Wednesday, May 31, 2006

Hazardous Duty (Part 1 of 2)


Every house has a quirk or two, whether it’s a porch light that flickers when it rains or a bathroom door that won’t stay closed. Homeowners learn to live with such inconveniences, and buyers expect little surprises like these to surface in the months after they close. However, some houses have things like aluminum wiring, radon, lead-based paint, asbestos, and mold. Far from quirky, these conditions are a bit more troublesome and, depending on the situation, may actually affect someone’s health. It’s not your job to search for or fix these conditions, but it’s a good idea to know a little about them to assist your clients. Many environmental and man-made conditions in homes worry people, so you can help your clients understand the risks and reach a logical conclusion. You can provide your seller with information on what to do if his house contains such a condition or assist your buyer in finding a qualified professional to assess the impact of such a condition.


Aluminum wiring. Just because a house has aluminum wiring doesn’t mean a buyer should immediately assume that it needs to be rewired. Many homes built in the late 1960s and early 1970s were wired with aluminum, which can be just as safe as copper wire as long as it has been installed correctly. Aluminum wires expand and contract more than copper ones as they warm and cool. Also, aluminum wires tend to oxidize when in contact with certain metals. When aluminum oxidizes, it heats up more to conduct the same amount of electricity, which then causes more oxidation. Eventually, aluminum wires may start to overheat and melt the attached fixture.

If your clients are considering purchasing a home with aluminum wiring, recommend that they hire a licensed electrician or inspector to check the wiring system for any potential problems. There are several safe remedies available to them besides a complete rewiring of the house.

Radon. In addition to the standard real estate inspection, your buyers might want to consider a test for radon. This colorless, odorless gas occurs naturally in the soil as a by-product of decaying uranium, and breathing its particles increases a person’s risk of developing lung cancer, according to the U.S. Environmental Protection Agency.

Certain areas of the country are more prone to radon than others, but it exists in every state. And radon levels can even vary from house to house on a given street, depending on the soil surrounding the structure and construction techniques used. Radon from the soil enters a home through small openings, such as tiny cracks in the concrete foundation, making lower levels of structures more susceptible to radon. The gas also can seep into ground water, putting houses that use well water at a higher risk for radon than those on a municipal supply.

The EPA recommends that buyers ask for either recent test results or to have the property tested. Even very high radon levels can be successfully lowered in a house through relatively inexpensive methods. Your clients can learn more about radon testing and remediation by calling the National Radon Hotline at 800/SOS-RADON; this hotline will send consumers information as well as discount coupons for radon test kits.

Asbestos. Once used in a variety of construction applications because of its durability, strength, and resistance to fire, asbestos was discovered to have one large drawback: It’s a carcinogen. If inhaled, the fibrous material lodges in the lungs and -- because of its durability -- stays in the tissues. Repeated exposures can lead to lung and stomach cancer. Asbestos use was curtailed in the 1970s. Before then, however, it was used in floor and ceiling tiles, insulation, roofing, shingles, siding, and some shielding around heating and electrical systems. Properly installed, asbestos-containing materials do not usually present a health risk. As long as the materials remain intact, the fibers cannot be released into the air; the danger arises when the materials begin to deteriorate or need to be disturbed due to remodeling or other work.

Buyers concerned about asbestos in a home should consult their local real estate inspector or state agency for more information about asbestos, its inspection, and its remediation.

By: Ward Lowe, www.texasrealtors.com

Stage Your Home for a Bigger Sale

In many parts of the country, the red-hot housing market is, predictably, cooling off a bit. So, if you're looking to sell your house as quickly as possible and for top dollar -- two of the most common home-seller motivations -- some experts believe that "staging" the property is more important than ever before. The idea behind staging is to spruce up your house to make it look less like your home -- that is, less specific to you -- and more like what a prospective buyer probably wants to see.
"Staging is not decorating," said Barb Schwartz, founder of Associated Staging Professionals and author of "Home Staging: The Winning Way to Sell Your House for More Money." "Decorating is personalizing a property to your taste, putting your unique stamp on it. Staging, on the other hand, is de-personalizing it, making it, for lack of a better word, more generic."

In the hope of selling in a reasonably short period of time and getting the most money possible for their modest two-story, three-bedroom home in Watertown, a middle-class Boston suburb, Melissa and Will Skinner have decided to hire Thomas Holmes-LaFever and Kate Stenson-Lunt who own a staging business in the Boston area called "Nuances." The Skinners have owned their home for a little more than three years now and have put it on the market for $474,000.
The Nuances team has big plans for the Skinner home. They want to take away the area rug in the living room in order to showcase the beautiful hardwood floors below. They plan to remove the personal photos from the fireplace mantle and add some topiaries. The home office is currently crammed with books and clutter, and the bed needs to be made hotel-style.

