| | MONTHLY NEWSLETTER August 2007 from Bill Duffey   RE/MAX Excalibur 480- 585- 2904  Well, I finally got in a vacation. Hope you enjoyed your vacation this summer! I will be sending out my newsletter after the 15th of the month, from now on (as the data is not available until after the 15th, from most of my sources). Finally, the Fed did not raise interest rates! This should help the housing market. Our market is in full swing as a "Buyer's market" but the true test of this market will occur over the next few months. Listings are still way up and sales are down. Some economists are indicating a turn-around in the fall for Maricopa county, however. (charts, below) As stated in my last newsletter, the market is not a bleak as some news stories indicate. Scottsdale, Carefree, Paradise Valley and Cave Creek will always be a very strong market in Arizona. If you are going to invest in these areas, historically, they have provided some of the best returns. Also, from that historical basis, these markets are like climbing a stepladder - they go up in value, level off and then go up again, to the next step. Patience is the order of the day, in my opinion. If you need to sell, then sell. Remember, you have already made a significant amount of money in a very short time (and home prices in the Valley are still considered to be a bargain, nationally). If you want to Buy, now is the time! Historically, this Buyer's market should slow, as the "snow birds" return. We shall see! Hope you enjoy this my newsletter. Our "newest" office is now open. On the corner of Scottsdale Road and Deer Valley! I will still maintain my office in Troon. 
Valley's July home resales show big drop from 2005The Business Journal of Phoenix - August 11, 2006 July was not a red-hot month for Valley home resales. Nearly 5,600 resales were recorded last month, about half as many as July 2005, but slightly more than in June of this year. The Arizona Real Estate Center said this was the weakest July for home resales in seven years. In terms of home prices, the median price was nearly $265,000, down from June, but about $10,000 above the median level of July 2005. Jay Butler, director of the Arizona Real Estate Center, said the current level of activity, year-to-date, is very comparable to that recorded in 2003 (41,200 sales year-to-date) and 2004 (56,745 sales). Another sign of a changing housing market is the increasing number of vacant homes. During the second quarter of each year, the Arizona Real Estate Center conducts a survey of housing in Maricopa County. Based on the annual survey, it was determined that 3 percent, or 30,200, of the single-family homes were vacant. That marks a 1 percent gain over last year's 19,400 homes. The Arizona Real Estate Center is associated with the Morrison School of Management and Agribusiness at Arizona State University's Polytechnic campus in Mesa. The center collects and analyzes data concerning real estate in the greater Phoenix metropolitan area. For more: www.poly.asu.edu/arec. | Arizona tops in home sales decline | Source: www.azcentral.com 08-15-2006 2:30 PM
Spring home sales in Arizona fell 27 percent from 2005, according to the National Association of Realtors. In their quarterly report, the trade association said the states decline was the largest in the country during the April through June period. |
Click here to view the NAR economic and market watch report brought to you by the Arizona MLS http://www.armls.com/pdfs/NARTrend2Q2006.pdf 
 $2,998,000 for both
_______________________________________________________________ The Eight Big Mistakes you can make when Buying a home. The 8 Deadly Mistakes to Avoid When Buying Your Home:
1: Failing to have a plan
2: Thinking, "I can't afford a home"
3: Failing to properly "screen" your Realtor
4: Failing to get pre-qualified for a mortgage loan
5: Choosing a loan based only on the interest rate
6: Failing to obtain a home inspection from a qualified inspector
7: Not knowing your rights and obligations
8: Failing to make your own inspection.
Avoid these mistakes, or it could cost you thousands!!
DEADLY MISTAKE
1: FAILING TO HAVE A PLAN: Deciding to buy a home is probably the biggest financial decision you'll ever make. It's an exciting decision, but it's serious business, too, and you deserve serious advice. Zig Zigler, a famous motivational speaker, once said that people don't plan to fail - they fail to plan. With a game plan, you will eliminate many of the headaches involved in this complicated transaction. You need a clear plan when deciding to buy a house. Evaluate your current situation Do you currently own a home? If so, will it be necessary to sell before making another purchase? Are you renting? How much time is left on your lease? Do you and your family plan to use the back yard? What is important about the location of your house? Do you want to live within 10 minutes or one hour from the office? Make a list of features which are important in your home. Write down desirable locations you would consider, an acceptable price range, number of bedrooms and bathrooms, and any other amenities. Be specific. It is unlikely that you will find a home that offers every feature you desire, however, without a wish list, it will be more difficult to recognize a home which meets your expectations. Provide the information to your Realtor. Your Realtor will look for homes that match your criteria. This will save you time - you won't need to look at homes that don't fit your needs and desires. A proper game plan will save you time and reduce the hassle of shopping for a home. Spend a little time in advance and save a lot of time and money in the future!
