They Love Me, They Really Love Me...

Being a real estate professional is never really easy. It's not really that difficult either, truth be told, but the last few years have been quite a roller coaster ride.
None of this is evidenced more clearly than by how new home builders treat Realtors. Talk about feast or famine! Back in 2005/2006 they were so confident of their ability to attract buyers that they practically dared Realtors to show their homes. "Must be present at initial showing to be eligible for commission, Blah, Blah, Blah..." "Do not pass machine gun towers without obtaining special permit from obergruppenfuhrer..." Well you get the message.
Suddenly, it's a brand new day and my inbox is flooded with all kinds of generous offers. All I have to do is swing by, take a look at the new complex (now with highly competitive pricing)and I get a voucher good for dinner and a movie.
Or- Are gas prices forcing you to park your fuel-guzzling land yacht in despair? Never fear. Zoom by our new and improved mega-sub-division and we'll give you a $25 gas card. Just for showing up!
My how times have changed. As I get older, I realize that some of my faculties are not what they used to be. Luckily, my memory isn't one of them. So,you'll excuse me if I don't immediately add these guys to my Christmas card list.
I was even offered an I-Pad, whatever that might be. I suppose if I ever get my I-Period, I'll find out.

Retirement and Vacation Homes: Are They Worth The Trouble, or Expense?

Recently, I got sucked in by a T.V. show called "House Hunters International" on HGTV. The concept is fairly self-explanatory and involves a family who decide to buy an additional home (although some are actually re-locating) in a country other than their own. So, we are treated to Europeans of every stripe checking out properties all over that great continent, as well as Americans making the trek overseas.
I must admit that I have never been a great fan of buying a second home and have often advised friends, neighbors and clients against it. I have good friends who travel to Cape Cod from Arizona each summer for three months. They have toyed with buying an apartment back there, but I have generally discouraged it. In my mind, it is very difficult to deal with the maintenance and upkeep when you are 3000 miles away. Quite how these people cope when the 2nd home is in another country (sometimes involving a different language) is hard to fathom.
My initial thought is why would you want to go on vacation every year for the rest of your life in the same spot? In the same house, even? I could almost justify it, almost, if your intention was to ultimately retire in that location. However, I still feel that a seasonal rental is the better way to go. That way you can visit a different resort, country, locale or region each year and just walk away from the property after each trip. I fully recommend a website that has holiday homes for rent by owner around the world, including entire islands. It is www.vacationrental.com.
Still and all, it is a fascination T.V. show to watch, especially as it showcases cultural differences between countries as related to buying and renovating homes. However, one American in Paris stopped me in my tracks the other evening. I about dropped my gin and tonic. She was looking for an apartment in the heart of Paris (they call it a Pied a Terne, which I think is French for potato) and found her ideal home priced at $250,000. Except for one thing. It was 85 sq ft! You read that right. Eight and a half feet by ten feet. Slightly less than a quarter of and average two-car American garage. Do you really want to live in Paris that badly? Or , if it is to be a vacation home, do you take your $250,000 and rent a place for $5000 for one week for the next 50 years?
As they say, you pays yer money and you takes yer choice...

Banks Hit Bottom. Keep Digging.

Part of the fun of being a Realtor is that you are required to attend 24 hours of continuing education in every two year period. The categories covered include legal matters, fair housing and ethics among various others. Some of the presenters on these topics can be quite dry (not always their fault) while others can make almost any subject entertaining. No mean feat when each class is 3 hours long, by law.
Therefore, like many other Realtors I am sure, I have a small group of "favored" instructors whose classes I am happy to take. One such class occurred just last week. As a Realtor, it is sometimes interesting to get together with other agents to share stories, both good and bad, about the real estate market in general. That day was no exception.
It began with a pet peeve of mine, and one about which I have posted previously, which is being forced to pre-qualify with "preferred" lenders on REO properties. This led to a general diatribe against the inefficiencies of most banks dealing with both short sales and their own inventory.
We heard of banks foreclosing on properties on the day before a scheduled short sale that had been approved by their mitigation dept. with full knowledge of that fact. We heard of some banks in that situation that then re-listed the property at a price that was lower than the approved short sale price. Shareholders, are you listening?
The best tale was a doosy! The buyer was negotiating an REO purchase with a bank. The buyer kept submitting ever lower counter-offers to the bank until they finally accepted the lowest price. Apparently, they thought the market was crashing around their ears. Too funny!
Remember, these banks are desperate to take over the real estate business, particularly the listing side. Yet, many seem to struggle with just their core business of managing loans.
I say be careful what you wish for. If banks continue to dump homes (thereby lowering prices across the board) they may indeed end up owning the whole real estate market, inventory included. Of course, at that time it will all be worthless, so they will be welcome to it.
What say you?

Does It Really Have To Be This Hard?

