Category Archives for ‘Advice’

You know in the movies and on TV when a drug addict falls off the wagon and goes on a bender, how he wakes up the next morning and is confronted by the physical evidence of his failure? I felt like that this morning. Except, instead of being surrounded by passed out hookers and drug needles, I had to face an empty Cheez-it box, the wrapper of a dark chocolate and caramel Dove bar and an empty wine box.

Diets are hard. Also? Garlic and Parmesan Cheez-its are like meth; one hit and suddenly you’re 5 days into a downward spiral filled with carbs and sugar and you don’t even know how you got to Wendy’s, much less how you managed to eat not one but two double patty bacon blue cheeseburgers and a large fries.

Not that this has anything to do with today’s post. I just felt the need to confess.

Let’s talk about “The Market”. Yes, The Real Estate Market, hence the air-quotes I was just making in your head while you were reading this. I know, I know, you don’t really care that much about The Market unless you’re buying or selling right this very second. Even then you’re not sure you care very much. I get it. It’s boring. I’ll try to keep it brief. And as your reward for sticking with it, I’ll end this post with a sexy photo.

As of today, Maricopa County has 14,664 residential properties actively listed for sale. To give you an idea of scale, when The Market had gotten super schlumpy* back in 2009 there were as many as 50,000-60,000 properties listed actively in Maricopa County. Conversely, when the market was moving like lightening and prices were jumping up $10K every month back in 2005 we had as few as 5,000 listed properties.

The inventory has been steadily dropping for awhile now, but it’s starting to reach scraping-the-bottom-of-the-barrel levels.

OK, you’re saying, so how does this affect me and why should I care?

Well if you’re a buyer, this means it’s going to be more difficult to find a house. It’s like when you go to Walmart to try to find something cute to wear. You may be able to find something that will work, but it’s not going to be easy and you’re going to have to do a lot of digging through gross stuff ‘designed’ by B-list celebs. When you do spot a shirt that’s actually pretty cute and not at all disgusting, you might get into a fight with a lady wearing a leopard-print tube top who thinks she saw it first (and if you do, you should just yank on the bottom of her top, grab the cute shirt and make a mad dash for the register while she’s covering her chestal region. All’s fair in love and Walmart). House buying in a more normal market is more like shopping for a cute outfit at Target. You’ve got a reasonable amount of options and time to try everything on and make sure it doesn’t fit weird.

If you’re a seller, I have good news and bad news about the current state of The Market. The good news is that with so few options, if you price your house correctly it should sell fairly quickly. The bad news is, I know you’re thinking this means you can bump of the price on your house, but it doesn’t, really. Yet. As of right now, we haven’t experienced any real spikes (or even gradual increases) in pricing yet. But that said, a decrease in supply is generally an indicator of an upcoming increase in prices. We just may be finally getting back to a market where our real estate increases in value, rather than holding people hostage to houses they’ve grown out of or that aren’t in areas they want to live. That would be peachy, right?

And what if I’m not currently buying or selling, you ask? How does this low supply situation make any difference to me at all? Well, here’s the thing: Arizona real estate may always be volatile. Hopefully we won’t have an exact repeat of the insane roller coaster ride prices took from 2004-2009, but we may have that kind of activity again on a smaller scale. If supply gets low enough and people get desperate enough to obtain property, competition will drive prices up. Will you be one of the people who didn’t learn anything from the last time and who jumps into buying up investment property at inflated prices? Will you get caught up in the frenzy and help to push everything up further? Will you be party to the cycle so many of us (ME) didn’t see coming and that had a drastic effect on our bank accounts? Or will you be able to step back and understand the bigger picture and use this information to make smart real estate choices not because it’s what everyone is doing, but because it’s right for you? I’m just doing my part to keep us all in the latter category.

OK, I lied and I didn’t keep it short. But I totally have a sexy picture for you:

Who doesn’t find a young father with a hot new haircut reading to his adorable son before bed totally sexy? No one. You’re welcome.

*Schlumpy is a technical real estate term that means slow, shitty and depressing.

New builds are the Angelina Jolie of home buying: glamorous, alluring, sexy and perfectly-coiffed, but at the same time, inscrutable, unpredictable, prone to man-stealing and potentially not worth the high paycheck. When you first see them all dressed up for the Oscars looking like the unattainable fantasy of all men (and 75% of women), those model homes are hard to resist. It’s important to keep in mind, however, their history of wearing blood in a vial on a necklace and that time they passionately kissed their brother at a televised award show. These things can influence your decision, is all I’m saying.

