The highs and lows of parenting and real estate.

Yearly Archives for 2008

Things To Do! – Beta

I’m adding a new feature to this site (one of many new things to come), and I haven’t had a chance to get all of the details properly worked out for a formal unveiling; but rather than put it off indefinitely until I manage to squeeze 26 or 27 hours out of every day and am able to get it together the way I want, I’ve decided to start this out with a little test version, or ‘beta’, if you will.

I’m going to have a couple of guest bloggers on my site once or twice a week. The first one will be Amanda, who is one of my very best girlfriends and who always has her finger on the pulse of the East Valley community, with a column we’re calling (right this very second, until I can think of something more creative) Things To Do:

My favorite pick of the week: letting your pup run around on Chase Field! Read on…

*ArtFest of Scottsdale – Love it!

*Fetch on the Field – Let your dogs run around the Diamondbacks field!! It’s a giant baseball dog park! $10 for 2 humans and a dog, $5 each extra. All proceeds to Animal Control and the Humane Society

*Chihuly: The Nature of Glass – Can’t wait to see this! Awesome glass art at the Desert Botanical Garden. Nov 22- May 31.

*Mesa Fall Festival – Sat, 10am-3pm. Music, art, commercial vendors. 15 E. First Ave.

*The Big Pour – Beer Festival, Hohokam Stadium, Saturday 5-9pm

*Mad Mud Run – Saturday. Ick. 4 miles of running in the mud.

*Backstreet Boys – Backstreet’s back alright…. Dodge Theatre, 8pm, Friday

*Night Lights – Light art and music for the holidays. Saturday, downtown Scottsdale.

*Hot Dogs and Antiques – There’s a combination for ya! Grand opening of Pittsugurgh Willy’s hot dogs in Merchant Square. Get a dog, get a discount. Sat, 11am-4pm. 1509 N. AZ Avenue in Chandler.

*Holiday Boutique – DaySpring United Methodist, over 50 vendors, 1365 E. Elliot in Tempe. Thur-Saturday

*Chris Botti – Mesa Arts Center, Friday 8pm

Restaurant of the Week:

Lucille’s BBQ – I don’t know how I missed this one, everyone else seems to already know about it. This chain opened a location at Tempe Marketplace. We went there on a whim this weekend and it was SO good. Real southern-style BBQ. Fried green tomatoes, grits, and amazing BBQ. Highly recommend, and I’ll be running back there soon. 🙂

Hike of the Week: West Fork of Oak Creek One of my favorite AZ hikes, and it’s perfect this time of year. Easy 3 miles.
Thanks, Panda!

Anything Can Be Fixed

I am currently working with three different clients who have radically different viewpoints on house repairs.

Client #1:

A first time buyer who is stressed about anything that appears to be broken in a house. Drywall cracks are especially disconcerting to the couple (and unfortunately, common in Gilbert, the primary location we have been looking in) but we’ve discussed several other issues that have made them uncomfortable with the idea of purchasing one property or another.

Client #2:

A buyer with much in the way of DIY skills, who wants to purchase a property with lots of potential in the ‘sweat equity’ arena. We’ve looked at houses with partially finished additions, houses with doors that lead out to nothing but a 15 foot drop and houses with termite infestations. None of these issues have deterred him, just the complications involved in obtaining a mortgage on these houses.

Client #3:

A seller with a house that has great bones, but that cannot catch a break concerning the escrow in which we’re currently embroiled. This poor house has encountered in the last three months: pool equipment theft, inadvertent locking of a security door causing the house to be inaccessible, a slow leak into the kitchen cabinets causing water saturation and mold, pool pump leaks, a brand new garage door opener not opening, a bizarre leak/paint bubble in an exterior wall in the master bath and various other small issues/necessary repairs.

All of these home buyers/sellers have different motivations for their strong feelings about what needs to be repaired in the houses they’re dealing with. Client #1 does not have a lot of capitol to put into a house after purchase, so they need it to be pretty move-in ready. Client #2 wants something that he can put his own stamp on. He loves things that are not as attractive to other buyers, but that maybe he can polish from a stone into a diamond. Client #3 knows that his house isn’t a lemon, but is frustrated with the bad luck he’s had regarding repairs.

My personal view about home repairs is that anything can be fixed. Termites can be treated, mold can be re-mediated, leaks can be repaired, pools can be degreened and refinished. It’s all a matter of how much it will cost, and who is going to pay for it. And this is why you need a decent real estate agent, because those are the big questions in real estate. How much is it going to cost to make my house into my home… And who will pay to do it? Your agent needs to be there for you to get that answer and make sure that it is the one the will work for you.

