They were so excited. Even after I handed them the keys, they were slow to believe that the modest Spanish bungalow was now in their adoptive custody. Over the course of four exasperating months, we must have seen and dismissed close to a hundred homes. This one needed too much work. That one had a poor kitchen layout. Yet another sat on the “t” of a subdivision’s entrance: bad feng shui, or so I was told. Before the market skies parted and yielded the seventeen hundred square foot, clay tile miracle that appeared to have met extinction in their price range, our flagging spirits were all but ready to pack it in. The May 5th, 2005 discovery saved them from another year of apartment living. A challenge, at best, with a ten year old daughter, let alone with a half-baked bun in the oven.

“Can we go in,” the wife asked in a small, cautious voice.

“Of course,” I responded. “It’s your house, Liz, you can do whatever you please.”

She ignored my extended hand and engulfed me in a fierce hug. Her husband clasped my shoulder in a vice grip which betrayed an adolescence spent laboring on the family farm in Iowa. His curt nod spoke volumes.

“You’re welcome, Mel,” I replied.

“Thank you both for hanging in there with me. I know it hasn’t been easy, and I can’t tell you how much I appreciate the patience and trust you’ve shown. It’s been a long, tough slog, but I think we got it right.”

“Yes, we did,” Mel said, breaking his silence for the first and only time that morning.

“We would like to have you and your wife over as soon as we get settled,” Liz added.

“I’d like that,” I told her.

I meant it, too. I like just about every client I take on, but felt a special kinship with this couple for reasons that surpassed the extended time spent in each other’s company. After bidding the happy couple farewell, I glanced in the rearview as I navigated my way down the tree-lined street. Instead of going inside, they remained rooted in place, holding hands and staring at their new home.

I received a phone call from Liz this morning. Turns out that Mel has been out of work for some time now, and they cannot afford to keep the house. Might have to move back to the Midwest and look for a position on the farm. See just what kind of life is left in those gnarled, old leather hands.

I hate this job sometimes.

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.

So what exactly is it that keeps this one-way conveyor belt moving?  What intrinsic value of the Arizona lifestyle keeps folks coming in droves to the Valley of the Sun? Why does the city still nostalgically known as “The West’s Most Western Town” continue to add labels, such as the nation‘s “Most Livable City,” and find inclusion amongst various new best-of lists, such as the “Top 100 Cities for Young People,” (1) with each passing year?

Young people?  In Arizona?  Bet you didn’t see that coming!

Let’s examine why exactly Scottsdale might appeal to people of all walks of life.

Is it the 314 days of deep blue skies and sunshine? A horizon so boundless that the occasional passing cloud is quickly chased away like a stray tumbleweed through the Sonoran Desert?  The average high temperatures of 85 degrees, and a scant 7 & a half inches of annual rainfall?  Where the only ice you will find in December lies inside a cocktail glass?

Possibly.

Is it the Scottsdale Unified School District, which routinely ranks atop the state in performance and outpaces local and national averages by a wide margin in critical categories such as SAT and ACT scoring?  Which boasts an off the charts percentage of schools categorized as “excelling?”  With 50% of the adult populace holding a bachelor’s degree or higher (which likewise outdistances the state and national averages by a wide margin), education has always been a top priority to the citizenry of Scottsdale.  Surely the robust school system is the reason an out of towner looks to Scottsdale with a longing eye?

Possibly.

Could it be the vibrant nightlife and fine dining that boasts an inordinate amount of upscale eating establishments, wine bars and the like? Where you can’t fall down without landing on the finest Fillet Mignon or Prickly Pear Margarita you have ever tasted?  The more than 125 art galleries which make Scottsdale a bastion of high culture? Is it Taliesin West, the former winter home and school of renowned architect Frank Lloyd Wright which lives on as a popular tourist destination?

Possibly.

Is it the golf? The more than 40 courses which can be found within Scottsdale‘s city limits alone? From Par 3 executive courses to PGA venues, there is something for every skill level. You are moving to Scottsdale, Arizona. It simply must be for the golf.  Right?

Possibly.

