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July 14, 2006

On-line CMAs yield confusion

by

Suburban Phoenix Real Estate Broker

Author website

From RealEstateJournal.com:

After getting five estimates — four from online sites, and one from a professional appraiser who inspected the home in person. We were told the home might sell for anywhere from $291,000 to $375,000 — an $84,000, or 29%, spread.

The appraiser is probably closest to the mark, of course. Completely automated systems like Zillow.com can be accurate by accident, much as a gift-buyer might be accurate buying you clothes using measurements obtained from your friends. In many cases, I can tell practically to the dollar what a home will sell for. Other homes defy prediction. Certainty is never hard to find, though. If you want to know what your house is worth, sell it. The home’s value is what you got for it. Everything else is just a guess, no matter how well educated.

July 13, 2006

Got Junk? Welcome The Junk Guys

by

Realtor, Staging Consultant

Author website

Last Winter I represented a couple who bought a home from a pair of ancients who had lived in their house for over 30 years. During their long tenure, they never ran across a memento that they didn’t want to keep. So although we gave them a long escrow, by the last 5 days they hadn’t made a dent in emptying their nest. The seller’s agent, Dan Peacock, a fine Realtor whose license is currently with Homesmart, worked some magic and the house was empty at close, and at the time that’s all I cared about.

But, have you ever found yourself in this situation: surrounded by mountains of stuff, so much that you no longer have any idea of what you have, so much that it’s crowding you out of enjoying your home? And so much that you’re overwhelmed at the thought of how to go about getting rid of it? I was there earlier this year when I sold the family home, which I had bought from my parents eight years earlier. The home was full of memories. Memories of my youngest sister going to Senita Elementary then learning to drive and cruising MetroCenter then going to prom at Moon Valley. Her wedding gown was still hanging in the laundry room and her children’s kindergarten projects for Grandma and Grandpa were still tacked to walls and taped to cupboards. On top of those were my own memories. Memories of my life in the house during the last years of my late husband’s life: Decorating ideas we had cut out from Phoenix Home & Garden and Architectural Digest. Pretty stones we had collected along the shores of Southern California. And more recent memories with Greg and Cameron: Dried flowers from my wedding bouquet. Michael Jordan and Star Wars posters in Cameron’s bedroom. Memories that will last a lifetime, but stuff that was consuming my thoughts and my time. We had moved from that house over a year before, but still all that stuff was there, and we had sold the house.

There was a solution. Yesterday sellsius° real estate blog mentioned it Read more

July 13, 2006

Real estate market healthier than reported; news market rancid

by

Suburban Phoenix Real Estate Broker

Author website

Thrills, chills, front-page headlines — everything but the truth. It’s a way of life for Dr. Jay Butler of the The Arizona Real Estate Center. Today’s Republic trumpets June was cold month for resales:

The Valley’s resale housing market took a hard fall in June, its worst performance for the month since 2000 and clear evidence that buyers sat out the start of the crucial summer selling season.

That “worst performance for the month since 2000” business is interesting, and it comes straight from Butler. It sounds authoritative, but it’s actually like a baseball card statistic, useful only in context. Dr. Butler doesn’t publish his underlying numbers, so there’s no easy way to compare apples to apples.

Here, by contrast, are real numbers drawn from the MLS system:

Number of Homes Sold

March 2003 6471
2004 8678
2005 9959
2006 7469

April 2003 7429
2004 8889
2005 9567
2006 6725

May 2003 7428
2004 8932
2005 9853
2006 7582

June 2003 7409
2004 9969
2005 10225
2006 7209

I don’t have numbers back to 2000, but it doesn’t matter. June 2006 was remarkably like June 2003. As I’ve pointed out before, comparisons to 2004 or 2005 — of which the Republic never tires — are inappropriate. From March of Read more

July 12, 2006

The top ten overpriced real estate markets

by

Suburban Phoenix Real Estate Broker

Author website

From sellsius° real estate blog, citing Forbes magazine, the top ten overpriced real estate markets:

1. Essex County, MA
2. San Francisco, CA
3. San Jose, CA
4. Honolulu, HA
5. Cambridge, MA
6. New York City, NY
7. Tucson, AZ
8. Oakland, CA
9. Boston, MA
10. Los Angeles, CA

I’m sure all of Phoenix is relieved to have missed out on this distinction. Interesting that seven of the ten are either in Massachusetts or California…

July 11, 2006

Why stop at recycling the newsprint?

by

Suburban Phoenix Real Estate Broker

Author website

It’s deja vu all over again at the Arizona Republic. Magazine names Willo district one of top cottage communities it says in Wednesday’s paper:

They’re busting their buttons in the downtown Phoenix neighborhood of Willo.

