Tucson Real Estate News

In HBP-101 Part 1, Part 2 and Part 3 we talked about the role of your Realtor, Internet searching options and what to look for when viewing home. Now you’re ready to make an offer.

Making an offer is more than just offering a dollar amount. There are other things to consider, date of closing, concessions, warranty, choice of Title Company, amenities included with the home, fees payment and much more. This is where your Realtor should be researching and making recommendations. By this time you should have a good relationship with your Realtor. He or she should know what your needs area and how to apply them to the contract. Things to consider when making an offer:

1. What are the comparative sales? Your lender is going to have the home appraised. Knowing what the appraiser may be looking at will help in determining a fair value to offer. Your Realtor should be providing you with this information to help determine the right price to offer. Most contracts have an appraisal clause requiring that the home appraise at or above the selling price. Smart and honest sellers will have already completed this task.

2. What is an acceptable offer? Anything shy of the asking price the Seller is going to consider they are putting into your pocket as a buyer. If they are asking $150,000 and you offer $145,000 the sellers interpretation is they are already giving you $5,000. Add to it a home warranty for $450, and Seller concessions of 3% of the selling price for buyer closing costs and another $4,350 is deducted from the price. The offer in reality is now $140,200. The seller will see that they have given up $9,800 to you as the buyer. Ask yourself, why would you give a stranger $9,800? Everybody wants a deal, but there are limits. Being reasonable gets results.

3. What are the best conditions for you? Each buyer has different needs. Maybe you can afford the payments and FHA 3.5% down payment, but not the closing costs. Maybe you can afford all the costs and want a lower price. Having a refrigerator added may be important. There are differences in appliances so being specific about value or type helps here. Maybe postponing closing until your lease is close to expiring is important.

After an offer is accepted you have a contract. While negotiating with the Seller it is still just an offer. If another buyer comes into the picture, you could lose your negotiating power. The longer it takes the higher the risk of losing. If you like the home, chances are somebody else likes it. A win-win scenario that can be negotiated quickly is best for both sides. In Arizona, once buyer and seller have an agreement and a contract is established there is a pre-defined inspection period which can be negotiated as well. That is the first obstacle. The next is the appraisal. Within the Arizona contract is a safeguard called the Appraisal Contingency. The last obstacle is underwriting. Underwriting is a lender requirement. As a Buyer the hardest obstacle can be underwriting. So, good communication with your lender will be important to your sanity.

Now you’re ready. Now you have a good foundation for staring your search and buying the home of your dreams or your starter home. Working with a Realtor of your choice will help you tremendously. Happy house hunting.

These questions will help you decide whether you’re ready for a home that’s larger or in a more desirable location. If you answer yes, it’s a sign that you may be ready to move.

1. Have you built substantial equity in your current home? Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if you’ve owned your home for seven or more years, you may have significant, unrealized gains. Has your income or financial situation improved? If you’re making more money, you may be able to afford a high mortgage payment and cover the cost of moving.
2. Have you outgrown your neighborhood? The neighborhood you pick for your first home might not be the same neighborhood you want to settle down in for good. For example, you may have realized that you’d like to be closer to your job or live in a different school district.
3. Are there reasons why you can’t remodel or add on? Sometimes you can create a bigger home by adding a new room or building up. But, if your property isn’t large enough, your municipality doesn’t allow it, or you’re simply not interested in remodeling, then moving to a bigger home may be your best option.
4. Are you comfortable moving in the current housing market? If your market is hot, your home will sell quickly and for top dollar, but, the home you buy will be more expensive. If your market is slow, finding a buyer may take longer, however, you’ll have more selection and better pricing as you seek your new home.
5. Are interest rates attractive? A low rate only helps you buy a bigger home, it also makes it easier to find a buyer.

Should you decide that selling your home and moving is a good idea take advantage of the Selling Your Home tips and Staging tips offered on this page.

In HBP-101 Part 1 and Part 2 we talked about the role of your Realtor and Internet searching options. Now it’s time to talk about physically looking at homes.

The Internet is full of different sites for searching. There are two ways to looks. Some Buyers like to drive by and look on their own before calling their Realtor®. That gives you an opportunity to decide from the look of the neighborhood or outside appearance of the home whether you want to look further. If you’re from out of town and in town only a few days you may not have that option. It is for these buyers looking to come to Tucson I put together the pages A Look at Our Neighborhoods, Starter Homes, homes for Military Families needed to be reasonable distance from DMAFB, students looking to live near the University of Arizona, Golf Communities, and Luxury Homes.

