What's so SHORT about a Short Sale???

Why the SHORT in short sale?  Is it the short turn-around time by the bank?  Yeah-right!  Is it the short tempers that are produced by the end of the transaction?  Getting warmer....

A short sale is named for the fact that the bank in the transaction is agreeing to take an amount that is "short" the full amount owed.  This is the only part of a short sale that is short.  In fact, I can assure you that by the end of the deal, the time frame has usually been extended far beyond everyone's expectations.  And with experience as my teacher, I have learned that by the end there is a high liklihood that tempers will be very short as well.

Why buy a short sale?

Well, you can save money if the deal goes through.  Short sales typically are accepted at 85% to 90% of market value and when you're buying a big ticket item like a house, that's a lot of savings.

You have to remember, though, that you are pretty much buying the house as-is because the seller is usually unwilling or unable to make repairs.  In Arizona you have a 10-day inspection period after the bank accepts your offer to inspect the home and you have the opportunity to walk away from the purchase at that time if you so desire.

Why pass on buying a short sale?

By far, the most painful part of the experience is the extensive wait.  Buying a home is an emotional experience for 95% of the population.  When you make an offer on a home being sold as a short sale, you don't know whether you get to buy the home for at least a month or two, sometimes longer.  Even though the seller signs the contract, it still goes to the bank for approval and the entire deal is contingent upon that approval.

What happens if you wait for two months only to find that the bank is not going to accept your offer?  That can be very difficult to deal with.  While banks typically will counter, there are times when there is more than one lien holder on the property and all of those lien holders have to agree.  It is not unheard of for banks to become stubborn with each other and send a home to foreclosure over a couple thousand dollars.  In that case both the owner and the potential buyer are stuck in the middle.  It might be interesting to note that investors suffer in this case, too.  While a loss is never a good thing, the bank's job is to mitigate that loss.  If they foreclose the loss is typically much greater than selling a property short.

Rosemont Copper Mine Debate Heats Up

Within 2 weeks the scoping period for the Rosemont Copper Mine ends.  At that point, the environmental studies will begin and we won't hear anything from officials until spring of 2009.  There has been a lot of conversation and excitement (not always in a good way) about the proposed mine from local citizens and even from our elected officials.

On May 22, 2008, Representatives Raul Grijalva and Gabrielle Giffords sent a letter to the Coronado Forest Service regarding what they believe to be the flawed scoping period that is currently in progress.  As many in the public have not been aware of the process and facts were not all presented at the beginning, they requested that a complete Cine Plan of Operations be created and that the scoping process should be restarted at that point.

Additionally, our representatives pointed out that one of the Forest Service's objectives was "to grant permission to the Company to use NFS for certain activities related to the operation of the Rosemont Mine."  With an objective like that, it is highly unlikely that the option of denying permission to use our public lands is even being considered.  Why then are they even allowing public comment?

Here's an interesting article regarding whether or not the review is fixed:  http://www.tucsonweekly.com/gbase/Currents/Content?oid=oid:108889

And from a more optimistic viewpoint, an article talking about Save the Scenic Santa Ritas and their involvement in the opposition to the mine.  http://www.vailsun.com/articles/2008/06/27/news/news01.txt

If you're still interested in reading more, check out these articles published in the Tucson Citizen.

Opinion from tucson Citizen: http://www.tucsoncitizen.com/daily/frontpage/89304.ph

Security risk of the mine:  http://www.tucsoncitizen.com/daily/frontpage/89565.php 

Don't forget to send in your comments to comments-southern-coronado@fs.fed.us.

I Paid for my House - Why Can't I Get the Keys???

Why would we sign all the documents, put down all our money, and have to wait another day to receive entry into our home?

This was a question posed to me by a client recently and it is a fantastic question that deserves an answer.  It doesn't make sense that you would pay for a home and have already signed the documents and still be waiting to get the keys, right?

Well, the problem here is that even though my clients put down a sizeable down payment, they were still not paying for the home in its entirety.  Like many other people, they were also obtaining a mortgage loan.  When you obtain a mortgage, the house is not completely paid for until the mortgage company sends the loan amount, commonly known as "funding the loan".

Funding a loan is unfortunately not as simple as pressing a button.  In fact, many loan companies won't even fund on the same day that the buyers sign.  They must receive the signed documents and review them for accuracy and to ensure that they have all the necessary signatures.  On rare occasions buyers may have to come back in and sign the paperwork again.  This is most likely to occur when dealing with Power of Attorney signatures where one person is signing for another using a Power of Attorney.

