Proposed Rule Change for Short Sales in the Tucson MLS
December 20, 2008
Landed in my inbox today, a proposed rule change, if I understand the message correctly:
MLS Rule Change for Short Sales
Section 3.18- Short Sales:
As used in these rules, short sales are defined as a transaction where title transfers; where the sale price is insufficient to pay the total of all liens and costs of sale; and where the seller does not bring sufficient liquid assets to the closing to cure all deficiencies.
Participants are required to disclose potential short sales to other participants by stating the following in the Agent Only Remarks: ‘Potential Short Sale’.
Within two (2) business days of seller’s acceptance of written contract, the listing broker shall change the short sale listing’s status in MLS to ‘Active Contingent’, ‘Active CAPA’,’Pending’ or ‘Sold’, as is appropriate per MLS Status Definitions.
Disclosure of short sale shall not be made in the Property Description, Marketing Remarks, or any other publicly viewable component of the MLS without the seller’s written permission to the listing broker.
What does that mean? It means that short sales will be harder for the public to identify, assuming most sellers won’t want their property stigmatized by being advertised as a short sale in the public remarks. I’ve got mixed feelings about this one. From the seller perspective, it may generate more activity for their home sale - but then there’s a large group of buyers who don’t want to touch short sales, so they get excited about a home, call me about it, and then I get to tell them it is a short sale.
The problem with short sales is that only a small percentage actually close, and they can take months to do so. Not every buyer can afford to wait like that.
What say you?
What Did They Pay For It?
December 12, 2008
It used to be a discussion mostly had with Sellers - why the amount they paid for it however many years ago doesn’t really impact the market value today. But now I find myself answering this question more and more for Buyers. And the same answer still applies - it doesn’t really matter what they paid for it, we’re trying to figure out market value now, not market value four years ago.
However. In our public record, in the same place I look up previous sales, it tells me the loans that have been taken out against the property, and when. So if someone bought a $200,000 house 2 years ago and financed 100% of that, then I know that the loan balance most likely hasn’t gone down all that much, and that if we’re making an offer on the property below $200,000, then we’re probably looking at a short sale situation.
Which still doesn’t make the property any more valuable. But it might make a seller more reluctant to sell if they don’t really have to.
Rising HOA Fees
December 1, 2008
I was showing a few luxury condos here in Tucson the other day and got into an HOA fee discussion. After doing a little research, we discovered condo community where the fees have more than doubled over the past 3 years, from the low $100s to the high $300s. Which isn’t an insignificant increase over such a short duration on very new units.
There are many HOAs that are trying to raise fees right now. Those in foreclosure or otherwise tight budgets often let the HOA dues slide first. When you buy a home with a homeowner’s association, you’re usually supposed to receive copies of the most recent financial report and reserve studies and copies of the operating budget. Typically, you’ll get these on a disk in the mail, and you really need to check those things out. I don’t get copies, only you. So make sure you’re looking into the financial stability and dues history of homes in an HOA.
Rising HOA Fees
December 1, 2008
I was showing a few luxury condos here in Tucson the other day and got into an HOA fee discussion. After doing a little research, we discovered condo community where the fees have more than doubled over the past 3 years, from the low $100s to the high $300s. Which isn’t an insignificant increase over such a short duration on very new units.
There are many HOAs that are trying to raise fees right now. Those in foreclosure or otherwise tight budgets often let the HOA dues slide first. When you buy a home with a homeowner’s association, you’re usually supposed to receive copies of the most recent financial report and reserve studies and copies of the operating budget. Typically, you’ll get these on a disk in the mail, and you really need to check those things out. I don’t get copies, only you. So make sure you’re looking into the financial stability and dues history of homes in an HOA.
Lender Owned Homes in Tucson
November 25, 2008
Been out showing a lot of homes recently - here’s a gem from a near half million dollar listing, lender-owned. Buyers tend to be surprised that lenders try to sell homes here in Tucson in such sad states of filth, neglect, and disrepair - at least until I take them into their 3rd or 4th lender owned property and they realize they’re nearly all filthy and in bad condition.
However, sometimes you can get these lender owned homes at fairly sweet prices. Just be prepared - it’s gonna take some work to get the home into shape. "Move in ready" and "Lender Owned" rarely, if ever, go together.
Range Pricing in Tucson - Why?
October 27, 2008
Okay. I’ve talked about range pricing before. Admittedly, it isn’t my favorite, because I see it used incorrectly most of the time.
Range pricing was invented in a rapidly changing market where it was hard to pin down a value, but you knew it was somewhere between X and Y, with market value somewhere in the middle. Used properly, I’m okay with that. You can also use range pricing as a marketing tool, especially if you think market value for your home is just over a common limit that home buyers search for. For example, if I’m fairly sure a home’s value is between $255k and $265k, I might range price it from $250k-$265k to make sure that those people only searching up to $250k see that house when they search for homes online.
