by Paul Slaybaugh | Jul 23, 2010 | Home Selling, Scottsdale Real Estate
I have seen my share of thumbs down houses over the years. It’s a sad truth, but for every summer blockbuster, there is a Real Estate Gigli. Properties that look so promising in the MLS trailer fall flat despite the star-studded cast. Granite counter tops, stainless steel appliances, new carpet, manicured back yard … a quick read-through of the script tells you that the home should be a smash hit. Only when you see it on the big screen do you realize that the photos omitted the faux oak paneling throughout the entire downstairs, or the sunken conversation pit in the living room. You never know where Rosemary’s Baby may be lurking behind the pleasing marketing facade that a savvy listing agent has erected to entice showings.
Enter the Real Estate sneak preview.
Knowing all too well that I am performing preliminary recon, sellers will occasionally grill me as to my intentions when I arrive for a preview appointment. As I circumnavigate the home, they give me the unabashed hairy eyeball treatment reserved for ex-cons, Realtors, bankers, lawyers and ill-mannered guests who don’t sit on the plastic. Believe it or not, though, the preview does not merely serve as an arbiter of a buyer agent’s pass/fail verdict. It is a crash course in product awareness.
To those who would disallow Realtor previews because they anticipate the reports will discourage potential buyers from viewing the home, allow me first to offer a mild rebuke, and then to assuage your fears. First, disallowing preview appointments will have the opposite than desired effect. Like the producer of straight to DVD smut who would sooner pay a personal assistant a livable wage than allow an advance screening for critics, you are telling wily Real Estate agents that the house is a total clunker if you won’t let them in for a quick peek prior to an actual buyer showing. Thou doth protest too much, Ed Wood.
Moreover, you do you and your home a disservice by limiting Realtor previews. Salesmanship requires a deft touch. It is just not that easy to sell what one hasn’t seen. When I come through with my client, you want me to focus on the features with which I became acquainted during the preview rather than blundering about blindly. Knowing what specific hot buttons light my buyer up, all parties are best served if I have direct, first-hand knowledge of such. You know, the stuff that doesn’t necessarily make it into the MLS.
Is the second bedroom close enough to the master to make a suitable nursery?
Is the kitchen open to the family room or a candidate for expansion?
Is the yard private, but not overwhelming?
Worst case scenario? The home is not a fit for my clients, and I save everyone time. Surely you don’t want any more strangers stomping around your home than absolutely necessary, especially if there is zero chance that the property will work for them. To boot, I just might remember your house as a possible fit for the next buyer I meet.
Want to sell your house? Heed the marquee:
Coming soon … to a home near you … Realtor Paul Slaybaugh!
Pretty please, let him in.
by Paul Slaybaugh | Jul 6, 2010 | Home Selling, Scottsdale Real Estate
2010 is the Year of the Niche.
It’s true, feel free to consult the Chinese calendar to verify. Scottsdale Real Estate practitioners, in self-defense, have turned to new and interesting means of keeping their businesses relevant in these inexplicable times. Today’s homework assignment for a Real Estate adventurer? Finding a profitable, niche specialty. Thus, the members of the rank and file have been advised to choose a tunnel and follow it out of the malaise. Two examples stand above the rest as the most popular paths to career CPR: bank-owned property sales and short sales.
Forever a fringe subset of the industry, the foreclosure market has become a predominant segment. Virtually unheard of outside a counter-culture circle of practitioners a few short years ago, short sale specialization is another a bully of the current Real Estate pulpit. Given the adapt or perish mantra that permeates a commission based existence, it is hard to fault an agent for migrating to either avenue in an effort to remain profitable. It’s Survival 101.
I won’t pretend that I have not considered both routes as viable solutions to the systemic problems facing the current Real Estate market here in Scottsdale. The smart money goes where the action is. And yet, I have no particular affinity for the institutions that contributed to the implosion of my clients’ property values. I have no burning desire to represent said institutions in transactions against the little guy whom they have summarily defrocked. I’ll put my buyer in the car and go try to steal a property from the bank, but there aren’t enough deflated greenbacks in the US Treasury to convince me to sign on as the Devil’s listing advocate.
Short sale sellers deserve professional assistance. Sadly, I fail to believe that an agent who would flee to “specialization” in this sector at this late stage would prove a legitimate source of the expertise that so many need (and so few actually have). A weekend course and some moxie do not an expert make. Perhaps the specialists that are being churned out at an alarming rate will boast the training and experience necessary to be of legitimate value during the next down cycle, but such “expert in training” zygotes are not the answer for those who need assistance NOW. The stakes are too high to navigate the short sale obstacle course on a bike whose training wheels were only recently, and prematurely, removed. A substantial incubation period is necessary before such a “specialist” fully morphs from a liability to an asset.
Beware the marketing Sirens who would lead a negative equity seller onto the rocks with good intentions.