Once the bank has determined that everything is in order they will release the funds.  However, it still takes about 2-4 hours to reach the title company because it must go through the federal reserve before reaching them.  Once the title company receives the wired funds and matches it with the correct property, they will send funds to the seller's mortgage being paid off (if there is one) and will cut checks to the seller, real estate companies and anyone else who is being paid out of closing.  They will also record the transaction with the County Assessor's office and the buyer will be the official new owner of the home!

Thank you very much for the excellent question, Amy.  I wish you and Mike the best in your new home!

Tucson Real Estate Market Report- June 2008

Well, we have reached the dog days of summer, the time each year when I question my sanity for living in this sun scorched city.  As I eagerly await the arrival of the monsoons and the cooling temperatures that they bring, I will take a minute to talk about what is going on in the Tucson Real Estate Market.  I will compare numbers from May 2008 to May 2007 and will also talk a little bit about the change between the numbers from April 2008 and May 2008.  My numbers are obtained from the monthly statistics published by the Tucson Association of Realtors so they don't contain statistics for homes sold that were not listed on the MLS.

Home Sales Volume and Home Sales Units

These numbers are still down substantially from last year, although the number for Home Sales Units would be the one to focus on more as lower prices this year make the decrease sharper by volume than it is just by unit.  The home sales units have decreased 27.7% from May of 2007, although the month to month volume increased slightly (5.34%).  So we sold a few more this month as opposed to last month, but still less than we were selling last year.

Median and Average Sales Price

These are still lower by about 10% than last year.  However, I hate these categories because there is no differentiation regarding what categories of homes are selling.  For example, in a month where mostly homes under $200,000 sold, these categories would be lower than in a month that saw a surge in homes selling that were valued at over $1,000,000.  Until there is some clarification, these categories do not provide an accurate picture of what is going on in the real estate market.

Pending Contracts

This is an important category because it is forward looking.  For example, even though last year at this time home sales volumes and units were up, the pending sales were slowing down, indicating a slowing market and problems ahead.  This year, we are seeing pending contracts up by 25% from last year's numbers.  As opposed to last month's numbers, the pending contracts decreased by about 4%.  This is a small number, but is something to keep an eye on.  Fortunately the new listings decreased by over 6% month over month so our pending sales are still outpacing our new listings on the market.

Active Listings and New Listings

Both of these categories have decreased since May of 2007.  This is great news for the future because pending contracts are up.  We are still making steady progress towards clearing excess inventory off our market and making the balance between buyers and sellers more even.  In the meantime, it's a great time to be a buyer.  Active listings decreased 12.3% from last year and 3.2% from just last month.  This is a good sign for future stability. 

An even better sign is that new listings have decreased by 23% from last year.  This is the time of year when sellers are usually putting their homes on the market moreso than in other seasons and yet sellers don't seem to be rushing to do so this year.  This will mean that as buyers continue to purchase properties, the inventory is shrinking much faster than if sellers were also getting out there and putting their homes up for sale.

My Analysis

I still hear people predicting that prices will continue to decline for a while.  This may be true in other parts of the country, but I disagree with that prediction for the Tucson, Arizona real estate market.  Because inventory is shrinking on a monthly basis, it is only a matter of time before prices actually start to increase.  Additionally, interest rates are on the rise which makes homes less affordable even if they are lower priced.  I never pressure a client to buy a home if he/she is not ready, but I am sounding the warning now:  Price-wise, this is as good as it is going to get in the foreseeable future.

We have already seen foreclosures and short sales flooding the market and while they are still occurring, banks are starting to wise up and try to work with their customers to prevent those situations.  This is an awesome turn of events for those who find themselves in that predicament and yet it also means that the likelihood of a flood of new foreclosed homes coming on the market is slim to none.  I'll say it again.  If you are thinking about buying a house in Tucson, this is as good as it gets.  Get it now so you won't be looking back six months from now wishing you had taken advantage of the low point in the market.

Why Use a Realtor? Negotiations

Wow!  I can't believe you got away with that!  OR They said yes to everything we asked for???  These are the words that happy clients say to their Realtor when they realize that he or she just exceeded their expectations.  I enjoy hearing comments like that and I constantly work to improve my game with every transaction.

For years, real estate agents were viewed almost as highly paid tour guides and they held on to the information on homes for sale like it was gold.  And, well... maybe it was.  But with the rise in the popularity of the Internet and the ability for average people to access information on what's for sale, agents have had to hone their craft and focus on other ways to add value to the transaction.  I for one, think this is great because real estate transactions are complicated and consumers need someone in their corner fighting for them and making sure their interests are protected.

