What happens next? I’ve signed my name on the dotted line…

The first thing that needs to happen is you want to ensure the escrow is opened within 1 business day. To open the escrow, any party to the transaction needs to get a fully signed contract to the escrow officer. You can walk it into their office or email the documents. In addition, the buyer must deposit the earnest money with the title/escrow company. This should happen within 24-48  hours of acceptance of the offer. As a seller, you can confirm the earnest money has been deposited through the earnest money receipt provided by the escrow officer.

Once the escrow is open and the EMD is deposited, you want to ensure you have the SPDS to the buyer or their agent no later than 5 days from acceptance. The term SPDS simply refers to the seller disclosures. As of this blog posting, you want to use the updated 2017 version. You can find these and download these at anytime through our private client area by clicking on State Files. Once you provide these to the buyer or their agent, they will review and they should initial and sign the SPDS AND return a copy to you. It is very important you have a signed copy from the buyer. The next step is the CLUE report. Essentially, this is a 5 year claims history on the property concerning insurance. It tells the buyer if the seller has made an insurance claim on the property over the specified time period. A CLUE report can be obtained online or you can contact your insurance provider and let them know what you need. Claim reports are almost always free from your insurance provider and you can get them within about 2 days of requesting. At this time, it’s also necessary to provide your buyer with any other agreed upon disclosures per the purchase contract that you signed. For example, this could include the LBP disclosure, mold disclosures, etc…

From that point, you are on your way to the inspection and BINSR period. We will update the blog to go over the BINSR in our next posting.

ARMLS has recently gone through a lockbox exchange via SUPRA. As with many other markets in recent months, Supra has introduced the blue tooth functional “I” boxes to the ARMLS market. We currently have about 10 in stock. If you have an old box and would like to exchange it, please email us at info@congressrealty.com or call us at 800 657 6579 ext 1.

** ARMLS is the MLS system for Phoenix, Scottsdale, and surrounding markets.

While national websites like Trulia and Realtor.com have a lot of traffic, don’t forget about the exposure your listing will receive on local IDX-enabled websites.  A Realtor’s own website specializing in Paradise Valley, Arizona, will have a small fraction of the national traffic of the national websites, but his traffic will be highly-targeted to the area and price range that he is actively working.  Someone might initially browse listings on a national website, then move onto a site that is area-specific.  They might want specific information about neighborhoods, property values, trends, etc. that is not necessarily reflected in national data or generic search queries.  Using the Paradise Valley website as an example, an online homebuyer can click on a search for the Montelucia Residences, and not only see all the active listings but get a brief write-up about the number of homes, the fact that they are adjacent to a luxury hotel, and the grocery store that residents would most likely shop at.

There seems to be a bit of confusion surrounding the Phx/Scottsdale market right now. Different homeowners have very different points of view on this topic. The reason for this is simple – Location.

It is nearly impossible to buy a SFR entry level home in the Phx/Scottsdale area right now. Most every property that fits this criteria will see 10-15 offers within a few days of being on the market. Outside of this spectrum, activity has increased dramatically for areas outside of the Phx/Scottsdale area, however, we aren’t seeing the same kind of multiple offer frenzy that we are in Phx/Scottsdale. (There are exceptions of course)

What is really nice is the high end market is starting to pick up as well. We are seeing more and more offers on properties in the 400-800k area and even a few in the 1Million plus range. We recently had a listing in Phx in the 400k range that saw 3 offers and went under contract within a few days of listing.

What advice do we have for sellers?  Don’t get overwhelmed and get yourself into trouble with multiple offers. If you aren’t certain how to handle a multiple offer situation correctly…. Call us at 800 657 6579. We can assist you with just about anything involving a multiple offer situation. We can go over the highest and best technique versus issuing multiple counters to find out which is best for your specific situation.

If you are a property owner in Arizona, it is very important to realize that there are many different MLS’s throughout the state. It is imperative that your property be listed on the correct local MLS. To illustrate this point, Tucson, Green Valley, and Rio Rico all have different MLS systems. Each city has their own sep system. As a seller in these areas, you want to ensure your property is on the correct system. Listing a home in Rio Rico on the TARMLS website for example will provide little to no value. In this example, your home needs to be placed on the Santa Cruz County MLS system.

Anytime you are interviewing full service agents or limited service agents, always ensure that agent is a member of your local MLS. Do not be fooled by national companies who try and trick you into listing your property on the largest available MLS instead of your local MLS.

Local is always better in the world of MLS exposure.

Here is a good high level of synopsis of the Phoenix real estate market.

In September 2009, there were 6948 total sales of single family detached homes on the Arizona Regional (Phoenix area) MLS.

• 93% were below $400,000
• 48% were lender-owned (REOs)
• 20% were short sales

The main trend we have seen in the past 4 months is that the # of lender-owned sales as a percentage of all sales has DECREASED from around 67% to 48% while the percentage of short sales has INCREASED from about 11% to 20%.  Contact us if you are interested in selling your property.  Yes, we do handle successful short sales.

