Teachable Moments

I had to use my big-girl Designated Broker voice on Thursday. I ended up escalating my concerns to the branch manager of the title company. Under no circumstances should my sellers have signed without my knowledge or me reviewing their documents. Ever. And that goes for every client who  walks into their office. Always.

Think of it this way: if you have food allergies and go to a restuarnt. Would you not inquire about every ingredient in the house special, just to make sure you don't suddenly die on the resturant's floor? I belive you would.

As an agent, that's what I do. I make sure every ingredient--or line item on the settlement statement--is accounted for.

Was there a promissory note slipped in at the last minute for an assessment that the seller did not know about? "It doesn't happen!" is the wrong answer. I have seen it happen. By the way, my seller did not owe the money. But had they signed and it had been recorded that way, it would have been a circus of hoops and paperwork to unsign!

What about a seller who has filed bankruptcy, but an unscrupulous creditor attaches a lien to their property. When the seller signs, they find out they aren't getting a huge check, but instead, they are "supposed to" pay a defaulted creditor. Don't laugh there. This is what a certain bank in West Georgia tried with me. Ask the US Bankruptcy Trustee how well that worked out for that bank.

Title companies don't know the history of the seller or buyer. They just know there are documents to put in front of our clients to sign. As agents, our job is to protect our clients. We have the history and the background. We look for those potential issues. We work with the title officer to make sure our clients are protected.

It is our job.

I ended up discussing with the branch manager that the purpose of my call was to create a teachable moment for her escrow officer, because that is what I wanted. Well, that, and I wanted to make sure my naive sellers got their equity without a hitch.

Why I Write (and Sometimes Drink)

About an hour ago, I asked my friend Kaye the Broker for a level-check. Should I be some level of furious that the title company called my condo sellers into sign without sending me the settlement statement AND not telling me they were coming into sign in the first place? You know, in case I wanted to check the numbers first AND wanted to go with my clients? That, by the way, would be my job and what my clients hired me to do. 

Her reply was, "Be tactful."

I am not feeling tactful at the moment, so I settled for an e-mail to the title officer saying, "How awesome they got to sign! Any chance I could see the settlement statement please?"

See! I said please.

And lest you think that was a wee bit snarky, after 51 years, that was as tactful as I could muster. Not sorry. But then again, I haven't seen the settlement statement just yet either. So, my level of decorum can possibly go down. Fortunately, I know how to soften a blow with three little words, "Bless your heart..."

This is the second awful transaction in a row I have had with this particular title and escrow company. In both cases, the buyer picked the title company. Per the contract, they have that right. However, I think at this point, I am going to start pushing back on this particular contract item. I hate incompetence. I my sellers may potentially be put into a harmful situation (what on earth did they sign???). I hate that I need to be tactful to a high-level of incompetence. Stuff like this gives the real estate industry a bad name with the public.

Trusted Advisor University

Every month my pal Sally and I meet for a cauliflower crust pizza lunch and then head off to TAU--Trusted Advisor University. It is free for us real estate folks. Essentially, us participants get together and listen to a fabulous and knowledgeable speaker give the state of the market speech. It is 90 minutes of charts and graphs and other fascinating bits of knowledge to help us be better at what we do. Here's a few tid-bits:

• There are currently 23 homes for sale in Gilbert AZ under $300,000. There are 240,000 residents in Gilbert. So, yes, a shortage.
• The home market index for the greater Phoenix metro area is 200.7. If I may break that down. Think of an index of 100 as "balanced"--just enough buyers and sellers. This means there are 2 buyers for every home for sale.
• The average percentage of sold price versus listing price (under $500,000)  right now is approximately 103 percent. So homes are selling for 3 percent higher than their list price.
• Even if there is an upcoming recession, recessions don't tend to hurt real estate prices and inventory. Historically, the two recessions that impacted real estate pricing and inventory in the last 50 years were in 1991 and 2008. Given there are currently in the Phoenix metro market 2 buyers for every 1 home on the market, a dip in the market at this point, would mean we might have 1 buyer for every 1 home on the market. Also, "recessions" mean two quarters of a flat economy. Historically, we are through a recession by the time someone gets around to announcing we are in a recession. The obvious exception is 2008. The second obvious exception is 1929-1930. Those two recessions lasted a bit longer and if you look at some of the economic policies in place, that might have contributed to the length of the economic downturn. But what do I know? 
• Condos can now receive FHA certification again.
• Most homes being built in the Phoenix metro area right now are multi-family. This is partially because of the lack of land available to build homes. It is also because there is such a huge demand for affordable housing right now.
• Roughly 95 percent of the agents in the room had their license less than 5 years. I found that fascinating. I am considered an "old timer" because I was around through the boom of 2004 and the bust of 2007.