However, when I see a $50k price range spread on a $250k house, in a community of very similar homes with plenty of comparable sales, then there’s something very wrong. On that kind of house in that price band, you can narrow down value to a range much smaller than $50k.
All the seller is promising to do is accept or counter offers received within that range - which doesn’t obligate a home buyer to make an offer within that range. As with all homes, we’ll do our own market research, decide on a probable value, and make offers accordingly.
Negotiating and Real Estate
October 7, 2008
Question from the audience: What’s your negotiating style?
Answer: Whichever way you’re most comfortable with.
I like to discuss negotiating styles with my clients before we get too far along in either the home buying or home selling process. Some folks are very aggressive, and aren’t happy with the result unless each party has gone back and forth several times with counter offers. Some folks want to make one offer and be done with it.
For you to be happy with the outcome of your home negotiations, I need to make sure that I know how you want me to negotiate on your behalf. You want to be hard-line aggressive? We can do that. Is this the one you have to have and you’re prepared to step up and take it? We can do that too. It’s all your choice.
You’ll still get my advice and my take on the situation, of course. Over the past years as a real estate agent here in Tucson, I’ve gotten pretty good at reading the situation, and usually have some kind of idea as to what will or will not work. But I think it is important that you’re happy with the process, regardless of the outcome. Just another thing you ought to be discussing with your agent.
Falling in Love with the First One
October 2, 2008
Buying a home is a series of choices - and after you’ve decided what you want and need, and have your financing ready to go, we’ll head out and start looking at homes, so you can pick the right one for you.
Occasionally, I have a client who falls in love with the first home we see, but doesn’t trust that choice, thinking, how can I know if it’s the right one if I haven’t seen everything else?
Here’s what I know after showing thousands of homes, in every part of Tucson, to many, many home buyers: Not everyone has that "A-HA!" moment right when they walk in the door. Chances are, you’ll have a good attitude when you walk in, and like what you see. And that feeling grows as you tour the rest of the home. But because there was no flash of light, no sudden insight the minute you stepped into the house, you’re not sure if this is the right one.
So here’s what we do: we go see a couple more homes. And then we’ll go back to the first one. And if it feels right, if it feels comfortable, if it seems even better after seeing the others, chances are, you’ve got a winner.
And on the plus side, I’ve likely already checked out a good portion of the homes that meet your criteria, so we’re hopefully only seeing the best of the best to start with. So it’s okay to fall in love with the first home, and it’s okay to be unsure about that. Getting you to a place where you can make comfortable decisions is what I do - and we can get there.
The Junkmail Deluge
October 2, 2008
One of my recent first time home buyers called me the other day, asking about the mounds of refinance, home equity lines of credit, and credit card offers piling up in her mailbox, whether they were important or not.
Usually - not important.
In Pima County, home sales are public record, which means that companies can take a feed of those records, see that you just bought a house, for how much, and send you a bunch of junkmail, offering you loans or refinances and whatnot. By and large, you can ignore this stuff.
However - it’s worth at least a quick look to make sure that the mail is really junk and not your existing lender telling you that they’ve sold your loan to some other company. Many times, the company you make your monthly mortgage payment to changes fairly quickly after you buy a home, so you need to watch for a letter from your existing company, and a letter from the new loan servicing company with your payment coupons.
Because you don’t want to be digging through 3 days of trash to find that payment coupon you ripped into pieces without even opening the envelope, so that you can tape it all back together and mail in your mortgage payment to the new loan servicing company when you realize your loan has been transferred. Not that I’d know from experience or anything.
The Junkmail Deluge
September 30, 2008
One of my recent first time home buyers called me the other day, asking about the mounds of refinance, home equity lines of credit, and credit card offers piling up in her mailbox, whether they were important or not.
Usually - not important.
In Pima County, home sales are public record, which means that companies can take a feed of those records, see that you just bought a house, for how much, and send you a bunch of junkmail, offering you loans or refinances and whatnot. By and large, you can ignore this stuff.
However - it’s worth at least a quick look to make sure that the mail is really junk and not your existing lender telling you that they’ve sold your loan to some other company. Many times, the company you make your monthly mortgage payment to changes fairly quickly after you buy a home, so you need to watch for a letter from your existing company, and a letter from the new loan servicing company with your payment coupons.
Because you don’t want to be digging through 3 days of trash to find that payment coupon you ripped into pieces without even opening the envelope, so that you can tape it all back together and mail in your mortgage payment to the new loan servicing company when you realize your loan has been transferred. Not that I’d know from experience or anything.
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