As any Realtor will tell you, there are times when this profession can really wear you down. Times when you wonder why you bother. Truthfully, I am sure most jobs are like this, but then we remember why we decided to sell real estate, or whatever it is you do, and the moment passes.
In this vein, and considering the many hurdles that face both seller and buyer in these troubling and difficult times, I have to ask? Why do we have to make this more difficult than it already is, or than it needs to be?
I came across a listing in the MLS that seemed to be a good match for one of my out of state clients. Good location. Perfect size. And a pretty decent price. And then: there it was. Like a turd in a swimming pool. Hidden away in the private Realtor remarks, "Tenant has first right of refusal." What? So you want my client and I to view your property, go to the trouble of writing an offer in the vain hope that the tenant won't exercise his right and steal the property away from us. If he wants to buy it, then just buy it! Does it have to be this hard? Oh yes, and all for 2 1/2% commission. I wish you luck.
Also, and I've mentioned this before. I despise the must-pre-qualify-with-my-lender for an offer to be valid listing. Guess what? All my buyers are pre-APPROVED not pre-qualified. In essence, you are saying that you do not really trust our lender, but you insist that we provide sensitive personal info to a lender that you alone deem trustworthy. Better yet; you want us to cough up this info in Phoenix the identity-theft capital of the U.S.A. What could possibly go wrong? "But," they bleat, "The Bank that owns it insists upon it..." they would. Then again, they're the idiots mostly responsible for this mess in the first place. Avoid such listings like the plague and they will eventually figure it out. Or not!
Finally, an increasing amount of short sale listings require that the potential buyer be on the hook for attorney's fees for "handling" the transaction. Here's a hint. If you are unable to negotiate a short sale as a licensee, don't take the listing. Let's keep the parasites out of our business.
It really doesn't have to be this hard.

Going Into Foreclosure Again? Twice in Six Years. How Is That Possible?

Part of being a good real estate professional is knowing your local market intimately. It sounds obvious, but it is imperative that you are aware of trends, subtle neighborhood differences or any other factor that can affect value. Education is key.
Whilst reviewing homes for sale in my town recently, I came across a potential short sale that "rang a bell" with me. Sure enough, it was a home that I remembered had gone back to the bank back in early 2008. Here it was again, just three years later, being offered as a short sale. It was a little jarring so I decided to investigate. I realize prices had not really done much of anything in that time; well slightly down, but how was it possible to be back in trouble so quickly?
A bit of history. The home sold in mid 2003 for $320,000, and then was re-sold at the end of 2004 for $400,000 even. This is in keeping with what we know of pricing trends back then. Prior to 2004, prices were mostly flat-lined and it was in late 2004 that we began to see "investor" fueled increases in a few states. Flash forward to February 2008 and we see it being foreclosed upon with a total indebtedness of almost $450,000. More than the original sales price. Safe to assume the owner, like many others, had re-financed to release some of his "equity". Which wasn't really there. House-as-ATM strikes again.
The bank then sold the house some five months later for $400,000. I remember thinking at the time that the price seemed high. And therein lies the problem. That last owner simply paid too much, but as he put down 25% the bank was less than stringent in its appraisal. That last selling price was identical to the 2004 selling price, even though the reality was that prices had dropped to pre-2002 levels. Because of the large down-payment the bank figured they were safe. Well they were wrong! As ever, price is everything.
It reminded me of another case in 2006. I had a client looking for vacant land to build his dream home. He found a 5 acre parcel priced at $639,000. Wary that the market had likely peaked, we offered $450,000. The seller countered at $539,000 and actually wrote this on the counter-offer, "And not a penny less!" I advised my client against it, given the market conditions, and we walked away. Three years later, the land sold for $272,000. Glad we dodged that bullet!
By the way, four years later in 2010 he bought a 4000 sq. ft. home with a pool on 4 acres for $850,000. A home that had sold for $1.5 Million when he was looking at land. I love a happy ending, don't you?

Market Correct Pricing Is Crucial, And Always Has Been

Now, perhaps more than ever, a sensible approach to pricing is imperative in today's difficult market. With more restrictions on appraisers keeping a tight rein on their work, it is important that both buyers and sellers are reasonable in their expectations.
Some weeks back I received a phone call from a gentleman whose home was currently listed by a friend (not always the best situation, in my opinion.) "Why," he wondered, "is my house not selling?" A quick search revealed the truth. His home was a plain Jane, builder-basic Formica and vinyl house in a large sub-division. There were many other homes with updated kitchens, granite counter-tops and top quality flooring on the market. He was asking $269,000 even though a near neighbor with a much nicer home was listed at $249,000. The only fix was to lower the price to a point where a potential buyer could perform the upgrades and be rewarded financially for doing so. He thanked me and I noted that a week later he had reduced the price. To $264,000! Clearly, he did not get it and his friend was not helping him. A month later, however, I noted that he had lowered it to $225,000 and now it was in escrow. A bit of a slow learner, but he got it in the end. You're welcome.
In a similar vein I got to talking real estate with a gentleman whilst on a hike recently, after he discovered I was a licensee. We were discussing recent sales on a particular street, one of which I participated in, at prices that were close to one million dollars. He opined that to him they were only "worth" half a million. To back it up he trotted out the old saw that something is only worth what someone will pay for it. Sure, except that people were paying those prices in many cases. I tried to explain that more accurately something is worth what the "market" would pay for it, not what a misguided individual my want to pay for it. It all fell on deaf ears. He then went on to say he thought that it was a good time to build his own home (???). However, he was having trouble, even in this down-economy, finding a contractor willing to discount his services enough to satisfy his needs. I wonder why.
Ultimately, I walked away and, unusually for me, decided not to offer him my business card. I have worked with difficult folks in the past, but as Ron White memorably stated, "You can't fix stupid!"