Is it the strong local economy? The one with the ultra low unemployment figures and strong income levels (median family income of $85,000+ per 2009 estimates)?  The one powered by tourism (39% of city workforce), convention revenue, 2^nd home buyers, strong aviation industry presence centered around the Scottsdale Airpark, medical field stalwarts such as Scottsdale Healthcare (largest private employer with nearly 6700 employees), the Mayo Clinic (2nd largest private employer in Scottsdale with nearly 5000 employees), etc?  Notable businesses include the Fortune 500 company, Allied Waste, as well as Rural Metro (private fire protection), Go Daddy, General Dynamics, Dial Corporation, Cold Stone Creamery and TASER International.  So, is it the allure of a healthy job market for a highly skilled workforce that makes Scottsdale Real Estate so historically vibrant?

Possibly.

Or how about the shopping? The spender’s paradise which boasts Kierland Commons, Fashion Square Mall, The Promenade, Old Town, Gainey Village and The Borgata, just to name a few?  Where you will find that perfect something that you can’t live without in every shop?  As synonymous as Scottsdale has become with retail therapy, it has to be the shopping, right?

Possibly.

Perhaps it’s the unbelievable location and access to the rest of the Valley?  Minutes from Sky Harbor International Airport, Scottsdale is connected to the rest of the greater Phoenix area by freeway. Bisected by the Loop 101, previously distant reaches of the Valley such as Chandler/Mesa/Gilbert to the south and Glendale/Peoria to the west are now readily accessible. Could the prime central location be the reason for Scottsdale’s popularity?

Possibly.

Wait, it has to be the resorts, right? After all, our well-earned reputation as a resort town is what first put Scottsdale on the national map. With over 70 resorts and hotels, half of the Valley’s resorts are located in Scottsdale. Might the lure of an afternoon at the Hyatt Regency’s pool or the Westin Kierland’s spa be the source of enticement?  Maybe afternoon tea and relaxation at The Phoenician, or reaching out to touch the mountains at The Four Seasons in Troon?

Possibly.

How about the immediate access to escape from the daily grind? The ability to trade the heat of a July day for an afternoon in the high mountains with only an hour and a half’s drive north as payment? Or to dip toes in the Pacific Ocean by making the 6 hour drive to San Diego? Heck, less distance than that puts a traveler on a lazy beach in Rocky Point, Mexico. Is it the convenient getaway capacity that attracts all of these new Scottsdale residents?

Possibly.

These are all very strong contenders for the title of most alluring, but I think it boils down to something far more simple, yet somewhat indescribable. Most people move to Scottsdale, Arizona for the very reasons that I have never left. Those reasons are hard to express with words.  Less a physical place than a state of mind, Scottsdale is that internal intersection where an unencumbered side street of your soul meets the thoroughfare of refined, modern living.  The desert Southwest stirs something ancient and irresistible within the romantic ventricles of even the most hardened heart.  Lacking the eloquence to due her justice with my pen (or keyboard, as it were) alone, I yield to pixels.  The images below should provide greater insight as to why this native son still calls Scottsdale, Arizona home after all these years.

(1) Phoenix Business Journal (2007)

Statistics courtesy of the City of Scottsdale (2009)

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Let the Scottsdale Property Shop be your relocation guide.  Follow the links below to all things Scottsdale.

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The phrase alone inspires a host of reactions that run the full gamut between antipathy and, well, slightly lesser antipathy, depending on the audience.

As any semi-interested news watcher and industry blog reader can attest, the Real Estate investor is the greatest scourge to befall our fragile ecosystem since polybutylene plumbing. What, with the housing supply lines ill-equipped to handle the artificial demand, our flimsy pipes swell and burst when the pump and dump investment surge strikes a hapless market. Aside from the banks who flooded Wall Street with dubious mortgage backed securities that were chopped and reconstituted in more numerous and indiscernible ways than Joan Rivers’ alleged face, the fount of no-money-down investors is the most vocally derided catalyst of the Great Real Estate Bubble of 2005 ©.

Well, guess what?  The investor is back … and that’s a good thing.

Hold your rotten tomatoes and easy with the pitchforks, if you will. How can I possibly opine that the reemergence of the buyer subset that sent values through the roof, only to crash them through the basement when they left a valley of foreclosed “investments” in their wake is a good thing? Is the demand any less artificial now than it was when the previous incarnation of ne’er do wells spiked our collective punchbowl?

In a word, yes.