Here’s how a visit to the new build models has a tendency to go:

The large colorful signs and banners draw you in on your way home from lunch Saturday afternoon. You may not even be seriously considering purchasing a new build. You might not really be in the market for a new house. That won’t seem to matter when you glimpse the circus-like atmosphere of the model home center. It’s inviting and fun. They’re begging you to stop by. Why not just take a look?

You walk in the door to the sales office and are immediately inundated with floorplans, color choices and a subdivision layout all over the walls. There’s a smiling, friendly salesman who acts so familiar you wonder for a split second if you already know him from somewhere, but you don’t.

You’re struck dumb. It’s sensory overload. You know these houses and the things in them must cost money, but you don’t see prices anywhere. You become tense at the possibility that it’s wildly out of your price range. What if you ask about the prices and they’re embarrassingly far out of your financial universe? That would clearly be humiliating and should be avoided at all costs, you decide.

You throw out a test question: Do you have a list of what’s available? The smiling agent turns to you and pauses. You see a deadness in his eyes. The silence is just long and awkward enough to make you realize how stupid you are for asking something like this. The answer must be utterly obvious, but you don’t know what it is. It was a terrible, stupid question. The sales rep finally answers, Well, why don’t you tell me what you’re looking for and I’ll let you know what we have that would work for you. This is where you conclude you should just let the agent tell you what he wants to and avoid all uncomfortable conversations.

By the time you’ve left the new build office, two hours later, you think you’ve agreed to something, but you’re not sure what. You registered and signed your name on some document, but it was only presented to you long enough for you to scrawl your signature and then was whisked away. You remember remarking that a 6 bedroom, 8 bath home with a basement and both and indoor and outdoor swimming pools was a nice house and you wonder if you’ve agreed to buy it. The agent seemed really excited when you said you liked it. And you’ve got free bottles of water in your hands. That has to mean you’ve purchased something.

It doesn’t have to go like this. Don’t be afraid to ask the sales agent specific questions. He’s the dumbass, not you. To help you navigate the reality of buying a new build house, I put together a list of 10 questions you should never be afraid to ask.

1.    What is the average build time?

This will vary depending on the builder, the market and the availability of materials, but you can expect an answer of anywhere from 90 days to 8 months.

2.    Do you have any available specs?

A spec home is a newly built house that’s already had everything in it picked out by the builder and constructed. These are also referred to as ‘inventory homes’. They are usually ready to close in 30 days and they have a set price.

3.    Is there a lot premium?

New build pricing can be ridiculously confusing. There is usually a price range each floorplan ‘starts at’ (the range is for the different elevations), and then the upgrades increase the price from there. With some new builds all of the lots will have a cost or a ‘lot premium’. This will be higher if the lot is larger or in a better location. With other builders only the really great lots have a lot premium.

4.    What is the average amount people are spending on upgrades?

The builder isn’t going to be able to tell you how much you’re going to want to spend on upgrading the counters and the flooring and what have you, but usually the sales rep can give you an estimate of what other buyers have spent. This is sometimes in the form of a percent. So, if they tell you the average buyer is spending an extra 10% on upgrades, and the house you’re considering ‘starts’ at $300K, then expect to be up between $330K and $350K when all is said and done including upgrades and lot premiums, elevation and the like.

5.    How much earnest do you require?

Every builder will have a different amount required at the time of writing the contract to secure the lot and start the building process. This is usually not a negotiable figure. It’s also not usually refundable once building has begun.

6.    What are your incentives?

Most of the time (just to further confuse things) the builder will have some sort of incentive program that takes money off of the price. This is usually fairly convoluted and difficult to understand. Make sure to ask as many questions as it takes to feel like you are comfortable with what the incentive is and how it can be used. Sometimes they will have a $25K incentive to upgrade options that cannot be taken off the price. So you need to realize that you will have to use all of the money at the design center to get it. You can’t reduce the base price using the incentive.

7.    Does your preferred lender have any incentives?

Sometimes the preferred lender of the builder will have additional incentives for using them. Make sure you get all of the rules on this as well.