Real Estate Predictions For 2011

Well it's going to be a question of good news and bad news, depending on which side of the fence you stand: buyer or seller.

If you are a seller, I expect that prices in the Phoenix metropolitan area will remain flat, with a possibility of some areas losing another 10% in value. This is because we are not done with distressed properties. In fact, Bank of America's recent moratorium on foreclosures, since expired, only served to kick that can down the road. Add in the fact that the state of Arizona is suing them, and you can deduce that 2011 will also be a rocky year.

At this point I must add, and I have said this before, that the banks are also their own worst enemy. Their languid responses to short sales, (anywhere from two to twelve months) is costing sales and delaying the possibility of a return to a normal market; whatever that will mean in the future. Their utter disdain for the conventions and customs of the real estate market is certainly not winning them any friends among the ranks of real estate professionals. So, keep offering insulting commission rates for what are arguably more difficult transactions and see the caliber of agent you will attract. Keep insisting that potential buyers MUST pre-qualify with your Aunt's second cousin at Billy-Bob's Ammo, Pizza and Mortgage Emporium. Let me know how it all works out for you. Many real estate pros have long memories so your future will not be bright.

I think the main problem with the banks, due to their corporate culture, is that few of the people tasked to approve a short sale have the stones to actually sign off on that loss. Too often they are scrambling for excuses to kick it upstairs, or off to another lackey, so as to avoid responsibility for any decision-making. This further exacerbates the problem.

On the positive side, it won't be a bad year for buyers, price-wise at least. For those who saw prices sky-rocket in '05 and '06 and who thought that the dream of home-ownership had died for ever, the reprieve has been extended. It will be a demanding and possibly fraught experience due to the above-mentioned reasons, and the cautiousness, understandably, of the appraisal community. However, for those buyers with a steady job and a good credit score there will be some good deals to be had.

Here's hoping that everyone enjoys a happy, prosperous and most importantly, a healthy 2011.

Fannie Mae: Please Stop Trying To Help.

Recently, I was working on a search for a client when I came across a Fannie Mae owned property, the lister of which encouraged me to click on the "documents" tab in the MLS. For those of you not in the know, this is a folder that contains any extra disclosures or forms that are required to close the transaction. Lo and behold, what did I find on that day?
The latest folly to be foisted upon a weary industry trying desperately to recover. This form required a potential buyer to agree to pay Fannie-Mae $5,000 if they should have the temerity to re-sell their own home within a year. Note, not only if they sell it at a profit; just if they sell it at all! Where to begin. I understand that these people are trying to punish "investors". This is not the way to achieve that. What of some poor schmo who loses his job, or has to re-locate? Why should he be punished? If a so-called investor is able to make a sufficient profit, then the re-capture amount will best be another cost of doing business.
We do not need any new laws. We need to enforce the ones we already have. The last property boom and bust was fueled, in part, by an "investor's" ability to claim he was going to "owner occupy" each property he bought. Over and over again. To claim such on the purchase contract erroneously is a felony. How many prosecutions have you heard of? Exactly!
Mind you, this is the same Fannie Mae that was formerly run by Franklin Raines. Mr. Raines is famous for massively and fraudulently over-stating Fannie Mae profits in order to inflate share prices. That little boondoggle enriched him to the tune of some $90M. After investigation, he and his two co-conspirators reached a settlement. He surrendered his stock option, which is hilarious because his shenanigans had rendered them worthless, and was fined just under $3M. That, in itself, was particularly odious because the fine was paid by an insurance policy paid for by Fannie Mae. Which means you paid it.
To re-cap then: The same Fannie Mae that was largely responsible for the current melt-down, and that aided and abetted Mr. Raines in his criminal enterprise is now trying to pick our pockets one final time in the unlikely event our home should increase in value.
We are in the best of hands.

Home Affordable Foreclosure Alternatives Program (HAFA)

For those of us selling homes in the greater Phoenix metropolitan area, short sales are a simple fact of life. In some newer communities, homes built in 2006 for example, almost every single one has entered the re-sale market a distress sale of one kind or another.