The 2010 investor is not the fly-by-night operator who purchased the nearest home for sale at the conclusion of a four hour seminar on how to get rich in Real Estate investing with no money down. Shoot, who needed money down when you barely needed a pulse and a job to buy a house back then? No, today’s investor, by and large, is showing up at trustee sales and plunking down cash on a barrel. He has the skin in the game that his counterpart of yesteryear did not. He is investing in a very real sense of the word.

In addition to securing an interest in the property with his own bankroll (thus making the prospects of simply walking away from a property that doesn’t return as hoped less palatable), the other crucial dynamic at play is the return of sanity to the overall investment arena. When investors were driving Scottsdale and Phoenix property values into the stratosphere back in 2005, there was little regard to the initial purchase price. Our entire market temporarily forgot that you make your money on the purchase. Buy a property right, and the return will be there when it’s time to sell. In the throes of insanity, investors were climbing over themselves and each other to purchase property, any property, for 50k over whatever ludicrous price was being sought by an apoplectic seller. Investors were betting on the come. Pay whatever now, and the joint will be worth 100k more in two months whether a hammer is ever swung in renovation or not. With the year long fervor, they got away with it … for awhile.

Today’s investor is not settling for just any property he can get his hands on, but is showing up at the courthouse and robbing the bank blind. Paying pennies on the dollar and rehabbing a previously dismantled home, his margin is large enough to bring the distressed apple of his eye to market at a price actually supported by recent sales comps.

The coup de grace? Today’s investor fills a need that the banks won’t. He is essentially financing the fix-up costs that many banks have abandoned in self-defense. Against a backdrop of tight lending purse strings, consider the difficulty many people have just in coming up with 3.5% or 20% down payments, let alone remodeling capital. With home equity lines all but vanished from the marketplace, that stripped bank-owned home bargain isn’t all that realistic for the buyer who doesn’t have the available cash to put it back together, regardless of how appealing the price tag. When you could tap a line of credit to finance improvements, it wasn’t that big of a deal to throw in some new carpet, counter tops and appliances after closing. Now, you have few options other than reaching into your own pockets. Thus, there is a sizable buyer pool for a move-in ready home. The well heeled investor who assumes the risk and fills that need is not to be derided.

Take the mom & pop homeowners who are unable to price their homes competitively due to high loan balances, mix with the interminable wait of short sales, fold in the distressed condition of much of the bank-owned inventory and bake at four hundred degrees to create a casserole of supreme frustration for many disenchanted home shoppers. A rehabbed home at an affordable price, if not the outright theft that was envisioned at the outset of their house hunt, begins to look more and more appealing to many buyers after getting an up close look at what the reputed bargains actually look like live and in color. In essence, by purchasing a property from an investor, a buyer has found an end-around to financing renovation costs.

If your last nickel is earmarked for your down payment, and you can purchase a renovated home at a fair market value that you can afford, don’t begrudge the man his margin. While the stereotype of the lecherous vulture remains, we would be remiss not to acknowledge the good he can, and does, bring to a market like ours.

Investors: they’re not just for nuclear Real Estate holocausts anymore.

The cycle of despair ends today.  Your days as a perpetual Real Estate shopper are over.

House hunting can give you a rush like none other.  No buyer quickly forgets the first time he steps through the front door to a new potential future.  The magic.  The exhilaration.  The knowledge that one is virtually unfettered to choose his own adventure.  Of course, once that initial euphoria grabs a hold of a buyer, he must experience it again.  Houses 2-10 still hold some residual magic, but do not hold a candle to that very first experience.  Houses 11-20 hold an air of disappointment.  Soon enough, each successive property becomes a progressively greater assault on the sensibilities.  Your friends and relatives grow weary of your constant trolling of Realtor.Com.  Your erstwhile volunteers will no longer join you on the weekly Sunday home tour with your beleaguered Real Estate agent.

You don’t care.  Despite all evidence to the contrary, your silver bullet is out there.  You don’t need help, you just need more listings.  Where are all the new listings, anyway?  Everyone knows that banks are giving houses away for pennies on the dollar, so this simply must be the week that the 5000 square foot home on 4 acres hits the market.  For $125,000.

Welcome to Detox.  My name is Paul.  I will be your cold dose of reality for the next 30 days.