The Great Road Trip

Let me introduce you to David. David is the oldest of Bonus Dad's two sons. The younger one, Icky, is a bonus brother. David is not. I dated David for about 20 minutes when I was 17 and I just simply can't refer to him as a brother. He laughs when I tell him that. David is a Bonus Good Friend. I am very grateful to him and his wife who opened up their home to me last week when it looked like I was going to be stranded in Chicago overnight because of airline travel hell. Oh, I should probably add, David, his lovely wife and two daughters live in Chicago.

Right now though David is up at the charming 1936 cottage in mid-state Michigan with Bonus Dad and me. He has inherited the cottage from Bonus Mom when she passed and he wants to rebuild. I can't say I blame him. The basement is caving in and--it was nice of them not to tell me this until last night at midnight--there has been a bat spotted hanging around the basement, with a few random theories thrown out about how it got down there to begin with.

The home was hodge-podge built since 1936, with the fireplace and basement added in the 1940s. The downstairs bath was added in the 1950s. The dining room and 55 degree staircase was added in the early 1960s. The upstairs was expanded in the 1990s. At that time, the roof was raised so that even us short people could stand up straight on the second floor. The upstairs half bathroom added in 2002. I don't know when the screened in porch became a room.

This is rural America. I would like to think there were permits pulled and licensed contractors involved. Most likely. Probably. Maybe. But dang! This place is charming.

Anyway, David is rebuilding this sweet cottage. He has decided he wants to explore having a modular home put on the property. The closest modular home manufacturer is in Iron Mountain Michigan, which is only a 6-ish hour drive away. Mind you, there are dealers who sell this particular home much, much closer, but the actual buildings are built in Iron Mountain. Bonus Dad is a retired engineer and who doesn't love a good road trip? So, we went to investigate.

Iron Mountain is in Michigan but on the Wisconsin border.

We arrived for our factory tour at 4 p.m. Thursday, only because Iron Mountain is in a different time zone. Otherwise, we arrived at 5 p.m., Eastern Time. We left that morning around 9:30, which would have been grand, except the bridge traffic was down to one lane. There was a boat-load of construction on Highway 2 and the Bob's Bigboy in St. Ignace had more than 10 employees working for less than 10 patrons, but nobody, nobody I tell you!, could figure out how to get a burger cooked.

I wish I had taken pictures of the building process. It was truly fascinating! It is an assembly line, with each 50X20 module built on a separate stage. Each module is sent through the assembly line, where different aspects such as electricity and plumbing or cabinets are added. A house can have as many modules as the plans call for. So a 2 story four bedroom home could be 4 to 6 blocks, linked together. All of the homes are built, inside out, so the exterior walls are the last to go on. This way they can adjust whatever they need to adjust (outlets, insulation, etc.) as the process goes through. Is it cost-effective way to build a home? I don't know.

For those of you architect types or just have a curiosity, here is the web site: https://dickinsonhomes.com/

We stayed the night in a hotel that this company had built in this fashion. We were told it was 30 separate modules, had we not been told this, I wouldn't have known. It looked like a normal building with a brick facade.

In Michigan, homes are built on basements or crawlspaces, so that the foundation doesn't crack when the ground freezes and thaws. This company doesn't build basements, but they do subcontract out the work so they have the right specifications. Also, as one could imagine, building out here is not a year-round type of occupation. If one is building a modular home, it can't be placed on the site until the weather is good.

The next day we toured the models and David got a better sense of what he wanted. They gave him tons of plans to review. I guarantee Mrs. David is going to have a lot of opinions that she doesn't know she is going to have once they get this party started. I foresee a road trip for the David family to Iron Mountain in the future.