2: THINKING, "I CAN'T AFFORD A HOME" : Many people feel that they can't afford a home, but affording a home has never been easier. Mortgage rates are more flexible today than ever, and the tax laws favor home ownership like no other tax shelter. Home ownership is a durable (real) investment. Although no one can say if a specific home will appreciate in value, generally speaking, the odds favor the home owner. Numerous unique tax advantages are available to home owners. The thousands of dollars you pay in mortgage interest is deductible. This tax deduction alone can sometimes make owning your own home cheaper than renting with after tax take home dollars. Check with your Accountant, see the dramatic difference that home ownership will make.
3: FAILING TO PROPERLY "SCREEN" YOUR REALTOR: It's likely that you don't often interview people. Yet, in order to find the Realtor who is right for you, you may need to interview several. The quality of your home buying experience is dependent upon your skill at selecting the best qualified person. It's interesting that in the real estate business, someone with many successfully closed transactions usually costs the same as someone who is inexperienced. Bringing that experience to bear on your transaction could mean a lower price at the negotiating table, buying in less time, and with the minimal amount of hassles. Your agent should be a skilled win-win negotiator! Agents make it their business to provide every service connected with your home search, from expert advice in the early stages through careful monitoring of your settlement. The more closely you work with your agent, the better your needs are known and the more effectively you can be served. Your agent should have access to the MLS systems - a computerized system that will assist you in locating the home that fits your needs and desires. The purchase of your home could well be the most important financial transaction you have ever made. The person you select can make it a satisfying and profitable activity, or a terrible experience. It's your home. It's your money.
4: FAILING TO GET PRE-QUALIFIED FOR A MORTGAGE LOAN: Don't waste hours searching for a home that is not in your price range! Save time and money by pre-qualifying for a loan. Before you go shopping for a home, you need to determine how much you can afford. Once you are pre-qualified for a mortgage, you will know what your buying power is - you will save time by looking only in your price range. This process is simple. A lender will ask you basic questions concerning your history, run a credit report, and determine your buying power. You can even get pre-approved for a loan! Imagine for a moment, if, when you and your Realtor initially draft your offer for the home you select, you are already approved for the loan - IN ADVANCE... No stress, no worrying about qualifying, no concern whatsoever about your ability to qualify would stand between you and the home of your dreams. In today's market, a pre-approval can be a powerful negotiating tool. The old system saw the buyer spending many hours locating the perfect home, carefully drafting an offer, awaiting acceptance of the offer, consulting a loan officer, filing the multitude of forms and applications, and often this was all a waste because, for whatever reason, he was turned down for the loan. You deserve peace of mind and negotiating power by getting an approved loan before you make an offer.
