Commission – Paying the Realtor

Commission tends to be a dirty word, so I will try to clean it up a little bit here.   I am always amazed at how people think commission works, but I am going to give it to you straight…. at least as straight as I can, because Real Estate offices are changing their models somewhat.

In a typical office………   New Traditions Realty is what I would consider a typical/traditional office.

If I or any one of our Realtors would list your home, and we charged a 6% commission (this can be negotiable as well)  on the sales price, a $200,000 priced home would be charged $12,000 in commission.  The listing side of the transaction would typically receive 3% of the 6%, and the buyer’s agent (his/her brokerage) would receive the remaining 3%.    Once the brokerage receives the commission after closing, it is split between the brokerage and the agent.    I know that no one likes paying commission, and it does seem like a lot of money when a home is listed.   It is.  Realtors, however, do work as independent contractors, so they pay their own social security taxes, health insurance, and have no benefits.    When they receive their portion of the commission, they still have many expenses to pay.

That is a very short explanation of how it works, and as I mentioned, some brokerages are going in to different models and developing different options for agents.   If you would like more detail than this short description, let me know – my door is always open.

Real Estate looks like a lot of fun to people, and it is!!  I enjoy about 95% of it, but it is certainly not an easy job.  A good Realtor will go thru all the ups and downs of the process with you, and try to make your experience the best it can be.   The truth is, it takes a lot of steps to get to the end result and have a happy and satisfied client.   THAT IS ALWAYS OUR GOAL!

Thanks for your continued support!

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Phoenix rarely stays boring for long…..

Phoenix rarely stays boring for long….. but that is certainly where the Real Estate market is right now.    
Overall we are not seeing much change over the last few months and we are still eagerly waiting for some more significant developments, one way or the other. Boring is the worst situation if you are in the analysis and commentary business. (from Michael Orr, the Cromford Report)   Cromford report – snapshot June 8 2014
The better news is probably that active listings have dropped slightly, as demand has picked up just a little.   Regardless, homes are on the market longer, (the Valley average is about 82 days) as buyers have more choices and they are taking their time on making decisions on which home to purchase.   Most would say we are still in a buyer’s market, and Valley sellers have a hard time wrapping their heads around that.  Fortunately for sellers, prices have not fallen.  In fact, they have edged up just slightly over the past 9 months.  This is unusual in the Phoenix area, where we are used to seeing years with over 20% appreciation.
Boring is not so bad once in a while.  For a change, buyers are not feeling hurried to buy something without putting much thought into it.   Mortgage Rates remain very low, and payments are typically less than a rent payment for a similar sized home.
When Real Estate turns boring – Realtors get busier – We have to work harder in marketing our listings to make sure the right buyer sees your home.  We also spend more time with buyers as they narrow down their choices.   It is actually rather enjoyable when you do not have to scramble to beat the others with offers.
Have a great week everyone.   It is another hot hot week in Phoenix.

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Market shaping up as Buyer’s Market once again….. but for how long?

Good News goes to the Buyers this time!  Number of sales are down about 14% while inventory is up around 14% (year over year).  With more inventory, and fewer buyers – that makes for some good negotiating opportunities. We are starting to see seller paid closing costs again, and more repairs being agreed to by the seller before close of escrow.

The lower priced homes are still getting sold quickly, especially if the home is in good condition.  Most buyers will pay premium for a home that is move-in ready.  Keep that in mind if you are preparing to ready your home for sale.

OK – a little good news for my sellers –  Foreclosures continue to dwindle, and now make up just a small % of the inventory for sale.  The same holds true with Short Sales.  Therefore, the competition for sellers is now New Construction and your neighbor’s homes.

More good news – Even with more inventory – prices are holding steady.  We’ve had a really strong appreciation growth over the last 24 months – Holding steady is not that bad of a thing.

The buyers will jump off the fence soon.  Rates are still excellent and in many cases, a mortgage payment on the same house is less than the rent would cost.  I am looking forward to a good sales year in 2014!!

(all information here is for the metro Phoenix area)

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Real Estate Good News from Lea

Bits and Pieces of Real Estate News – to keep you informed.
The Big News last week was in Financing:  Borrowers who went through a bankruptcy, short sale, or foreclosure may now be able to borrow money for a home in less than 3 years – In fact, FHA announced that there are exceptions that will allow a family to get a mortgage just one year after the event.  This affects thousands of Arizona families, and could potentially increase the buyer pool dramatically to an already shortage of inventory.
Mortgage Delinquencies:  The proportion of homeowners with past-due home loans from April through June fell more sharply in Arizona than in any other state.  The current mortgage-delinquency rate is now at only at 3.58%. At the peak in 2009, over 11% of the state’s mortgages were delinquent.  We’ve come a long way on this roller coaster.
Year over year, In Arizona, we are at about a 20% increase in the median sales price – that is slightly lower than the previous 12 month period.  Prices seem to have stabilized to some degree – but the hot summer in Arizona always slows buyers down, and the rise in interest rates has also had an impact.  The full mls stat report if you would like to see all the numbers and statistics for the Valley:   stat-august-2013-1
There are still plenty of buyers, and the snowbirds will be back before we know it.   Many homeowners have been on the fence for a few years without knowing when to make the move – that can be a difficult decision.
Wondering what your home is worth? – just shoot me an email and let me know you would like to see the most recent comparable sales in your neighborhood –  I will deliver the results to your email.