David wanted me to go with them on the trip because I know something about houses. I don't know how helpful I was. I asked a few questions that seemed reasonable. But let's face it, I know about Arizona houses. Anyway, I need to find an accountant, because I am now wondering if I can write off part of this trip. Even if I can't, it was a lot of fun to talk shop and see how these homes were made.

The Devil We Know

I love it up here. 

I am in Michigan. I have been to most every part of Michigan since Tuesday. Is it really only Saturday?

Right now I am at the dining room table in this amazingly charming 1936 cottage. Bonus Dad is in a recliner on his laptop. Neither of us are talking. Instead, we are both comfortably sharing a space, doing our own thing. Out the window, I have a view of the lake, where the loons and geese are hanging out. Today's high might be 75 degrees.  All is right in this little patch of the world. This is the way summer should be.

Yesterday morning, Marty accepted a job in the swamp. I got the news while we (Bonus Dad, his son and I) were in Iron Mountain--which is on the border of Wisconsin in the Upper Michigan Peninsula (More on that trip later). I then spent the next three hours of our trip across the UP (Upper Peninsula) when I had cell service, texting and e-mailing those who needed to know. I talked to investors, contractors and family. I called Uncle Sunshine. I asked Bonus Dad if I could stay until October instead of going home and packing up my life (He said sure!). In between those chats, texts and calls, I enjoyed the view of Lake Michigan next to Highway 2. Blue skies, blue water and green trees.

This morning, Marty called me at 4:50 a.m. his time to tell me he changed his mind. This wasn't the right time/opportunity or something. In any case, he has chosen to unaccept a job he accepted. We aren't moving. I asked him to please stop the job hunt for now. It is hard on the kids. It is hard on my digestive track. It is hard on friends and family who are riding this roller coaster with us.

Because Marty works for a defense contractor who just saw some astronomical loss from their commercial division, who knows if he has a job in six months. That's ok. We will deal with that then. But we will deal with it in the Phoenix metro area.

Eventually we will leave AZ. I don't like it there. It is too hot. It is too crowded. But for now it is home. It is the devil I know. Eventually I will meet the angel I don't know.

Happy Problems

Though the house isn't going on the market for a few more weeks, there is work to be done for my listing in Peoria. My graphic artist friend Scott needs to make postcards for me. I need to put the listing on a few super-secret FB sites only real estate agents can access. There is a post to order. Photography to schedule. There might even be tours to coordinate if we get that far.

Then there is the nagging issue that we haven't even priced the house because the market is so fluid right now and prices are going up as I breathe.

Happy problems.

Muffy is in Charge

Today is the scheduled Community Outreach meeting. I will be missing it because I should be on a layover in Chicago by the time the meeting is called to order.

What a bummer! I won't be there to hear Muffy summarily shut down everyone else's ideas when she calls for a discussion, explaining, "it won't work," before the unsuspecting person can even finish their point. Muffy will then ask if anyone else has any better ideas and when nobody will speak, she will just announce everything will be done her way. It is like Junior High without the the protection of a juvenile criminal record if she purposely accidentally got bitch-slapped by an annoyed horde of real estate professionals.

I looked over the agenda yesterday. The Community Outreach Committee is still battling the same challenges it had last time I went: they need donations for lockboxes for the first responders. They also need to "find" a way to write letters to soldiers. And, they need to find speakers for the Critical Needs fund.

It seems to me an effective Chairperson should be looking for long-term solutions for such things. But what do I know? I am not in charge.

Random Adventures

Marty had five job interviews in a week. FIVE! They were with three different places. I didn't do the interviewing, but I am exhausted.

________________________

The buyers of the cute little condo felt that perhaps their demands were a tad... demanding and backed down. Good thing, because, even though the place is under contract, I have had two agents show the place.

________________________

Bonus Dad's son called me last week, "What do you want to do when you get here?" he asked. I said, "I want to read books, do jigsaw puzzles and laugh. And most of all, I don't want to make any decisions," was my answer. Then he asked me if I needed to go visit a winery up in Northern Michigan while I was there. I guess my mood was oozing through the phone. And yes, I want to go to the winery.