We all know how frustrating it can be when banks take up to 7 months to respond to an offer, by which time the buyer has likely already purchased something else. Frustrating for seller, buyer and agent alike. Hopefully, that is about to change.

On April 5th 2010, the above mentioned program, known as HAFA, came into effect. On its face, it seems to be a step in the right direction. Participating banks, and that is almost all of them, agree to abide by established time frames for responding to offers and for determining the net proceeds they desire from a short sale. If they do not comply, they will be ousted from the program.

It is quite involved so I suggest you Google it, but here are some highlights. For the Realtor, it prohibits the bank from reducing the commission. For the seller, they will be absolved of the debt without any judgements or promissory notes allowed. The seller may also receive $1500 for re-location. (Quick translation; relocation= not trashing the joint.) The bank also receives a financial incentive for following the guide-lines.

All in all, it seems to be a win-win situation. So why am I concerned? I search the MLS every day for various clients, often in areas that are chock full of short sales. Since this program was announced, of all the short sales I have reviewed, only ONE has mentioned HAFA. This is tragic. This means that there are hundreds of agents out there who have the listings, but do not have the faintest idea of how to process them within the new frame work. It is tragic because what is, or was, an extremely difficult process no loner needs to be. If the agents don't know about it, do the banks? If a great idea fell in the forest, and no one was there to hear it...

I am curious to hear opinions on the from professionals across the country. Maybe it's just my area. What say you?

The Shame Is, That They Don't Really Have Any

In this short post, I am re-visiting a topic upon which I have ranted before. Realtors who negotiate commission rates in the "remarks" section. Firstly, it is in direct contravention of MLS rules to negotiate the commission in an MLS listing. I saw one today that said, and this is disappointingly typical, "commission to be 50% of whatever bank will pay." So if the bank offer $1.00 and a sandwich you are obliged to accept 50 cents and half a PB & J? Have you no pride in your work? Have you no self-esteem?

If your client were to see that type of verbiage, would they see you as a champion of their cause; fighting fearlessly for their last dollar? More than that, when I see that kind of defeatist phrasing in a listing I sit back and smile. Why? Because I know that if we were to pursue your listing, I would crush you in the negotiations.

If you are that agent, you need to consider another line of work. You most certainly are not benefiting your client, so you need to step aside and let us professionals take care of business.

Likewise to all you puppets who insist that buyers must qualify with your preferred lender. Grow a spine! The message you send is this, "I do not trust the loan status report (LSR) that your lender has provided because the lending business is so corrupt/malleable/unregulated (pick one), but I insist you blindly trust my random guy with all your most private and critical and secure information before we can proceed."

If you don't stand up to these banks, you will just end up under their complete control.

For the record, I have never allowed a client to qualify with another lender on the whim of a seller, and I never will.

A Disturbing Sign of the Times

There is an old adage regarding the "Golden Rule". Them with the gold, get to make the rule. We had an irritating example of this just last month. We had listed a property for our client and it had sold within days for full price, which in and of itself was quite a shock. We later discovered that the buyers had coveted the home years before so that when it came on the market they just snapped it up. Even though they were going with a large down payment, we still felt an appraisal at full price might be a stretch in this market, and advised our seller accordingly.

In the meantime, our seller also had a second shot at what he considered his dream home when a short sale that had dragged on for almost a year suddenly became available. Our offer was accepted, but it was contingent on the first sale. The appraisal came in at the desired price of $545,000 and it looked like two families were going to get their dream homes. Who was it who said "I love it when a plan comes together"?

Then, the waste product came into direct contact with the oscillating, rotating air-moving device. The day before drawing docs on the first sale, a loan processor arbitrarily and capriciously decided it did not like the appraisal. It then ordered a drive-by appraisal which came in at $470,000! The original appraiser was mortified by this lack of respect for her work and requested the opportunity to defend herself. This was duly granted. In the meantime, the processor ordered another drive-by, and this one came in at $400,000! Nobody told me there'd be days like these!

In the end, they completely ignored the official appraisal and said they would stick with the drive-by evaluation of $470,000. Everybody said "They can't do that!" But they did. Luckily, both buyer and seller were willing, and financially able, to reach a compromise. The seller came down $25,000 and the buyer was able to come up with the extra cash, so it closed, albeit a couple of days late.

Interestingly, when we came to an agreement with the bank on the short sale we were buying, they gave us 10 days to close it. This, after they had messed around the previous buyers for more than 9 months. The stones on these people. We closed it in 9 days. That night, Mrs K and I went out for frozen yogurt. It was good.

