Many new homebuyers (and some “experienced” buyers) aren’t prepared for the challenges of buying a home.  It can be a bit overwhelming and frustrating.  Here’s a list of common considerations that can derail the process:

Get loan pre-approval.

Your lender can review the various loan programs with you and help you decide what may work best for your situation.  After working out your loan options you should know how much home you can afford.  This will allow us to narrow the focus of your home search to only those homes that fit your price range.

Having loan pre-approval will allow us to move quickly when submitting offers (you need a lender Loan Status Report to accompany each offer).  Loan pre-approval will convey to the seller that you are a serious buyer, improving your negotiating position.

After loan pre-approval, avoid any major purchases, especially those using credit cards or requiring new credit accounts.  This will have a negative impact on your credit score and can invalidate your loan pre-approval.

Research the home locations you are considering.

Phoenix is a large metropolitan area.  Do you want to live on the west side, southeast valley, Tempe, Maricopa, Ahwatukee?  Consider your work location commute times, schools you prefer, etc.  Drive the areas, visit the schools.

As a Realtor, I must abide by Fair Housing laws and can’t recommend one area over another based on my view of crime, good schools, or demographics.  There are on-line forums that may help provide insight from others, city crime tracking sites, and school ranking sites.  Once you settle on a general location, I can help you find a home that meets your needs.

Be prepared for disappointment.

If you are looking for low cost bank owned homes, be prepared to be one of many bidding for these homes.  Competition is fierce and your odds of success are lower for bank homes, especially if you can’t offer cash for those under $100K.

If you are considering short sales, you must have an abundance of patience.  The odds of the seller’s lender approving your purchase is low, and expect any answer to take several weeks to months.

Even dealing with “regular” sellers can be challenging, especially if they have not priced their home to current market realities.

Even with a fully accepted offer, things can go wrong.

The inspection may turn up issues that can’t be resolved with the seller.  The appraisal may come in too low.  Your financing rate may go up if not locked and push you out of your price range.   If a condo, owner occupancy may not be high enough for the lender’s requirements.  You may encounter title issues that can’t be resolved.

Be careful with planning your move.

Do you have to give notice to a landlord?  What happens if the closing gets delayed?  Try to have backup plans available.

But, all things considered…

All of this can be scary, but a big part of my role is to help you get through the bumps in the road to buying your home.  Every purchase has it’s challenges, but I strive to work through them with you so we get to the end goal of getting your new home as smoothly as possible.   Let me know if I can help you.

I’m working with a client that was surprised when he heard that offers had come in on a short sale listing above the listed price (which is not unusual for a short sale or bank owned home priced well below market). This prompted the question that’s the title of this post.

He was not aware that offers could be submitted and accepted over listing price.

The listing price for a home is an asking price. Any listing can be negotiated to a final sales price either below or over asking depending on the situation. The seller is not obligated to take the first offer made at list price (or any offer for that matter).

I was involved in a short sale with another buyer where the seller listed at $112,000. After submitting an offer, we found out the bank would not take anything less than $120,000. In another case with a bank owned home, the price had been set well below market value. This generated about 20 offers within 3 days, selling for well over the listed price. This is a common listing strategy to generate strong interest in a home.

This is one reason to have a Realtor on your side when buying a home. They can assess the specific situation, analyze comparable market values, and recommend strategies for submitting offers that will work in your favor.

Planning is in progress for the grand opening of the Phoenix-Tempe-Mesa new light rail system. From the Valley Metro web page:

The grand opening of METRO light rail is Saturday and Sunday, Dec. 27 and 28, with all train rides free. Station celebrations will be held Saturday from 10 a.m. to 5 p.m. Saturday activities will occur along the entire 20-mile METRO alignment. There will be music, activities and exhibits at many park-n-ride and light rail station locations. Because we expect a lot of Valley residents to join us in marking this piece of Arizona history, we’ll also have shuttle buses to get you back to your car if the trains get crowded. Rides will run from 10 a.m. – 8 p.m.

Sunday will offer a more low-key opportunity to explore the METRO system, its beautiful stations and the Valley’s light rail destinations. Rides are still free from 10 a.m. to 6 p.m., so if you’re not big on parties, plan to explore METRO on Sunday.

For specific Tempe plans in conjunction with the grand opening, visit the Destination Tempe web page.

There are several Tempe events planned through the holidays and into the New Year.  Here’s a run down of the most popular with links to more information:

• Nov. 11th, Veteran’s Day Parade - begins 10am near ASU Gammage, Mill & Apache
• Nov. 23rd, Ironman Arizona
• Nov. 29th, Fantasy of Lights
• Dec. 5th-7th, Fall Festival of the Arts 40th Anniversary
• Dec 13th, Fantasy of Lights Boat Parade
• Dec. 26th & 27th, Light Rail Grand Opening
• Dec. 31st, Fiesta Bowl Block Party
• Dec. 31st, Insight Bowl
• Jan. 18th, Rock ‘n’ Roll Marathon

STAR POWER® is a real estate agent education organization.  Agents can subscribe to their free scripts to deal with various sales situations.  Many of the scripts are corny, but occasionally I find one that offers sound advice, such as this one to advise a seller not to go FSBO:

Click here for the full article. 