The first step to recovery, of course, is admitting you have a problem.  Trust me, you have a problem.  Further, you must admit that you are powerless to the tug of your addiction.  I offer as “Exhibit A” this August 9th, 2009 email sent to your agent regarding a property you found online.  Time-stamped at 3:48 AM.  “Exhibit B” is your agent’s cell phone records from 3:49 – 4:32 AM of the very same day.

Step two is to understand that a power greater than yourself can restore you to a sane existence.  No, it’s not your brother’s mail carrier’s uncle who owns four rental properties.  It’s your agent.  Listen to him/her.

We’ll just skip step three because we all know that the realm of Real Estate is presided over by a supreme being in the guise of a braying, one-eyed donkey with cataracs.  Pin the tail on him and you are as likely to get donkey kicked in the goods as you are to win the investment lotto.  See step two for obtaining the services of one who knows how to best manipulate, if not outright tame, the fickle Real Estate beast.

You are now ready to move on to step four.  This is where you take full and unflinching stock of your own morality.  “Thou Shall Not Steal” is a typical shortcoming of many Real Estate shopping addicts.  The thrill of the grift, after all, is one of the primary tarpits into which the saber-toothed buyer has fallen to become bogged down to such an irretrievable degree.

While admitting to yourself the wrongs you have committed is no picnic, neither is admitting those things to the higher power of your choice and a fellow non-home buying human.  When you can do so, you have conquered Step five.  Don’t even think about omitting the part where you burned 1897 hours and 16,789 gallons of your agent’s time and gasoline.

Step six is opening yourself up to the full removal of the defects in your character from a higher power.  Once again, your agent will gladly fill this role in absentia and remove said defects via Paypal and/or rubber mallet.

If you can bring yourself to ask for said absolution, you have mastered step seven.

Step eight requires that you make a list of all those you have harmed and be willing to make amends.  You can start with your spouse, co-workers and anyone you have pumped for advice and proceeded to dutifully ignore.  Just make sure that your REALTOR is somewhere in the mix.  No greater sin than trumping his/her decades of industry experience with the sage advice of your hairdresser and life insurance agent.

Step nine is actually making the aforementioned amends.  A little wine and cuddling to soothe frayed nerves and egos is a good start, but cash money absolves all.

Step ten directs that you continue to take stock of your failings and immediately admit subsequent wrongs.  You may be on the road to recovery, but that doesn’t mean you are immune to calling a listing agent directly to schedule an appointment after your agent has patiently educated you over the past year and a half.  And yes by the way, that does make you a bad person.

Step eleven directs you to establish more direct contact with your agent.  Email and the occasional phone call will suffice.  He or she is tired of sending smoke signals in the direction of East Jabib to reach you.  When the right property comes along, don’t make a search party necessary.  Bloodhounds are pricey by the hour.

Step twelve is reserved for those Career Buyers who have had complete spiritual awakenings and will actively work to spread and promote these guiding principles to their brethren in shopping addiction.  Praise the lord and pass the turnips, you are now ready to purchase a home!  Go forth and proselytize!

Should you experience temptation to return to your former habits or worse, suffer a relapse, it is important that you understand three things:

1) These things happen and you are still loved.

2) Just not by your agent.

3) You are completely and totally screwed.

Of course, I am talking about bank owned property sales.  If the creepy crawlies in the walls don’t get you, the asset managers will.

About a year and a half ago, I, like many of my Real Estate brethren, was forced to take stock of the focus of my career.  Having long relied on the nearly continuous repeat and referral business that I cultivated through years of diligent service, I was forced to ponder the unponderable when the Great Market Implosion of 2008 (c)  threatened to sabotage my business model.  If you could even call it a business model, that is.  I subscribe to the notion that if you do right by the clients that you have now, you will never want for clients in the future.  Good business practice begets good client retention.

And yet, there I was.  Looking around for the vine upon which my new business had died amidst the economic crop dusting that was rendering entire markets fallow.  My hedgerow bustled only with concern.  So what to do?  With credit markets drying up and loans increasingly difficult to come by, the resale market became a stagnant bog.  The only sign of life would be Nessie popping her head above the surface of the foreclosure loch on occasion to swallow another hapless homeowner.  Against this stark backdrop, many of my respected colleagues turned to the very institutions that led us down this path to housing oblivion for their salvation.  Sensing that resale properties could not compete with the dirt cheap foreclosures, and that finding loans for buyers had become vastly more difficult than finding properties, I was tempted to follow suit.