Prior emails and phone calls to your Realtor® will help decide which homes you want to see. When pulling into a neighborhood or up to the home for the first time there will be some that you just don’t want to go any further to see because of curb appeal. I prefer to know before getting down because a quick phone call to the seller and moving on saves both of us time.

When looking at a home, it helps if you know what to look for. You should be doing a cursory inspection of the property. To name a few…

• Water stains under a sink may indicate a leaky faucet and possible mold.
• Water stains in the ceiling indicate a prior roof leak.
• Different texture along a wall with a bath tub on the other side could reveal a prior leak.
• Poor roof drainage would result in water stains, wood wrought, or mold under eves and along facia boards.
• A crack running the length of a home through tile, up the wall and along the ceiling could indicate a structural problem.
• Dirt tubes coming from the ground along outside walls indicates termites.
• Are roof shingles coming off or intact?

The flow of a home will let you know whether it will fit your life style.

• Is the home open or boxy?
• Are larger bedrooms important or a larger living area?
• Is the kitchen the right size, too big or too small?
• Can you see your furniture fitting in this home?
• Do you have to go through a bedroom to get to the back yard?
• Is the master bedroom separate from the other bedrooms?

Take good notes. At the end of the day after looking at six or more homes your brain turns to mush. Taking good notes will help separate which is which not to mention aide in retaining your sanity. Here is one method to make it easier on you. Sit down each day and pick the best two of the day. Throw out the rest and forget about them, they can only lead to confusing the search. Day two take the best two of that day and the best two of the day before. Then break them down to the best two overall. Day three and each day after you can do the same thing. You will find a method that works for you. What I have seen is the more you hang onto the harder it becomes to make a decision.

When you find the home you like you will know within seconds. Keep in mind if you like it, somebody who saw it yesterday may like it as much and may be putting an offer on it now. It happens all the time to Buyers. Which will take us to Part 4, Making an Offer.

Not all real estate practitioners are REALTORS®. The term REALTOR® is a registered trademark that identifies a real estate professional who is a member of the National Associations of REALTORS® and subscribes to its strict Code of Ethics. Here are eight reasons why it pays to work with a REALTOR®.

1. Navigate a complicated process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multipage settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.

2. Information and opinions. REALTORS® can provide local community information on utilities, zoning, schools and more. They’ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

3. Help finding the best property out there. Sometimes the property you are seeking is available, but, not actively advertised in the market, and it will take some investigation by your REALTOR® to find all available properties.

4. Negotiating skills. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can provide you information about which investigations and inspections are recommended or required.

5. Property marketing power. Real estate doesn’t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner’s contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a REALTOR® he or she will generally prescreen and accompany qualified prospects through your property.

6. Someone who speaks the language. If you don’t know a CMA from a BINSR or an LSR from a HUD1, you will appreciate why it’s important to work with a professional who is immersed in the industry and knows the real estate language.

7. Experience. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each sale/purchase. Even if you have done it before, laws and regulations change. REALTORS®, on the other hand, handle hundreds of real estate transactions over the course of their career. Keeping up with current changes. Having an expert on your side is critical.

8. Objective voice. A home often symbolizes family, peace of mind, and security. It’s not just four walls and a roof. Because of this, home buying and selling can be an emotional undertaking. For most people a home is the biggest purchase they will ever make. Having a concerned, yet objective third party helps you stay focused on both the emotional and financial issues most important to you.

Here is an interesting article (blog) for Sellers from HomGain that gives different perspectives. If you are curious, I am DougT in the comments section. 

HomeGain Survey Finds Home Sellers Fare 50% Better in Getting Their Homes Sold Using a REALTOR® Than Selling On Their Own

When it comes time to sell your home there are several things you should know. Many Sellers get upset with their Listing Agent because that Agent failed to insure the Seller understands the Listing Agents role. I commonly hear, “My Agent never brought any buyers to see my home.” That is a common misperception. Think for a moment, would you really want your Agent representing the Buyer as well as you? To whom should that Agent be liable? It’s impossible to serve two masters. There is a dual agency issue if the Listing Agent also represents the Buyer. Wouldn’t you prefer your Agent to be loyal to you the Seller? Now, if the other Agents within the Listing Agent’s company didn’t show your home you might ask why not. We’ll get to dual agency on a later date.  Let’s talk role of the Listing Agent.