________________________

Bad MLS Pictures, Swamp Edition

It is late at night and I can't sleep. Marty's interviews are going swimmingly. Will he find a job 3,000 miles away? I have no idea. But, in the event he does, I looked at a few homes for rent that might be a good fit. At the risk of offending home hunters everywhere, if you have seen one, you have seen them all. It is for that reason, I believe the agents who listed these properties didn't have much to work with.

This is the primary photo on this listing. Yep. The house comes with paint buckets. 

This gem includes a door. 

This house has an updated master bath. This isn't the master bath. 

Here is the master bath. We, at the Sunshine home, scratched our heads looking at the shower curtain rod that extends across the potty. I live with a teenage boy. The jokes were flying. 

This house comes with chemicals located right next to the gas hot water heater. Did I ever tell you about my first listing? The garage caught fire when the chemicals ignited the gas hot water heater. 

This house includes a potty. Squee! 

This home has walls! Double squee! 

And who wouldn't want to see the backside of a garage door as the primary photo? Wouldn't that just pique your curiosity to click on the listing? 

And finally, Polly asked what the rest of us were thinking.

Do the dudes in the picture come with the home? 

The 2019 Broker Lunch

I was only allergic to half
of the menu items. 

I went to the annual Broker Lunch last week. It was a nice distraction from Marty's interview, which was scheduled for that exact time. Last year I went with El Jefe*, who is a fun person, but doesn't exactly have the social graces one might look for in a dining accomplice at a professional function. I didn't make that mistake again.

This year, a friend and fellow broker and I carpooled. I haven't introduced my blog readers to my Broker friend, Kaye. But I adore her. I strive daily to be half as wonderful as her--which I fail miserably at. I hope some day to be half as worthy as simply a human. Kaye lives close by and we meet once a week for tea, or if the weather is permitting, a walk. The world needs more people like Kaye.

No, the world needs all people to be like Kaye.

On my other side, was another delight, Beth. I have met Beth a few times through Jane of all people. Beth is also a designated broker. Between the two of them, and others at our table, great conversation ensued. I even felt social and slightly less introverted.

Anyway, back to the lunch. The food was adequate. The first speaker was dynamic and interesting. He talked about cyber security. By the way, please don't use the same password for everything. And Dropbox is easily hacked. And change your password on a regular basis. Small businesses are the leading victims of cyber hacking and ransom ware. Good stuff, but scary.

The Association President explaining,
"Copper State Association" isn't
catchy enough.

We had another speaker who was the legal council from the Arizona Association of Realtors. Usually I like hearing the lawyers speak. However, she wasn't very well informed and talked to us brokers about matters that weren't relevant. That was disappointing.

At the end, we were give some exciting-to-someone news. We have a new name for our Realtor Association! We will be called--and I am not making this up--the, "West South East Valley Association of Realtors". WSEAR for short.

There had been a vote weeks back. I voted for "Copper State Realtor Association," which was one of the choices on the ballot. I must have been in the minority, because apparently most found West South East Valley Association of Realtors to be a more exciting name.


*In case you are interested, here is last year's lunch post. https://adventureswithrealestate.blogspot.com/2018/08/lunch-with-el-jefe.html

Seller's Inspection Respsonse

Yesterday I met the seller and her handyman at her cute little condo to go over the extensive list of disapproved items the buyer wants fixed. Half the stuff on the buyer's list falls into the, "do the buyers not understand this is a seller's market?" Seriously. My clients are not replacing the bathroom vanity because it is ugly. Nor are they hiring a licensed plumber to (and I am not making this up), "caulk and grout the shower." And (I am not making this up either) they aren't replacing a functioning and fully intact kitchen window.

When I wrote up the reply, I did have a bit of fun stating the seller was not responsible for another unit's leaking pipe and therefore could not fix it. Nor could the seller treat for termites when the buyer did not provide evidence of termites. Hell has no wrath like a girl with a public relations background who can write with big words.

