ALL PHOENIX REAL ESTATE

Given the discussion online and what I’ve heard from more than one client over the past couple of days, there seems to be considerable confusion about the future of the $8,000 home buyer tax credit.

As of the moment, this tax credit is due to expire on November 30. (And I, for one, would be happy to see it disappear as I’ve discussed earlier.)

According to CNN, the latest plan under discussion would extend the $8,000 credit for first-time buyers through next June 30 and also add a $6,500 credit for non-first time buyers. Supporters of the credits say the bottom will drop back out of the housing market if an extension isn’t passed, apparently believing that the credit was a primary factor in the brisker sales of 2009.

That doesn’t necessarily match what I’ve seen in the Phoenix market. My experience has run much closer to this analysis, from the same CNN story:

Critics, while acknowledging that the credit has helped to generate additional home sales, say it has been poorly targeted and therefore not cost-effective.

They point to estimates that only 10% to 20% of the nearly 2 million homebuyers who will have gotten the credit by Nov. 30 bought solely because of the tax break.

The tax break largely has been an afterthought for the first-time buyers that I’ve been working with. By and large, they were going to buy based on interest rates, on prices and on their own circumstances. Getting a tax credit the following April was a nice bonus but had next to nothing to do with the actual decision.

If you watch Twitter, you’ve likely seen bulletins that the extension has been passed - this simply isn’t true. In some ways it’s feeling like a fait accompli but it hasn’t happened yet.

Simply put, if you’re not under contract already, it’s pretty much too late as most lenders are having a hell of a time closing in 30 days. And November 30 remains the deadline, at least until something concrete passed.

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It’s been an interesting couple of days’ worth of questions on Trulia Voices. Look for just a moment at the Arizona buyers’ feed and you’ll see question after question about problems trying to purchase a bank owned home.

I’m not going to try and answer these questions here - more often than not there’s more to the story than what is posted here or than what the buyer may be aware of. But they ought to serve as a cautionary tale for anyone thinking about purchasing a bank owned home on your own, or even through the listing agent as we see here:

“Listing agent shows me a bank owned house. I make an offer on the spot that is over the listing price and I offer cash. Three weeks later I’m still waiting to hear from the bank. A friend calls the listing agent about the same house and is told there haven’t been any bids that have met the asking price so the bank hasn’t accepted an offer.”

Here’s another:

“What is a reasonable amount of time to wait for a bank to accept/reject an offer of cash that is higher than the listing price?”

Or this:

“I am looking for information on a house that was/is owned by IndyMac. I had put an offer on it, they accepted and then everything fell through.”

Or this:

“I recently had my offer accepted on a bank owned property. I filled out the Addendum contract which they canceled by accident. I resubmitted it and am waiting to hear back. Does anyone know how long this could take?”

As useful a resource as Trulia Voices can be for getting multiple opinions, rarely do these opinions exactly meet what the buyer either wants or needs to hear for one very simple reason - no one answering the questions has any first-hand knowledge of what really happened.

Every transaction is different in some way, shape or form. And that’s even more true on bank owned homes, where communication from the listing agent and asset managers (who are working on behalf of the bank) often is negligible. It’s not uncommon to not know there’s an issue on a bank owned home until almost the closing date, whether it’s a question of clear title (been there), HOA dues owed in arrears (done that) or asset managers who aren’t able to sign their docs in a timely manner (got the T-shirt.)

There are two basic issues I see with the questions above:

1) If you’re trying to purchase a bank owned home on your own through the listing agent, you’re better off slamming your own head with a kitchen cabinet door for a while. At least then the pain will wear off when you pass out from the bludgeoning. The person above said they went through the listing agent thinking they’d get a deal because both sides of the commission wouldn’t have to be paid; they do have to be paid, to the listing agent himself because the listing agent has a contract with the bank for “x percent” and that “x percent” will be paid by the bank whether there’s one or two agents in the deal. Period.

2) None of these folks seem to trust what their buyers’ agents are telling them, so they’re looking for validation of their suspicions in a public forum. And they’ll probably find that validation from someone, even if that person is wearing an aluminum foil hat.

Simply put, get a buyers’ agent to help you purchase a bank owned home and manage the process on your behalf. And if you don’t trust the agent with whom you’re working, find an agent you’re willing and/or able to trust. Without that, this process is going to be more stressful and painful than it really ought to be.

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Saw this note buried inside the Realtor remarks on a listing yesterday:

“If the buyer is making multiple offers, please disclose on a separate addendum.”

The question is, does a buyer need to do so?

It’s understandable why a seller would want to know whether a buyer is making offers on multiple properties, hoping that one will be accepted. It only makes sense for a seller to think twice about accepting an offer from someone who may not be fully committed to their particular home and who may change their mind if another offer comes through.