There are several roles for the Listing Agent. The two primary roles are marketing your home and protecting your best interest. The marketing of your property is through signs, riders for buyers to call or text to get information about your home, flyers, MLS, Internet sources, open houses for other agents, open houses for the public, advertisements, etc. The front yard sign lets your neighbors and anyone passing through your street that your home is available. When it comes time for an open house you can bet neighbors will show up to see what it looks like. There are a variety of people who attend open houses; we already talked about neighbors. I see some of the same people at different open houses. That’s their entertainment. There are those who like the neighborhood and are interested. Some will see the signs on the street and swing by. Others are looking in the morning paper; which are few. There are those who look for open houses on the Internet. The majority are driving through the neighborhood of a nearby street.

Archaic and least effective marketing is through magazines and newspapers. With the age of technology if your home isn’t accessible on the Internet, it won’t be included with the homes Buyers are wanting to see. The more places your home can be seen, the better the opportunity for the one buyer you need will see your home. Magazines and newspapers are on the decline for subscribers and readers. Many buyers from out of town have already looked at what they want to see on the Internet. I like this humorous cartoon video that represents how archaic and out of touch some Agents are.

Traditional flyers do not capture buyers. People driving by your home want information about it. Traditional and informative flyers are for nosey neighbors and looky-loos.  Traditional flyers with all the information about your home do not allow your Listing to capture information about that potential buyer and make a sales pitch to sell your home. Riders with 800 numbers, texting access, or QR codes help the Listing Agent to have an immediate connection with that buyer while their interest is hot. Putting flyers with a QR code or text number with minimal information will force that person to be active and either call, use the code or text for information when it is convenient for them. Creating another opportunity for your Agent to contact that potential Buyer to answer questions or make a sales pitch.

Pictures are the most overlooked aspect for selling a home. The old adage that a picture is worth a thousand words is applicable to real estate. Quality and sequence are important. If the Buyer has to go through 15 pictures to see what the kitchen looks like you’ve lost them. If the pictures are too dark, too light, have white glaring windows or show a cluttered home, you’ve lost a potential buyer. A good Realtor will know all the tricks for taking the right pictures. Sometimes you just can’t get a good picture because of size of condition of a home. There should be at least a few good pictures in those instances. Cluttered rooms, picture covered refrigerators, and posing pets don’t sell homes.

The broader the net the better the chance. Listing Agents are fishing for buyers for your home. You can catch more with a net than a hook. Broad presence on the Internet is key to success in today’s market. Social media is increasing importance to marketing homes on the Internet. Realtors who understand the power of Facebook, Twitter, G+, Linked In, You Tube, and numerous other avenues have a better chance of finding a buyer sooner than the Realtor advertising in the Sunday paper. Enough marketing, I think you get the point.

Protecting your best interest is another important role of your Realtor. This obligation starts with the listing contract. Your Agent will ask you to complete a Sellers Property Disclosure Statement that is required with every listing. The key is “disclosure” if in doubt ask your Agent and disclose it. Withholding information that affects the value or condition of the home can lead to litigation. Who do you know who likes being sued? Your agent will help protect you through negotiating the best deal for you. An experienced Realtor will recognize pitfalls and hazards that can hurt you as a seller. A good Realtor like me (hint…LOL) will write conditions into a counter offer that helps to protect you as the Seller. Things you may never think of.  Double checking paperwork prepared by the Title Company to make sure the Buyer, their Lender or their Agent didn’t slip something in that wasn’t agreed on in writing.

Reporting is important to Sellers. You want to know what is going on concerning your home. How many people are seeing it on the Internet, what did the buyer have to say after their agent showed them your home, what did that Buyer who called about your property say, is nobody looking at all? Communication saves a lot of problems. Which is why I prefer to communicate frequently and report weekly with Sellers.

1. Tax Breaks. The U. S. Tax Code lets you deduct this interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.

2. Appreciation. Real estate has long-term stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average of 6.5% each year from 1972 through 2005; and 88.5% over the last 10 years according to the National Association of REALTOR®. In addition, the number of U.S. households is expected to rise 15% over the next decade. Creating continued high demand for housing.

3. Equity. Money paid for rent is money that you’ll never see again. However, mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. When you sell, you can generally take up to $250,000 single/$500,000 married couple as gain without owing any federal income tax.

5. Predictability. Unlike rent, your “fixed-mortgage” payments for payment and interest do not rise over the years. So your housing costs (interest amount paid) will decline the longer you own the home. The amount applied to the principal (loan amount) will increase over time. The only increases will be in property tax and insurance.

6. Freedom. The home is yours. You can decorate it as you prefer without landlord permission. You can personalize your home to fit your wants, needs, and desires.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity. There is a social impact ot home ownership as well that impacts, families, education, confidence, employment stability, and much more.

