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.
The Camera Phone House
October 20, 2008
I showed a home the other day that has been on the market - continuously - for 899 days. Which begs the question: why hasn’t this home sold?
Two big reasons.
1) It’s overpriced for the condition of the home. It’s a partial remodel, with a bad paint job, missing baseboards, some original vinyl, with a brand new kitchen, new carpet, and some badly laid new tile. Please note: a new kitchen does not a ’stunning complete remodel’ make. The seller’s last price adjustment was in June 2008. So that house has been sitting there, at the same price, for 139 days. You know what happens when you do the same thing that isn’t working, over and over, and expect a different result? But that’s not the only problem.
2) The seller hired an agent - their second agent for this home, the first was a relative - who took 6 pictures with what appears to be a camera phone, wrote a 2 line description, and plopped it onto the MLS. This is the one that is so frustrating to me. Why, as a home seller, would you settle for someone who does a bare minimum - and doesn’t even do the minimum well? The pictures and description in the MLS are so very important. With around 80% of home buyers starting their search online, the representation of the home online has to be spectacular to stand out from the crowd.
Needless to say, we weren’t impressed. Next.
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.
Continental Ranch - How Home Values have Changed
September 24, 2008
Had a little fun with some numbers and graphs today. Two things to show you.
First, this is a graph of average price per square foot for Continental Ranch from the start of 2004 through today, sold single family homes only:
You can see the Continental Ranch market peaked sort of late 2005, early 2006. And that the spread of this data, the range in selling price per square foot, has grown wider over time as well. Some of those home owners are back to 2004 values, but not all.
One other thing I think this illustrates well - I’m asked near daily if we’ve reached the bottom of the market. But if you look at the period roughly between 9/2005 and 3/2006, there’s a 6 month spread of data where values don’t really go up or down. In this case, it signaled the start of values declining in Continental Ranch, but we didn’t see that numerically until 6 months later. I can’t call an official ‘bottom’ until prices start trending in the opposite direction, which may be half a year after the start of the change. Do I think we’re close? Probably, but there are some major events coming up soon that could change that answer depending on the outcome. The best you can do is to make decisions based on the information available today, and with an eye to how long you plan to own that home.
One more chart. I do love graphs.
This is a chart of the ratio of sale price to original list price since early 2004. Lots of home buyers want to know how much to offer. As we can see here in Continental Ranch, some homes are priced well, and sell at or near 100% of listed price, and others, well, others sell far below their original list price. And many more are selling far below list price than were a couple years ago. Is this a sign of Sellers pricing their homes unrealistically? Or agents not in touch with the market and overpricing? Or both?
Take the Memories, but Don’t Leave the Paint
September 19, 2008
In honor of Talk Like A Pirate Day, I bring you this undersea adventure room.
And yes, the ceiling is painted in the water motif too.
I’m sure the child who lived in this room adored the dolphin and all the custom paint. But when it came time to sell, the owners were too emotionally attached to the paint job to repaint the walls with something more neutral.
And this house sat on the market for a long time, slowly coming down in price. And the owners moved away. And they got to take all their lovely memories of this room with them - and still didn’t repaint it, even though they’d already left the house behind.
And the house sat on the market longer. Because it wasn’t just one room painted in an, ah, unusual manner. It was the whole house. And finally, someone picked it up on the cheap, and turned it into a nice place.
Memories, you get to take with you. Your paint job - not so much. Holding onto this paint job cost the owners tens of thousands of dollars.
Photos Matter. A Lot.
September 13, 2008
I was at a new listing with my photographer the other day. He takes the photos, and I play assistant: holding flashes, stopping ceiling fans, opening blinds, clearing counters, holding the pool cleaner hose out of the shot, that sort of thing.
So I’m hiding in a nook with my Seller in the kitchen, just outside of the photographer’s 
shot, ready to spring into action to move something on or off the counter, and my Seller turns to me and says:
This sure is different from what the last agent did.
Turns out, the last agent came over with a 
disposable camera, snapped a few shots, and went on their merry way.
So yeah, I can see how this would be different.
I think having good house photos when you’re trying to sell is one of the most important things. If your home doesn’t look 
attractive and inviting in photos, then no one is going to want to come and see it.
Good real estate photos takes some skill too. Personally, I know the kind of shots that I want, but I don’t have the camera equipment or the patience to learn how to do it. I hire out my photography, and it’s hardest working money I spend on a listing, 
hands-down.
I won’t post the old agent’s photos to protect the (not so) innocent, but I think my photographer’s work stands alone, even without showing you the other photos for comparison purposes.
I don’t care if you’re selling yourself or if 
you’re listed with another agent. Demand good photos. I don’t care about the list price of your home either. Every home needs superb photography, from the $90,000 condo to the million plus mansion.
Using All Sources To Value A Home
September 13, 2008
More and more, as the local MLS becomes merely one option as a place to list your home for sale, it becomes important to check other sources when you’re trying to value a home for sale or find comps to write an offer.
Especially in the high end market, many of those sales happen from word of mouth, are not listed in the Tucson MLS, or may have been listed in other services where it can get more exposure to that high end buyer.
In the regular folk price range, there are always sales that aren’t entered into MLS by the agent, or were sold by owner.
If we want to get a full picture of the value of a property, I think it’s important to check all sources - not just the local Tucson MLS.
One of those important sources is the Pima County Recorder. Hopefully, anytime a property transfers ownership, that Buyer and Seller had the sale and the deed recorded. Luckily, I have pretty easy access to that through a system called CRS, which aggregates public data from sources including the recorders office. Now, it may take a little bit of time for CRS to get updates from the Recorder’s office, but usually, I can see recorded sales within a few weeks of them happening.
Being The Nicest Home On The Block
September 13, 2008
A quick note on a busy day:
Being the nicest home on the block is really not the best thing in term of your home’s value.
Think about it this way: would you rather pay for a $200k home in an area of $100k homes, or would you rather buy a $200k home in an area surrounded by $400k homes?
The fancy name for that is the Principle of Regression: basically, all the homes around your home are either helping you or hurting you. So if you’re the best home around, every one else is keeping you down!
And a nice desert vista from North Tucson:
Can We Get A Little A/C Action In Here?
September 13, 2008
Summer has spung (or does Summer sum?).
The weather man says it’s going to be 107 this week.
And I don’t mind the temperature, really. You live in the desert long enough, you learn how to deal with it, how to keep cool.
However, it is time to issue my annual summer complaint about people trying to sell their home in the Tucson summer while leaving off their air conditioner.
I can’t tell you how many vacant houses I’ve walked into over the past few days where it was 90 degrees. Inside. I tell you, no one wants to spend time in and contemplate a home when you’re slowly roasting. It’s exhausting.
Please, those of you selling your home here in Tucson, vacant or not - let’s turn on that air conditioner. Give yourself a fighting chance to keep someone in your home long enough to possibly consider purchasing it. You don’t have to set it to 72, somewhere in the low 80’s is acceptable.
Your potential Buyers will thank you!
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