Cottage Living magazine has named the historic district as one of the “Top 10 Cottage Communities in America.”

A profile of the neighborhood, generally bounded by Central and Seventh avenues and Thomas and McDowell roads, will appear in the July/August 2006 issue of the national publication.

Great news. Trouble is, it’s old news. The same article ran in the paper on June 30th.

Oh, what the heck. Even if it’s a twice-told tale, it’s still a great story:

“Places with charming architecture, where you can skip the car and stroll to locally owned shops and restaurants; places where neighbors know your name and are happy to have a cookout on Friday evening,” [Cottage Living Editor in Chief Eleanor Griffin] said. “Willo boasts crisply manicured lawns and small, doted-on houses of all types – it’s definitely a charming community of tight-knit residents.”

July 11, 2006

The peaks and valleys of my first year as a full-time Realtor…

by

Realtor, Staging Consultant

Author website

Want to know when the real estate market will get back to normal? I have a crystal ball. Well, a really good spreadsheet analysis, anyway…

I’ve been a real estate licensee for three years, but I’ve been a full-time Realtor for only a little over a year. This means that when I joined the National Association of Realtors and local affiliates, I entered the industry at the height of Metropolitan Phoenix’s market correction — or irrational exuberance, depending on your point of view. On average, houses were appreciating between 35% and 65% a year. Homes were selling within days, sometimes within hours, and neither Realtors nor appraisers could keep up with what price a house should sell at. So, Realtors were running comps, pricing above all the recent sales, above last week’s sales, then waiting for the fax to churn out multiple offers to buy the house for even more than that! Representing buyers, helping them get the homes they wanted for a price they could afford, was hard work. But representing sellers was “easy,” so that was the preferred side of the transaction. I walked into the business with a winner — a seller — a dear friend who was leaving the company we worked for at the same time I was. I left to become a Realtor and she left to move to Tucson.

Because I was so new — and afraid of making any mistake that would result in Juanita getting less than she should — I asked Greg to take the listing so I could assist and learn. That was my last chance at my own listing during last year’s wild ride.

Then, sometime during the winter, the market became stable. It was no longer a seller’s market. My buyers were able to buy the homes they wanted without having to outbid other would-be buyers. This was a great market. Then the whispers came and the news media shouted: We were headed toward a “bubble burst.” What a silly metaphor for our housing market, comparing it to the technology industry of the ’90s, when venture capital camouflaged foolish business plans Read more

July 10, 2006

O, for a young and money-hungry web programmer…

by

Suburban Phoenix Real Estate Broker

Author website

Joel Burslem The Future of Real Estate Marketing cites ShackYack.com, but I don’t think we’re seeing the same thing. What he sees is another manifestation of what he calls Real Estate 2.0. What I’m seeing is a particularly user-friendly interface to an IDX system. In other words, this is not the disintermediation of a brick ‘n’ mortar broker, this is a competitive advantage built by one broker to use against all the others. It’s not perfect, mind you. If the buyer has no idea where they want to live — a relocating family, for instance — this tool won’t be of much help. But still, it’s very cool.

But the other end of this is that I’m thinking maybe Joel sees this as a very complicated application, whereas it seems to me to be just an integration of an IDX-like database with the Google Maps API. The beauty of the tool is in the user interface, but that’s really just a Cascading Style Sheets job.

In other words, a young and money-hungry web programmer could probably reverse-engineer this in no time, if the price was right…

July 10, 2006

“You see this all the time in Orange County…”

by

Suburban Phoenix Real Estate Broker

Author website

We’ve talked about seeing homes like this in Las Vegas. Even so, these will have more yard than homes being built there. From the Republic:

As residential land in Ahwatukee Foothills gets more scarce and expensive, one home builder has come up with a new concept for building homes: cottages.