 

Copyright © 2007 Rod Rebello
www.RodSellsAZhomes.com

There were 11,567 new listings in November, down from October's blip up of 14,137, and the lowest monthly increase of the year. 

Click here for the full article. 

Copyright © 2007 Rod Rebello
www.RodSellsAZhomes.com

I read a post by Bryant Tutas discussing perception of market data, looking at sales data for his area since 2002.  As he was inspired by another blogger, I was inspired to review data for Tempe and the metro Phoenix area.  Here’s similar data I got from the Arizona Regional Multiple Listing Service (ARMLS) as of 12/17 for single family detached homes, extended to include average square feet and Days on Market (DOM):
 

Tempe
Year	Sales	% Change	Avg Price	% Change	Avg SqFt	% Change	Avg DOM	% Change
2002	1,441	-	$187,300	-	1,868	-	49	-
2003	1,538	+6%	$201,946	+7%	1,917	+3%	53	+8%
2004	1,638	+6%	$224,740	+10%	1,915	+0%	42	-21%
2005	1,654	+1%	$300,696	+25%	1,859	-3%	25	-40%
2006	1,259	-24%	$337,609	+11%	1,858	+0%	59	+58%
2007	957	-24%	$344,606	+2%	1,922	+3%	84	+30%
Metro Phoenix Area
Year	Sales	% Change	Avg Price	% Change	Avg SqFt	% Change	Avg DOM	% Change
2002	55,713	-	$197,314	-	1,897	-	62	-
2003	65,351	+15%	$212,253	+7%	1,938	+2%	64	+3%
2004	81,015	+19%	$240,085	+12%	1,955	+1%	49	-23%
2005	85,299	+5%	$325,176	+26%	1,948	+0%	30	-39%
2006	60,429	-29%	$361,927	+10%	1,965	+1%	73	+59%
2007	42,373	-30%	$365,102	+1%	2,073	+5%	112	+35%

Amazing as it may seem in today's market, the average price in Tempe and the Phoenix area in general has actually increased for every year since 2002, including 2007 (as of 12/17). However, then you notice that total sales have dropped by 50% since 2005 (similar declines noted by the other bloggers for their markets).

You can probably come up with a few scenarios to explain the increasing average price in the face of falling sales. Fewer lower priced homes selling, buyers selectively targeting higher priced homes (possibly explaining the higher average sq ft), etc. The rate of increasing prices has dramatically fallen off in 2007, so we may be turning the corner to lower average pricing next year.  Although if you believe NAR, prices will be on the rebound (their perpetual theme).  Hard to see it with this data.

Should you think that the data may change significantly in the remaining couple of weeks of 2007, you should note that there are only 3,887 pending sales for metro Phoenix, 81 for Tempe.  Hardly enough to make a difference, even if they all closed in December (unlikely).

 

Copyright © 2007 Rod Rebello

The new light rail service for Tempe is scheduled to start in about a year.  The new service will run through the ASU campus and along Apache Blvd before heading into Mesa.  The city has already kicked off studies for extending the line further into south Tempe, where I live. 

The rail as it exists now does not do much for me unless I drive or take a bus (good luck with that) to a stop further north.  Not too convenient. It would be great to take the rail service into downtown Tempe or further into Phoenix without the hassle of driving.  To get down to my end of town though will be a challenge for the planners.  They have to somehow navigate through a railroad crossing which runs east-west between Apache Blvd and Broadway Rd. 

Now all that's assuming I haven't moved before 2015 which is the earliest any extensions in Tempe will be built.

www.RodSellsAZhomes.com

 

Recently, Russell Shaw pointed out that Real Estate agents are considered by the Harris Poll to be at the bottom of the most prestigious occupations.  While you may think that those at the bottom would have low self esteem, not so according to Time Magazine which ranks Real Estate Brokers in the top tier of those most happiest with their job (ranked #18, with 45.29% saying they were "very happy").  We were ahead of athletes and school teachers.  The bottom? Gas station attendants.  My job satisfaction comes from experiences like this one.

The emotional ups and downs of being a Realtor.  On a recent sale as the buyer's agent, I met the owner agent at her now former home on closing day to pick up the keys for the new owner.  She wandered about the house for the last time, sad, on the verge of tears, leaving her family's home of 20 years, and her mother's home before that.  Soon after she left, the new owners came by to get the keys.  They were extremely excited and happy to finally have their new home, hugging me for helping them.   I stood there with mixed emotions, thinking of the former owner's sadness, but feeling good about helping the new owners.  I got to experience the sadness and joy of transferring a home within about an hour.