by Paul Slaybaugh | Jul 16, 2009 | Home Selling, Scottsdale Real Estate
Picture a bowl of primordial soup. No, really picture it. What does it look like? I see a gelatinous, gray gumbo of sorts. The contents within completely impervious to the light of the sun underneath an opaque, spoon-devouring outer layer. I don’t need to make out the individual invertebrates that I sense roiling about the porcelain confines to intuit that a wayward finger would disappear into tiny, prehistoric mandibles within moments of straying into the land of the culinary lost.
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.
by Paul Slaybaugh | Jul 12, 2009 | Scottsdale Real Estate
My wife has an affinity for collecting quotes. Whether humorous or inspirational, on fridge magnets or flowery stationary, she likes having the visible reminders nearby as a lifeline to help pull her out of whatever malaise she may happen to find herself mired in at a given moment. Truth be told, prone as I am to ridicule the sappy sentimentality, I kind of like having them around the house, too. Sitting here in the kitchen on a slowly unfolding Sunday morning, sipping my first cup of coffee and awaiting the incubating bounty of cranberry muffins that is teasing my nose and stomach, one particular wall hanging catches my eye. Emblazoned across its whitewashed, faux wooden surface in black scroll lettering is the following:
“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.
by Paul Slaybaugh | Jun 16, 2009 | Home Buying, Home Selling, Scottsdale Real Estate
Everyone wants a piranha.
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.
by Paul Slaybaugh | Jun 4, 2009 | Scottsdale Real Estate, This & That
We Realtors are a self-important bunch. Just ask us, we’ll tell you.
“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.
by Paul Slaybaugh | May 29, 2009 | Home Buying, Scottsdale Real Estate
So I’m enjoying one of the myriad HGTV Real Estate shows the other night. First time home buyers were the focus of this particular program. Unable to watch without properly entertaining myself with my own sarcastic commentary (did that agent really just say that?), this has become one of my favorite pastimes.
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.
