see you give it a shot when you first went on the market,” the old-timer said, scratching a suspicious looking cluster of basal cells on the tip of his leathery nose. “Hadn’t seen a price like that in ages. I thought you were nuts, but figured you’d drop the price until you eventually found the market.”

“The market is where we’re priced, Bruce. These buyers and their agents are just too stupid to realize it. If they expect us to give them our house for what the short sale and foreclosure trash is going for, they’ve got another thing coming,” Jason argued.

“For a smart guy, you sure are dumb. The market is what a buyer is willing to pay you, son,” Bruce sighed. “Look, if you won’t do it for yourself, do it for us. We still have a little equity in our place, and we need every penny we can get out of it. Figure at least thirty percent for the down payment on the condo in Sun Lakes, another fifteen thousand or so for the medical bills that Medicare won’t cover and a few other expenses, and there isn’t much left. Every day you sit on the market at that ridiculous price, our golden years get a little less golden.”

Maggie removed a tube of ointment from her denim purse and passed it to her husband. Bruce smiled his thanks and applied a substantial dollop to his angry nose. The musty aroma of wet putty filled the room.

“Not to be rude, Bruce, but how is any of that my problem? I’m holding the line here so that all of us get the prices we deserve. I’m doing you a favor.”

Maggie patted her husband’s knee as Bruce shook his head.

“It’ll be alright, sweetheart. We’ll just have to wait another couple of years. I’ll ask Agnes about picking up that night shift at the diner.”

“And what about you, Mom,” Jason asked the diminutive figure to Maggie’s right. “You can’t be in on this. You just can’t.”

A single tear started the slow journey from her false eyelash to the point of her skeletal chin, leaving a contrail of mascara in its wake.

“Oh my, sweet, sweet boy,” she blubbered before breaking down into soul-rattling sobs. “How could I have let this happen to you?”

“Don’t cry, Mom,” he pleaded. “Please don’t cry.” His lower lip started quivering as Alexis walked over and put a reaffirming hand on his shoulder. He collapsed into her waiting arms.

“Let it out,” she cooed in his ear. “Let it all out.”

Jason did exactly that. He cried openly for the first time in his adult life, purging his body of the shame and frustration that gushed forth with his tears.

“I’m sorry,” he wailed. “I’m so, so sorry.”

Hands engulfed him as Jason suddenly found himself at the epicenter of a group hug.

“It’s okay,” one voice said. “We’re sorry, too,” said another.

“So what now,” Jason asked of no one in particular when the cluster loosened, all still dabbing at moist eyes.

“Allow me to introduce myself. My name is Stephan Crawford, of Crawford and Associates Appraisals,” the previously unidentified master of ceremonies revealed. “We have our top residential appraiser scheduled for ten AM tomorrow. It’s all arranged and paid for. All you have to do is be here to let him in.”

Jason blew out the breath he wasn’t aware he’d been holding.

“You mean tomorrow? But I’ve got an appointment in the morning, and-”

“It’s taken care of, Jason. We’ve cleared it with your boss,” Stephan assured him. “Isn’t that right, Henry?”

A dour looking man entered the room from the kids’ wing with Blaine and Daniella in tow. His black on black attire was at odds with the Little Mermaid tiara that sat atop his mussed silver hair. He had the desperate look of an aristocrat who had just spent the weekend in county lockup.

“Mr. Samuels,” Jason gaped.

“Hello, Jason,” the new arrival began. “You are not welcome at the firm until this situation has been … resolved.”  He chewed on the last word as he removed the undignified adornment from his angular head.

“But, sir,” Jason protested. “The Mayfair file-”

“Will be waiting for you when you get back,” his cadaverous boss interrupted. “You’re not doing anybody any good right now. Craig Tallman will handle all of your files until you get your head screwed on right.”

“Tallman,” Jason snorted. “He couldn’t hang a jury with twelve feet of rope and a stepladder.”

“And neither can you in your present state,” the senior partner countered. “The billing errors, the first year lapses in judgment … need I mention the fiasco with the character witness in the McElroy case? Put your house in order so we can get you back to your winning ways. That’s an order.”

Jason nodded his resigned acceptance.