"Would I have cleaned up the house before a potential buyer came in? Yes, of course," said Melissa Skinner. "But would I have paid the same attention to detail and the overall sort of 'wow factor?' No, probably not."
The staging is considered so valuable to the eventual successful sale of properties that the Skinners' Realtor pays the $250 evaluation fee for every home they sell. The owners then decide if they want to pay the full fee, which typically runs between $500 and $3,000. But, the investment can be well worth it, said Anita Shishmanian, a real estate agent for Century 21.

"They seem to get a bit of a payback on it," Shishmanian said. "For probably every $100 they spend, they make -- that is, gain in value -- $1,000." That sounds like a worthwhile investment, indeed.
The Skinners decide to go for the full treatment, so they check into a hotel for the night to let Nuances do their thing. The following day, the Skinners are very pleased with the results. The guest bedroom no longer looks like a playroom. And, with the treadmill gone and fewer books jamming the shelves, the office actually looks like an office. Meanwhile, the master bedroom looks like it belongs in a luxury hotel.

"It makes such an incredible difference," Melissa Skinner said. "I mean, I honestly didn't expect it to be this much of a difference. It's really shocking."
The home now has that "wow factor," and that, Holmes-LaFever says, is the key to staging success.

"When you buy a home it is emotional, not intellectual. It's not ‘oh, I guess we could live here if we have to.' We want them to open the door and feel," he said, sucking in his breath to demonstrate the excitement, "'I've got to live here. This is mine.'"

After all, you only have a few seconds to grab the buyer, Holmes-LaFever said. "You have to grab them when they open the front door," he said.
By: www.abcnews.go.com

GREAT Site.

I found this site tonight. Remodelormove.com It has great resources and a really cool calculator estimating if you sold remodel or move. Check it out.

Tuesday, May 30, 2006

It's a Great Time to Buy!


Catherine Reagor, Glen Creno, & Ryan Konig
The Arizona Republic
Mar. 5, 2006 12:00 AM


Metropolitan Phoenix's housing market started 2005 with a bang but ended it amid concerns of a price bubble. Home values soared and houses sold within days in most neighborhoods during the first six months of the year. But then investors began to bail, listings climbed and asking prices stared surpassing home appraisals.

By September, the market was showing signs of cooling. In October, home prices slipped slightly.
The Arizona Republic's Valley Home Values analysis of housing prices and sales by postal ZIP codes that shows all neighborhoods racked up big gains early in 2005. Increases from 30 to 50 percent were common as metropolitan Phoenix led the country in percentage gain of housing price. But prices began to level or dip during the last three months of the year.

The slowing has continued this year with metropolitan Phoenix's overall median existing home prices inching down again. Resale listings exceeded 30,000 in January, nearly nine times the level of the same month of last year, says the Arizona Regional Multiple Listing Service. Selling time increased from about 5 1/2 days to 49. Sellers are frustrated because they are getting few offers, and many are cutting prices. Buyers seeing the slowing have become much more cautious.
Neil Brooks, a Century 21 agent in northeast Phoenix, said shoppers are trying lowball offers of $30,000 to $50,000 less than asking prices as a starting spot in negotiations.

"Last year, it was the sellers who were being very aggressive, and now it's the buyers," he said. "There's so much inventory, they can sit back and spend their time looking at bazillions of homes."
Most real estate market watchers say the Valley's housing market is only reverting to a stable one after last year's frenzy. Metropolitan Phoenix led the nation for home price increases with an almost 50 percent run-up during 2005. And that price includes a few dips late in the year.
Now sellers need to be more realistic and realize their homes aren't going to be sold in just a few days, or a couple of hours, for thousands more than they are worth.

"The market has done a complete about-face," said Barbara Sage, a northwest Valley and Sun City specialist at ERA Encore Realty. "Last year, 14 offers for a home would come across at once, clogging up the fax machine."
Now, she said, after showing a property the seller's agent will call and tell her the "owner is anxious to sell." She tells them with a "yawn" that her buyer has a few more properties to look at.
"The days of multiple offers made on sight-unseen properties and offers well above list price are gone for now," said Cecil Duarte of Serving Valleywide Realty. "The market has softened. Inventory ballooned, and the days are here again for buyers to negotiate on price, terms and even seller contributions toward closing costs."

