ALL PHOENIX REAL ESTATE

It may surprise you to know I don’t always put a lot of forethought into these posts. Or it might not surprise you at all. And that’s really okay either way.

The point is other than the weekly market update, most of the other topics are derived from the issues and questions that I am confronted with on a daily basis. Watching the Canadian dollar rally is cause for a post, as is every buyer’s inevitable confusion about the “great price” they saw for a property being sold as a short sale.

For the past month of so, the variety of questions has narrowed considerably:

• What do you mean the short sale for $75,000 isn’t really available for $75,000?
• Is this home still available (followed by “then why does it still say it’s available online)?
• I know this is a buyers’ market (it’s really not, in most cases) so I can get this house for 25 percent off, right?
• Do you have any more pictures?
• Why is it every home I make an offer on has seven other offers already made?
• Why can’t you tell me where the good neighborhoods are?

I may be oversimplifying and skipping a relevant question or two, but almost every inquiry over the past couple of months have fallen into one of these broad categories. Which makes for almost as thrilling reading as it does for thrilling living. Not to make it sound like a complaint … one of the reasons I got into this business was because I enjoy helping people learn more about the market in which they are buying and the buying process … but it does become a bit repetitive and occasionally frustrating.

For instance, this week there is a couple coming to the Valley from Canada. We will not be working together because they balked at signing a Buyer Broker Agreement, upon which I insisted. There are a number of reasons for wanting an exclusive employment agreement for the duration of a home shopping trip, especially a shorter trip such as they have planned. But one of the main reasons is I don’t want to have to waste precious time explaining why the poor information they receive from others is, well, poor.

Earlier this year I explained the reality of short sales to a buyer. He then went to another agent who told him how great short sales can be - great values, easy answers, short time frames … all bunk, by the way. And even though I can provide statistics, market data, anecdotal information, etcetera to prove this other agent was saying whatever they felt was necessary to get this buyers’ business, I was faced with an objective I couldn’t overcome. This agent had told him what he wanted to hear. Reality was no longer important.

And maybe that’s really where some of the recent frustration comes in. I find myself battling perceptions about the market and the buying process that aren’t necessarily correct. Often the only way to convince someone of the reality of the situation is to watch them fail once or twice (or more) in the buying process. Except then blame gets shifted back to the agent, even as we warned that there was not going to be a successful conclusion.

It seems it’s much easier to shoot the messenger than take the message to heart.

Hopefully that’s not the case for you, dear readers. For you have seen the answers to these issues over and over and over and over and over and over again this month …

We’ll try for some variety in June.

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A couple from across the county calls because they’re planning to move to the Valley, they’re searching online for a home and they stumble across this site. (Not hard to do, since I do my level best to throw this site out there like stop sticks with the expectation either the search or Tobey will keep them here.)

Soon they discover a problem … only one photograph is available for many of the listings. So they call asking me if there are any other photos available, which there aren’t because the listing agent has opted for the path of least resistance.

“But how they can they expect to sell a home without any photographs?”

They do because they can, at least when it’s a bank owned home in a market where there are buyers jockeying for position on the few homes available like Tobey and his beagle brethren thrusting their snouts into each other food dishes looking for the last piece of Beneful when the bowl’s almost empty.

That doesn’t necessarily mean that it’s right. In my office, where we have a contract with Freddie Mac and a handful of other lenders, woe be the agent who doesn’t take 20 photos of every listing - the maximum that can be entered on REMAX.com (there is no upper limit for the local MLS, not that many test the system that much.)

It’s sometimes challenging. On a basic 1,600 square foot house you tend to need to get to be a bit creative in trying to get to 20 photographs. But it’s what we do because we have a standard of practice that we’re trying to uphold. That’s not always the case, and the lack of effort is rewarded right now just as often as those trying to provide the most possible information for a buyer.

And though it’s less noticable, the lack of effort extends to the basic listing data as well. Is there anyone out there who doesn’t know what a vaulted ceiling looks like? Apparently there are more than a few agents who don’t … a buyer and I recently toured homes where that was his main requirement and half the homes had 9-foot flat ceilings, not vaulted.

There once was a panel discussion where one of the agents said he wants fields for everything - granite countertops, outdoor grills, water features on pools, plantation shutters, you name it. That way, he said, we’d be able to sort by whatever we choose.

Except you’re likely to miss more qualifying homes than you find, for the simple reason that there’s a segment of the local agent population who feels they’re too busy to enter information and photographs in the MLS beyond the bare minimum.

And the current sellers’ market we’re seeing on the bank owned side is affirming their laziness.

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Here’s a blatant repeat … but I’m in the mood.

Hopefully this is only the second time I’ve rolled this one out and not the third. Oh well. Hard to care when the floating opera is going by.

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I find myself dealing with the near constant dilemma of the real estate industry today … do I make myself available to show homes to people who have made it clear they don’t place any special value in what I do.

We’ve been discussing this among ourselves in the real estate blogosphere for years - the real estate business model as it currently stands now is flawed. Commissions for both listing and buyers’ agents are determined by the seller as a portion of their net. The buyers end up paying this cost (in theory) in their loan but in many ways the fault for the current system lies with the buyer.