8.    What are your HOA fees and what does this include?

This seems like an obvious question, but you often get caught up in the whirlwind of all of the other info and forget to ask this one. It’s an important one.

9.    What is standard with your properties?

Different builders have wildly different base standards. With a KB home, you often start at a pretty low price, but that price includes 8 foot ceilings and laminate flooring with gold metal transitions to the carpeted areas. With a Blandford home, your base price is going to feel high, but you’ll usually get granite counters, 18 inch tile and lovely plumbing fixtures without spending a dime extra. It’s important to know where you’re starting. Ask the sales rep for a tour of the model and ask which things are standard with that model and which are upgrades. You’ll probably be shocked. Much of what’s in the model isn’t even available for the actual buyer.

10.    Is landscaping (front or back), appliances, blinds or paint included?

This is another one that will vary from builder to builder. Front landscaping is pretty commonly included, but still often not at all. Meritage had an EI package at one point that stood for ‘Everything’s Included’ (blinds, landscaping, appliances). Sometimes these things are not included, but can be added as an upgrade at the design center.

Or hey, better yet, call your agent and she’ll run interference with the sales rep. Your agent will be happy to meet you out there at a moment’s notice. She doesn’t get paid unless she goes with you the first visit. And it’s nice to see the sales reps get a little nervous when they’re evenly matched. If I’ve learned anything, it’s that deadeyes are countered with a steady gaze, an eyebrow raise and a head tilt.

You’ve seen 87 houses:

53 were horrible, disgusting homes you were fairly certain should be condemned

7 were nice but backed to a major road, giant electrical lines or a Walmart

20 were almost right, except the floorplan wasn’t Feng Shui

5 totally would have worked except you found too many dead scorpions and/or cockroaches for your comfort

1 seemed perfect until you researched the sex offenders in the area and realized a child molester lived next door

But one house was THE HOUSE. One house has everything you’re looking for. The master has his and hers closets. The kitchen has an island with room for four barstools. The downstairs guest room has its own bathroom for the in-laws who can’t make it up the stairs. The backyard has a pool with a margarita table in it. There’s a closet under the stairs that’s totally big enough to house an orphaned magical nephew you would prefer to pretend doesn’t exist, if you needed to. The house is close enough to an elementary school the child molesters can’t legally live within a respectable distance. It’s the house you can see you and the hubby and kids living in for the next 20 years.

So now what?

Now you come to me and say, OK, we want to make an offer. Can we go in $30K low? It’s a buyer’s market, right? I mean no one can afford houses right now, so we should be able to get this for a steal, shouldn’t we?

This is where I cradle my head in my hands and try to decide if wine at lunch is acceptable if I put it in a sippy cup.

I’m not saying I don’t understand where you’re coming from. I remember when Jason and I bought our first house, way before I had even considered diving into the shark tank that is the life of a professional Realtor. I had no idea what the house was ‘worth’; I just knew it seemed like a rip-off to pay asking price. It felt like in Rocky Point when you want to buy a piece of jewelry from the street vendors; only the suckers pay full price, right? And then the locals laugh at you behind your back.

I’m here to tell you: Buying a house is not like bartering for cheap junk in Mexico. I know, it’s a revelation.

There are three things you need to take into consideration when making an offer on a house. That’s right, only three things. It’s not scary and complicated if you can boil it down to three things. And this works in any market. You don’t need to consult a stock broker or a weather girl or even a tarot card reader if you just consider the three following things:

1.    The listing price in comparison to the recent sold comps.

2.    How long the property has been on the market.

3.    How bad you want the house.

Yep, that’s it. That’s all of the information that should go into what offer to make on the house. Let me walk you through an example so you can understand how it works.

Example 1:

Perfect house A is listed at $250,000. The comps show other similar houses in the neighborhood have closed escrow for between $227,000 and $268,000. House A seems to have better upgrades and amenities than most of the sold comps.

Perfect house A went on the market 2 days ago.

Perfect house A is the perfect house! You reallyreallyreallyreallyreally want it!

The analysis of this data shows that you should make an offer at or slightly above list price. House A’s value is supported by the other houses that have sold. House A just went on the market, so they are unlikely to accept a low offer and could potentially have competing offers. You can’t afford to let House A go because you superalot want it. You need to make a strong offer.