"Homes lasting on the market longer will affect prices," he said. "If we get that speculated 'dump and run' by investors, I expect to see prices to get competitive, and sellers offering incentives like they did in the early 1990s."
The slowdown has hit the new-home market as well. Builders that were overwhelmed with demand a year ago now are offering such freebies as thousands off spec homes, free pools or price cuts on upgrades to bring back the buyers. Top players and industry analysts disagree about the prospects for this year after a record 2005 when 63,570 new homes were permitted in the Valley.
Some look for a performance similar to last year as population gains and new jobs keep buyers coming. Others look for a steeper decline. The new-home median price increased nearly $100,000 to $299,000 last year, said analyst RL Brown, publisher of the Phoenix Housing Market Letter. And there is worry across the board that even with demand softening, higher costs for land and for materials, labor and city-approvals are pushing new-home prices beyond the comfort level of the mass-market buyer that volume builders rely on. High prices also remove a key incentive for people to move to Arizona.

Healthy slowdown?
"Those kind of price increases cannot be sustained," said Brown, who sees a slowing market as a positive change and predicts a 4 percent price increase for new homes this year.

Doug Fulton, of Tempe-based Fulton Homes, said the slowdown was obvious to him on a recent flying tour of Pinal County. He said the number of new-house slabs in Maricopa was down by a third or more compared with six months ago

Fulton, of Tempe-based Fulton Homes, said executives of public builders are under pressure from Wall Street to duplicate last year's results in the Phoenix market this year. He said that would be difficult and said he would be happy with the 10 to 15 percent price increases he expects this year.

"It's no longer 'build it and they will come.' That's not what will happen in '06," Fulton said. "It will be a battle. Corporate expectations are very high, but we are coming back to a more normal market."

Investors made up at least a quarter of Valley resale home purchases last year but market professionals say that group of buyers is leaving.

John Foltz, president of Phoenix-based Realty Executives, said the experienced speculators are pretty much out of the market, leaving newbies who could get hurt by the slowdown.

He said the worst-case scenario for the resale market this year would be flat prices.

"We haven't seen a decline in home prices in years, and I don't think we will this year," Foltz said. "For resale prices to decline, we would have to experience interest rates in excess of 10 percent and a job reduction of 40,000. Both are very, very unlikely."

Buyer-seller standoff?
Jay Butler, head of the Arizona Real Estate Center at Arizona State University Polytechnic, said the housing market needs to "cool down to sustain the appreciation it gained last year. I wouldn't be surprised to see prices fall this year" as the market recovers from the investor buying binge.

"Investors played a key role in turning the Valley's housing market upside down," Butler said.

Pete Kanton of Arizona Realty Advisors is trying to sell several of his own Valley residential properties as well as some for clients.

"All are priced competitively, at or below what other homes of similar size and amenities have sold for in the areas," he said. "All have been marketed on MLS, signs, classified ads and mailing to the neighborhood. But none have sold."

"In addition to the normal drop in activity, the first quarter of the year the market appears to be in a 'holding' pattern," Kanton said. "Buyers are anxiously waiting to see if sellers will begin those price reductions many have speculated about, and sellers are looking at comps their agent puts in front of them from middle to late summer and into last fall when the market peaked and not willing to lower their list price because others got that price."

Timmy Carter is glad the housing market is slowing. Last spring, he looked for a home for weeks before finding a "doll house" near Central and Missouri avenues in Phoenix.

He made a full price offer. Later that day, he was told another buyer had made an offer for more. After a two-day bidding war, he got the house for $25,000 above the listed price. But then a week before closing, his "stomach was in knots" and he decided to go with a gut feeling and not close on the home.

He checked property records later and saw the house sold for the original price.

'I was being shanked the whole time and my gut feeling proved me correct," Carter said. "The market last year duped quite a few buyers. I am glad it's over."

Terry Mindham spent most of 2005 in Iraq training Iraqi police cadets so he missed out on most of the big runs up in the Valley's housing market.

He now wants to move to Virginia, tired of the desert after his time in Iraq, and knows his 1,700-square-foot home in Surprise won't sell fast or for the prices buyers in his neighborhood say they sold for last summer. So he has decided to sell it on his own "for sale by owner" to try to save money on commission.

"I plan to try selling myself for a while, pricing it so that the buyer actually gains a large part of what a Realtor would have added to the cost," he said.

But Mindham said he would pay real agent agents 3 percent if they bring him a buyer.

"I am not pressured to sell so it's worth my time to see if I can make a sale happen on my own," he said.

