We’re rolling out some new stuff this week, making a lot of changes on the back end of the blog and my other website, hopefully rolling out my new fabulous MLS search. To let my developers be able to backup and move everything around, I’m not going to post over the next day or three. Hopefully, there’ll be little to no downtime, but if things start to look weird around here, come back in a day or two!
In the meantime: baby quail.
Cute little guys.
Most often, with the contracts my Buyers and I negotiate, the homes appraise easily for the sales price. However, every once in a while, a low appraisal comes in.
In Tucson real estate, using the typical resale contract, once we find out that the home didn’t appraise, it starts a 5 day clock, within which the Buyer can walk away from the deal with their earnest money.
But that’s not what typically happens. Usually, in those 5 days, we go back and negotiate with the Seller, try to strike a new deal before the 5 days expires.
As a Seller, you can hold firm, wait for that Buyer to walk away, and hope the next offer is at least as high and that the next appraisal will come in at the sales price. Or, you can try to hold on to the deal at hand and reduce your price.
Of course, remember that a low appraisal doesn’t mean that the Buyer has to walk away. It’s their choice, certainly. But if a Buyer is putting down enough money, if the loan to value ratio is low enough, then some banks won’t care if the appraisal is slightly lower than the sales price.
I’ll admit - the monsoons are one of my favorite times in Tucson. I grew up in a city where we averaged maybe 3″ of rain per year. So these huge rain and thunder and lightening storms that cross our town mid Summer are fascinating to me. (Tucson averages closer to 12″ of rain per year, by the way.)
These huge storms build up in the Southeast and move across the town heading Northwest, usually mid to late afternoon. It’s really quite amazing, you can look at the clouds and see exactly where it is raining and where it isn’t. You can look West and see a couple of high fluffy white clouds, and the next moment look East and see nothing but dark low thunderclouds.
This year’s monsoons seem a bit tame compared to other years, but at times, the storms are incredibly violent, just ripping through the city, dropping rain and lightning bolts, with a low grumble of thunder to accompany its trip across town.
And then you get fabulous sunsets, like this one that I just caught the end of:
Number 9 - Community Property
Arizona is a Community Property state, which means that anytime a husband and wife purchase property in Tucson, it is assumed that they’ll hold title together, equally, as community property.
When one spouse tries to buy property on their own, the other spouse usually has to explicitly give up their rights to that property.
Married couples can decide to hold title to a property in other ways, of course, but only married couples may hold property as community property. Other options may include:
When anyone buys property in Tucson, the escrow officer will send out a form, asking how you want to hold title. There can be significant tax and legal implications depending on what you choose - not only in who eventually ends up with the property when you die, but what happens to it should you divorce, who is responsible for the taxes, and other fun topics.
Here’s a link to a short description of each type, and another link to a more indepth discussion of the more common ways of holding title, as provided by Title Security Agency.
Summary of the Top Ten Things to Know about Tucson Real Estate so Far:
So I was helping out a fellow agent the other day. Her clients had purchased a home, started moving in, went out of town for a short time, and promptly lost their house keys. Frantic and frustrated, they asked if we could have the house re-keyed before they returned.
And being nice sort of agents, we said okay.
I was a little worried that I wouldn’t be able to have it done. I mean, I’m calling a locksmith on a house I don’t own, asking them to break in, basically, re-key all the doors, hand me a key, and leave. Turns out, it was a lot easier than I thought. The lady who scheduled the appointment just asked me to bring a copy of the contract, some kind of proof that I was connected to the deal.
No problemo.
So I meet the locksmith at the house, and after walking up to the door and warning me that this could take 30 seconds or it could take 10 minutes, he sticks a little thingy into the deadlock, goes jiggle-jiggle, and 5 seconds later, we’re in.
I mean, literally, it took him five seconds.
So I’m sitting there waiting for him to finish re-keying the locks, thinking about how I no longer feel safe behind my locked doors if it only takes a handful of seconds to get in. We got to talking about locks and which is better or worse, the different kinds, and I asked if there was anything that could be done to keep someone from coming into my house so quickly.
And while he said that no lock is unpickable if someone is really determined and has enough time, that there are several things you can do to keep the vast majority of people from picking your lock.
He mentioned locks with something called ‘mushroom pins.’ A little research tells me they’re also called security pins or spool pins, and make the lock harder to pick.
Good to know, good to know.
Last week, we talked about buying a home with little or no money down. Here’s another aspect we didn’t cover in that discussion, from a Seller’s perspective.