Which brings me to negotiations.  One of the many reasons that you should use a Realtor is that we are expert negotiators (a lot of us are anyway).  Let's take a look at the skills that an ideal agent and negotiator has that can mean thousands more in your pocket or even the difference between completing the transaction or having to walk away.

Preparing for the Negotiation

There are many opportunities for negotiation throughout the transaction, although most people think of the negotiation at the beginning as being the big one.  That's not always so because things brought to light during the inspection period are cause for negotiation either as a request for repairs or possibly a reduction in price/credit for closing costs.

A good negotiator prepares in advance by knowing as much as possible about the other party.  There is a lot of information that is available in terms of public records, how much a person owes on a home, etc.  However, there is also very valuable information to be gained by speaking to the other party's real estate agent.  In the course of casual conversation I have had many agents reveal items that were pure gold when I went to begin negotiations on behalf of my client later.  On the other hand, I have found that revealing certain tidbits in my conversation about my clients can be quite helpful.  The trick is to be very conscious of the picture I am creating of my client by revealing only certain details.  If these are sensitive details, I get permission from my clients ahead of time and discuss how revealing them might hurt/help their position.  Even non-sensitive details must be revealed very sparingly and I am surprised at how many agents seem to talk just to hear themselves talk and end up damaging their client's negotiating position.

Who are you Playing To?

With real estate transactions I am not usually talking to the person who is the decision-maker.  Instead, I am speaking to that person's agent.  That agent has a position as a trusted advisor to the decision-maker.  Therefore, convincing him or her that something should be done or is in the best interest of the transaction is vital to having that information conveyed convincingly to the decision-maker.  There is an interesting dynamic here because the agent, while not the decision-maker, has a definite financial stake in bringing the transaction to a successful close.

Often my clients give me a lot of information about why they want what we're asking for.  That is very useful and I usually find their reasons to be quite valid.  However, my job is to pick out the points that the other party will find most valid.  This is the same tactic used by an attorney when he or she restates what the client has said but in a way that is very convincing to the judge or jury.  She may not focus in on every detail that the client has revealed but only uses the very best to accomplish her purpose.

During the Negotiation

Even though everything in real estate is put into writing, the actual conversation that I have with the agent ahead of time is of extreme importance.  It gives me a chance to let them know what we will be asking for and allow them to think it over.  It also gives me the opportunity to give reasons for my clients' position and to expound upon the ways that this will benefit their client.  It is of extreme importance to also do a lot of listening during this phase because I need to know what the thoughts/desires of the other party are so that I can craft a solution that is equitable to both parties.  Sometimes giving in on one small detail will net my clients concessions that are worth thousands so listening is vital.

Giving in a Negotiation

There are times when giving in a negotiation actually produces a win.  For example, a seller may agree to a couple hundred dollars worth of work in order to keep a transaction alive.  Since the seller nets a lot more with a completed transaction, this is an obvious win.  Or a buyer may forego repairs in order to get a credit for closing costs.  Suppose this buyer has a business that specializes in those types of repairs?  The closing costs are then worth more to him than having the actual repairs performed.  Therefore it is a win for the buyer and the seller has avoided the time consuming process of finding qualified contractors and getting repairs done prior to close of escrow.  Another win-win.

Winning at Negotiating

A negotiation is only a true win when everyone feels that he or she has gotten a good deal.  There are times when a real estate transaction produces a loss for one party (such as in a short sale).  However, helping that party to mitigate that loss transforms it into a win.  An expert negotiator will look for ways to find benefit for all parties and that benefit does not always have to be financial. 

Who do you have negotiating on your behalf?

Tucson Real Estate Market - Steady Progress May 2008

As we enter the prime homebuying season this year, I see a lot of small improvements in the market but no drastic changes.  This is probably a healthier way to recover than suddenly having tons of buyers snapping up properties right and left.  That would be exciting, but would actually add to market instability rather than cure it.

I will be comparing the numbers for April 2008 with those of April 2007, but I will also compare April 2008's numbers with those from March 2008 so that you can see how things are changing in the short term as well as the long term.

Home Sales Volume and Home Sales Units

Both of these categories have decreased since last year.  However, while volume decreased by 32.76% from April '07 to April '08, home sales units decreased only 26.17%.  Why?  Well, the numbers indicate that these days more lower priced homes are selling than the mid-range or high priced ones.  Even if we were selling the same number of units as we were last year, we would still see the volume number decreasing.  Not only that, but home prices have fallen some since last year, so it naturally would take more units to make up the same volume.