And it’s for the exact reason I would never have a buyer make such a disclosure - it makes no sense from the buyers standpoint to do something that will make it even more difficult to get an offer accepted.

For the past several months, writing multiple offers has been the only way to fly for those looking at bank owned homes. It makes no sense to lose an opportunity on another home while waiting several days for the lender to make a decision on one.

With extremely few exceptions, these sellers never disclose that they are considering multiple offers at once - it’s an assumption one has to make as the buyer based on the current market conditions. And if a seller isn’t required to disclose they’re looking at more than offer, why would a buyer need to disclose they’re writing more than one offer?

There’s one section of the AAR Residential Resale Contract that on the surface appears to throw a wrench into the equation:

5c. Buyer Warranties: Buyer warrants that Buyer has disclosed to Seller any information that may materially and adversely affect the Buyer’s ability to close escrow or complete the obligations of the contract.

Now … standard disclaimers apply: I’m not an attorney and am not providing legal advice in any way shape or form, simply my own opinion. Does not include tax and title, mileage and results may vary, not valid in all states, limited time only.

Could the presence of other offers written by the same buyer, when the buyer only wants to purchase one property, constitute “information that may materially and adversely affect the Buyer’s ability” to buy this specific home? Possibly, but I believe it depends on the intent.

If the buyer’s intent is to purchase this home if an offer is accepted, then I don’t have an issue with multiple offers for this reason - circumstances change, and the contract allows the buyer an out with the inspection period. Properties that seemed suitable on Tuesday may be suitable to a buyer on Thursday for reasons as simple as the discovery of barking dogs or, if you live near one of my neighbors, a really loud and proud rooster.

It’s not a cut and dried situation but, then again, very few things in real estate are.

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Somewhere there’s a joke waiting to be told involving the Hollywood Grind blog or US Magazine and bumpy bottoms, but I don’t have the heart.

Back around the first of April, it was clear that the Phoenix real estate market had taken a turn. Activity spiked, inventory fell. In fact, about the only thing that didn’t happen - and by not happening it defied the law of supply and demand - is sales prices did not improve along with the lessening supply and increased demand.

Fast forward six months and it’s worth examining what “bottom” is being discussed when various pundits explain that the Phoenix market has hit bottom.

From the standpoint of sales volume, the pace through the late spring and summer was closer to what it was back in the insanity of 2005 … that would mean the bottom, in these narrow terms, had passed.

But that’s not what most people want to know about. For the vast majority of folks - even though of us who both sell real estate and own a home - the bottom we want to see is the one which defines an improvement in sales price and home values.

Are we there yet? Maybe, possible, sort of depending on where you are.

In El Mirage, for example, the median price has held roughly steady for seven months now. That would seem to me to be a bottom being formed, though there needs to be an upturn at some point to define it.

But that upturn doesn’t necessarily a bottom make. In a few other communities, we’ve seen an upswing in median prices followed by another drop. In most of these cases, these are parts of the market that weren’t hit as hard by foreclosures early this year but slowly have caught up to the contagion the rest of the market has felt.

Oh, and let’s not forget the legendary second wave of foreclosures that nearly seven months after it was predicted still has not reached the market as banks get a bit smarter about the flow of homes coming to the market.

What will happen next is anybody’s guess.

And maybe the bottom really lies in the eyes of the beholder.

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It’s been a little bit of a mind-bending week here at All Phoenix Real Estate central. After many, many months of delay I finally sat down to listen to classes taught by Brian Buffini about migrating my real estate business to one that is, if not exclusively by referral, is driven by that dynamic.

These lessons have led me to a rare week of reflection and organization.  My mindset always has been that any day that doesn’t involve an accepted contract is a failure, which clearly is mental. Unless you have an REO contract or a large-scale team of agents who are working for you, there absolutely will be days when a sale doesn’t take place.

But that doesn’t mean that the day has not been a success. For me this week, there have been successes in finally taking the time to update my database to include sales that were completed long before I purchased Real Estate Success Tools last December. There have been successes in the personal notes I’ve been writing, even though my friends in Canada won’t be seeing them for a couple of weeks due to the vagaries of the postal system. And there have been successes in simply realizing that the activities today, though they may not result in a sale tomorrow, still are productive.

And there also is success in realizing that the referrals I receive, and there have been many through the years, are the best reflection of the business I’ve conducted and are at the top of my daily to do list.

So don’t be surprised if you see a note coming your way or if your phone happens to ring now that I’ve gotten everything reorganized. Things have been busy on this end for the past several months, but not so busy that there isn’t time to take the few minutes needed to say hello.

And, by the way, I’m never too busy for any referrals of yours, my dear readers. You too, Mom.

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