I'm From The Government, And I'm Here To Help

Recently, in the middle of April, we were working with a buyer looking to purchase a home in the $150-$160K range. With the $8000 tax credit about to expire, we thought there might be a spring in his step, but we were wrong. He was curiously detached about the credit and reasoned that prices might even go down upon it's expiration. We tend to agree with him. When the government introduced "cash for clunkers" to salvage the auto industry, its main effect was to drain all future sales from the pipeline in short order. Much the same will happen in the housing market. It makes sellers and buyers lazy when it comes to negotiating. If $8000 is on the table, the seller wants to get his "share" while the buyer is less motivated to haggle. I am not a fan of artificially supporting the market for anything, especially when the money involved does not exist and will have to be borrowed. All in all, another smoke-and-mirrors job by the ne-er-do-wells in D.C.

Talking of smoke, an agent called me for feedback on a house we had shown. I told her it positively reeked of cigarettes. To which she replied that they had repainted the house. Be that as it may, the place still stunk like an ashtray. Either have the place professionally deep-cleaned or throw out the carpets. To not do so is a sever dis-service to your client and frankly, is wasting the time of your fellow agents. No one will contemplate such a home without a deep discount.

FNMA, Corruption and Personal Responsibility. Where Have All The Grown-Ups Gone?

Many folks reading this article today are probably fellow Realtors who are well aware of the further eduction requirements that must be undertaken in order to remain licensed by the state. For those with real jobs, let me explain that we must complete eight 3 hour courses every two years here in Arizona. This morning was just such a course. Sometimes, the subject and the lecturer are so interesting that the time just flies by. At others, the subject matter is so dry that even the most entertaining speaker in the world, can not make it interesting. Today was such a day. However, in amongst the drudgery, a few nuggets came to light that make it worthwhile.

It wasn't the fact that Franklin Raines, after inflating the reports of FNMA's profitability, was able to enrich himself to the tune of $90 Million in unearned bonuses. Nor was it the fact that his lawyers negotiated the return of a paltry $5 million of his ill-gotten gains. Nor was it the fact that he voluntarily returned his stock options: never mind that they had been rendered worthless by his pitiful leadership. It wasn't even the fact that he was not imprisoned for his deeds. I've come to expect that from the denizens of Washington, D.C.. It was the fact that, despite all the shenanigans, the mis-management, the misguided rules and regulations imposed by a clueless congress; we have learned nothing.

Had a foreclosure? You can get a new home loan after three years. Bankruptcy? No Problem. Only a two year wait. The Fannie Mae Homestep program for their REO properties has a "no appraisal necessary" component. Most likely because none of their properties would actually appraise in the real world. Their solution, therefore, is to finance their over-priced turkeys in house so long as you are able to come up with a 3.5% down payment. Mind you 2% of that can be gifted. In reality, the buyers are in no way "buying" a home. They have not invested in anything. The are glorified renters. This is one of the many reasons people have walked away from their homes. They had no vested interest. Apparently, some genius thinks it's a good idea to do it all again to see if the results differ. And we all know what that is the definition of.

The culmination of the sorry times in which we live is demonstrated by an article that most of us have read. It is entitled "cash for keys". This is the latest fiasco in which lenders, prior to taking a property back, bribe the owners with cash to not trash the property on which they are delinquent. That's right. Rewarding people for doing exactly what any decent, upstanding citizen should do. It has come to this. It does not bode well for the future.

Banks Just Don't Get It

Recently, I railed about agents charging potential buyers for the costs of a "special" negotiation team in securing the debt forgiveness. This was over and above the traditional commission being earned and I felt very strongly that buyers were being gouged.

Later this week, I will have another tirade on how banks are abusing the very people they need, in order to extricate themselves from a mess, largely of their own making.

Meanwhile, I continue to be disappointed by the demands made of buyers by the banks themselves. Many have taken to requiring a potential buyer to qualify with a "preferred" lender. You don't have to use them, of course, but you are requested to at least pre-qualify. I saw one this week that required a buyer to fill out an attached form. Among the required information was not only your social security number, but also your mother's maiden name. All this to be faxed (how very secure) to "Joe's House-Painting, Pet-Sitting and Mortgaging Emporium". In the identity theft capital of the world, as Phoenix most certainly is, this is surely a recipe for disaster. This was not even a recognized bank, although that would hardly improve the situation, but a rinky dink mortgage broker that I had never ever heard of. I would add, that I have so far not allowed a client of mine to be blackmailed in such a fashion, and I have yet to lose a deal because of it. However, in the above example, the agent who "requested" that you comply, stated categorically that your offer would not be presented without it.

Essentially, today's buyer is not being treated with any respect, despite being an extremely valuable commodity and the only way out of this current quagmire.

Banks are sending a very clear message. Even though you have been through the trouble of getting yourself pre-approved, they do not care. They are telling you that they do not trust their "colleagues" in the lending industry. Yet, even while they are telegraphing their mistrust, they are insisting that you place all your trust, and financial information, in them. They are arrogant beyond belief and I suggest that we, as an industry, ride them as hard as possible until they learn better manners.