That's not all bad, though.  A lot of home sales are created by families "moving up" so after they sell their lower priced homes, they move into mid-range homes, etc.  If the trend continues the benefit will spread to all market segments and Tucson's real estate market will grow stronger and eventually become robust once again.

Average Sales Price

The average sales priced decreased by 8.91% from April of last year to this year.  That makes sense if lower priced homes are the ones selling.  Additionally, the market is not as strong price-wise this year because there are so many foreclosure and short sale homes being sold.  Until the short sales and foreclosures are not such a big part of the market, we can expect that this number will not be climbing.

Pending Contracts

The amount of pending contracts rose 27.11% year over year and 9.71% just from the month before.  This is a very good sign and is indicative that in Tucson at least there is returning consumer confidence when it comes to the housing market.  It is to be expected that more homes sell in late spring than earlier in the year, so in this category, I take more encouragement from the percentage increase from last year than I do in the percentage increase from last month.

As I have mentioned the past couple of months, as buyers come out and take advantage of the deals available in this current market, they will continue to buy up the inventory eventually taking us to a place where prices begin to increase once again.

Active Listings and New Listings

Both of these categories show significant decreases this year.  Active listings decreased by 15% and new listings decreased by 21% compared to April of 2007.  Month to month, active listings saw a decline of 2.37% while the decline in new listings was marginal (a mere 0.12%).  The fact that new listings stayed pretty much the same during a time of year when more and more homes usually appear on the market is very telling.  Sellers appear to be very aware of market conditions and only those needing to sell are doing so.  That in itself bodes well for the stability of home prices.

Other factors affecting the Tucson Market

There are certainly other economic factors which affect the Tucson Market and should be considered.  The economy in general has a huge impact on how much house people can afford.  While interest rates remain quite low, there is instability in other portions of the market; most glaringly we are seeing huge price hikes at the gas pump.  These changes affect both consumer buying power and consumer confidence and could sideline the improvements we are seeing if they go on for too long.

Additionally, the number of foreclosures and short sales can affect how long we remain in the current price trough.  It is hard to say for sure how long this will continue, although I have noticed a trend where banks are becoming more realistic about current market conditions and are beginning to work things out with many borrowers, thereby allowing more of them to stay in their homes.  However, we still have numerous short sales on the market and I personally am finding that I'm doing more short sales than I am normal transactions.

My Analysis

I am still cautiously optimistic.  The Tucson real estate market is showing signs of a slow and steady improvement.  Barring any catastrophic influences from the U.S. economy or elsewhere, I expect that we will see prices start to rise by next year at this time.  It is still a fantastic time to buy, especially if you plan to own the home for 5 years or more.  Even if we experience a temporary dip in prices due to economic factors, you will still come out ahead in five years by holding the property and either living there yourself and renting it out.  Happy house hunting - let me know if there is any information or assistance I can give you in your search.

Home Invasion in Rita Ranch Leads to Murder

Although I had been hearing that there have been several home invasion attempts in the past few weeks in Rita Ranch, it has only been recently that the perpetrators were successful.  Last Sunday night, they forced their way into a home and killed a 47 year old man.  The rest of the family was left physically unharmed.

Unfortunately, these perpetrators have NOT yet been apprehended.  Therefore, they may repeat their crime or attempt to do so in the next few weeks.  Many of us who live in Rita Ranch or Vail have chosen this location due to its very low crime rate and the "family friendly" feel to our neighborhoods.  For the most part we are safe here.  We are experiencing a situation where a group of criminals is trying to take advantage of how relaxed we are out here regarding safety.

I encourage you all to keep an eye on whether your doors are locked.  Many times it is easy to leave them unlocked if you're going in and out and I have to admit that I myself have accidentally left my front door unlocked overnight a couple of times.  Also, when I walk or jog through my neighborhood I many times see garage doors left open.  Home invasion robberies are a crime of opportunity.  It is easier to just open an unlocked door or force your way in to a home where the homeowner has opened the door to answer it than it is to actually break into a house.

So keep yourselves and your families safe.  Lock the doors, close the windows and keep an eye on who is in your neighborhood.  The description of the vehicle being driven by the suspects is a "light-colored imported SUV with a broken rear window covered in plastic."  To read the entire article reporting this home invasion, visit the Vail Sun website at http://www.vailsun.com/articles/2008/05/14/news/news01.txt.