My favorite items included explaining to the buyer that the seller could not duplicate an issue with "inoperable" the living room window (I opened it without a problem). Nor could they duplicate an issue with "inoperable" closet doors. They opened. They closed. I am not sure what else they are supposed to do.

And finally, I have no idea what is wrong with the brand new exhaust fan in the bathroom. But it worked fine when we turned it on.

"Is it supposed to do anything else?" my client asked the handyman. "I don't think so." He replied. "Maybe a light show?" I asked. "I don't have the box anymore, but I can contact the manufacturer," he answered. He might have been serious. After all, he is pretty helpful.

We are returning our list back to the buyer's agent. I am curious what will happen. However, if it is going to fall out of escrow, I would prefer it happen before the weekend so we can get it back on the market.

Pro Tip

Just a reminder folks, the "A" in Zillow stands for "Accuracy."

List of Repairs

We received our repair requests from the buyer of the cute little condo. They included such directives as:

"Have licensed plumber caulk bathroom tub," and "label main shut-off valve," which is outside and obviously a shut-off valve. But hey! I have a label maker if my sellers need to borrow it.

Then there's my favorite: "Add screw to door hinge."

And my other favorite: "Treat for termites" even though there is no evidence of termites and the the buyer did not pay to have a termite inspection performed. So is the seller supposed to infest the property with termites so they can then treat it?

And let's not forget their request to have another unit's leaking pipe fixed. Seems to me, they might have scored some good neighbor points by knocking on the door and alerting the owner of the leaking pipe. But, what do I know.

There were a boatload more repairs along these lines too. None of them are huge. But the list is super-duper long.

However, the house is as-is. The contract says so.

The agent and I discussed what "as is" meant, and she swears the contract doesn't say the buyer is purchasing in as-is condition. I suggested she might want to read the contract again, though I said so in a nicer way. I really do like her.

Curious as to why she would give me such an extensive laundry list of mostly petty items, I looked her up. She has done six sales since 2015. So, I'm guessing she doesn't have a lot of experience. I may be guessing about her experience but I am certain she doesn't know what is in the Arizona purchase contract.

My clients are going to have a minor coronary when they see this list. Their first response will be to walk away. I can't say I blame them. I have a call into their handyman, asking for quotes as well. I would rather go in proactive than reactive. It is going to take some convincing for my sellers to be cooperative when they see this petty list.

Tour Results

The tour last week was loads of fun. Overall, there were about 15 of us, caravaning along. In our vehicle, there were 5 of us, crammed into someone's SUV, driving around Tempe, discussing the market and other real estate topics that would make the average person's eyes glaze over. But we loved it.

Pro tip: If you aren't the driver on these tours, always volunteer to be the navigator, so you get the other front seat.

I navigated us to homes ranging from a half acre, $649,000 property with a new, but but buckling, roof to my cute little condo. At each property, the agent said a few words and asked for specific feedback.

The agents were fun, which alwasy helps. We even had the know-it-all hot-shot sales guy who told us more than once how he is a know-it-all hot-shot. He was very pleasant but was floored when I mentioned (in a loving way) that a $649,000 home should come with a landscaped front yard and a new roof that isn't buckling. But, that's just me.

We saw a brownstone in the heart of downtown Tempe that, if anywhere else, would have been a darling property. However, this one backed up to some seriously scary apartments. The owner has had this house for a year and made $40,000 profit as an Air BNB. Why is she selling? I am not sure. The agent kept saying it "should" appeal to college professors. Possibly. But most college professors don't want to live in student housing overlooking the slums.

We also saw a few just average homes. All were quirky and cute. One house had been rebuilt from the studs up, only because it caught fire two years ago. There was a tri-level that might, possibly be more outdated than my tri-level (Mr. Know-it-all hot-shot kept telling the listing agent "nobody in their right minds would ever live in a tri-level."). Two properties backed major roads. Most were updated to the hilt. One was not, and had that 1990's faux paint on the walls--a bargain at $529,000! All of these agents asked for specific feedback ("If you would all mention that my client needs to paint the turquoise faux painted wall... that'd be great!").