So where does that leave a conscientious objector to the hordes of freshly minted “experts” with 6 months of experience in a chosen area of specialization? Right back where I started: 100% loyal to real, live humans.
There is nothing wrong with diversifying one’s business practice to gird against shifts in the market, but I refuse to abandon a loyal client base for the new money of bank business. Once you become beholden to the financial institutions, there is little time left in the day to service those who now constitute an under-represented segment of the Real Estate market. Sure, the bank guy might take on a few moms and pops here and there, but can an overextended agent really provide a private seller the level of service required to do this job? A dubious proposition in the best of times, let alone in the murkiness of 2010. With a market that is still twenty thousand leagues beneath the sea, your agent’s periscope better be nimble and at the ready if you are to avoid the same shipwrecked fate that has befallen so many neighbors. Unthinkable in an industry with more per capita agents than snakes on a plane, but I surmise that all of this nichefying has relegated the non-distressed homeowner to afterthought status.
Assuming you have no equity in your home, or will be unwilling to part with it at the market’s nadir if you do, the industry has given up on you as a viable source of business. It has moved on. And yet, there are a few straggling agents who aren’t quite ready to throw in that towel.
While it may seem that every agent and his recently licensed brother have gone to work for the banks, know that there are still a few of us diehards around who pledge allegiance to you. Our phones aren’t always jammed with 8 bazillion calls about our 8 bazillion listings. We won’t take a week to respond to your questions and concerns. We have staked our careers to providing a certain level of service, and we will not compromise it. Market conditions be damned.
Tempting though it may be to wear the “Certified Gastrointestinal Distress Expert” or “Short Sided Career Reinvention Specialist” hats, we stay away from the light and cement our enduring commitments to those left behind in the industry’s pursuit of the next big thing.
Our niche is you.
Should you require the hands on, fully attentive assistance of a couple of non-certified, non-distressed, non-toxic property experts, give us a call. We’re not too busy panning for the bank’s gold to take it.
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 16, 2010 | Home Selling, Scottsdale Real Estate
Among the interesting turnabouts that abound in the Scottsdale Real Estate market as of late, the rental market has demonstrated surprising new strength. Where there was formerly a preponderance of housing options for prospective tenants over the last couple of years, what with all the struggling homeowners out there eager to find someone else to pay their mortgage while they shacked up in less costly digs, a noticeable contraction in available properties for lease is occurring. With more and more people walking away from their upside down homes, whether by necessity or by choice, the credit and financial hits they take in the process renders them radioactive to the purchasing option for years to come (though, some have perfected the “buy and bail” strategy of purchasing a new home before abandoning the current residence). As such, the rental market has become inundated with demand.
With this surge in demand and a subsequent decrease in supply, rental values have not only held firm, but have noticeably increased in the markets I work. From a purely anecdotal standpoint, I have been shocked by the level of competition for not only the properties I have had listed for lease recently, but for the tenants I have worked with to secure rental properties as well. Mind you, I am not simply referring to the low end pricing (sub $1000/month) where heightened competition is always to be expected, but in more expensive price ranges to boot. In particular, I am seeing a LOT of interest in properties that are renting in the $1400-1800 per month range.
Checking the latest statistics to see if what I have noticed is playing out on a larger scale, I see active Scottsdale rental listings are down to roughly 1800 units (as of ARMLS’s May figures). This marks a steady decline from an inventory that reached a high point of 2568 in November of 2008 and did not dip under the 2000 unit threshold until January 2010. The 5.19 months of rental housing supply (as determined by the current rate of absorption) is at its lowest point in years. Interestingly, the overall average rental rate has not shown a noticeable jump, despite my recent personal observations. Given the decrease in total inventory and increase in absorption (units leasing per month), however, I fully anticipate next month’s numbers to reflect a higher baseline average.
This shift in the rental market tells me two things:
1) Before deciding to walk away from a house that appears irretrievably underwater in terms of negative equity, homeowners (and potential future renters) really need to study their options carefully. If I had a nickel for every misguided homeowner who erroneously believed there was an unmitigated plethora of housing options, at bargain basement prices, waiting for them once they pulled the plug on the Bank of Extortion … er, I mean “America” … I could comfortably retire to my literary tinkerings. The assumption that lower selling prices go arm in arm with lower rental rates is patently false. Further, with all of the newfound competition for rental housing, your chewed up credit report will be scrutinized a bit more by potential landlords than most would expect. Sure, a human landlord may be more understanding of the recent economic woes than some faceless underwriter, but as in any free market, it always comes back to options. If there are renters out there with fewer credit issues and deeper pockets, you are going to get aced out. Please consider where your escape pod is heading before abandoning ship and scuttling that home turned financial Death Star. If there is no soft landing, how have you benefitted?