5: CHOOSING A LOAN BASED ONLY ON THE INTEREST RATE MYTH: I've been told that a fixed rate mortgage at today's rate is the best mortgage loan. Many different types of loan programs are available. It is a mistake to think that just because Aunt Sue got an X percent 30-year fixed rate you should get the same loan. You should get together with an expert who can explain the many different types of loan programs. Each program may have its own series of special benefits for you and your specific needs. When considering such an important decision, it is best to explore all possibilities. It may well be that a fixed rate is the best type of loan program. It may also be that you can save a significant amount of money by exploring alternative adjustable programs. A full service lender with relationships throughout the mortgage industry is a must in today's market. Lenders need the flexibility of the small business owner with the clout of a large company. Today there are almost as many different loan programs as there are housing options. A few considerations are anticipated time in the home, available asset base, current income situation vs. future income situation, etc. It is wise to pick a program that fits YOUR lifestyle. Example: If you pay off a loan in fifteen years versus thirty years you will obviously save a lot of money in interest expense. It is important to note that this savings is due to repaying the loan in half the time. The savings is not due to a significant savings in interest rates. You would expect that there would be a much lower interest rate since the loan has a quicker repayment and, therefore, a loan with less risk. The difference in interest rate is not that significant. Rates on 15 year loans may be 1/4 percent to 3/8 percent better than 30 year rates. Payments on 15 year loans will be approximately 25 percent higher on a monthly basis. MYTH: I should go to my bank to get the best loan at the cheapest interest rate. Typically a commercial bank will own a separate business entity which shares the bank's name and happens to offer mortgage financing. But, this does not mean that you will get a special deal just because you are the bank's client. The bank's mortgage subsidiary has no special access to your financial records as you might expect. The bank's mortgage subsidiary must request your financial records from the bank just as any other mortgage company. Your mortgage loan process will not be simplified or viewed differently from any other applicant making a request. The perception of most people who go to their bank's mortgage subsidiary is that their loan payments will always be made to their bank; thus, all of the individual's banking needs will be under one roof. Most mortgage subsidiaries sell their loans on the secondary market and may sell the loan servicing just as any other mortgage company will. Another important consideration is that a typical bank mortgage subsidiary works with a small number of mortgage products. You may not find a wide variety of loan programs and your loan officer may not have a good comprehension of all the different programs offered. It is doubtful that they can adequately advise you as to the best program for your needs. It is possible that you, or the property you are buying, may need to have special underwriting to approve your loan application. Just as you should interview your Realtor, you should also interview your lender. Not all lenders look after your needs. Select a lender who is willing to discuss your needs and help you choose the loan program that is best for your situation, not the best for the Lender!
6: FAILING TO OBTAIN A HOME INSPECTION FROM A QUALIFIED INSPECTOR: A home inspection reports on the structural and mechanical condition of the home. After the inspection, you will have the facts you need to make a decision about buying your home. A well-qualified building inspector (all Inspectors must be licensed in Arizona) must adhere to federal building and licensing standards can spot problems that you might not be able to see. Expect problems to be clearly explained, repair expenses closely calculated, maintenance costs estimated, and a written report delivered within a day or two. Most contracts are written conditional on the outcome of several inspections. These inspections may include several items, including inspection for wood boring insects, excessive amounts of radon gas, structural soundness, and the condition of the heating, wiring and plumbing. When the contract is written, it should address who will be responsible if there are problems with the results of any of these inspections. If well written, home inspections can create a safety valve for both the buyer and seller. If poorly written, the result can be heartbreak and law suits.
7: NOT KNOWING YOUR RIGHTS AND OBLIGATIONS: Real estate law is extensive and complex; the contract for sale and purchase is a legally binding document. An improperly written contract can cause the sale to fall through or cost you thousands of dollars for repairs, inspections, and remedies for title defects. You must be certain which repairs and closing costs are your responsibility. You must know whether the property can legally be sold "as is" and how deed restrictions and local zoning will affect the transaction. If there are defects in the title, or if the property is in conflict with local restrictions, you or your Realtor must remedy them. Otherwise, you could lose thousands! I will assist you! I will make sure you understand all the technical lingo in the sale of your home. A commercial for a local vendor states that "Our best customer is an educated consumer". How true! It is my job to know the laws governing real estate transactions. I am involved in an on-going training program to keep up-to-date with these laws. You deserve to have an agent who is not only knowledgeable about the transaction but is also willing to educate you throughout the process so you will feel more comfortable.