The lure of pursuing bank-owned property listings was … gulp … quite tantalizing.  I saw REO agents handling more properties at a given time than they ordinarily handled over the course of an entire year while I banged my head against the resale wall.  Heeding the siren’s song, I went so far as to solicit lists of banks with whom I could apply to handle their overflowing inventories.  Hat in hand, it struck me that this was the 21st century version of standing in line for hours on end amidst scores of other able-bodied candidates for a factory job circa 1930.  A funny thing happened en route to the head of the line, however.  An epiphany, if you will.

In the current market, we all work for the banks in one manner or another.  You either list their houses, or you bring them buyers.  Only one side of that equation will bring you repeat business down the line, however.  I realized that I could not take on the workload that REO specialists enjoy tolerate without alienating the loyal client base that had propelled me to heights I had never really thought possible in my career.  Knowing there are only so many hours in the day, I made the conscious decision to forgo the possibility of immediate gratification with the banks to continue to serve real people.  It’s not an entirely altruistic choice either, but a pragmatic one.  The foreclosure market will dry up eventually, leaving the few remaining morsels to the established denizens of the deep who have waded through that knee-deep filth for the last two decades.  Those Johnny Come Latelys whose bank-owned property experience extends back a year or two will be in the unenviable position of having to redefine their expertise yet again.  Their neglected mom and pop clients will have moved on.

I do not want to watch my business wash up on the rocks along with the myriad other souls aimlessly following the tide on a makeshift raft of sticks and desperation when the winds finally change.  I’ll continue to take my chances with my own internal compass and weather-battered crew.

So, here you sit.  Spoon in hand, ready to dive into that noxious looking soup.  It may not be the most appetizing dish you have ever seen, but it’s the house special and the price is right.  The maitre d’ has already slipped back into the kitchen, hurriedly gathering the same ladled gruel for the next table.

No fear, your royal tester is still here.  Pass that gnarly bowl on over and I’ll help you determine its edibility.

I was sitting on your side of the table when we were eating steak and lobster, and I’m not looking for the check now that my dinner guests can only afford spam.  It may bring a little indigestion on this particular evening, but there are plenty of four star evenings ahead.

If you are buying or selling a home in Scottsdale, Arizona, and you are not an amorphous, soul crushing financial institution, it would be my great privilege to represent you in your pursuits.

“Raising children is like trying to nail jello to a tree.”

Not the first time I have seen it, but it still draws a chuckle.  Substitute the words “Selling Real Estate” for “Raising Children,” and you have this agent’s description of the arduous world of buying and selling property in 2009.

Case in point, one of my property listings is a short sale.  My lone short sale listing.  Now, and hopefully forever.  Over the four months it has taken our buyer’s offer to gain full approval, only to have a needed extension to the closing date entail another two week period of review and authorization from the banks involved, the twists and turns of this transaction have been nothing short of spectacular.  Fortunately, with a closing now on the horizon, we finally appear to have this bit of transactional jello firmly nailed to the mesquite in my backyard.

Apparently a glutton for punishment, I currently have two buyers with offers accepted by sellers and submitted to their respective banks for approval on short sales.  One of those buyers deploys for Iraq at the end of this month.  We will be lucky to have a loss mitigator assigned to the transaction by the time his boots touch the 130 degree foreign sands.  The other buyer is a first time homeowner who has been looking with me for several months.  In both instances, we’ve only grudgingly included short sale listings recently in our lists of properties to see.  The time factor is brutal, but it is the uncertainty that has been the primary deterrent.  It’s one thing to wait indefinitely for a foregone happy conclusion, but quite another to invest a month or six of your life into a transaction that may be doomed from the start.  As such, for many, short sale properties have really turned into the “just-in-casers.”  Throwing an offer at a bank as a contingency plan, buyers are well advised to continue shopping for a property in which the seller is in a position to provide a quicker response.  If a resale or bank-owned property pops up while the short sale is still in limbo, the buyer is free to cancel that transaction (provided a standard AAR short sale addendum is included with the standard verbiage) with no loss of earnest money and pursue the new candidate.  Lots of additional work for all parties involved, but you’ve got to get your fingers dirty in the current market if your seeds are to take root and grow into an actual sale.