There’s a Party in my Potatoes and You’re Invited!

I’m going to let you in on a secret, just between the two of us, and only because you’re a faithful reader.

Come a little closer… just lean in a bit and keep your voice down. That’s right, you’re cool. Nothing exciting here to see, People, keep moving.

Ok… I’m going to give you the recipe for Party Potatoes. SHHHHHHH! I said keep it down!! Act a little more nonchalant! Good lord, you want the whole world to know?

Party Potatoes

Party Potatoes is an age-old Disbrow Family recipe. Mom/Grandma Jackie only makes them on holidays and special occasions and gave me the recipe when I got married, with the expressed instructions that I was NOT ALLOWED to bring the dish to any occasion at her house.

They may not look like much, but I regularly bring Party Potatoes to Tolar/Newlin family events, alongside various other ‘gourmet’, billion-ingredient dishes, and the one that is gone first is always: Party Potatoes.

So I’m sharing this recipe with you, because Mom/Grandma Jackie Disbrow does not read blogs. However, you are officially sworn to NEVER BRING THIS DISH TO A DISBROW FAMILY OCCASION. Do you hear me Internet? Because I am not joking. Use this recipe for your own personal taste bud joy, but do NOT upstage the Jackie. Because I will cut you. Don’t cross me.

It’s very simple, People:

1/2 white onion – chopped
1 can condensed cream of celery soup (undiluted)
4 oz cream cheese
3/4 package frozen potatoes O’Brien
1 cup shredded cheddar cheese

Mix the first three ingredients and microwave them for 3ish minutes (until the onions are clear). Stir with frozen potatoes and bake at 350 degrees for approximately 30 minutes. Cover with cheddar and bake until cheese is melted.

Yep, it’s that easy. Take it to Thanksgiving Dinner and let the praise roll in.

Building New – Woo!

Our new house is currently under construction and due to be completed and close December 23, 2008. Which, I know, is an insane date to attempt any kind of move. But I’ve decided that I’m kind of into it. I really do not love the whole ‘decorating for Christmas’ thing and I actually think it will be pretty special to spend our first night in the new house on Christmas Eve.

Anyway, we are building in a new planned community out in North East Mesa called Mountain Bridge. It’s a Blandford Homes community and I couldn’t be more excited. Check out the view from our balcony off of the master bedroom:

master patio1.jpg

Yeah, that’s right; a green belt AND MOUNTAINS. I’m genuinely sick-to-my-stomach-ecstatic over the idea of mountain views from my own balcony. WITH ENOUGH BEDROOMS FOR ALL OF MY KIDS TO HAVE ONE OF THEIR OWN (yep, that’s how excited I am, I’m shouting at the Internet). Whee!

But enough of my own glee. My point is that building a new home is kind of an awesome option. I have several clients who have either gone this route, or at least considered it recently. I’ve shown 3,600 square foot houses for $299K out at Signal Butte and Elliot. I’ve sold 1,800 square foot houses in Maricopa for $114K (last month!). I currently have a client under contract to build at McQueen and Ray on an over-sized lot, 2,200 square feet, for $250K. There are fabulous deals to be had. There are great builders still in business.

Don’t however, make the mistake of going this route alone. The deals may be amazing, but the pitfalls are deep. Builders continue to declare bankruptcy without warning. Brown Family Communities, a local builder who was in good standing with all of their creditors, abruptly filed for bankruptcy, October 24 of this year, leaving buyers under contract high and dry. Keep yourself covered. There are things you can do to protect your earnest money. Hire an agent to show you the way and watch your back. And keep a close eye on this page.

Park Weather

How happy are all the Zonies to be living in the land of the sun right now? In our family, we couldn’t be more thrilled that it’s finally perfect park weather. Today we loaded up the wagon (Gray calls it the ‘Santa Wagon’ because Santa gave it to them last year for Christmas) and walked over to the park near our house.

Santa Wagon

swing hang

Gray Necklace

Jo Swing

And that is why we live in Arizona. Mid-November trips to the park where you can accidentally get caught in the sprinklers and not freeze to death.

Edited to add: This is also one of the reasons why I am a REALTOR. I need to remember days like this (Thursdays when all the other corporate drones are sitting at desks in cubes and I am at the park running around with my monkeys enjoying the gorgeous weather and winter green grass) when I am beating my head against the wall trying to meet under-writing’s final funding conditions that seem like they will never end while simultaneously calming my buyer who is ready to draw lender blood. These days make my chaotic lifestyle worth it.