8: FAILING TO MAKE YOUR OWN INSPECTION: You probably would not want to rely on the seller to point out defects in a house he is attempting to sell. There may even be hidden problems of which he is unaware. Be sure your sales contract is worded so that any "earnest money deposit" must be returned in the event the house fails inspection. If a major defect is found, you have the option to cancel the contract and have your deposit returned, bargain for a lower price to compensate for the cost of repairing the problem, or have the owner make needed repairs before the sale. Even before you get to the point of a contract and having a professional inspector look at the house, there are many items you can check yourself as you are shopping for a home. Structure - Basement, check the foundation for cracks or water marks. Floors, are they level? Does the roof sag? Water damage - Look for unevenly painted ceiling or wall; mildew odor in basement; signs of re-plastering or re-tiling in just one area of a room. Water pressure - Flush toilet and turn on both hot and cold water faucets at the same time to test. Plumbing - Ask what type pipes are installed and their age. If applicable, ask when the septic system was last inspected and cleaned. Stand near the tank to detect odor or soggy ground. Wiring - A 100-amp system is typical in modern construction and uses a one-inch main line; this can be seen leading to the fuse box. Appliances such as dryer or range require a 220-amp line. Notice if lights flicker or don't work. Check for electrical outlets . . . usually at least 2 in each room. Energy efficiency - Ask to check last year's heating and cooling bills. Determine if proper insulation has been used. Pests - Be alert for small accumulations of sawdust in the basement. This might indicate an insect problem. Obtain date and results of the last wood-destroying pest inspection. Ask to see the seller's survey made when the seller bought the house. When you are shopping take a copies of the "Home Buyer Checklist" to keep you alert to possible problem areas. Avoid "surprises" by keeping your eyes open. Be certain that you are clear on items which convey with the property and repairs which the seller agrees to make. Have this list with you when you go for your walk-through. You can be successful in the home buying process. During the entire process you should remember to buy with "resale" in mind. In short, be alert! Be curious! ******************************************************************************** 10 things to remember! 1. Find a real estate agent that you can get along with. Home-buying is not only a big financial commitment, but also an emotional one. It’s critical that the agent you chose is both skilled and a good fit with your personality. 2. Remember, there’s no “right” time to buy, any more than there’s a right time to sell. If you find a home now, don’t try to second-guess the interest rates or the housing market by waiting. Changes don’t usually occur fast enough to make that much difference in price, and a good home won’t stay on the market long. 3. Don’t ask for too many opinions. It’s natural to want reassurance for such a big decision, but too many ideas will make it much harder to make a decision. 4. Accept that no house is ever perfect. Focus in on the things that are most important to you and let the minor ones go. 5. Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price may lose you the home you love. 6. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself—room size, kitchen—that you forget such issues as amenities, noise level, etc., that have a big impact on what it’s like to live in your new home. 7. Don’t wait until you’ve found a home and made an offer to get approved for a mortgage, investigate insurance availability, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers. 8. Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be some costs. Don’t leave yourself short and let your home deteriorate. 9. Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big commitment, but it also yields big benefits. 10. Choose a home first because you love it; then think about appreciation. While U.S. homes have appreciated an average of 5.4 percent annually over from 1998 to 2002, a home’s most important role is as a comfortable, safe place to live. From REALTOR® Magazine Online |
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********************************************************************************* What is Agency? Why does it matter? - defined It'’s important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transactions. Ask your salesperson to explain what type of agency relationship you have with him or her and with the brokerage company.
1. Seller's representative (also known as a listing agent or seller's agent). A seller's agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.
2. Subagent. A subagent owes the same fiduciary duties to the agent's principal as the agent does. Sub-agency usually arises when a cooperating sales associate from another brokerage, who is not representing the buyer as a buyer’s representative or operating in a non-agency relationship, shows property to a buyer. In such a case, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the subagent. It is important that subagents fully explain their duties to buyers.
3. Buyer's representative (also known as a buyer’s agent). A real estate licensee who is hired by prospective buyers to represent them in a real estate transaction. The buyer's rep works in the buyer's best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer's rep may be paid by the seller or by a commission split with the listing broker.
4. Disclosed dual agent. Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to the clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it's vital that all parties give their informed consent. In many states, this consent must be in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them is legal in most states.
5. Designated agent (also called, among other things, appointed agency). This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.
6. Non-agency relationship (called, among other things, a transaction broker or facilitator). Some states permit a real estate licensee to have a type of non-agency relationship with a consumer. These relationships vary considerably from state to state, both as to the duties owed to the consumer and the name used to describe them. Very generally, the duties owed to the consumer in a non-agency relationship are less than the complete, traditional fiduciary duties of an agency relationship. *********************************************************************************** Note: Realtors in Arizona are allowed to do real estate auctions...costs more, however. See below. Daily Real Estate News | August 16, 2006 As Sales Slow, Sellers Give Property Auctions a Try
More sellers are putting their homes on the auction block in hopes of getting a quick sale.
"We do for real estate what a Fourth of July sale does for retailers," says Lynn Gardner, the owner of Homeland Auctions Inc. in Leesburg, Va., which auctioned 57 homes in this year's first half, up from 11 in the last six months of 2005.