Then there are the bank properties. Foreclosures, REOS or whatever other term you know them by, they differ from short sales in that the bank has already taken the property back from the defaulting homeowner.  No interminable wait while the bank assesses value and the seller’s qualification for a short sale, but there are still a few wiggly characteristics with these properties.  For starters, while infinitely quicker, you can still forget about an immediate response or any loyalty to the author of the first offer.  You can attach a two page cover sheet with your offer outlining your love of the home, how the drapes match your furniture and for the first time in your life, you feel like you have really found “home,” but the asset manager at the bank will still sit on it for 3-5 business days to see if anyone will beat it by twenty five cents.  Even if you offer full price or above.  Trust me … been there, done that.  Further, because everyone wants bank owned pricing, these properties are often highly competitive.  The banks know it.  Given this truth, the very best values that you are holding out for as a buyer are highly competitive.  If you’ve seen 100 properties and think the latest one is a screaming deal, so do the thirty other buyers who have been looking at the very same houses.  That awesome deal you see on a bank-owned price is often just the floor for the higher offers that pile up like clowns in a circus car.

Wiggle, wiggle, wiggle.

Of course, if transactions involving banks are akin to manipulations with an amorphous edible substance, selling a typical resale home at present remains more like nailing a pickup truck to a tree.  By and large, resale properties continue to be drastically overpriced.  Only the savvy sellers who price to compete with the banks stand a chance of actually unloading their homes.  No matter how strong the marketing nail or stout the trunk of seller resolve, gravity continues to win that lopsided struggle.  You can only prop up an unrealistic price for so long before it finally crashes back down to market value or the broken down rig gets towed right off the market.  No buyer is going to shimmy up that tree, get behind the wheel and drive said truck straight into the ground.

Is buying and selling Real Estate in 2009 a tricky business?  Hell yes!  Up is down, down is up, and nobody knows when this crazy ride will end.  But just like raising kids, the process is uniquely rewarding.  So grab a helmet, buckle up and don’t be afraid to enter the scrum.  As long as you know what to expect and bring an experienced chaperon, you’ll eventually get where you want to go.

Even if you end up with a few stains on your shirt along the way.

Whether a professional athlete intent on a signing bonus the size of Madagascar, a victim of a vicious fender bender fixated on the 2.8 million dollar legal prescription for a tender neck or a home buyer/seller whose sole purpose on this earth at the immediate moment is to grind as many Ben Franklins as possible out of the guy on the other side of a negotiation, aggressiveness is typically the hallmark virtue in the professional representation that is sought.

The sports super agent, who we are 95% certain has a life-sized portrait of his bare chested self wearing a boa constrictor around suspiciously well tanned shoulders hanging in his posh downtown office, is universally loathed by all.  Secretly, however, we all know he’d be the only guy we’d call if we needed to make a cash withdrawal from the abundant posterior of a team owner.

The weaselly ambulance chaser with the slicked back, Grecian Formula enhanced locks is similarly unlikely to find himself on the guest lists of many Bat Mitzvahs and baby showers.  That narcissistic predator might eat the baby.  When we spill the drive-thru coffee in our laps or stumble over the “Watch Your Step!” sign at a public establishment, though, he’s the guy we call.

Amicable folks are great to have around, but when the conversation turns to business, we don’t want Mary Poppins going into battle on our behalf armed only with a spoonful of sugar to make the medicine go down.  We’d rather employ the services of Dr. Jekyll to go all Mr. Hyde on the opposition and cram that spoon straight down their throats.

Easy, tiger.

There is a time to kill, and there is a time to frolic.  The problem with the constant grinder is that he often grinds himself right out of a transaction.  It is critical that you leave the other guy with some dignity at the end of a tough negotiation, lest all of your efforts collapse under the weight of the other party’s exhaustion.  After you’ve knocked the poor bloke to the ground and bloodied his nose, do the smart thing.  Extend your hand and help him up.

In practical terms, this is akin to finally saying “yes” after repeated “no’s.”  When you win on the key points, you are often in a position to make a small concession on some trivial tangential issue.  Too many times, I see lost opportunities for a clear victor to score easy diplomatic points at these junctures in the waning moments of a deal.  Want the inspection and other critical aspects of the transaction yet to come to go smoothly?  Give up something that isn’t really necessary.  Offer something minor, but unexpected.