“Besides,” the humorless lawyer continued. “We took a vote at the latest meeting of partners that you managed to miss. One more mention of your house or your lousy agent-”

“Hey,” Gerry objected.

“-and we strap you to the one-way gurney ourselves,” Mr. Samuels concluded behind arched eyebrows. “Understood?”

“Understood, sir,” Jason confirmed. “I know how difficult this has been on all of you. I know I have a problem, and I’m ready to get help.”

“Anything you need, Jason,” Stephan offered on behalf of the group. “We’re here for you.”

“I know that, and I can’t tell you how much it means to me,” he acknowledged, taking a step towards the kitchen. “I don’t know about you guys, but I’m parched. Can I get anyone a drink?”

Several requests for water followed him into the kitchen.

“Well, that went about as well as it could have,” Alexis suggested, hugging her children to her hips.

Stephan glanced at his watch.

“Five, four, three, two ..”

Heads turned sharply at the sound of a slamming door. Moments later, a massive engine springing to life preceded the squeal of tires as a vehicle careened down the driveway.

“Jason,” Alexis screamed, running after him.

“Let him go,” Stephan advised.

“What do you mean, let him go,” she demanded, stopping to stare at the weary appraiser.

“He’ll come back when he’s ready.”

“But he’s sick,” she protested. “He could hurt our equity!”

“Yes, he could,” the appraiser admitted. “But he has to make the choice voluntarily. All the comparable market analyses in the world won’t do a bit of good if he is not open to the possibility of change. Sometimes an FVA has to hit rock bottom before finding the strength to accept treatment.”

“FVA,” she asked.

“Former Value Addict.”

“And if he never comes around,” she posited.

“They always come around,” Stefan assured her.

“But if he doesn’t?”

“Then we move to phase two,” Stephan informed her.

“What’s phase two?”

“You don’t want to know,” he answered.

The appraiser removed a cell phone from the holster on his belt and made a call.

“Hi, Gloria, it’s Stephan,” he announced to the person on the other end. “I’m at the Steadfast residence.”

He took a deep breath and scanned the eager faces staring back at him before continuing.

“We’ve got a runner.”

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.

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.

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.

Certainly, we are all aware that Real Estate fees are negotiable and that there is no set standard for the services of a REALTOR. Mind you, that does not mean agents are under any obligation to deviate from their stated rates, but it does mean that what Agent X quotes for his services is not to be mistaken for what Agents Y and Z might charge for theirs. That piece of legal housekeeping out of the way, there are means at your disposal for securing the best possible value on professional service from your agent. Follow this simple list of Do’s & Don’ts, compiled over the course of eleven years in the business, and you will give yourself the best chance at securing the lowest commission rate to go along with the level of service you demand.

Do:

• Refer me business. This one goes at the top of the list for a reason. In a commission based existence, new sources of business are my lifeblood. While it seems patently obvious, many simply don’t think about sending potential clients to their agent unless prompted. The primary reason that the fees in a Real Estate transaction tend to be high is the risk to the professionals involved. Mitigate some of the risk in an “eat what you kill” profession by helping me find my next paycheck, and I am more likely to reward the added security with a concession of my own.
• Provide me with repeat business. Unlike the wireless companies who are always offering deep discounts to new customers, I am far more likely to offer a lower rate to an existing client than the man off the street. As multiple transactions from a loyal client over the years will eliminate much of the reliance on cold business lead generation, we agents consider the client for life the holy grail of financial security.
• Be pleasant to work with. Touchy-feely as it sounds, no one likes working for a Napoleonic boss. I deal with all types in this business, but I’m more apt to offer a better rate to those I’m eager to assist than the rabid seller in the Hannibal Lecter mask.
• Do your homework. While I will inevitably have to help you unlearn a few things that you’ve gleaned from your internet sleuthing (amateur home evaluation via online calculator, anyone?), an educated client saves me time. That is additional time I can direct to procuring new business or coddling less prepared clients.
• Provide me with an excellent product to sell at my recommended list price. Some listings are simply creampuffs. Beautifully appointed and priced right, I know without a doubt that it is going to sell within 30 days on the market. While I will earn my keep in establishing value and marketing to fetch a top of market sales price, such creampuffs are the closest thing to money in the bank that this profession offers. I’m not adverse to reducing my normal fee if it means planting a sign in the yard of a home that will sell quickly and generate a ton of buyer calls (new potential business).
• Purchase with an eye towards future resale. This is an offshoot of the previous item. When looking for a new home, many buyers focus exclusively on their needs and budget. This is a mistake. Future value potential and desirability of the property across a broad spectrum of buyers is critical to not only your return on investment, but to its appeal to Real Estate agents as a listing sometime down the line.  I won’t turn cartwheels when you call me to list a home for sale with a funky, unpermitted addition. A tough property to sell means no discounted rate.