The last stop on the tour was my cute little condo. It was the only property under $350,000 on the entire tour. I didn't want any particular feedback. I just wanted exposure. However, there was one major comment everyone had: the place has a peculiar smell. I suspect it was from the carpet cleaner last week, combined with the Lysol lavender scent I frantically sprayed earlier that day. But, I don't need to mention it to my sellers at this time. Why? Because while we were at my condo, sipping our cold bottled water I brought over earlier that day, I got a full price offer!

Another Interview

This would be my baseball choices.

Since my last post, Marty has another job interview scheduled. This one is with a place where he went through three interviews last year, only to come in second. They picked someone locally. The same folks from last year remembered him and want to talk to him again.

The interview is scheduled for next week. The job is in the swamp somewhere, but not the same location as this week's set of interviews. So far I have done nothing to research this city, partially because I have done lots of research before. And partially because I am done getting caught up in everything. I know what I need to know. The Trader Joe's in the Southern part of the city. There are two Costcos.

Also of importance, the closest MLB team is an American League team (sigh), a little less than two hours away. There is another MLB team--a National League team--a little more than two hours away in a different direction. But there is a reason they only have something like 18 fans (one of which, coincidentally, is my brother). I may end up giving up baseball if Marty gets a job in this town.

This new company doesn't pay as well as the other place he is interviewing, but has a few major advantages that are hard to beat. I think we would all prefer this one come out on top between the two. If there has to be a winner at all.

The entire experience is making my head swim and my stomach lurch. Most likely nothing will come of it. After all, they didn't want him after three interviews last time, right??

I don't mind moving and starting a new adventure. I really don't. I do mind the waiting and wondering.

Break Out the Tums

Hopefully the Costco sells these.

Marty has a second interview set up. It is a company that he says is a "good fit." The salary is reasonable. It doesn't help the build up of stomach acid as we go through this process again, but here we are. Maybe I will get distracted by something exciting like a real estate client.

The location is unknown, as I haven't spent too much time researching this place. My rule in these circumstances is to allow myself to look up one major fact a day. In this case, I know the city's population is 56,000 and the overall metro population is around 700,000. That sounds down right spacious.

I have gone on to one of the for rent web sites and sorta looked at housing. Marty joined me and I made him promise not to get a home without a pantry. With a dog, cat and bankruptcy, it will probably be slim pickings. However, homes tend to be on the market there for about 45 days, so perhaps there will be a landlord who is moderately motivated and find us downright charming.

This place also a Trader Joe's (Marty has a bit of a bromance going with the guy) and a Costco nearby. So, civilization. However, there's no reasonable baseball team to speak of in the area. And let's not forget this place is still in the swamp. But swamps, MLB and shopping are not as pressing. First he has to get through the second interview.

My stomach cannot take a heck of a lot more of this.

Touring

My cute little condo is going on tour this morning. To prepare, I whisked over at some early hour, shoved a bunch of bottles of water in the fridge, fluffed up the bathroom towels, sprayed some air freshner, and made sure there was toilet paper in the bathrooms. I also turned down the air, swept the porch and turned on the interior lights.

The way the tour works is some enterprising vendor, such as a mortgage company or title office, gets a bunch of agents who are somewhat desperate to have their home shown and all of us agents as well as any strays caravan around, property to property, oohing and ahhing over each home. This is not a tour for the general public, only for those of us in the industry.

As we do so, we are to give feedback about the listings. How is the curb appeal? Price? Does the seller need to declutter? All of the feedback is then compiled and the agent takes it back to their sellers. It is a handy marketing tool that allows for some pretty nice exposure for our sellers.

There are times agents specifically ask for feedback. Such ask, "If you think the home would show better if the six cat boxes are clean, please say so," which we do. Then the feedback is coming from a neutral third party and not the selling agent who has been bitching and moaning about the cat boxes for weeks.

Generally, the vendors have brought in lunch or in some cases, a party bus so we don't have to drive ourselves. In return, we listen to a five minute spiel about why their home inspection company/lending products/escrow office totally rocks and we should use them.