My Blogging Plan

I’m currently trying to schedule enough continuing education classes in, around and between the activities to which I’m already over-committed, to manage to keep my license in good standing when it comes up for expiration at the end of February. Today I wedged three credit hours of Disclosure into the morning and then three ‘General’ credit hours dedicated to ‘Blogging for Realtors’ into the afternoon. The class was taught by Rob Gibbs and although I didn’t have extremely high expectations for the class (the Disclosure teacher was a little ‘new’ and ‘nervous’, so to speak), I walked away motivated, inspired and enriched.

This blog is good for me and my business for several reasons. I need to recommit myself to making it work. I know that it is going to require some time and dedication, but in the long run, it will be worth it. Part of my problem in keeping with it in the past, is routed in my perfectionist, do it the BEST or don’t do it at all attitude, which tends to veer into the ‘don’t do it at all’ lane on a regular basis (IE: most of the time, my house is kind of a pig sty, except the random night when I’m vacuuming lampshades and taking a toothbrush to baseboards and not sleeping until 3AM).

The point that I’m attempting to embrace is that it’s better to post SOMETHING of small to medium value on a regular basis than the equivalent of “War and Peace” once every six months. And thus, a plan is born. Here are my goals: Five posts a week; two of general real estate content, one kid/my life related, one recipe and one about a local event/restaurant/activity. However, I do not guarantee length, or even Earth-shattering-ness (or, for that matter, even all actual words).

That said, feel free to categorize this post as General Real Estate Content. And here you go, on to the real estate related portion of the post. During my Disclosure class this morning, the teacher (also a home inspector) gave us a list of useful websites to help buyers obtain information about the house they are buying:

Arizona Repair Masons & Arizona Ram Jack
Arizona Registrar of Contractors
The Arizona Geological Survey
Environmental Data Resource
Better Plumbing

So there you go. I’m going to do my best. Hope to see you often!

Trend Homes Model Auction – Sept. 14, 2008

I attended a property auction up in Scottsdale last weekend with a client looking to buy. She was in town from Montana wanting to buy a second home/investment property out here for her and her husband to be near to warm winters and his daughter, who lives in Paradise Valley. I had set her up with an email auto-search of the types of properties for which she was looking, and one of the houses that popped up on the search was a model home being sold at auction.

I’m sure you’ve heard of the auction phenomenon. The Dobson Bay Club townhouses down the street from my parents had a huge ‘UP FOR AUCTION’ banner hanging from their front gate for several months last spring, inciting many a passing conversation among the Dobson Ranch bunch.

“Starting From [some inconceivably low number]!”, the advertising always reads on these types of sales. People who aren’t in the market for this kind of property at all suddenly sit up and take notice, wondering to themselves, How can I make this work for me and sell it for a huge profit? Even those who consider themselves to be savvy of the market, like myself, see deals like these and wonder, What will these end up going for? And how exactly does the whole thing work?

So I was excited to find myself in sitting the fifth row back from a stage in one of the ballrooms at the Hyatt Regency, Scottsdale last Sunday, at a Kennedy Wilson run property auction of Trend model homes.

Here are the basics:

1. My client had to view and do any inspections she wanted on the properties before the auction date. The houses were sold ‘As-Is’ with no inspection contingencies.

2. She also had to be pre-qualified through the preferred lender at the auction in order to be given a number to bid (in fact, just to be let in the door).

3. They were auctioning off 30 properties total; all model homes from four different Trend Home communities: Cooley Station in Gilbert, Lakes at Annecy in Gilbert, Tartesso in Buckeye and Cortessa in Waddell.

4. The starting bids were the minimum sales price (versus having an unknown reserve amount that the house won’t sell for unless it is met).

5. The starting bids ranged from $90,000 for a 1351 square foot house in Buckeye to $375,000 for an almost 7000 square foot house in Waddell.

And basically, it was pretty much just like an auction you see on TV. There was a head auctioneer on the stage shouting out prices and all of the buyers had big yellow numbers. The auctioneer had three helper guys in matching suits who would ran around the edges of the crowd and shrieked a sort of ‘Hep!’ when someone bid. It was loud (I don’t love loud). And sadly, my buyer didn’t even get a chance to bid. She had a maximum bid price that she and her husband had predetermined that was about 145% of the lowest bid price, and she didn’t even get to raise her big yellow card. That’s how quick things went.