Several sources have pointed to the Corus Bank failure as a critical step in determining what the true market value of high rise condos are.

Corus funded a number of speculative high rise condo projects in markets where we do a lot of business.  A few examples in Las Vegas:

• One Las Vegas
• Meridian
• Platinum
• Loft 5
• Juhl
• Newport Lofts
• Panorama Towers
• Village Green
• The Residence Las Vegas
• Soho Lofts
• Copper Canyon
• Boulders at Lone Mountain
• Verano
• Spanish Palms

Corus also funded a number of condo conversion or development projects in Arizona and Southern California, such as 44 Monroe (Phoenix), Safari Drive (Scottsdale), Wilshire Boulevard Condominiums and Solair (Los Angeles).  Now that the FDIC has stepped in, many of these largely unsold projects have been put up for sale with a 30 day deadline for a private placement transaction.   Corus previously tried to sell some of the completed REO or loans to investment groups, but the bid-ask spread was too high (because they would have been insolvent to let them go at the market price).  Now that they have failed, the true price will be discovered.

Even though the price discovery will be painful for someone who bought at or near the peak, it is important.  It is not healthy to have 50 units on the market at a huge range of prices and only 1 or 2 pending sales.  Lenders don’t even want to touch financing the few units that are purchased.  However, once a bottom price has been identified and a strong, patient owner is in place to gradually sell off the remaining developer units, the prices in these buildings will stabilize, financing will become available and transactions will again start taking place.

With the budget mess in Arizona, it is not clear whether Gov. Brewer would veto a revision to the new bill SB 1271, the anti-deficiency bill which allows banks to go after you for a deficiency judgement unless you lived in the house for 6 months.  Many experts feel this bill will have a negative effect on investment properties, second homes, and investing in general in Arizona real estate.

The Arizona Association of REALTORS is pulling out all the stops and most of the local associations (Prescott, Central Arizona – Payson, Tucson, Phoenix, etc.) have emailed us with an urgent Call to Action.  They want us to contact the governor and urge her to sign HB 2008.

Here are the talking points on why SB 1271 is bad:

• Removes any incentive for a lender to work with a borrower of a distressed loan
• Places the burden solely on the borrowers, allowing banks to conduct “risky” lending without consequence.
• Bankruptcy cases will increase dramatically since protection against deficiency judgment as been removed.
• Family owned property for children going to college or elderly parents may lose their anti-deficiency protection if the trustor did not occupy the home for six consecutive months.

We recently received a letter from the Bullhead City/ Mohave Valley Association of REALTORS® informing us that a new rule had been put into place.  ALL listings MUST have an ASSOCIATION lockbox installed.*  I put the asterisk there to indicate that if a seller refuses to have a lockbox on their property, they can a.) state in writing that they do not want one and b.) not have any other lockbox on their property (e.g. contractors lockbox), and still avoid incurring fines.  The lockbox vendor (GE) has been aggressively pushing this policy among many MLS’s.  It not only will cause more lockboxes to be purchased by agents, it will stifle any threat of competing lockboxes in those MLS areas, be it mechancial lockboxes or other electronic systems.  For instance, if one brokerage wanted to use a safe, competing electronic lockbox that only their agents could utilize, or if a group of luxury agents wanted to utilize their own private lockbox system, they would face fines.

We will comply with this and other rules.  We don’t really flinch when new rules like these are passed, we just adapt and continue to sell properties.  It is interesting, however, to see how companies like GE are able to tap into the local MLS monopoly and generate tons of money.  An agent in Bullhead City, Kingman, or Lake Havasu City, cannot say, “This rule is unfair,” and then quit the MLS.  They would be out-of-business, completely unable to sell residential real estate in Mohave County.  The MLS is so powerful that it has a degree of control over many aspects of the agent’s business (in this case, property access and lockboxes).

As a seller, this is just a demonstration of the MLS’s power in selling homes.  A seller should tap into this medium and take advantage of it, rather than fight it.  Just as you may not have liked the power Microsoft exhibited over the PC business when they were exhibiting what some would argue were monopoly-like forces, it still would have been wise to learn its products since most employers were utilizing them.  Over time, there may emerge competitors like Linux that provide an alternative, however, in residential real estate, this is many, many years away in my opinion.

In a bizarre turn of events, Sen. Steve Pierce, the sponsor of State Bill 1271, wants the law immediately repealed.  Apparently receiving angry voicemails from thousands of REALTORS and homeowners can have quite an effect in state and local politics.  He said that he intended to help small community banks in Arizona (which it would) and did not realize the unintended consequences.

This legislation would have been an extremely powerful resource for banks to obtain judgements against defaulting homeowners or to keep people that are far under water continuing to pay on the second homes and investment properties rather than face a deficiency judgement.  Again, the problem I have with it is that the law is being changed years after many of these people made their purchase decision, which they made under a clear law which protected them.  In the middle of a real estate meltdown, it is probably not a good idea to scare away other investors, second home buyers, and people buying for their kids and family members, who are helping this market recover.

Stay tuned…