OK, you say, I get it that if I really want a house and it hasn’t been on the market long then I need to make a good offer. But you’re a Realtor and you always want me to offer more money so I can get the house because it’s not your money. Show me how this system actually benefits me.

Yes, let’s do another example.

Example 2:

House B is listed at $279,900. Neighborhood comps have closed in the $240,000 to $270,000 range recently, but House B seems to need a lot more work than any of the comps did.

House B has been listed 48 days with no offers yet.

You like House B and it would definitely work, but it needs all new floors and a kitchen remodel, so for it to be worth it you’d need to get it at a really good price. Otherwise you’re OK with moving on.

Ah, so House B is an excellent candidate for a lowball offer. The seller doesn’t have anything else to go with and you’re not going to be devastated if you lose out on the house. The comps support a lower price. In this case, there’s no harm in going in fairly significantly low.

Are we all on the same page now? Alright, I won’t break out the wine yet.

I’ve had a post brewing in my brain for about a week. So far I’d held back from unleashing it on the world because I didn’t want to hear all the bitching about how I’m a Scrooge and a Grinch and various other nefarious cartoon characters who eventually turn into saps at the end of the movie. Don’t hold your breath, People, I’m not going to grow a heart anytime soon.

But I think my blogging idea canal is clogged with this post and I just need to write it and get the pathway cleared so the other blog topic ideas can start flowing again. Or possibly I need some fiber. One of those two.

The point is: The Winter Holiday Season, and specifically, Christmas, is the worst. AmIright? Don’t answer it. I don’t want to hear about how you love how this time of year brings out the best in people and makes you feel all cheerful and cozy and loved. It’s THE WORST.

(Edited to add: I started this post last week and I think I must have been in a seriously rotten mood. I’m posting this because I still agree with the general content, but wow. Not maybe quite this strongly. Wouldn’t you love to be married to me? #moodinessrulz)

Top Five Things That Suck About Christmas:

1.    Holiday Card Pictures – You know what I’m talking about. Everyone has to dress up in coordinated outfits, assemble at a specific time and place and smile at the same time. In theory, it should take 10 minutes tops. In reality the outfits you spent an entire day trolling the mall to find only fit 3 of the 5 people you purchased them for. In reality you have to bribe the youngest with enough sugar to fuel a space shuttle to Mars to get him to stand there and attempt a smile. In reality, the only picture where everyone in your family looks halfway reasonable and sort of like they might be smiling, is the picture where your second chin is most visible and you look like you have a lazy eye. And that’s what you end up sending out so the people who haven’t seen you in a year will know how you’re doing. That’s the mental picture they’ll have of you.

2.    Holiday Lights – I’m pretty sure the manufacturers of these stupid things are in a secret alliance with the National Association of Divorce Attorneys. Every year after the holiday ends my husband tests each string of lights and carefully winds them individually and puts them neatly away, but every year when he opens up the box labeled ‘Christmas Lights’ they’ve morphed into a seething, tangled vat of mostly dead bulbs, as if they have a mind of their own. That moment when my husband unearths the holiday lights of horror, is when he turns into a cantankerous, angry, holiday hating beast. I can see in his eyes that I turn into the bossy shrew who forces him to endure the light torture every year. It’s a wonder we’ve stayed married through nine holiday seasons so far. I’m convinced it’s an intentional plot.

3.    That person everyone knows who’s ‘all done!’ with shopping and all other holiday prep the day before Thanksgiving – Oh really? You’re all done with everything? Wow, good for you! You know, I have a special prize for you for being the first one to finish up the eleventy million tasks associated with this holiday. It’s right here in my kitchen. Did you read The Help? No? Oh, great book. Here it is, Minny’s Chocolate Pie, just for you because you’re so special. I got the recipe from that book. Now, if you’ll please excuse me, I have to go back to freaking the eff out about how I’m never going to get it all done and the holiday will be ruined for everyone in my family.

4.    The tacky – For every beautiful and tasteful holiday decoration there’s a hot pink artificial tree with zebra striped ornaments all over it. For every handmade, meaningful ornament you truly love, there’s a dancing Garfield the Cat wearing a Santa hat statue that plays Jingle Bell Rock my four year old cannot. Stop. Making. Go. Off. For every ‘Silent Night’ and ‘Peace on Earth’ there is an Alvin and The Chipmunks’ version of ‘We Wish You a Merry Christmas’. For every Bob and Doug’s ’12 Days of Christmas’ there’s a Justin Beiber ‘All I Want for Christmas Is You’. You can’t hide from the tacky. It’s drowning the cool. It’s killing the meaningful. Pretty soon we’re all going to be wearing matching hoodie/footie’s with cartoon Reindeers all over them and exchanging matching florescent purple Shake Weights. Mark my words.