As long as buyers look at real estate agents as an ends to a means, an extension of their lockbox key, and don’t look to see what additional value an agent might bring to the table, this system never will change.

Talk all you want about buyers paying for their own representaion; buyers don’t seem to understand why they would need their own representation because they don’t view the vast majority of agents as any different from each other. And that’s just not the case.

With Canadian buyers, for example, I’m almost certain I can help you save money if not on the actual transaction then on the exchange and wiring of funds. The folks I have recommended have consistently beaten the rate of any of my buyers’ local banks, saving everyone at least $1,000 … (maybe everyone but one, now that I think of it. He may have been a little less.)

So when a client opts to go with a friend of a friend after telling me their trip to Phoenix had been canceled, I at least know they paid more than they needed to for their house. Call it an “interview” tax for failing to interview your buyers agent and see what they’re able to do.

Why do I require a buyer broker agreement? Because purchasing property is a process. There are exceptions but more often than not the home someone ends up with might not match the exact criteria of what they said they wanted. It happens. By listening to your feedback and discerning what’s truly important, I can make adjustments on the fly and find just the right property.

It doesn’t make sense for me to invest hours beginning this process to turn it over to another agent the next day who has access to no move inventory than what I have. If you feel they’re a better fit, let them do all the leg work instead of riding in for the low-hanging fruit upon which so many agents survive.

Part-timers, intentional or not, exist because the public allows them to exist. As a whole, the public doesn’t demand more from real estate agents so it doesn’t receive more.

Now, if I had my druthers I would charge buyers to view homes with me - not because I want the minimal income but because writing a check elicits commitment. If you’re just looking you’re not going to write a check. But if you’re serious, why wouldn’t you write the check especially if it will be refunded as part of the commission at the end of the sale?

Why wouldn’t a buyer do this?

Because there are hundreds of agents who will do it all for free and never think twice.

Because there are agents more than willing to tell a buyer who doesn’t know better how easy short sales are to close, even when all the statistics show these transactions rarely close.

Because there is a pack of agents constantly searching for the low-hanging fruit, agents for whom business evolution has caused them to bend their backs permanently and lower their sights knowing they don’t need to be better than they are.

Because there are agents who don’t realize Canada has a different tax structure than the United States … one of my clients and I learned some wrinkles unexpectedly early last year, wrinkles that even your average property manager doesn’t know.

I want to charge because I think people ought to value my time as I value theirs. I’m not going to spend hours showing you homes you don’t want just for the fun of it because it’s a waste of your precious time. I respect my clients time because, again, this is a process and often a time-consuming one at that. No sense wasting precious time - yours or mine - on unproductive tasks.

But it’s not going to happen becaus, no matter what I do, most buyers are content to work with the first name they see on a for sale sign. If only they knew what they were in for.

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A couple of days ago I referenced the Cromford Report, which now is available to members of the Arizona Regional MLS. I’m of two minds on the whole thing - I’d just as soon not have another tool attempting to level the playing field by providing data most agents can’t figure out on their own. Then again, there are so few of us online doing this anyway, and the data’s so easy to work with, then maybe the playing field isn’t getting all that level.

That’s really neither here not there, except for the fact that the following chart comes directly from the Cromford Report (data deemed reliable but not guaranteed, actual mileage may vary, etc.):

For those of you who’s eyes are almost as good as mine these days, you can see the larger version of the chart through this link.

Scottsdale happens to be one of the slower markets in the Valley … prices tend to be a bit higher than elsewhere in the Valley so the low-priced foreclosures that have caused the waters to begin churning in many cities in the Phoenix market aren’t available there.

Having said that, take a look at the Average Sales Price as a Percentage of List. As of today, it’s sitting at 92.27%. This is an average, of course, and exceptions to exist. But what this points out is that except for the most desperate of cases where the seller wants or needs to sell and doesn’t care what they get as long as they sell … you’re looking at a discount of less than 10% of the list price on average.

Looking at the market these days is much like watching an NBA Playoff game … you see what your heart wants you to see. If you’re a Lakers fan, you want to see Damon Jones strung up for intentionally tripping Kobe Bryant two nights after flinging him off the court with a two-hand shove. A Nuggets fan may see nothing in either play.

So it goes with the Phoenix real estate market. Some see a buyers’ market but don’t really understand what that means. (In short, it means the buyers have more leverage than the sellers but it doesn’t necessarily mean sellers will hand you their home for 50 cents on the dollar just because you asked the question.)

Some see a seller’s market, looking at the overall data and not taking into account the various subcategories that make up the full picture.

Some will look at that 92% figure and say it’s just an average and that offers 65% of list price are more than reasonable in a declining market (though not declining as fast as it has been for the past few quarters.) Others will look at it and see a window of opportunity that is slowing beginning to close.

Truth be told, none of the people above will be wrong. This market is all things at once to all people, for better or for worse. Some buyers are finding deals at higher price points while buyers in the sub-$125,000 range are dealing with bidding wars and multiple offers (not to mention listing agents “too busy” to update their listings status.)

In any event, it’s only one man’s opinion backed by the numbers now available to any of the agents who can log on to their computers (which means we eliminated about 1/4 of the agents right off the top.)

I jest, of course. Ha. Ha ha. Hee hee.

Or not.

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