See the pattern here? The idea is to give a little to get a little. Take away some of the financial risk associated with the job, and I can work with you on the reward. On the flip side, there are surefire ways to relegate yourself to the going rate. Avoid the following list of don’ts unless you enjoy talking yourself out of a deal.

Don’t:

• Ask me what I charge in advance of an initial consultation. It is human nature to want to cut to the chase, but lacking context, I have no idea whether your home is a creampuff or a dud. Further, demanding to know what I charge without giving me the opportunity to outline what services I provide for that fee raises a red flag. It sets an adversarial tone and tells me that you are likely going to be a grinder. Until you give me the opportunity to see the property, and/or you present me with a special circumstance that might make me amenable to a discounted offering, you are going to get quoted the standard fare. If anything, I might even quote a slightly higher fee than typical as I have no idea what I’m walking into.
• Haggle with me. There is certainly no harm in asking me about my fees (how could you agree to do business with me without knowing the costs, after all?), or asking if I would be willing to reduce them. Instead of trying to junkyard dog me into a lower rate, however, offer me something of value (see list of DO’s) in return. I don’t respond well to coercion, and I negotiate for a living. Give me a reason to reduce my rate, don’t blindly demand it.
• Own the only million dollar home in a $250k neighborhood. You must purchase and remodel/renovate shrewdly. Making poor initial purchasing decisions, over-improving for the neighborhood, or otherwise rendering your home difficult to sell is the single greatest saboteur of a better deal from me. Signing up for 6 months of marketing on an unsalable property will not put me in a generous mood.  You’ll pay full boat, if I opt to take the listing at all.
• Play me off of other agents. It’s the oldest trick in the book, and one I can see coming a mile away. Fear of loss is a powerful motivator, just don’t be so obvious about it. A well-placed mention of the upcoming interview with another agent will work better than a full frontal assault of “Agent B said she’d list my house for ___%.” I know that I am likely competing for your business, and factor that into the rate I quote you. A subtle reminder won’t hurt, but a mugging will make me hold tight to my wallet.
• Approach me on one of my listings directly under the misguided belief that I will reduce my fee if you do not have representation. This bothers me on principle. I may offer a cooperating broker a percentage of my fee to produce a buyer, but under no circumstances does that percentage vanish or adjust if I am the only agent involved. I am actually hesitant to handle both sides of the transaction, as it opens the door to twice the transactional liability, and certainly will not double my workload for free. Regardless, this tactic is akin to cutting your nose off to spite your face. Go get yourself an agent of your own who will negotiate a better deal for you rather than dinking and dunking around with a percent or two of agent compensation. Think big picture.
• Ask me to reduce my fee if I find the buyer without the involvement of another agent. This is the flip side to the previous entry. Yes, I stand to earn a larger fee if there is no other agent involved in the transaction, but this approach is problematic in that you are essentially providing me with a disincentive to find your buyer myself. Why would I bust my behind and open myself up to the greater liability of handling both sides of the transaction for no additional reward? Such a commission arrangement essentially directs your agent to the couch, where he waits with feet up on the ottoman for a buyer’s agent to do his job.

I abhor the phrase “win-win.” So overused and misapplied to a business transaction. We are not Real Estate mediators, after all, but agents tasked with securing the best possible terms for our clients in the sale of real property. When it comes to the relationship between agent and client, however, it is the appropriate cliche. If we are to function as a cohesive unit to satisfy mutual goals, there are different routes to the “win-win” scenario. No need to butt heads when we each have things of value to offer in exchange for that which is most important to us. For consumers, that means making your agent’s job easier and directing future income potential his way. For agents, that means rewarding that consideration with quality, professional service at the lowest possible rate of compensation.

