13 Things Home Inspectors Won't Tell you

I have been reading Reader's Digest for as long as I can remember.  It is full of great articles, but I really started reading it because of the cartoons.

Over the past couple years, they have had a monthly feature that lists things people you interact with wouldn't normally tell you.  This month, it is "13 things your Home Inspector Won't Tell You".

#1 on the list is "Don't find a home inspector through your real estate agent.  It's on the agent's best interest to have the deal go through quickly so some pitch inspectors who find few problems."

What a crock!

Real Estate Agents are acutely aware that the performance of anyone they recommend is going to impact their relationship with you, and affect future sales possibilities.  There is no way that an agent would refer you to someone who is known to do a poor job - it just isn't smart.  My clients get a list of inspectors to check out - 3 inspectors that have done good jobs for my clients in the past.  Then my client chooses and inspector, and if they wish, I make the arrangements.

The rest of the list - paraphrased and edited by me -  is:

#2 Inspectors should spend at least 2 hours at a house - Unless it is a really dinky house - this is true.

#3 If an inspector says "this house has a lot of issues" be prepared to spend a lot of money to fix it up - an inspector will tell you what is wrong - it is up to you to decide if the issues are overwhelming.

#4 If you are the seller, make sure your house is clean on inspection day - True, the buyer often attends the inspection.  If your house is a mess, it can impact the buyer's decision on repairs.

#5 Ask for a sample report before you hire an inspector - Not a bad idea.  I have seen some pretty sketchy reports

#6 Even Brand-New Homes should be inspected - True.  Homes are about the last thing built entirely by human hands.  Humans have a way of messing things up

#7 Read the full report, not just the summary - True.  You paid for it, you should read it.

#8 An inspector encounters hazards on the job like creepy-crawly things - True

#9 As a seller, an inspection prior to putting your house on the market is a good idea - True.  It can alert you to potential sales problems, and give you some extra time to have things fixed.

#10 Ask all your questions at the end of the inspection - good idea

#11 Inspectors can't see inside walls or under the slab so I might not find defects that are in these places - True

#12 Some of the worst homes are owned by Do-it-Yourselfers - True

#13 Roof and foundation issues can stop a sale fast - True

Here are a few things that the Digest left out:

#14 Sometimes inspectors overstate the importance of a fault - like reversed wires on an outlet burning down a house.  It doesn't matter that the outlet has been that way and functioning fine for the past 15 years, now it is a huge safety concern.

#15 Inspectors carry loads of insurance - I once knew an inspector to be sued because a roof leaked - 4 years after the sale!  

#16 You don't have to hire an inspector - I don't recommend this path, but you can do your own inspection if you feel capable, or want to save the money.  Inspections usually start at about $300, and then go up if the house is bigger than about 3500 sq ft.  This varies from inspector to inspector.

#RealEstate #Avondale , #Goodyear , #Buckeye , #Glendale,  #Phoenix, #Surprise, #Peoria, #Tolleson, #Laveen, #Waddell , #Wittman

Hazards to Understanding the Market

May 26 from the Cromford Report - Over the last 2 years there has been an increasing trend for the true meaning of UCB status to change from "under contract accepting backups" to "pending but I like my listings marketed on Zillow®". These listings can often be difficult to show because many are not really available to accept offers. This is not something any individual agent is likely to admit when it is ARMLS asking, because it is a violation of ARMLS rules to have a listing in UCB status if it is not available for showings and actively accepting backup offers. However it is very clear to us that a large number of normal listings are being kept in UCB status purely because of the existence of Zillow (and to a lesser extent Trulia). In earlier times they would have been marked Pending, but pending listings don't appear on Zillow. Now they are used for a kind of bait and switch marketing program fishing for leads. The more listings on Zillow the more leads are generated, goes the theory. However Zillow does not create buyers, it just redirects a small number of them to different agents than they would have chosen to represent them if Zillow did not exist. NAR recently showed us that most leads still come from referrals from existing clients or repeat business from former clients. Zillow's impact on leads is nowhere near as big as they like to think.


From our perspective, it is unfortunate that the accuracy of ARMLS is being degraded in this way. Zillow is inaccurate enough itself without it having a viral effect on the accuracy of the ARMLS database. However we at the Cromford® Report have to measure the real world not the ideal world.

From Tim:  What this practice does is prevents the true number of Pending transactions to be counted accurately, and messes up the market statistics.  For any given area, it gives an inaccurate reading of absorption rates (how many homes are being sold in a period of time),  Average Days on Market, and the general activity in the marketplace.   Then, when the listing is finally marked "sold", it shows an unnatural disparity between the number of pending and sold properties.  Taken to its extreme, if no listings were ever marked "pending", then homes would magically go straight to being sold, without any indication of how many homes in an area are currently in escrow - a very important number if you want to sell your home!