Online Resources: www.GinnieMae.gov let you calculate whether buying or renting is the best option for you or you can use the Rent vs Buy calculator on this site. You will surprise yourself with the results.

1. Remove clutter and clear off counters. Throw out stacks of newspapers and magazines and stow away most of your small decorative items. Put excess furniture in storage, and remove out-of-season clothing items that are cramping closet space. Don’t forget to clean out the garage too.

2. Wash your windows and screens. This will help get more light into the interior of the home. Not to mention say something about how well the house is maintained. Don’t forget those bathroom mirrors.

3. Keep everything extra clean. A clean house will make a strong first impression and send a message to buyers that the homes has been well cared for. Wash fingerprints from light switch plates, mop & wax floors, clean the stove & refrigerator too.

4. Get rid of smells. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. Open the windows to air out the house. Potpourri or scented candles will help. Smells of fresh baked bread, vanilla, or apple & spice are popular as well.

5. Brighten your rooms. Put higher wattage bulbs in light fixtures (within manufacturers recommendations) to brighten up rooms and basements. Replace any burned-out bulbs in closets, hallways, bathrooms and fixtures. Cleans walls or freshen with paint if possible.

6. Don’t disregard minor repairs. Small problems such as sticky doors, torn screens, cracked caulking, or dripping faucets may seem trivial, however, they can give buyers the impression that the house isn’t well maintained.

7. Tidy your yard. Cut the grass, rake leaves, trim bushes, edges sidewalks, and clean gutters. For added curb appeal, place a pot of bright flowers near the entryway.

8. Patch holes. Repair any holes and cracks in your driveway and/or walkway.

9. Add a touch of color to the living room. A colored afghan or throw on the couch will jazz up a dull room. Buy new accent pillows for the sofa.

10. Buy flowering plants and put them near a window you pass by frequently.

11. Make center pieces for your tables. Use brightly colored fruit or flowers.

12. Set the scene. Set the table with attractive dishes and candles. Create other vignettes throughout the home to help buyers picture living there. Example, a chess game in progress.

13. Replace heavy curtains with sheer ones that let in more light. Show off the view if you have one.

14. Accentuate the fireplace. Lay fresh logs in the fireplace or put a basket of flowers there if it’s not in use.

15. Make the bathrooms feel luxurious. Put away those old towels and toothbrushes. When buyers enter your bathroom, they should feel pampered. Add a new shower curtain, new towels, and fancy guest soaps. Place personal toiletry out of site.

16. Send your pets to a neighbor or take them outside. It that’s not possible crate them or confine them to a single room. Insure that real estate agents are aware & not surprised.

17. Lock up valuable, jewelry and money. While a real estate agent will be present during the showing of your open house, it’s impossible to watch everyone all the time.

18. Leave the home. It’s usually best if the sellers are not at home. It’s awkward for prospective buyers to look in your closets, under sinks and express their opinion of your home if you are present.

The better your home is prepared for receiving buyers, the better your chances for buyers to be interested in your home above the competition. Be sure to take advantage of Curb Appeal, Pricing an other tips offered under the Selling Your Home tab on the left. Oh yes, and dont forget the Staging tab as well.

In HBP-101 Part 1 we talked about the role of your Realtor. I hope it dispelled some misperceptions. We also discussed getting a Lender. Now you are ready to start searching. Where is your home?

The Internet is full of different sites for searching. There are basically four methods for searching. First you sit down and start searching on your own; an autonomous search where you have full control. The second is setting an automated search based on the parameters that the website you are on will allow. The third is to have your Realtor do a search, and the final is to have your Realtor set up an automated search. Each has its pros and cons. The most common issue that arises is when your findings are different than that of your Realtor. There is a reason for that. What you set as criteria today may be different tomorrow, so the results are different. Your Realtor is using the criteria you set. So, when you change it and he or she isn’t aware of the change they can’t possibly have the same results. The MLS (Multiple Listing Service) allows website vendors search through their database for information. These websites, mine included, do not differentiate between the three types of Active listings. Some sites have outdated information (mine updates daily) and a house has sold yet still shows available months later on that site. So you get false results on some listings. Another advantage for using my website (hint, hint).

Now is a good time to define the status of listings.

         Active – Property is available to the public. No offer has been submitted on the property. The person who saw it yesterday could be negotiating an offer on it today. Don’t be surprised when they change from Active in the morning to another category by afternoon.

         Active Contingent – There is an accepted offer on the property. It has not gone through all the conditions of inspections and appraisal yet and could fall out of contract. I let my Buyers know that looking at these homes can be heart breaking since they don’t always fall out of contract. The one you really like closes and your search can be spoiled. Keep that in mind if you choose an Active Contingent home to see. Don’t get emotionally attached to it. You can make a back up offer in case it does fall through, but keep looking.