2. Our market may have reached (or is close to reaching) that sweet spot in which it makes sense for the homeowner with designs on a move-up purchase to revisit the rental potential of his/her existing home. While the notion of renting an existing house out (to offset the mortgage) to free oneself up to take advantage of the market conditions and purchase a considerably larger home for a fraction of its prior value is nothing new, the increasing strength in the rental market makes the strategy more feasible at present. The biggest hurdle to this play, other than deciding whether one is really cut out to become a landlord, remains the qualification process. Unless you are one of the fortunate few who maintain at least 25% equity in your home, you will essentially have to qualify to carry both loans (the existing house as well as the new one you would purchase). Even if you secure a tenant whose rent will cover the payment, you will be qualified for the new loan as if you were qualifying for both properties. If you have the means to do so, the time could be right to finally leverage the conditions that seemingly everybody and their brother’s mail carrier have already managed to exploit.
Whatever your goals for the Scottsdale Real Estate market, drop us an email or give us a call with your specific needs / questions. You might not be as trapped as you think.
(480) 220-2337 | paul@scottsdalepropertyshop.com
by Paul Slaybaugh | May 31, 2010 | Home Selling, Scottsdale Real Estate
The collection of hats in a Scottsdale Real Estate listing agent’s closet grows at an exponential rate. We alternately don the garb of property evaluator, pitchman, marketing pro, receptionist / showing coordinator, contract prep specialist, home inspection consultant, appraisal jouster, loan oversight committee (of one), repair foreman, closing editor, schedule contortionist, marriage counselor, dime store psychologist, balloon animal fashionista, etc, etc, etc. With the advent of Internet marketing, you can add a couple more titles to the overflowing job description: Google Engineer and Social Media Cruise Director.
Before you place too much importance on these latest additions, make sure your virtual Captain Stubing has what it takes to avoid the icebergs of an honest to goodness Real Estate transaction.
The great equalizer, the cyber-world provides the blank slate upon which even the most novice agents can paint a colorful picture of expertise. Years of experience trumped in the search engines by weeks of keyword optimized content. Those with their hard hats on in this soft medium can easily be mistaken for proven veterans of the Real Estate world. As such, even the most obstinate curmudgeons have yielded to the inertia of technology and joined the online fray in the ever-expanding global search for the next business prospect.
While we here at the Scottsdale Property Shop are ardent followers of the Internet prophets, we realize that this shiny new(er) medium is only the latest and greatest hat to hang on our business rack. The fixation with getting to the top of the pagerank heap has distracted many agents and consumers alike from the actual job of selling Real Estate. Think getting the most online exposure possible for your home is key to the probability of a sale? Well, you’re right. That said, raw exposure in the absence of ability is tantamount to brain surgery via an enthusiastic first year med student with a text book, albeit it one with exceptional illustration.
If you are reading this, you already know that we are adept at getting our services and our properties in front of a target audience. What you may overlook, however, is the fact that this is but one minute portion of the job. You must fully vet the agent(s) you choose to employ on all facets of the service, not simply the “Cool, my house will be on page 1!” factor. Click through the articles, peruse our thoughts on the state of the market, review our credentials. Only then, if you believe we’ve got the chops to handle the full responsibility of listing and selling your Scottsdale home, give us a call to move into stage 2 of the vetting process: a personal consultation.
While the Internet is a valuable tool, there is no magic Real Estate bullet or panacea for an overpriced or under-represented property. Your agent should know the community, the builders, the amenities, the home sales, the effective means of procuring a buyer, the nuance of negotiation, the ability to close and how to effectively navigate the escrow to the finish line. Google and Facebook will do none of those things for you (him). To add another clumsy metaphor, consider the various legs that prop up your home sale. If your agent does not have adequate experience with / knowledge of the product, the integrity is suspect. If your agent cannot effectively close buyer leads, the integrity is suspect. If your agent cannot, or does not know how to handle the various hurdles of the escrow process, the integrity is suspect. And yes, if your agent does not leverage the proper media for attracting suitors for your property, the integrity is suspect. Ask any particular leg to support more than its burden, and watch the entire structure collapse.
While I know a few terrific agents who have been in the industry for relatively brief durations, I am aware of all too many Internet marketing wizards who lack the first clue about the process of selling a home. It seems that the only thing taught in new agent training these days is how to leverage social media and/or drive traffic to one’s site. Valuable tools, but am I crazy to posit that learning to actually do the job is every bit (or more) as valuable as tracking hits?
I see such agents in my keyword Google alerts often enough to know that they have the marketing portion of the job wired, but who exactly are they? For all of that search engine juice, I’ve never seen their names on a sign in the communities they target. I applaud the promotional efforts, but cringe for the consumer who hires the Internet warrior out of mistaken belief in his/her expertise. After all, are we Real Estate professionals who market on the Internet, or Internet professionals who occasionally dabble in Real Estate?
I can buy dominant online position for a particular neighborhood for about $20/month, but I can’t buy ability. Even in the 24/7 virtual “what have you done for me lately” world, a track record is always in vogue.
Consumers … choose your weapons wisely.
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