You’ve bitten his neck on price, drank his blood on terms … time to give him a transfusion unless you want to carry his Doppelganger the rest of the way to closing.  For the record, undead weight is quite heavy.

Of course, because you are reading my blog, this advice assumes you were on the dispensing end of said treatment throughout the course of the initial negotiation.  If you were unfortunate enough to be on the receiving end, go ahead and drive a wooden stake through the SOB’s black heart.

“I don’t only sell homes.  I sell dreams!”

“You need professional help for the most important investment of your life!”

“I have planted more behinds in houses than McDonalds has in cardiologist offices!”

In most any arena, quiet confidence is the hallmark of ability.  The lowest common denominator of puffery, in turn, is an underlying insecurity about the quality (or need) of the service being rendered.  You sometimes can’t help but wonder if the egocentric assertions are for the benefit of the braggart’s audience or the braggart’s own sense of worth.  I, for one, would sooner enlist the legal assistance of my two year old than the “experienced, aggressive” attorneys who snarl their ways through 30 second local TV spots.  Is it too much to ask for a “smart, competent” one?

Look at the business cards we agents pass out with palsied fervor.  You have to wade through 6 lines of superfluous designations and production awards before you can even find a phone number.  I have been sporting the same cards for the past seven years with much the same obnoxious verbiage.  The deeper I get into my Real Estate career, the more I realize that performance is the only thing that matters.  No longer in a position where I feel the need to stand on a bar stool with a megaphone to capture my share of the market, it is a liberating thing to let go of the pompous demand for respect for simply selling a home.  Certainly, ours is an important job, but then again, show me one that isn’t.

When challenged on the role of the Realtor, and whether we really are the drain on society that most public surveys reveal us to be, I no longer attempt to shout down the vocal detractors.  My clients respect what I do and the assistance I provide, and that is all I require.  We aren’t curing cancer.  We aren’t utilizing an unparalleled skill set and education to launch unmanned crafts on Mars.  Assessing value, assisting with purchasing decisions, marketing a home, navigating a Real Estate transaction … all are skills that can be readily learned.  It outwardly seems like an easy gig.  Show a few houses, collect a fat check.  That is why there are more licensed Real Estate agents than 6 foot tall Cher impersonators at a midnight screening of the Rocky Horror Picture Show.

While there are few intrinsic skills that the average non-drooling citizen can’t acquire and ply successfully in the realm of Real Estate, the real value of working with a professional is the “been there, done that” factor.  It’s all about the learning curve.  Most everything in this world is doable, but more to the point, done well through practice.

Two very good cases in point occurred just yesterday amidst a very long day of showing property to two sets of buyers.  My first set of clients were highly intelligent buyers relocating from Northern California.  Tech savvy and coming to me with a month’s worth of research on the properties they wished to see, along with a spreadsheet full of notes, pros & cons, online value estimates, etc for each home.  This couple was fully dialed in and very capable of successfully purchasing a home with or without my assistance.  Much to their credit, they recognized where their knowledge gaps were, and allowed me to fill in the remaining 10-20% that can only be gained by doing something day in and day out.  Armed with their research and my local acumen, where we deviated from script was when we stopped in to look at a house that wasn’t on their list.  Brand new on the market, and an exceptional value for the school district, size and condition, it was a home that would have slid under their radar because of a few discrepancies with their original criteria.

We submitted an offer on that home and are awaiting a response.

My second buyer was another sharp, and highly educated guy.  We had been looking at property for about a month somewhat laconically, but have now really dialed up the urgency as he recently received notice that his Naval reservist status is about to be bumped to active duty.  He deploys in late July.  Highly motivated to secure a home for his family before he shoves off, we have been hammering new listings in the Southeast Valley virtually every other day for the past two weeks.  He mentioned to me last night how many part time agents he works with in the medical field that have solicited his business (are you happy with your current agent?).  What a commercial I could have made out of his quote.  Paraphrasing, he essentially brushed off the come-ons with the response that not only was he happy with my performance, but that I have done this all day, every day for the past 10 years.  In the area where I was born and raised to boot.  With the short fuse he has to get his family situated, he requires the attention and knowledge of a full-time Realtor.

