Author: Greg Swann (page 180 of 209)

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

The first transaction we do with the flat fee as a matter of policy will probably come together tomorrow or Monday, but, as I had mentioned, Cathy has been playing with the idea. She has a contract in play right now, so I had to write language for the Buyer-Broker Agreement:

Buyer’s Broker is to be compensated as follows: Up to $6,000 from Seller or Seller’s Broker, with any additional compensation paid by Seller or Seller’s Broker to be disbursed to Buyer at Close of Escrow to defray Buyer’s non-recurring closing costs, to pay Buyer’s down payment, to buy down Buyer’s loan rate, to reduce Purchase Price, or for any purpose mutually-acceptable to Buyer and Buyer’s lender, if any.

Except in an all-cash sale, I don’t believe any of this money can be rebated directly to the buyer, so that’s why I’m specifying a number of possible destinations. Given that it’s “free money” from the Buyer’s point-of-view, an unexpected windfall, buying down the interest rate might be the best long-term benefit — particularly if we’re also taking closing costs from the seller’s side of the HUD-1.

Technorati Tags: arizona, arizona real estate, compensation for buyer representation, phoenix, phoenix real estate, real estate marketing

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

Many years ago, I read the first couple of chapters from a book by an investment guru — “How Dilberts like you made me rich” or something like that. I must have seen it while I was staying with someone, because, as you might guess, I don’t have a huge store of respect for that kind of book.

But the first chapter, at least, was interesting. The author was talking about his youthful experience as a taxi driver, how he discovered that every other driver’s ideal — the long trip out to the suburbs — was in fact a money-losing proposition. His epiphany was that the real profit in driving a cab came from dropping the meter arm, and the more times he could do that — the more short trips he could make, in other words — the more money he would make.

When I started thinking about moving our compensation for buyer representation to a flat fee, I went through my own sales for last year. I had a great year, as did every agent with a pulse in Phoenix. I sold some very expensive houses — although Cathy landed my ultimate prize when she showed for me one day when I had a class. But I did many less expensive homes, along with some work that I did for no compensation at all. At the end of the year, I netted out to $7,638 a side. Not great, not awful.

But you can look at $7,638 as my gross value “per trip,” in taxicab terms. My belief is that, with the right marketing, engineering and support, I can do at least five times as many trips, and possibly more than that. I believe that one good agent, properly supported, should be able to sell 300 buyers a year, maybe many more. And, incidentally, throw off a lot of listings and referrals.

I did rentals when I was first licensed. I knew I needed experience, and I wanted it fast. New residential agents can starve for months, but I made money in my first week. It was lousy money, but the demand was Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

This is me from this morning’s Arizona Republic, a kinder, gentler, less incendiary Greg. (Permanent link.) That marks a year of these columns, 52 on the nose. To tell the truth, I expected to get fired a long time ago. But, if they’re not going to fire me, I wish they’d give me more space. At 350 words I have just enough room to introduce an idea without quite exploring it…

 
Local market is slow but not on life support

The nationally reported real estate news is dire, of course — bad news trumps good news.

The locally reported real estate news is largely defined by year-over-year comparisons, which tends to make things look worse than they really are. Is our market in excellent shape? Far from it. But neither should it be put on life support.

For the kinds of homes common on the west side of the Valley, September was a repeat of August, itself a repeat of July. Prices flat, sales slow but not awful, discounting moderate. Days on market is climbing, but available inventories of newer suburban homes are declining. (You can read more about these results at bloodhoundrealty.com/MarketBasket.php.)

But as interesting as those results are — and as promising for the recovery of our market — they speak only of sold homes. What about the homes that are not selling?

I’m looking at houses right now for an investor. He picked out one he was interested in, and, as a matter of course, I searched every similar listing in that subdivision — active, pending and sold — going back to May.

I found 10 active listings with that floor plan in that subdivision. This is as close as you can get to identical comps, like little plastic Monopoly houses, each one the twin of the next.

All of them were built between 2002 and 2004, all by the same builder, of course. All upgraded to some degree, none to the ultimate degree. No premium lots, no view lots, no pools.

What’s the spread of prices for these nearly identical homes? They run from $245,000 to $360,000, a difference of $115,000.

Which ones will sell?

The best-kept houses Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

In the Arizona Regional Multiple Listings Service at large, 5,607 homes sold in September against an inventory of 47,428, an implied absorption rate of 8.46 months. There are 5,932 properties listed as “Sale Pending.”

The historical numbers make it plain that we did not experience the traditional selling season, but they also make it plain that a simplistic year-over-year analysis — which we can expect from the Arizona Republic a week or more from now — is misleading.

Number of Homes Sold (with Days on Market)

March 2003   6471    67
          2004   8678    60
          2005   9959    36
          2006   7469    58

April    2003   7429    67
          2004   8889    61
          2005   9567    32
          2006   6725    60

May   2003   7428    67
          2004   8932    56
          2005   9853    27
          2006   7582    63

June   2003     7409    67
          2004    9969    55
          2005   10225    26
          2006    7209    67

July   2003     7643    64
          2004    8974    51
          2005    9326    25
          2006    6101    70

August 2003     7648    63
          2004    8968    47
          2005    9996    25
          2006    6170    76

Sept. 2003      6802    62
          2004    8648    45
          2005    9152    28
          2006    5607    80

Average prices are down from August, from $331,266 to 324,370 in September, a net loss of about 2.1%.

Note that this may not accurately reflect the Phoenix-area real estate market as a whole. All private sales and most new-home builder sales are excluded from MLS statistics.

Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate, real estate marketing

Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate, real estate marketing