5.     Guilt over the closing of another year and what I didn’t accomplish in it – Face it, even though the closing of another year is just another human construct that doesn’t really mean anything, we all feel the need to reflect on what we have (and have not) accomplished in the last year. The pounds we didn’t lose judge us from our midsections. The money we didn’t make mocks us from just out of reach. The organizational system we implemented last January remains in the corner we pushed it into mid-February, gathering dust. Sure, maybe things will be different next year, but considering your track record, how likely is that?

(OK, my heart grew a little in the last week. These things still suck, but now that the lights are actually on the tree and the presents are almost all purchased, I’m kind of looking forward to the big day. What can I say; I clearly should be medicated.)

One of my favorite business tips bloggers, Erika Napoletano, who writes Redhead Writing, does a regular feature called The Bitch Slap. This is where she gives her readers the hard truth and doesn’t pretty it up to save feelings.

I’ve decided the homeowners of the state of Arizona need a Bitch Slap, and I’m prepared to hand it out this morning.

The topic we need to have a little heart-to-heart about this morning is: Arizona Rooms. You know what these are. In Florida they call them Florida Rooms. They’re the backyard patios that have been turned into sort of outdoor rooms. Like you walk out the sliding glass door from the living room and you’re actually in another room, usually with windows and another exterior door and some kind of modified outdoor flooring. Often there is a little window A/C unit because otherwise the room would turn into a giant oven in the summer.

OK, people, here comes The Bitch Slap: these Arizona rooms are a horrible idea. No one likes them. Not even your Great Aunt Gracie who doesn’t really like to be outside but sort of likes to pretend she’s outside sometimes, actually thinks they make sense. Even Great Aunt Gracie thinks Arizona rooms are hideous, stupid and a giant deterrent to resale.

That’s right. I know you think you saw a well-done Arizona room once, or you knew someone who walled in their patio and it kind of worked, but you’re wrong. Or you’re lying. Or you’re stupid. One of those three. Arizona Rooms are crimes against architecture and good taste.

I guarantee I have not ever, in my almost seven year career as a Realtor, had a client walk into a house, spot the Arizona Room off the back and say, “Wow! Look at that! I have always wanted a poorly constructed homemade room with rancid outdoor carpet instead of a back patio! I love how it cuts off all natural light to the living room and kitchen area and makes the whole place feel more like a cave. And I bet that little wall A/C unit totally keeps this tiny green house nice and cool in the summer and isn’t a complete eyesore from the remaining, although constricted, backyard!”

Not one. I promise.

I almost get why you think it might be a good idea. You’re from some other state where people like to sit on their back porches (because they’re called porches in that state) and admire their backyards and relax. You think you will miss this in the summer because it’s just so hot in Arizona. So you think if you wall in the patio and air-condition it then you’ll be able to enjoy both the backyard and not die of heat exhaustion.

The logic is almost there, I’ll give you that. But just so much a lot of: NO. No one who lives in Arizona wants to sit and look at the heat waves rising off the ground in our backyards in July. We’re happily content to sit outside and enjoy the weather November through March. We prefer the comfort of the true insides of our houses when the weather is brutal. Did people sit on their porches all bundled up to watch the snow fall in the winter in whatever godforsaken part of the country you’re from? No? Well you live in Arizona now; it’s time to adjust.

Also? You’re not a contractor. You don’t have home building skilz. I don’t care how much HGTV you watch, you cannot build your own sort-of-addition and not have it come out as pretty as a steaming pile of poo. No one wants to sit inside DIY rooms that do a poor job of keeping moisture out and an even worse job of keeping the small amount of cool air the ugly ass window A/C unit you bought on sale at Home Depot generates in.

The point is, if you ever had the fleeting thought that it might be nice to turn your patio into an Arizona Room, please immediately reach for the nearest fork and stick it in your own ear. Then go back to enjoying the legitimate inside of your actual house.

The Realtors of Arizona thank you for not totally effing up your resale value.