Often there is some sort of vote of "best home on tour" where the listing agent gets to proudly take a sign rider (often for only 30 days or so) to hang at their listing as a way to entice buyers. ("Stop the car, Elmo! This home was best on tour! Did you see that??? We must buy it right now!" "That's nice Mildred. What does best on tour mean anyway?" "I don't know Elmo, but it sounds important.") Sometimes being best on tour is kind of a double edge sword, because the seller wants to know if their home is so great how come it hasn't sold just yet?? That's always fun. Some of my homes have won best on tour before.

This past week I invited my realtor pal, John to tag along. He is going through a sales dry spell, and is trying to drum up business. Sometimes it helps to meet other agents and get some fresh perspectives from folks who have also gone through dry spells. It doesn't hurt to also meet other agents who might be able to let you hold their home open too. And if nothing else, just see what inventory is out there for sale. Unfortunately John was busy, but he was very grateful for the invite.

Right now there is a challenge with few listings on the market so I did not know for sure whether or not this tour was going to happen until last night. I suppose it is a happy problem, or it would be if it were my home that fell out of the tour because it was under contract. But my cute little condo is still looking for a new owner. Maybe one of these agents will bring me a buyer.

Adventures in August

August is a busy month around these parts. Buckaroo started fire fighter school today. I love the fact he has a servant's heart and this is what he really wants to do. I don't love the fact my sweet little Buckaroo wants to put himself in danger.

Buckaroo also starts Mesa Community College in a few weeks. He is only taking two classes, and one is golf, but it is still a transition for him. And, like his mom, transitions aren't easy.

Additionally, Polly is starting Mesa Community College in a few weeks. However, she isn't going to the small satellite campus she's been at for years. She is going to the big, scary campus for four classes. Like her dad, she doesn't like changes, and this took a bit of coaxing for her to try something new.

Polly also has a birthday coming up. So do four other family members. August is our big birthday month. One of Polly's birthday gifts was a trip up north this past weekend to go hiking. Unfortunately, it was 100 degrees in Sedona. Then there was a spectacular monsoon and we saw and felt lightening strike inches from us. To be fair, we were sitting under the awning at the Sonic in Cottonwood, waiting out the storm when the lightening struck.

I have a trip planned to visit Bonus Dad later this month. We have talked about a few things to do. I don't care if all we do is sit around reading books and talking. However, I suspect he likes to be more active and all host-like when I come. It turns out Bonus Dad's son and two of the grand babies (who are 8 and 6) may still be visiting too, so that will be extra fun as well.

Then there's real estate. My little condo in Tempe took a price reduction today. That isn't a surprise, as we had agreed to lower the price after a certain amount of time. The condo is going on tour in a few days and hopefully I will get some feedback. At this point, I think it is a matter of just finding a buyer. Also, I am asking my realtor pal, John if he wants to hold it open this weekend.

I have another listing coming up too. It won't be on the market until September. But I will be able to start advertising it shortly.

There are other possible changes going on too. Some people make big transitions around the new year. Not me. I don't like transition and it takes me until around August to get everything in place. August is exhausting me. And it is only the 5th.

Flood of Frustration

It turns out the plumbing issue at the cute little condo only intensified. My seller, wanting to make sure there wouldn't be any more leaks, turned the water valve under the sink. It broke in her hand. Horrified, she turned the next one. It broke. And then the next one. And well, you guessed it.

And then my sweet seller waited until she got me on the phone before she completely lost her temper.

There are times all one can do is listen and commiserate, because logic wasn't going to get us anywhere. She wasn't interested in logic, she was interested in vengeance and justice.

The next day, Abe, my painter and handyman friend (and also a designated broker) sent his crew over to take care of the issue. Abe called me and agreed, this was probably a horrible coincidence. After all the plumbing is almost 40 years old. There is corrosion from past issues. So, basically, the timing was bad. But, on the bright side, it is now fixed.

"Do you think you could explain to her that the former buyers did not sabotage this place?" I asked Abe.

"I already did." Abe replied, then optimistically added, "It might take a couple of days to sink in."

I am pretty sure there is no possibility the sellers will ever be convinced this issue wasn't caused by bad timing. The only action that might make this better for them is probably a purchase contract. I had a lot of showings over the weekend, so who knows! Maybe that is all that will be needed to make flood of frustration go away.