More to come, stay tuned!

Short Sales; Some Disturbing New Trends

As a Realtor, I am still astounded at how some neighborhoods remain awash in distressed properties, be they short sales or foreclosed homes. Of course, it's not too surprising, especially when you realize that pretty much any home built or sold after 2004 is worth less today, than it was then, at least in the Phoenix area. Many subdivisions that were built in 2006 and 2007 have virtually no original owners. Most have simply walked away, as prices halved, whether they could make the payments, or not. That is a subject for another day, although I will allow that the economy likely hurt many of them, while another large section of buyers took on debt they could not really afford, in the hope of continued appreciation that failed to materialize. All the while, aided and abetted by voracious bankers.

Recently, I was working with an elderly couple who were looking to downsize into a newer home. As usual, we ran into the problem that many homes on offer were short sales. They had neither the time, nor the inclination, to embark on what can be a lengthy process, so we concentrated on REOs and regular sales.

However, whilst skimming through some short sales, I was taken aback by the conditions of many sellers. I am used to a seller demanding the buyer qualify with a pre-selected lender, and I am used to not complying with that request. I see no benefit in my client divulging all their personal financial information to some lackey at a random bank. As I said, I was taken aback by a listing agent that disclosed that the short was being negotiated by a special company and that the buyer was required to pay the $4,000 fee associated with this service. This fee coming on top of the 6% listing fee that is customary in our market. Then, and at least they disclosed it, they revealed on their business affiliation disclosure, that the crack negotiating team was, in fact, a subsidiary of their own real estate company. All this on a $200,000 listing, which means the additional burden on the buyer was 2% of the asking price. Here's a newsflash! If you are unable to negotiate short sales, do not accept listings that require them!

In another short sale offering, the lister disclosed that the bank may, or may not, at its discretion, impose an extra 1% fee on the potential buyer. Genius! Punish the very person who is getting you out of the mess that you were, at the very least, partially responsible for creating. Some of these banks are as useful as a screen door on a submarine.

It will get worse. The ill-advised first time home buyers tax credit of $8,000 will be expiring at the end of June. Watch how many well-intentioned and eager would-be purchasers get entangled in the net of indecision that plagues most banks and their alleged decision makers.

Watch how eagerly our elected officials will scramble to re-fix the fix that they caused to be broken in the first place.

It's gonna be a bumpy ride.

Another Reason to Love Cave Creek- It's Easy To Do

Here is another installment in an occasional series extolling the virtues of our little town Cave Creek. Our many and varied eateries have long made Cave Creek both a destination for tourists, and a haven for snow birders who return each winter. Recently, a new establishment has opened, garnering instant acclaim due to the hard work of its owner. Take a bow, Bryan's Black Mountain Barbecue.

We recently had the pleasure of taking lunch there with some out of town guests. I sampled the pulled pork sandwich, which was delicious and moist. My friend partook of the two meat combo, while the ladies each took a half slab of pork ribs. All were impressed with the preparation and taste. The ribs were smoky and tender and came out piping hot. My wife also had the baked potato salad, which to clarify, is a potato salad in which the spuds themselves are baked, so it is not a hot dish, it has amazing texture and spicing, in a word- Yum. Also, recommended is "our famous olive coleslaw". We had tried it with some friends at the recent "Taste of Cave Creek" festival. To admit, we had taken one bite and not really liked it. Boy, were we wrong! The second bite somehow drags you in and you quickly realize how scrumptious it is.

Located at 6130 East Cave Creek Road in Las Tiendas, they are closed on Sunday and Monday. And remember, it is freshly prepared so it will take a few minutes to arrive cos it ain't fast food, it's real food.

You're Welcome!

Cave Creek Gets A Boost From Walmart

The town of Cave Creek was recently involved in a minor kerfuffle regarding the re-zoning of a parcel of land on which Walmart were proposing to build a new store.

The town folk were overwhelmingly in favor of such a development, indeed the last council elections were a virtual referendum on the issue, with those for it being voted in, and those against being shown the door. In fact, four incumbents were defeated by four newcomers. Pretty decisive.

Naturally, this did not discourage the usual crew from central casting, including many non-residents, in mounting their knee-jerk reaction campaign to defeat the great Satan--- Walmart.

They succeeded in having the issue placed on the ballot in a special election and were resoundingly defeated, as expected. They did succeed in delaying the start of the project, therefore denying the town much needed revenue for another eleven months. Thankfully, cooler heads have prevailed and the tax revenue will prevent the need for a property tax, something for which we should all be grateful. Not only will the revenue derive from an estimated catchment area of 30,000 people from surrounding communities, thereby spreading the "load" but Walmart will also bring around 300 much needed new jobs to the area.

All in all, a good thing for our little town.