Here’s the common scenario: let’s say you just accepted an offer and agreed to pay 3% in down payment and an additional 3% in closing costs to the Buyer. And the Buyer does their inspections and then they ask for repairs.
Now, in Tucson, when a Buyer asks for repairs, they have to actually ask for the repairs, they can’t just demand money or a price reduction. What a Buyer can do, however, is ask for the Seller to either 1) do repairs A, B, and C, OR 2) credit the buyer $XYZ to go towards their closing costs instead of doing any repairs.
Many Sellers just throw money at the repairs instead of actually having them done, which saves the Seller some hassle, and the Buyer gets to pick the service provider that they like best. Sometimes, it’s the best solution all around.
BUT - when a Buyer is already getting their down payment and all of their closing costs paid by the Seller, then often the Seller can’t just throw more money at the repairs. The Buyer can’t accept any more money and still get the loan, all the costs are already being paid. The Sellers only choice is to actually have the repairs done.
(Well - potentially another choice would be to buy down the Buyer’s interest rate, and throw money at that instead of repairs, but you’d have to negotiate all that out in a very small window of time and you’d have to run it by the lender to make sure it was all fine with their guidelines, that you weren’t bumping up against other seller contribution limits.)
Just something to consider when you’re contemplating a Buyer’s offer.
An opinion piece at AZBiz.com yesterday makes the argument that house values around the University of Arizona will hold steady and prices will rise because the University has access to several sources of deep pockets and will not see the outsourcing or down-sizing that a corporation might.
It says:
“It is a no-brainer that even if we have a deep recession, the University of Arizona will have access to federal, state,and private-sector money and that it will not see the outsourcing, downsizing, and layoffs that will beset U.S. corporations. Research universities will be some of the most stable institutions in the country.
As oil prices increase, University of Arizona employees will choose housing where they can walk or bike to work. Housing to the east and west of the UA campus will continue to hold its value compared to the general housing market.”
One would assume the areas north and south of the University would share the same fate.
Let’s see. The average sales price, roughly a mile radius around the University, over time:
An admittedly crude analysis, but something that will be interesting to watch.
I spotted this yellow plant the other day - the yellow one is a little rare around here. Both are Birds of Paradise, but the orange/red flower one is the one you see most often.
I found the yellow ones once at a nursery and planted two in my front yard. But then they died. I’ve always been better at killing plants than keeping them. I’m not much of a ‘plant person,’ but this is one of a handful of local plants that I can identify.
Check out this Flickr group, with amazing pictures of the fabulous flowering Bird of Paradise, an ever popular plant for Tucson.
Previously, I had defined Active Contingent and Active CAPA for the Tucson MLS in this post.
There’s a small update to that.
Because of all of the short sales in Tucson, the Tucson MLS decided in March to make the following recommendation:
Effective immediately, the MLS Board of Directors recommends the following regarding Short Sales: Short Sales are to be reported as ‘Active CAPA’ if there is supporting language written into the Purchase Contract. If the language supporting ‘Active Capa’ is not present and written into the Purchase Contract, the status should be reported as ‘Active Contingent’. This is in addition to the statement ‘Short Sale, subject to court or lender approval’ being written into the Agent Only Remarks.
What that means:
If a home is listed as a short sale and the status is Active CAPA, then most likely, the Sellers have an offer in hand from a Buyer and are negotiating with the bank, but have not yet received an approval to sell the home at that price from the bank.
This can be a long waiting period: weeks, sometimes months.
Be aware though - most often in agent provided searches of the Tucson MLS system, Active CAPA listings are displayed alongside regular Active and Active Contingent listings. The smart bet is to search on a site that will show you the status of the listings.
The overview, as Kelley sees it:
or Download Tucson Market Stats for June 2008 here (MP3)
You can also read the written overview, on that Tucson Market Stats link at the top of the page. Or, you can subscribe to my Tucson Market Reports podcast here, just FYI.
The Quick Numbers:
Remember to check out the individual areas in the link at the top of the page. Click on Tucson Market Stats, and you’ll see the 9 areas of Tucson as links underneath.
Data gathered from the Tucson MLS and is deemed reliable but not guaranteed. Figures quoted here include only single family homes, townhomes, and condos in the 9 areas that make up the Greater Tucson Area: NW, N, NE, W, C, E, SW, S, and SE.
Kelley Koehler
(520) 918-5246
www.flickr.com
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