The Cottages at Lakewood, which are expected to begin sales in the fall, will be a cluster of 15 normal-size, two-story, single-family homes packed into 2 acres at 3510 E. Lakewood Parkway West.

Legally, they will be classified as condominiums.

“It’s a different type of animal. I’m still trying to get my arms around it,” said Jason Kush, vice president of sales and project development at Scottsdale-based Montevina Estate Homes, the developer.

“We call it a cluster project. You see this all the time in Orange County.”

The cottages will have only side yards, measuring about 10 feet by 60 feet.

The homes will be 1,900-2,200 square feet each and come in three models: Santa Barbara, Spanish mission and ranch hacienda.

Prices will start in the mid-$400,000 range.

July 8, 2006

Without the man in the middle, there might just be the void…

by

Suburban Phoenix Real Estate Broker

Author website

In The Fountainhead,the best novel ever written about the real estate industry, Ayn Rand said:

The shortest distance between two points is not a straight line — it’s a middleman.

Here’s Seth Godin on the same point:

Salespeople who sell properly sell stuff people wish they would have bought in the first place. It’s a huge service… I’m pretty sure we need more good salespeople, not less.

I actually don’t care too much for the kind of selling Godin’s talking about. It’s a thin line between helping people do something they should do and nudging them into doing something they should not do.

The salesmanship Rand is talking about is elemental in real estate, to be the source of and liaison with the many vendors involved in the sale of a home.

But the most important function for me, and the job I like the best, is addressed by neither: A good real estate salesperson helps people realize their dreams — and avoid potential nightmares. The first part is fairly easy. The second part requires real skill, especially with sellers. I don’t think these jobs can be done without.

July 6, 2006

Let’s go get sued one more time…

by

Suburban Phoenix Real Estate Broker

Author website

We looked at a house yesterday in Las Vegas. We’re loosely motivated buyers, so we didn’t waste an agent’s time. But we have this idea that we might buy a distinctive home in a choice location, trick it out in every possible way, then own it as a getaway vacation rental that we will rent ourselves from time to time, when we’re in town. We were looking yesterday in the allegedly ‘historic’ neighborhood of Downtown Las Vegas, which makes the historic neighborhoods of Phoenix look positively ancient.

Anyway, here’s what’s important in the present context: The lister of the home happened to be there as we drove by, and she offered to show it to us. She was eager and energetic, well-informed and enthusiastic, everything you might want in a Realtor, either as a broker or a seller. Except that in the course of about ten minutes, she committed at least two Federal Fair Housing law violations – religion and family status.

We can give the lady a break, I suppose. We weren’t offended, and I can’t image that even members of the two protected classes would have been offended. She was trying to be inclusive, even if unlawfully, not exclusive. All she really wanted to do was get the house sold, so she gave us information she thought we would want, even though doing so was in violation of the law, even though we had disclosed to her our status as Realtors from out of state, even though she should have known we would hear every violation of the law.

As it happens, we are very, very careful about this stuff. Not because we believe all people are individuals, equal in every metaphysical respect. Not because we find prejudice and exclusion abhorrent, repulsive, nauseating. Not because we want to spread the social, emotional and financial benefits of homeownership as far and as wide as possible. We uphold every one of those noble ideals. But here is the reason we are so serious about Fair Housing laws: Because the fines at the Federal level are $11,000 – per violation. Add to that state, county Read more

July 6, 2006

Let’s go get sued some more…

by

Suburban Phoenix Real Estate Broker

Author website

At 360 Digest, an exceptionally fine real estate weblog, Marlow Harris weighs in with this idea about an incipient on-line real estate start-up:

Blue Roof, like Redfin and Zip Realty, misrepresents their status as “Realtor” and claims to be a member of the National Association of Realtors and adhere to its strict Code of Ethics, while actually NOT being a Realtor subject to their rules, regulations and ethical code.

I don’t know if this is true or not, with respect to any of the vendors named, but, if it is, it seems to invite considerable exposure to litigation. No, not a trademark infringement suit from the NAR. A judge might reasonably hold the RealtyBot sites to the claims they are making, even if those claims are untrue. A mere real estate licensee is answerable only to the statute law of the licensing jurisdiction. Realtors are held to much higher standards, both because of the NAR Code of Ethics and because of the presumption that the aspiration to professional status implies greater education and more rigorous care and diligence. Real estate brokers, whether or not they are Realtors, are held to the highest standards. Ignorance of the law is not only not an excuse, it is not even a mitigating factor.