Another Good Reason To Make Cave Creek Your Home

Cave Creek, which I am proud to call home, is a great little western town with an eclectic mix of art stores, restaurants and bars, plus antiques and collectibles sprinkled throughout the town core. Add in the awesome Spur Cross Conservation Area with its many and varied hiking trails, and Cave Creek makes a great destination for a visitor on a day out. It also makes for a great place to live.

Many creekers are over-achievers and the latest incarnation of that trait is the monthly (first Saturday) "Thieves Market" situated for the most part in the parking lot behind Big Earl's Greasy Eats. It is an open-air market that brings together a mixture of both local merchants displaying their wares, plus vendors who come up for the day. All manner of arts, crafts, metal-works, vinyl records, clothing (both new and antique), BBQ equipment, jewelry, massage, bric-a-brac, concrete statues, antiques and Americana is on display. Grab a cup of coffee and stroll around. This week I even saw a WWII Japanese rifle. There is truly something for everyone. Come up for the shopping, then stay for lunch at one of our many great eating establishments. You could stay on site and enjoy one of Big Earl's legendary burgers. Or you could cross the street and eat at the newly-opened, and extremely popular, Bryan's Black Mountain Barbeque. (I'll be writing more about that eatery next time).

See you at the next Thieves Market on January 2nd, 2010, it is a blast. And maybe you'll fall in love with Cave Creek just like I did.

(Photo courtesy of Sonoran News)

Oh, Bank of America...Have You Met Customer Service? No, I Didn't Think So.

This is a story that despite being fraught with difficulties, has a happy ending. It is partially about the difficulties we sometimes experience with short sales; it is partially about the hoops one must go through to obtain a loan, but mostly it is a sorry tale of complete, absolute and total lack of customer service that a client of Bank of America can expect today.

Let's start at the beginning, shall we? We had out of state clients that were looking to buy a home in the Cave Creek area, having lived there previously. Naturally, we encouraged them to get pre-approved so that they would not be hampered, should we locate the perfect home. They were well-qualified, with a down payment of 20%, and they told us that they would contact Bank of America, an institution they had used previously, with success. We have long held reservations regarding BofA, which are beyond the scope of this article, but we had no choice but to allow them to proceed. So they called BofA. Again and again and again! That's right, they had to call three times before they were to receive the courtesy of a reply. Personally, I would have dumped them then and there on that basis alone. Unfortunately, the buyers' previous experiences had created a loyalty to BofA that was neither warranted nor deserved, as they would now confess today. As you are no doubt aware, the purchase contract in Arizona requires an addendum called the Loan Status Report (LSR) which, in part, informs the seller as to how far along the process of getting a loan the buyer is. Additionally, it requires that the lender respond to enquiries during the escrow period from the agents involved so that everyone is up to speed. BofA do not "DO" LSRs. Such is their arrogance that they choose to transact business in a state that requires such a form, whilst essentially thumbing their nose at the process. Instead, they give you a "Buyer Ready Approval Certificate" and promise to close the loan within 30 days, or...or, nothing, actually. They make the promise, but there is no penalty if they fail, so it is an empty one. Curiously, when we asked our clients if they had furnished all their tax returns, etc., they told us that BofA said not to bother, until they found a home. Hmm! In reality, they were only really pre-qualified, not pre-approved. The fact is that BofA do not care to perform the necessary work ahead of time, instead they prefer to have you jump through hoops, (hoops that could have been cleared weeks earlier) during the escrow period. It may delay your closing, but better that than have them do their due diligence ahead of time, after all, you are just the customer, right?

As an aside, we were in back-up position on a short sale at this time. Then, the phone call. The original buyers had backed out, so it was ours if we wanted it. We did. BofA swing into inaction. Their ability to return a call was non-existent. Their communication skills dreadful. The "personal banker" that had begun the ordeal would not speak to either the buyer or us, as the file had been forwarded to processing/underwriting. The phone messages on all contact numbers essentially said "The chances of us calling you back with 24 hours are so small as to be incalculable." They demanded all sorts of financial evidence (retirement accounts, IRAs, etc.) that should have been dealt with before we even found a property. They demanded roof repairs two days before we were scheduled to close escrow. They demanded ADEQ water records on the day we were scheduled to close escrow. Such reports normally take 7-10 days to process, although we were able to get them the next business day, due to a helpful contact. It appeared to us, that all these last minute demands were the result of an organization that did not even pick up the file until about the third week of escrow. Such is their contempt for the client, that they would much rather make you do the impossible, than start work on the file in a timely manner, in order to allow you to honor their requests. All the while, not returning calls or communication in any way. They promised to call back, they didn't. They promised loan docs by a certain deadline, three days in a row, and were unable to manage it even once. All without letting the client know. You see, they manage to communicate, the little that they do, through the "customer service" people who answer the telephones. These people cannot help you, they can only relay your messages of frustration via email to the actual person who CAN help you but you are not allowed to speak to on the phone. In all the days of our escrow the client spoke to the actual "loan officer" a total of- wait for it- four times. Meanwhile our clients spoke to the unhelpful drones at "customer service" everyday.