We only stayed for the first 18 houses (about 45 minutes) because my client was bummed out that she’d lost. But here are some numbers:

House #1 (3/2, 1801 square feet, Gilbert): Minimum Bid of $125,000 – Sold for $213,000
House #2 (3/3, 2455 square feet, Gilbert): Minimum Bid of $145,000 – Sold for $225,000
House #7 (5/3, 6914 square feet, Waddell): Minimum Bid of $375,000 – Sold for $446,000

I did the math on the 18 I watched and together, they sold for about 137% of the minimum bid. The closest to minimum bid of the ones I saw went for 113% of the minimum and the farthest went for 169%. The ones my client liked were the most desirable ones and went for the higher end of things.

All in all, I think for the most part these houses were a decent deal. I have some concerns about buying a model home in a half-built community (Trend Homes filed for bankruptcy in February of this year), but the prices stand up to the comparative properties. However, I think a lot of the people who came in to this auction had their eyes on the prize of the minimum bid. In real estate, that listed number is generally a maximum bid, so it’s easy to get excited about the idea of no one else wanting that one house that you do. That was just not the case. There were plenty of people there who would have taken any one of those houses for anywhere close to the minimum bid.

“Hope” and Realism on TV

Real Estate on TV is all the rage right now. The DIY shows seem to have given way to shows about ‘fixing and flipping’ or remodeling to sell for the most possible money. I am, of course, obsessed. It’s my two passions coming together (have I mentioned that I LOVE TV? I do. Feel free to sneer, I’m used to it. I still love it).

Unfortunately, for the most part I have to enjoy my real estate TV for its drama and the ridiculousness of it all rather than any resemblance to real life. In fact, I watch that show, “Million Dollar Listing” on Bravo primarily so that I can scream at the TV about how stupid, egotistical and cartoonish the agents on it are portrayed. And don’t let me forget to mention my very favorite pseudo-real estate show, “Flipping Out”. How can you not love a gay obsessive-compulsive narcissist with a fixing and flipping business whose primary hobby is driving his friends and employees sometimes literally insane? You can’t. He’s just so lovable.

However, I watched a new real estate-centric show on TLC today that I actually think has a lot of basis in what’s going on in the industry right now. It’s called “Hope for Your Home”. I’m not sure exactly how each episode is different, but this particular episode was about a family who had purchased a home with an adjustable rate mortgage that was just about to adjust. Their payment was going to go from $2000/month to $3000/month and they couldn’t afford the new payment. They needed to refinance their house to get a loan that would have a lower payment, but couldn’t without increasing the value of the house. A real estate professional came into the house and told them what renovations they should do to increase the value of their house and then brought in a team to help them.

I’m not sure how realistic the details of this process with the family were, but the general idea of a home owner in a mortgage with a payment that’s about to increase is a problem affecting way too many people right now. Addressing this problem with a solution other than: A) Suck it up and pay it, or B) Walk away from the house and let the bank foreclose, is inspiration I think this country can use.

Many, if not MOST of the people who purchased houses in 2005 and 2006 in Metro-Phoenix are underneath their loans. Of those people, the ones who got a loan with a fixed rate and who are staying in the house they bought for the next 5 to 10 years are fine and dandy. All of the rest are likely in trouble. That’s a lot of people who can use some solutions right now.

The family on the show turned a half-bath into a full, made the master closet a walk-in, repainted the exterior and generally uncluttered the house. It cost them $10K and according to a mortgage broker, upped the value of the house from $350K to $400K, allowing them to refi for a payment of $2300/month. The numbers were a little neat and tidy to be true, but the work they put into the house and the concepts behind the actions seemed extensive and noteworthy.

It’s a show I’m going to be keeping my eye on.

The Impending End of Ameridream

Have we ever discussed down payment assistance? I’ve explained the program so many times in person that I can’t recall if I’ve ever set the metaphorical pen to paper about the subject. Well let’s just assume for the sake of this post that I haven’t; here’s a quick run-down.

When the market (and the economy) was hot a few years back and the mortgage industry was a thriving, risk-taking, happy-go-lucky thing, there were loan programs that provided 100% financing. A buyer could purchase a property with no money down and wouldn’t even be on the hook for closing costs if he or she could get the seller to agree to pay them. 100% programs were among the first to be cut when things started to sour and mortgage companies began to go belly-up.