Larger auction firms — including Sheldon Good of Chicago, Williams & Williams of Tulsa, Okla., J.P. King of Gadsden, Ala., and Pacific Auction Exchange of Bakersfield, Calif. — also report rapidly rising demand from individual sellers as well as home builders and investors stuck with excess inventory, and banks with foreclosed property to sell.
Auction services aren't cheap. Commissions and marketing fees often exceed 10 percent of the home's value. Sellers generally pay upfront for all or part of the costs of newspaper ads, mailings and other marketing used to drum up interest.
Home sellers tend to show more interest in using auctions when the housing market is weak. The last time auctions were popular was in the late 1980s and early 1990s when home prices fell sharply in many parts of the country.
But Chris Mayer, a professor of economics and real estate at Columbia University’s Business School, says sellers have it backward. Auctions work best in strong markets when there are plenty of determined bidders to push the price up.
Source: The Wall Street Journal, James R. Hagerty and Michael Corkery (08/16/2006) |
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Daily Real Estate News | August 14, 2006
Inflated Real Estate Appraisals Under Scrutiny
Law enforcement officials are increasingly concerned about inflated property appraisals, especially in markets where home sales and price gains are declining for the first time in years.
Critics have long warned that many appraisals are too high because generous appraisals help mortgage loan officers and brokers, who often select the property appraiser, complete more deals.
Iowa Assistant Attorney General Patrick Madigan says many subprime loans involve inflated appraisals, and borrowers with credit problems are particularly vulnerable to default if they owe more than their homes are worth. He says the overstating of appraisals is "widespread" among loans to subprime borrowers.
Housing professionals note that the situation is worse in states like Florida and California, as home buyers in these pricey markets were forced to accept questionable appraisals in order to push their deals through.
Jacquie Doty of Freddie Mac predicts that inflated appraisals will lead to higher default rates in the coming years.
Source: Quad-City Times,John Heiderscheit (08/14/06) |
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************************************************************************************** What's the fastest way to brighten a room,
sharpen decor, and make a room look like new? You guessed it! It's a fresh coat of paint. That's the tried and true method for a quick makeover. When it's time to paint can you really tell the future color by holding up a sample that's hardly bigger than a postage stamp? Experts say no. But they offer help. Get six or eight of the same samples and tape them together into a block of color. Tape them to the wall and observe the effects of natural light, incandescent light, and how the room changes. If in doubt, go a couple shades lighter than the dramatic color you might be considering. Color seems to darken and intensify as you spread it across the walls. If what you need is not a paint job, but a whole new home, then call me. It's easy! You'll need no brushes. There's no clean up and no stress. I'll help you find the right home in any color you want! Regards, Bill Duffey GO TO MY CONCIERGE PAGE FOR A LIST OF VENDORS. <click here Hope you enjoyed this newsletter...let me know if you have suggestions or if you would like me to write an article on any real estate subject.
Please remember that selling or buying your home is not a "do-it-yourself" project. Call me, and I'll handle all the details. I also have a "Moving Coach"! The service is Free for my clients. *Please consult your tax adviser. Please note: This email and any attachments contain confidential and/or privileged information for the sole use of the intended recipient. If you are not the intended recipient you may not read, disseminate, distribute or copy this email message or any attachments. Please notify the sender immediately (by reply email or phone) if you have received this email message by mistake and delete this email message, along with any attachments from your system. Email transmission cannot be guaranteed to be secure or error-free, as information could be intercepted, corrupted, lost, destroyed, delayed or may be incomplete. The Sender does not accept any liability for any errors, omissions or viruses in the contents of this email message or any attachment. This email also conforms with the Arizona Commercial Electronic Mailing Act of 2003. Your Privacy is important to me. I do not share your email information with any other party. If you do not wish to network in this way and desire to be removed from my newsletter email list, simply send me an email with "remove" in the subject line (click on the "email Bill" link. You will be excluded from the list, in a few days. Copyright 2007 Bill Duffey. All Rights Reserved.  To remove yourself from my mailing list, you can opt-out by just sending me an email.
Please put "remove" in the subject line. NOTE: If your home or property is currently listed for sale with a licensed Real Estate Broker, this is not intended to be a solicitation of that listing. It is not our intention to solicit the listing of another real estate Company. GO TO MY CONCIERGE PAGE FOR A LIST OF VENDORS. PS: I never receive any compensation from any vendor, ever!  
LEGAL STATEMENT <please click here to read Regards, Bill Duffey |