#RealEstate #Avondale , #Goodyear , #Buckeye , #Glendale,  #Phoenix, #Surprise, #Peoria, #Tolleson, #Laveen, #Waddell , #Wittman

7 Things to Know about Pre-Qualifications

All Right!  You have your pre-qualification, and you can buy a house!

Here are a few things to remember about a pre-qualification:

Pre-Quals show you how much you can borrow, and most lenders now are also putting the maximum purchase price on the paperwork as well.  It is the lender's responsibility to help you choose the best program for you. It is your Realtor's responsibility to find homes that will allow your type of loan. Here are some common mistakes people make when referring to their qualification:

1) Not all pre-quals work for every house.  A Seller may decide that they do not want to accept VA loans, or FHA loans.  Most everyone will accept a conventional loan.

2)  Your pre-qual tells the Seller how much you are qualified to borrow, who is loaning the money, and what loan program you are using.  If there are multiple offers, the Seller will take all of this into consideration.

3) You still have to make a down payment!  If you have a pre-qualification for $100,000, you still have to come up with a down payment of at least $3,500, or more depending on the loan program

4)  Pre-qualifications are loan program dependent - If you are pre-qualified for an FHA loan, you cannot switch to a conventional loan without obtaining a separate pre-qual, and vice-versa.

5) Pre-quals do not take into account CLOSING COSTS.  They say how much you can borrow, and how much you have to put down, but they don't tell the whole story.  Your lender should have covered this with you when they issued your pre-qual.

6) Pre-quals are only as good as the lender that makes them.  Check to see if you have a reputable lender.  If not, or if your lender is a very small company, the Seller could turn your offer down because the lender is not well known.  If your lender is small or unknown, get some material from your lender to tell the Seller about your lender's history and background.  Give the Seller some confidence that the lender knows his stuff.

7) A pre-qual without documentation is almost worthless.  If you have a pre-qual but you have only talked on the phone with your lender, the Seller is likely to reject or at least stall your offer until the documentation is complete.


#RealEstate #Avondale , #Goodyear , #Buckeye , #Glendale,  #Phoenix, #Surprise, #Peoria, #Tolleson, #Laveen, #Waddell , #Wittman

The Thrill is gone from the Phoenix Market

From the Cromford Report:

There is no upward momentum in prices any more and annual appreciation rates are starting to fall like a rock as comparisons with this time last year get harder. The average price per square foot is holding up strongly because:

• low end homes are selling in much smaller numbers than last year
• distressed homes selling for below market are much rarer than last year
• the high end luxury market is stronger than the mid-range

These are all pulling prices artificially in the same direction.

The monthly median sales price avoids contamination by the luxury market but is subject to massive contamination by distressed homes. Because [Distressed Homes] are now scarce the median sales price now gives us a good guide to what is happening in the non-luxury market. By separating the market into lender-owned, short sales & pre-foreclosures and normal sales, we can better see what is happening to prices:

• Normal sales: monthly median sales price now = $198,000 and on May 17, 2013 = $190,150. Appreciation rate = 4.2%
• Short sales & pre-foreclosures: monthly median sales price now = $140,000 and on May 17, 2013 = $140,000. Appreciation rate = zero.
• Lender owned homes (including HUD): monthly median sales price now = $133,630 and on May 17, 2013 = $136.000. Appreciation rate = negative1.7%

So we are seeing around 4% annual appreciation for normal sales and either flat or negative appreciation for distressed sales.


You can still [find] plenty of increases in you look at the annual averages, but that is all because of the upward movement between May 2012 and July 2013.


#RealEstate #Avondale , #Goodyear , #Buckeye , #Glendale,  #Phoenix, #Surprise, #Peoria, #Tolleson, #Laveen, #Waddell , #Wittman

Real Estate Fact and Fantasy

Dorthy's Magic Slippers - A Genie in a Bottle - Unicorns - Flying Dragons - The Easter Bunny - Santa Claus - Zombies - whatever...

All these have about as much to do with Real Estate as my East Coast Client's grip on the Real Estate Market!  You won't believe what she thinks is possible - Read on!

Fantasy Real Estate is actually very real!  It exists in every Buyer and Seller.  The Seller can't help but have fantasies of selling immediately for over asking price.  The Buyer can't help but dream of finding the perfect home and paying pennies for it.  Imaginative and fun, but not very likely.

I inherited this client about 15 months ago from another agent at Zip.  She lived on the east coast, and was very excited about selling her 2nd house here, and buying a condo/townhouse in a retirement community.  This is not an uncommon scenario, so I went to work for her doing comps, making suggestions, etc.  I visited her house here with some friends of hers who stay here year round.

About 6 months into our "relationship", it became very obvious that she didn't really have a grip on reality when it came to the metro area market, which I thought was due to distance and lack of personal observation.  So, I spent two days at the end of last summer taking her to see properties she had "liked", and properties she could afford.  She fixated on one property that was out of her price range, and then went back to the east coast.