The government sponsors what’s called an FHA loan, that allows buyers to purchase a house with only 3% of purchase price down, and this 3% can be gifted to the buyer. This is not a new program at all, but during the boom, there was little reason to use FHA loans and they kind of went out of fashion for a few years. Now that 100% is gone, the FHA loan is the new black, if you know what I mean.

Down payment assistance programs like Ameridream (which is the most well known of the programs, but Nehemiah is another) are a kind of work-around that turns FHA into a 100% loan. FHA stipulates that although 3% down can be gifted to the buyer, it cannot be gifted by the seller (too close to home). So a non-profit organization called Ameridream was created that allows people to donate money to them and they, in turn, gift that money to buyers for their down payments. It allows a seller, if they agree to it, to donate the 3% down payment to Ameridream (plus a $500 service fee) in the name of the buyer of their house and then Ameridream will gift that money back to the buyer, who can then buy the house. I know, it sounds shady, but it’s been taken to court lots of times, and had so far stood up to the scrutiny.

Unfortunately, that has come to an end, at least for the time being. The housing bill that The President recently signed made these down payment assistance programs illegal as of October 1, 2008. The idea is that these loans where people don’t have any money to put down, are much more likely to be defaulted on, thus costing the government more money to pay back the mortgage companies (FHA loans are loans that are made by banks, but insured by the government).

So here’s what it comes down to: if you want to buy a house with no money down, you better do it soon. And by soon I mean like next week. Until this ruling is overturned or appealed, you’re going to need at least 3% of the purchase price of the house you want to buy saved up, or you’re going to be out of luck.

Thinking About Buying New?

In this market builders have been dropping prices like crazy and offering amazing incentives. $75,000 off an already completed newly built home (or a ‘spec’) is definitely not unheard of. The deals are out there and the builders are willing to do lots to make things happen, so I can see how this would be an attractive option for buyers.

There are are few things to keep in mind, however.

#1: First and foremost, it is essential to be represented by a buyer’s agent. It is, of course, very possible (easy even) to walk into a new build development and have the agent there help you through the process. However, they will not be representing you. They will be representing the builder. They will not help you to negotiate. They will not explain to you your rights in the transaction. If you walk in to a development alone, expect to go it alone. The builder will not pay a commission to an agent representing you unless that agent brought you to the development the the first time and registered you. So even if you’re just thinking about buying new, get a good agent and drag her around with you to models. You will be happy you did.

#2: Many builders are currently hanging by a thread. They have developments they’ve poured money into that aren’t selling and they’ve dropped prices so low that they’re out of pocket in some areas. Engle has filed Chapter 11 Restructuring Bankruptcy, which they are marketing as a positive change, but that isn’t reflected in some developments where building has halted. Randall Martin has officially ‘walked away’ from their houses. Some communities are built but only half sold, and others haven’t finished building and have some owners already in. People are being left high and dry. Another builder, Trend, hasn’t released official word on financial troubles, but anecdotally, some of their offices and model home sites should have been open to sell this weekend and weren’t. It’s not looking good. It’s really hard for the general public to know which of these builders and communities are stable and which are not. It’s important that you align yourself with an agent who has an ear to the ground and can steer you in a safe direction.

#3: Being under contract for a new build house, doesn’t mean that your price is set in stone. If you’re 6 months out on a new build and you, or your agent sees that the base price has dropped or that the builder is offering new amazing incentives, your agent can go back to the builder and request (or, you know, demand, whichever tactic would be more effective) that your base price also be dropped. Builders know that even though they have your earnest money and it’s non-refundable, if they drop their prices enough, then it would be worth it to a buyer to walk away. It’s smarter for them to allow you to drop your price and stay in the contract that to risk you walking away. This is something that a smart and savvy buyer’s agent should know and be able to negotiate.

#4: A great buyer’s agent will have search resources and contacts in the new build industry to help you find the right development for you. It’s not just as simple and driving around all day following the flags. An agent can gather all of the info, find out the skinny on the builder’s financial state, get the incentive info and even schools and amenities information even before you take the time to go out and look at models.

#5: If for some reason you’re driving by models and are moved to stop and check them out and can’t get ahold of your agent, disclose as you walk in the door that you have an agent and want to be represented by them. Let the salesperson on duty know that you’ll leave if this is a problem, but that you have your agent’s name and phone number if it’s OK to register yourself with them and you’d like to take a look at the models. Many builders are OK with this as long as they know upfront.

There’s no reason to negotiate the new build minefield alone. Be a smart buyer and bring your agent along!