Symbiosis … it’s a beautiful thing.

Times were a buyer could reasonably anticipate that a seller would provide a one year home warranty policy with the sale of a home. Given the equity crunch that many are experiencing, and the prevalence of short sales and bank owned homes in the current market (which typically do not provide such policies), home warranties have gone the way of the buffalo as a throw-in to a Scottsdale home sale. With the lack of disclosures and repairs that accompany distressed property sales, however, such protection has never been more important. With that in mind, we are offering the following October promotions in addition to our always competitive rates.

For Buyers:

Free Home Warranty Policy - Register to utilize Paul Slaybaugh’s services as your buyer’s agent prior to 10/31/10 and receive a complimentary one year home warranty policy with your purchase at the close of escrow. See below for additional terms and limitations.

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For Sellers:

Free Home Warranty Policy For Your Buyer – Want to stand out from the competition by offering a home warranty policy to potential buyers? I understand the equity pinch may not make such overtures possible. Let me do it on your behalf. Register to list your home for sale with Paul Slaybaugh prior to 10/31/10, and I will provide your buyer with a complimentary one year home warranty policy at the close of escrow. See below for additional terms and limitations.

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Additional Terms:   Promotion valid with website registrations prior to October 31, 2010 only. Close of escrow must occur prior to 10/1/11 for offer to remain valid. Promotion is offered exclusively and may not be combined with any other offer. Maximum value of $325 per policy. Not responsible for cost of additional coverage over and above $325. Not redeemable for cash value. Utilize registration form below to qualify.

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Note:  The following is the opinion of Paul Slaybaugh only, and, therefore, patently correct.

Unless you are trying to get under a specific price barrier, you are better off leaving your asking price alone than making a minuscule reduction.

Sounds contrary to logic, doesn’t it? And contrary to the groveling we agents typically employ to wrangle an unrealistic seller into the wakeful world. Why on earth would the guy who has been hammering you on price from the listing’s inception reverse course now that you are willing to acquiesce slightly?

Because a 5k price adjustment to a property that needs to come down 50k sends a signal to buyers, and not the one you think it does. Assuming I did not hit the hooch prior to the initial listing consultation and abet your decision to list the house for $404,900 (thus making it entirely likely that the eventual buyer for your house is not currently seeing it due to his searches being constrained by a 400k ceiling), such insignificant tinkering with the price essentially puts buyers and their agents on notice that you are not all that open to negotiation. Shaving a few measly bucks off the list price is equal parts admission that the current pricing isn’t getting it done, and revelation of an unwillingness to give up on the sales price targeted.

That’s a sales molotov cocktail.

If you move your listing price from $425,000 to $419,000, everyone and their mother knows you are still looking to command upwards of 400k.

Perhaps this is the message you hope to impart, but it makes you appear even more recalcitrant than you did prior to showing the modest reduction. Of the two primary goals of price adjustment – attracting a new group of buyers, and re-energizing those who have already seen the home – you accomplish neither. Adjustment for the sake of adjustment isn’t going to fool anyone and should not be prescribed haphazardly. It is just going to perpetuate the belief that, even upon further reflection, your opinion of value is not compatible with reality.

Many times buyers and their agents will put a home on the watch list if it appears to fit their needs, but is overpriced. That very first price reduction goes a long way in their determination as to whether your home is to be a viable contender. If you show a meager concession after 90 days on the market, they will intuit that you will not be open to an offer more in line with current values. Further, at the current rate of adjustment, it will take another 2 years for you to eventually work your way down to where you need to be. Adios muchachos, it’s on to the next contender for them.

If you really have no flexibility to drop your price, you are better served to keep them guessing as to your motivations and likely openness to negotiation. Better to show nothing than to show you are thinking about haggling in cents when the buyer is thinking in dollars.

If you need to reduce your price to break into the appropriate buyer demographic, bite the faux-equity bullet and do it. Doing so piecemeal not only alerts potential buyers to your likely miserly approach to negotiations, but robs you of the impact an appreciable change brings.

I know you don’t want to give your home away, and I would be derelict in my duty to let you do so. Just bear in mind that you cannot give away that which you don’t have. If your list price does not reflect current market value, you are fretting about closing the door on money that was never yours.

If you need to make a price adjustment, make it count.