Discount Brokerages

The bane of any active realtor's existence right now is "discount" brokerages who promise the public a lower commission for the exact same services I offer. The general public tends not to be sophisticated buyers and sellers, given they don't buy and sell regularly. Therefore, the buyers and sellers aren't necessarily calculating what this really means. However, the discount brokerages make their services sound sexy. 

For example, there is a company out there who has a color in its name. They are charging a 1% to 1.5% commission to the seller (with the phrase "buyer's commission not included" in small print). They are also charging a flat dollar amount starting at $6,500 along with the percentage. So think of it this way, the seller's commission has two parts and then there is the buyer's commission.

Therefore the total commission is $6,500 plus 1 to 1.5% of the sales price PLUS the buyer's commission. If a home costs $240,000 that would generally be around $16,000.

If one were to use a traditional method of just a straight commission, well you can do the math, but I guarantee it is lower.* By the way, in the Phoenix metro market, most homes do not cost $240,000.

The same holds true with buyers. In this model, these buyers are to pay a flat fee (often up front before any home is found) and a percentage commission to their agent. If the sellers aren't offering this buyer commission, then the buyers are on the hook to pay their agents. Imagine if a buyer doesn't have it but signed a contract to pay it no matter what? Don't be shocked, it is happening. Or, imagine this.

And then, if all goes well, this discount brokerage is offering a rebate back to buyers (subject to lender approval) when the home closes of somewhere in the half a percent range. Where does this money come from? The seller's proceeds actually, but on paper it looks like a virtuous brokerage that cares about its clients.

It is all convoluted, but the buyers and sellers don't know any better. They aren't sitting around doing the math. They are seeing "discount!" This model is becoming popular with the fly by night companies coming into town, touting "experienced agents." Whatever. These "experienced agents"  are the same agents who worked for 21st Century, Executive Realty or Max/Re three months earlier and jumped ship for better leads.

I am not the only one frustrated by this smoke and mirrors game. I talk to other agents often who know the public is being duped. We don't have the capital to fight this. Nor do I have the time. Besides, it sounds great on the Internet. And we all know whatever is on the Internet, must be true.


*Note, I am not allowed, by law, to discuss actual commission percentages as we don't have a "typical" commission in my industry. That is the line that keeps me out of trouble with the powers that be. But for the example above, think around 6 percent.

The Great Flood

So, my cute little condo is back on the market after the buyer backed out because it wasn't what you might find on the HGTV. It is clean, with new carpet, paint, fixtures and a few other nicities. The price also reflects the fact there isn't a butler's pantry and wine cellar, so I think we already had that covered.

Anyway, I got a call today from an agent. She was there at the condo and there was a minor flood. It turns out the supply line at the toilet was leaking and water had seeped through the bathroom and into the hallway on to the new carpet. Fortunately, we live in the desert, so it isn't like this won't dry in a day.

Marty and I met the sellers at the home, who raised holy hell. The former buyer did this! No, probably not. This was the reason they backed out! Maybe. If it wasn't, they would have used it as a reason, that's for sure. My sellers were ready to sue! This would not be tolerated!

I hated to break the news to my folks, the cost of new supply line is about $14 and the carpet cleaner might be $30, so if they wanted to go in front of a judge and ask for $44, they were welcome to, but it might be hard to prove this wasn't an unfortunate coincidence.

The really good news is the agent showing the home has a buyer who might be interested. I was able to call off the other two showings until I know the carpet is dry (tomorrow) and have them reschedule. Hopefully it will have a new buyer soon, right after we get the toilet's supply line fixed.

A Simple Request

May I make a request for all of you buyers out there? Please, stop asking for Buckingham Palace when your budget is a Pomona Bungalow.

The cute little condo fell out of escrow. I am not surprised. The buyer's agent gave a lot of silly reasons why, but it boils down to this: the buyer wanted an updated, granite counter, indoor pool, built-in sauna, six bedroom, eight bath mansion inside this 1,000 square foot condo.

It is ok to want. It is not ok to expect a seller to remodel a home just to suit your needs. You can do that once, and only once, you move in. And in order to move in, you must first buy the place. Then you can install an atrium in the foyer. Well, you can as long as the home owner's assocaition is ok with it.