As it turns out she wrote to the owners of the property she liked and tried to negotiate some sort of deal with them.  They turned her down flat with some lame excuse, but in her wildly imaginative mind, she "almost had a deal".

I should have dumped her as soon as I found out about the caper above, but decided to try one more time.  I went to see a condo with her friends here, and it was very nice.  Her friends were going to visit her after we saw the condo.  I had a chat with her friends and suggested that they try to help her gain insight into the market.  I didn't work.

The next thing I know, this cloud-biter wants me to make an offer to the people with the condo on contingency. OK, I say, let's get your house on the market.  "Oh no," says the star-gazer, "I don't want to put my house on the market until I know that I have a deal".  HUH?  I have explained how contingencies work before this, and I explain it again, but it is like talking to a brick wall - or a unicorn.  The words have no more effect than bows and arrows against a fire-breathing dragon.

To make matters worse, the market has changed, and I have sent her the comps.  Again, she shows her incredibly escapist grasp of the fantasy world she inhabits by saying the comps are wrong, and her house is worth $20,000 more.

I no longer work with this client.


#RealEstate #Avondale , #Goodyear , #Buckeye , #Glendale,  #Phoenix, #Surprise, #Peoria, #Tolleson, #Laveen, #Waddell , #Wittman

You Cannot "Delegate" a Real Estate Transaction

Today we talk about a problem client.  Let's call her Jasmine.

Jasmine is supposed to be closing on her new home in a week.  She is supposed to be closing on her old home in a week and 10 days.  The amount that she will receive from the sale of her old house will more than cover the down payment for the new house.

Jasmine is an upper-middle-level executive at a large corporation.  She changed jobs a while ago, and now has a commute that is over an hour one way.  She came to me to sell her current house, and help her find a new home closer to work.  She is a very capable and intelligent woman with only one real problem:  Jasmine is over stressed.

During all of our discussions, and during meetings with her lender, she was advised that if she purchased a home before she sold her current home, she would have to take funds out of her current accounts to make her down payment.  Jasmine, her lender and I all had conversations about if she bought the new house first, she would be able to replace the money in her accounts quickly from the sale of her old house. That just makes sense, right?  The loan can't start, the property can't be transferred, nothing can happen unless the down payment is made.

Jasmine is now claiming that nobody told her that she would have to pull funds from her accounts to make a down payment.  Really?  She believes that just having her house "under contract" means that the down payment funds will be guaranteed to the Seller of her new home when the deal closes on her old home, and that the Seller of the new home should just wait for their money.  HUH?

Jasmine's stress level at her job, coupled with her demeanor of giving orders and expecting them to be carried out, has left her in a precarious position.  She doesn't remember all the details about what she does in her job - that is for somebody else.  However, she didn't remember the "details" (if you can consider the source of a down payment a "detail") of what she wanted done with her houses either.  She just "delegated" work to people.  The lender was to do the Lending, the appraiser was to do the Appraising, the inspector was to do the Inspecting, etc.  Everyone did their part, but Jasmine Didn't Get Involved.

Now she is also angry about having to store her belongings temporarily while transferring from one house to the other.  What was this woman thinking?

We are scrambling to extend the purchase date on the new house, and maybe move up the purchase date on the old house to minimize the amount of time required for the extension.

Jasmine could have avoided all this trouble, saved the energy from being angry, kept her life much simpler if she had just paid attention instead of pretending to pay attention.  I wonder how she manages at her job...

#Avondale , #Goodyear , #Buckeye , #Glendale,  #Phoenix, #Surprise, #Peoria, #Tolleson, #Laveen, #Waddell , #Wittman

Negotiation - The Heart of the Transaction

If I was being chased by a hundred bad guys, I would certainly want Jet Li on my side if they caught up with me - wouldn't you?

#Negotiation of Real Estate Transactions can be just as intricate a dance as the choreographed fight scenes in a martial arts movie.

I am proud to announce that I am one of only 52 agents in all of Arizona who has completed the Master Certified Negotiation Expert course of study offered by the Real Estate Negotiation Institute.  This course of study has already enabled me to negotiate over $15,000 worth of benefits for my clients, and either save or enable two other transactions.

There is way more than price to consider in a Real Estate Transaction.  Here is a partial list of things to be considered:

1. Cash on hand
2. Type of Loan
3. Seller's bottom line
4. Current market values
5. Concessions by Seller
6. Concessions by Buyer
7. Personal Property included in the Transaction
8. Beginning/Ending of month close
9. Move dates
10. Lender Requirement
11. Lender Used
12. and on and on...

You don't just throw these things in a pot and stir to see what comes out!  My objective as a negotiator is to make sure you maximize your side of the equation.  With the training I have had, and the results already produced, shouldn't you want me on your side?

#Avondale , #Goodyear , #Buckeye , #Glendale,  #Phoenix, #Surprise, #Peoria, #Tolleson, #Laveen, #Waddell , #Wittman