Oleanders - Highly Poisonous

It is amazing to me as I go about showing homes how few people seem to be aware of the fact that Oleanders are highly poisonous to both humans and animals.  They are found all over here in Tucson, AZ, most likely because they grow quickly and are quite hardy.  Of course you have to ingest the leaves and/or branches of the plant to be poisoned, but that is a likely scenario if you're dealing with toddlers or small animals.

Oleander poisoning affects both the digestive system and the cardiac system, oftentimes leading to death.  The poison is so potent that it is able to kill horses.  I recommend using other shrubbery to decorate your landscape, but if you choose to use Oleanders be advised of their toxicity.

For information on common poisonous plants, click here:  http://plantanswers.tamu.edu/publications/poison/poison.html

Proposed Rosemont Copper Mine - Scoping Period

There are several more hearings and open houses coming up regarding the proposed Rosemont Copper Mine in Vail, Arizona.  Here are the dates and locations:

Open Houses

April 22, 2008 6-8 PM at Sahuarita High Schol Cafeteria, 350 W Sahuarita Rd, Sahuarita, AZ

April 23, 2008 6-8 PM at Elgin Elementary School Cafeteria, 293 Upper Elgin Rd, Elgin, AZ

Hearings

May 12, 2008 6-9 PM at Elgin Elementary School Cafeteria, 293 Upper Elgin Rd, Elgin, AZ

June 7, 2008 9 AM - 12 Noon at Sahuarita High School Auditorium, 350 W Sahuarita Rd, Sahuarita, AZ

June 30, 2008 6-9 PM at Rincon High School, 421 N Arcadia, Tucson, AZ

Comments

To submit comments by mail, the attress is ATTN: Rosemeont Copper Project EIS, Coronado National Forest, 300 W Congress St, Tucson, AZ  85701.  By Fax, send your comments to (520) 388-8305.  You can also email your comments or concerns to comments-southwestern-coronado@fs.fed.us.

The Formal Comment Period will end on July 14, 2008.

Tucson Market Recovery Continues - April 2008

For the last couple of months I have been predicting that the Tucson Real Estate Market is on its way to a recovery.  The most recent numbers (March 2008) confirm that we are indeed headed in the right direction.  From working in the market, I can also tell you to expect April and May numbers to be even better.  On more than one occasion in the past couple of weeks I have seen buyers who waited a few days to put in their offer only to find out the house they were interested in had received an offer from another buyer.  Buyers are indeed out and using their purchasing power to take advantage of today's very affordable home prices and our excess inventory will be cleared off the market in the very near future.  Here are the numbers:

Home Sales Volume and Home Sales Units

We see a huge increase in both of these categories this month which is a nice contrast from the past few months.  The increase was 25% and 27% respectively.  So not only are more homes selling this month than last month, but there is a large difference in last spring to this spring.  Considering that our major softening began in early '07, this is a good sign.  We are indeed on our way to recovery and should face a more normal market as buyers and sellers regain a feeling of confidence.

Average Sales Price

The average sales price decreased by about 1%.  This makes up for last month's increase of 1%.  Not much is happening in terms of a change in sales price.  To me, that is to be expected.  Even though sales volume is up and buyers are out there, they have not cleared out enough inventory to change the supply/demand curve to make prices rise.  Even if they continue buying at this pace for a few months, prices may stay somewhat static because sellers may respond and begin putting more homes on the market.  It remains to be seen how sellers will respond to the market change.

Active Listings

Active listings decreased by about 2%.  That is not too much of a change from last year, but is a change from the past couple of months.  Could we be seeing a tentative return of seller confidence?  I'm not sure yet, but am looking forward to seeing what happens over the next 30-60 days.

Pending Contracts

A huge jump in pending contracts occurred this month, with an increase in 31% over last year.  So active listings are close to the same number but many more of those are being sold.  We are indeed seeing our market turn around and considering how much more activity I am seeing actually working in this market, I expect to continue to see a high number like this in next month's pending contracts as well.

My Analysis

We are at the bottom of the market price-wise, from all indications.  We do still have a wild card out there in that we don't know how many more foreclosures will be listed on the market.  However, I am starting to see predictions that we are in the final innings of the credit crisis as well.  If you are thinking about buying and were waiting for things to bottom out, this is your final chance.  Prices are more likely to go up than down from here and mortgage rates may not stay this low either.  I certainly don't see prices falling any more, although you may have a couple of months of them remaining fairly stable as we clear out what is left of our housing inventory here in Tucson.

If you'd like to see what's available in your area, email me at Robin.Willis@azmoves.com or give me a call at (520) 481-3695.  Happy house hunting!