You the man, Mike!

See, I told you we Realtors are a self-important bunch.  Even this purported piece of anti-puffery has morphed into a promotional effort … but I digress.

When you scythe through the hyperbole that thrives in the fields of Real Estate marketing, the underlying value that a solid agent provides is readily evident.  We simply obscure the benefits at times via the bombastic claims that occasion the rolling of eyes and heavy groans from those whom we would deem to impress by overstating our linchpin status to Western civilization.  A good agent is worth far more than his/her fee, but a poor one is worth a great deal less.  The trick is deciphering the difference between the two.

As you contemplate that sobering thought, I’ll get back to my task for the day of adding the following accomplishments to my already bloated business card.

“Outstanding Achievement in Reading” – Cochise Elementary School: 1980-1982, 1984  (I was shafted in ’83).

“Super Citizen Award” – March 1982, September 1983

“Blue Ribbon in Long Jump” – Field Day 1985

“Eating All of My Crust Award” – Grandma Slaybaugh, 1983

“Junior Assembly, Fox Trot, 1st Place” – 1987

Hmm … I think we’re gonna need a bigger boat card.

There is the Realtor who feels the need to point out the backyard or the front door to the dumbfounded buyers.  The agent who demands to know “if this is a house you can see yourself living in” within seconds of stepping through the front door.  It’s a carnival of overselling that I can only hope has more to do with the camera than the standard practices of my erstwhile colleagues.

There is one particular practice that repeats itself ad nauseam on these shows, though, that truly makes my blood boil.  I’m speaking of the agents who seemingly forget that their job description as a buyer’s agent is to protect the interest of their clients.  It’s awfully hard to do that portion of the job correctly when you push every property that you look at as the greatest thing since canned yams.

Homes have flaws and some are fatal.  While it is ultimately the burden of the consumer to make that determination, these silly shows raise my ire when the response to the buyer’s observation that there is a train running through the back yard is, “Hmm, let’s go back inside and look at that wonderful kitchen again!”

Or my personal favorite brand of exchange:

Buyer: “This only has 2 bedrooms?  We need at least 3.”

Agent: “Yes, but look at those hardwood floors!”

Buyer:  “The floors are nice …”

Agent:  “And remember that this is your first house.  The first house is never the dream house.  You can always move up to the bigger house in a few years.”

Timeout!  This is the worst brand of advice, and I simply cannot tolerate it.  No, the first house will not be the dream house, but to advocate making sacrifices on the aspects of the home that will impact resale potential the most is unconscionable.  You don’t eliminate the third bedroom and 75% of future buyers, you eliminate the hardwood.  You don’t purchase the stigmatized property with the highway behind it just to get the kitchen with the stainless steel appliances.  Those are poor purchasing decisions.

If I had a nickel for every time I heard that a first time buyer should not worry about some major feature of a house, I would be a piggy bank.  While it is always important for a buyer to discern the future value potential and ability to resell a property he or she is considering, it has somehow become cliche that it is not as important to the first time buyer.  As if the lower dollar value of the investment or the knowledge that he or she will only be in the home for a couple of years would somehow mitigate the importance of due diligence.

I maintain that future value concerns are even more important to first timers than most.  For the very reason that they will likely enjoy a shorter stay in the home, they need to be especially cognizant of resale capability.  The retired couple who is buying the home they envision for spending the duration of their golden years can more afford to make a purchasing decision with their specific needs in mind than the couple that is just getting started and will use their first property as a springboard to their ultimate home.  They don’t want to get off on the wrong foot by making a poor initial investment.

You can more afford to screw up your purchase if you never plan to sell it.  If this is the house you plan to die in, by all means, buy the one on the ancient burial ground with the sweet discount and benevolent (hopefully) spirits.  Otherwise, buy something that someone else will want to buy from you.

So first-time home buyers, you will have to make sacrifices, especially if you are looking in a higher end market like Scottsdale.  That does not mean you should settle for having a power plant next door or the funky one bedroom house with the garage converted to a recording studio.  Eliminate the properties that have unfixable or expensive structural/locational problems.  Remember, you can always replace the vinyl flooring and the laminate counter tops.

Not so easy to re-route the Amtrak.