In the meantime, the short sale final approval, which was also handled by another worthless BofA department, was contingent on a HUD 1 being approved that reflected a certain minimum dollar amount. This was duly sent, and ignored. So we had the loan docs signed, were ready to fund, but we still could not close. Bank of America was preventing Bank of America from closing on the house. We knew the name of the individual who needed to approve the HUD 1, take a bow Kim Alexander, but the operator ran interference and could not be persuaded to allow us to speak to her. We were not authorized. The operator would not even explain the procedure or the process or the time frame usually needed to complete the authorization. She preferred to spend 20 minutes arguing about what she would not do, rather than spending 5 minutes on explaining the process. It was like dealing with the government. The listing agent, who WAS authorized to speak to Ms. Alexander, was also denied access. Unbelievably, due to the listing agent's tenacity, someone in the chain of command accidentally gave out the direct number of the short sale deadbeat. OPPS! Ms. Alexander told the lister that "I have had the HUD 1 since 9.30". The lister said, "You mean 9:30 this morning?" "No," she replied, "I mean 9/30 (Sept. 30th)." It was Oct. 5th! Wonderful, but it gets better. She eventually sent the approval to the title company. However, it was encrypted for "security reasons" (I have no idea why as it contained no secure info, like SSNs, for example). The title company was unable to open it, so they contacted Ms. Alexander. Guess what she did? She put them in contact with a techie in India or Pakistan, I am not kidding, who was also unable to open it. Could BofA have been more unhelpful? Why not just scan and email the approval? Too simple, I suppose.

Ultimately, we closed escrow around eight days late, which is not too tragic in the overall scale of things. Remember, though, that we had been in back-up position so I have no idea how long the original buyers had been mistreated before the deal fell in our laps. Maybe they died of old age. I have heard of some short sales taking up to 7 months to complete.

As I said at the outset, this is a story partly about short sales, but mostly about an epic failure in customer care. Not so long ago, when dealing with a buyer, their lender would often make a great effort to impress you in hopes of future business. BofA has made no such effort, and obviously believes it is too big to concern itself with peons like me. That is their right. However, it is probably no coincidence that they just posted a 3rd quarter loss of $2.2 Billion.

Anecdotally, other title officers and Realtors have said that generally banks no longer seem to care. In our area, it seems that BofA have the worst reputation, whilst of the big ones, Wells Fargo maybe has the best.

What do you think? I'd love to know.

How local should your real estate agent be?

We recently closed escrow on a home in the city of Buckeye that we helped a first-time buyer secure. They kindly sent a note thanking us for helping to make the experience as smooth as possible. They also stated how glad they were to have stuck with us, even as friend and colleagues were pressuring them to use a "local" agent. (We are based in Cave Creek, AZ) It got me to thinking "Is that a valid concern?"

As with many things in life, it depends. Information is so freely available in this hi-tech era, that it is relatively easy to garner information. In a previous life, when I lived in Los Angeles, it was not unusual to sell homes as far apart as Marina Del Rey to the west and back to Pasadena or Glendale to the east. In fact, I even sold one home that belonged to a friend in Palm Springs, some hundred miles away. Although some agents choose to concentrate on one particular area, it is not unusual for denizens of large metropolitan areas, such as Phoenix, to spread their wings a little. We have sold homes in areas as far north as Cave Creek and Anthem (and a vacant lot in Black Canyon City) to the home in Buckeye to the west, and houses in Gilbert and Mesa to the East. The only difference between Phoenix and Los Angeles is the commute time. From Cave Creek to Buckeye, a 70 mile trip, takes about an hour and a quarter. A journey of similar distance in L.A. would most likely take two or more hours.

The other important aspect in selecting my wife and I, is that we are very experienced agents. Between us, we have 25 years experience and therefore have run across, and solved, most problems you are likely to encounter in a transaction. We are experienced negotiators. We have many contacts. For example, we are currently representing a buyer on a home in Tonto Hills that has a private water company. A week before closing, the lender required a lot more information on the capabilities of that company. That info can only be obtained from the Arizona Dept. of Environmental Quality and would take 10 days to access. We got that information the very next business day.

So the question becomes. Are you better off with a "newbie" who lives in Buckeye, or an experienced pro who is willing to undertake a 140 mile round trip to show you properties? How about the Buckeye "pro" who was selling homes for $265K three years ago? The exact same home that you just bought today for $110K. How helpful was their advice back then? And before you ask, we deterred many of our clients who did not need to buy over the last few years, soon-to-be-retireds, for example. There is much more to life than money.

Finally, any business depends upon referrals as its lifeblood, none more than real estate. That is why we are always willing to go the extra mile, literally, to satisfy our clients.