         Active CAPA – There is an accepted offer on the property, however there is some condition than must be met. It used to be that Active CAPA properties required the Buyer to sell their home in order to buy this home. You could make an offer on the home and the Seller could require the first Buyer to remove the condition to remain in contention for the home. If they couldn’t the Seller could sell the home to you. Anymore this category is misused for Short Sales. Which we will get into later.

         Pending – An accepted offer with inspections completed, appraisal came in, and any requested repairs have been completed. Sellers usually won’t allow Buyers to see their homes when they reach Pending.

         Closed – The home has sold and the Deed is now recorded in the new owner’s name. It’s off the market.

Now that you have a good foundation for understanding the status of properties it will make that portion of searching easier for you.  Next is the parameters for searching. Requirements are like restrictions when it comes to searching. The more requirements, the few homes. Your searching has to be realistic to what is available. For those who read Part 1, you got a hint about areas. I always get a kick out of someone who wants a home in Dist 16 at a price of $50,000. Dist 16 has the highest concentration of million dollar homes than most parts of Tucson Metro.  A good argument for having a Realtor to start the searches for you since we live the real estate market.  Some things to consider when setting criteria:

         How big of a home do you really need today, five years from now, and 10 years from now?

         What is your life style? Do you like hiking and mountain biking?

         Do you like being close to shopping?

         Do you want to be within walking distance of amenities?

         What is you maximum loan amount per the Loan Officer?

         What’s your budget?

         Where will you be working?

         If not working, where do you want to play golf or go to the movies?

Notice I didn’t ask about how much square footage you would like, how many bedrooms you want, or how many garage spaces. Those will come soon enough. The geographical area should meet you life style. Would you like to live 20 miles from soccer practice and 40 miles from work? Unless you like driving 120 miles a day. I didn’t think so. I have seen clients who wanted an 1800 square foot home settle comfortably into a 1600 square foot home for less that had a good usage of those 1600 square feet where the 1800 square foot homes felt cramped or boxy. Two bedrooms may be good today for a young couple, but what about 5-10 years down the road. How many grew up sharing a room with a brother or sister? There is a lot of give and take when searching. I guarantee that you will find the right home on the wrong lot and the wrong home on the right lot. It happens with every buyer. Rarely will you end up with the same criteria you begin with.

Let’s start searching for homes. Click here to Search For Homes.It will open a new window so you can toggle back and forth to follow the below
instructions and search results. You will see a default search set for $150,000
to $650,000 3 bedroom 2 bath homes in Tucson.

1.       Under the heading Quick Search, change it from Tucson to Oro Valley which should display how many listings area available in Oro Valley

2.       Under the heading Advanced Search change minimum price to $200,000 and max to $350,000

3.       Leave property type set for Residential

4.       Set minimum square footage to 2,000

5.       Click Update to see results

6.       Under the heading Features select Golf

7.       Now you will see fewer homes

8.       To see each home click on the blue Details link

9.       Now you can see information about that particular home

10.   You can request additional information on that property or register and save it for future reference

11.   Feel free to play with it and try the different criteria under the Advanced Search heading

This is one means for searching for a home. Through the selection Search/Log In/My Account you can conduct a more basic search, sign in to your account, or view your saved searchses; giving you more options. I have Quick searches set up on the home page for Military families within a short distance of DMAFB, Golf Communities, Starter Homes, near the University of Arizona, Luxury homes, and a tour of some of Tucson's Neighborhoods.  If you choose to register on my site the only time you will hear from me is to say Thank You through the automated response. The next time will be when you ask me for information. You can set up as many searches as you like. I don’t believe in pestering Buyers using my website so you can feel safe and share it with as many people you like. Hopefully you will contact me when the time comes to see the homes in person or purchase a home. That covers the first two searches I explained in the beginning.

For fine tuned searching a Realtor can do more with the access we have to the MLS database. Coupled with knowledge of the local market a Realtor can save you lots of time searching the wrong areas and for the wrong homes. Example would be searching for only Active listings, eliminating short sales or searching for only bank owned properties that have been foreclosed on a specific school district or elementary school boundaries, etc.  Finally, a Realtor can set up a customized search based on your needs. One that will automatically email you each time a new listing comes on the market matching that criterion.

Next time I will talk about what to look for when viewing homes and get started on the process for making an offer on a home. Meanwhile have fun searching and don’t hesitate asking questions.