For all its virtues, the internet has always been driven by an ‘aw shucks, we’re just having some fun’ attitude. Witness a major, multi-national communications conglomerate named ‘Yahoo’. But real estate is not an ‘aw shucks’ business. A real estate practitioner – licensee or not, Realtor or not – has the power to ruin his clients’ financial lives forever. We’re not talking about impersonating a Realtor, a funny idea. We’re talking about depersonalizing, deprofessionalizing – ultimately deligimating – the fiduciary relationship. If the agency law hammer ever drops on these practices, whether or not they are buttressed by lies, the damage awards are going to be collossal.

July 6, 2006

Let’s go get sued again…

by

Suburban Phoenix Real Estate Broker

Author website

Before we hopped our Southwest flight to Sin City, I had time to read but not comment upon this bit by Catherine Reagor of the Arizona Republic. The truth is, it gets hard to care after a while. Whether the Republic‘s real estate reporting is completely tendentious, completely uninformed or completely random, it is almost always completely wrong. Ms. Reagor, in particular, never once saw a cliff that she didn’t immediately jump off of, whether it’s the wonder and beauty of ‘affordable’ housing expropriated at gunpoint or the dream of a desert paradise master-planned in every particular by Locutus of Borg. If the Republic is singing the praises of an on-line real estate start-up, it might be wise to park your wealth anywhere else.

Even so, and harkening back to the idea of lawsuits against RealtyBots, I seized upon the opportunity to play my favorite game as a real estate broker: Name that violation. I summarized the article to Cathy, emphasizing this:

Some real estate Web sites make money on advertising.

Others, such as myfuturenet, try to make money on the back end by getting buyers and seller to close deals online using their mortgage and title firms.

In possession of that little bit of information, a mere 36 words, the challenge for you is to name that violation.

Cathy got it instantly, of course, as every skilled practitioner would. The law this business model is most likely to violate is RESPA, the Real Estate Settlement Procedures Act. Every vendor used in a real estate transaction should be chosen by the buyer. If a real estate licensee refers a vendor, he must disclose any ‘referral fees’ or other kickbacks received from that vendor. Our policy, of course, is no kickbacks of any kind, ever, since there should never be a doubt in our clients’ minds about our absolute fidelity to their interests. But a business model that binds buyers to certain third-party vendors seems to have a RESPA suit, an agency suit – or both – baked in the cake.

July 6, 2006

Market-Basket of Homes: Values up 0.33% in June

by

Suburban Phoenix Real Estate Broker

Author website

Is there light at the end of the tunnel? Home values were up slightly, by 0.33%, in the June 2006 BloodhoundRealty.com Market-Basket of Homes. Average sales prices were up $851, from 257,148 in May to 257,999 in June. Nevertheless, values are down $11,876 from the December 2005 high of $269,875. Market-Basket homes spent an average of 69 days on market, one day less than in May.

As has been the case in recent months, most Market-Basket homes are selling at or above list price. A few deeply-discounted properties pulled down the average, and average discounting netted out to 1.75%, up from 1.31% in May.

A total of 176 Market-Basket homes were sold in June, down from 211 in May. Inventories of available homes continue to climb. There are now 1,525 homes available for sale in the Market-Basket, which would imply an absorption rate of over eight months. A six-month absorption rate is considered normal.

Based on the idea of the Consumer Price Index market-basket of goods and services, the Market-Basket of Homes uses average sales prices for a small subset of all Valley home sales to get a clearer idea of what is happening in the middle of the bell curve. The alternative method, striking a median among all closed transactions, introduces too many extraneous factors to provide a reliable indicator of what is happening to prices for those homes that are most avidly desired by the greatest number of people. To that end, the Market-Basket of Homes looks at sales prices for MLS-listed suburban homes from 1300sf to 1900sf built in 1998 or later, the homes that drive the resale market.

The BloodhoundRealty.com Market-Basket of Homes is updated monthly and is always available at http://www.BloodhoundRealty.com/MarketBasket.pdf

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