A definite cooling?
"Home prices in metro Phoenix are down or flat now," said John Burns, a national real estate consultant. "Investors are selling. Listings are up. The market definitely is cooling."

He thinks prices may fall slightly more in some outlying areas of the Valley but that prices in Scottsdale, Tempe and most of Phoenix will hold up.

Eric Brown, a veteran Valley home builder who heads Artisan Homes, said last summer when he predicted housing appreciation in 2006 would be half of what it was in 2005, he was "overly positive."

Shannon Osborn put her home in the 85254 ZIP code in north Scottsdale on the market last December. She has lowered her price twice so it's $25,000 less than where she started. Her real estate agent is running several ads, but so far the only potential buyers who have come to see it want to "flip the house" so they don't even come close to the asking price.

"With what I owe and what I have put into it, I am not going to give it away," she said. "My home is beautiful and all the new interior remodel is beautiful. So I am at a loss on ideas."

Margie O'Campo de Castillo, past president Hispanic Association of Real Estate Professionals and head of Arizona Dream Realty, said the housing market still is strong.

"But homes won't appreciate like last year," she said. "Sellers can't over inflate their prices anymore. If you don't think the market is slowing, just look at all the open houses."

Friday, May 26, 2006

The Truth About Appraisals


The appraisal process often baffles consumers. They may feel their home is worth a higher dollar amount, and the appraised value doesn't always make sense to them. It is important to know that appraisal guidelines are dictated by the lenders, and in some states, it is a requirement to also disclose what the appraisal will be used for because there are different rules to follow depending on the purpose.

In effect, lender guidelines force appraisers to put a fair market value on homes based on comparable sales in the same area, and the home must be bracketed in size and value. For example, there is no set dollar figure associated with a great view, pool, spa, bathroom upgrades, etc. If a homeowner installs a custom pool that cost them $30,000, but the local marketplace supports the value of a pool at $15,000, then that item will be bracketed as [$15,000] on the appraisal.

Upgrades can usually be expressed at full value in newer homes, because the only way to get those upgrades was to put more money into the cost of building the home. On the other hand, the upgrading or remodeling of an older home is rarely reflected in full in the final appraisal. This is because the home had value in its original condition, and again, the value of the upgrades must be supported by comparable examples within the same marketplace.

These comparisons must be drawn from current market activity within the last six months, and some lenders will want to look at both closed and pending sales, to see if there is any room for negotiation. This is a safeguard to prevent appraisers from attaching too high a value to the home in question. This guideline further states that appraisers can only base their opinion on the value of homes that have actually closed escrow. Any supporting comparison from pending sales will reinforce the reference to the closed sale given.

However, when property values are increasing drastically within a marketplace, the appraiser is generally permitted to make a concession and put more weight on the evidence provided by comparisons to pending sales and listings, allowing for a "real time" appraisal.

Although there is no formal standard to speak of, most lenders give the appraiser a 5% margin of error. If the file is reviewed and the appraiser is off by 8%, there is a good chance the value will be cut by the full 8%. It is in the best interest of both the appraiser and the homeowner not to try to push the value up higher than the market will support, otherwise the property evaluation would then be exposed to a severe appraisal review.

As a Loan Executive, I make a point to follow lender guidelines at all times, and work within the systems they provide. This promotes a good relationship with the lender, and smooth closure for my borrowers.

Thursday, May 25, 2006

Referrals

If anyone knows of anyone buying, selling, or needs a rental here in Arizona please let me know. I here to help. View my site at www. RelocatingtoAZ.com
Jamie Culbertson
Phoenician Properties Realty

Here We Are

Welcome to the entirely new Real Estate Market that we were all dreading. Even if we didnt want it to come we all knew that it couldn't keep going on like it was. Buyers have the upper hand and sellers are dropping their prices like crazy. Still if you are in the middle of the city, i.e Phoenix, Scottsdale you are doing just fine. It is all of these areas lke Queen Creek, Goodyear, Avondale that are going to be hit the hardest. The outer lining cities are just too long of a drive for peolpe to commute, and jobs just aren' pooping up as much out there as much as they are in Phoenix. Gilbert at least has the signs of a great freeway system being implemented as we speak, but the westside of town has no new signs of freeway access. The I-10 freeway is just a cluster F!@* going home at 5pm. If you looking for a great deal now is the time to step up. In one year from now people are going to see a steadiness of pricing and they will really know what their home is worth. Where as now sellers are feeling out a market that no one knows where their home should be priced.