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Appraisals – NOT an exact science.

Appraisals – We love them and we really dislike them!!   One thing is for sure – The appraisal on your home in the Phoenix Real Estate Market  would show a huge increase from a year ago – In fact, we now know that the late fall of 2011 was the market  low – we have been on the way up ever since and the improvement is still on the upward momentum.   Appraisals are not an exact science!  In fact, an appraisal can be very subjective to the person doing the job.  Of course, the homes used to compare  have to have similarities to the subject property, but choosing those comps is where the variance can come.  For instance, is a lot that backs to the golf course comparable to the house across the street that backs to the major street?   What about a detached work-shop? – How much value does that add?  Should a foreclosed home be used if you are comparing to a traditional homeowner that has meticulously cared for their home?  If a pool cost $50,000 to install, why does an appraisal only show an increased value of $15,000 to $20,000?   The business of appraising is not an exact science, and most Realtors are not appraisers – I am not!  I can provide a market analysis and give my “opinion” on the value of your home.  (A market analysis is free and an appraisal can cost between $300 – $500)  Another Realtor could come and do the same thing for you and come up with a different number.  The point is, when you are trying to place a value on your home – there can be be a difference of opinion.   I tell everyone – I can certainly give you a range of pricing that I feel the home would sell for, but a homeowner knows their home much better than I do or even an appraiser– Collectively, a list price can be derived.

When the appraisal is done as a part of a sales transaction – and the appraisal does not come in as high as the purchase contract price – there are 3 options available to the buyer of the property:

  • Ask the seller to reduce the price of the home (the seller does not have to reduce the price, but the buyer has the option of voiding the contract and receiving a refund of their earnest money)
  • Pay the difference in cash between the purchase price and the appraised price (the lender will only lend on the appraised price or the sales price – whichever is lower)
  • Negotiate the sales price after the appraisal – meeting in the middle!

For more information on appraisals – from the National Association of Realtors:

http://buyandsell.houselogic.com/articles/what-you-must-know-home-appraisals/

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“I am a Recovering Perfectionist”

I just read a Blog post from a fellow Realtor…. And although her story is much different than mine, these 5 words

stopped me cold, and I read them over and over:

“I am a recovering perfectionist”

I loved the sound of those words.   The author is just about my age too, and I think many of us coming of age in the 60’s and 70’s probably feel the same way.  Mom’s took care of the house and made sure dad and the kids were healthy and happy. We wanted to keep that tradition but also realized we could work outside the home and help with finances too.  Okay Okay….I know it is not just my generation. Many of you feel the same way, and think you can handle it all.
My personal resolution for 2013 is not to be so hard on myself if things do not go “perfectly”.  Al will tell you that I gave up on a “perfect”  house a long time ago. (That one was not too hard to give up).  Cooking is not so perfect either. Thank goodness there are now more than just a couple of restaurants in Queen Creek, and I found the Southwest Chicken Salad at McDonald’s is tasty, healthy, and an easy pick-up at the drive-thru.
I read that article while at the hospital with my daughter who had just had surgery on her hip.  It was to be a fairly simple procedure, and I had plans for the following day at my office.  After talking to the surgeon post-op and then waiting next to her bed in Recovery – I could tell it was not going to be a simple healing.   She was in a lot of pain, and my only job was to feed ice chips and stroke her hair to let her know all would be OK soon.  THIS is the important stuff that needs to be done as perfectly as possible. The house will get dirtier… Emails may not get answered, and the prospect from Washington may not get called back as quickly as they expect. That is OK.  I will do the best I can, and some days it will get done quicker than others.   It is not in my nature to let things go, but I am vowing to give myself a break if I fall short of perfection!   I hope you can do the same.

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Queen Creek Arizona – A Nice Place to Live

No houses to show this morning – A nice break on such a beautiful Arizona Morning!   My husband and I decided to head out to the Pork Shop this morning to order our Thanksgiving Turkey.  As we passed Schnepf farms, many cars were turning into the Chili and Pumpkin festival, and then right around the corner, the Olive Mill had plenty of cars turning in also.   I had a re-newed appreciation for our small town.   We moved to Queen Creek  in 2001, and were the first home to build on our street in what is now part of the Queen Creek Town Center.    Eleven years ago, it was very different.  There was Rudy’s – the local diner with good hearty breakfasts and Mexican fare – or go across the street  to the Queen Creek Cafe – those were just about the only places to go on Saturday mornings.    If neither of those suited you, it was a good drive to the nearest alternative, but life was good, and there were always neighbors to sit and shoot the ____ with!    I am not going to be one of those that says they miss the good ole days (did I mention the nearest grocery was 10 miles away?)   Now, I have my choice between Target and Wal-Mart, Fry’s – Safeway – Albertsons, and Bashas are all close.  Now for dining,  it would take lots of Saturday mornings to try all of the options, let alone the newer fast-food Chains.    I like it here, and we are probably not going anywhere, anytime soon.  This is home.  Friends from Mesa, Chandler and Gilbert all used to say “Why would you want to move to Queen Creek?”  I would always say “Why Not? – We like the small town feel”  – Now when they come to visit, they say WOW – when did all of this happen?  Although the town is growing, the powers that be have been able to keep our “small town feeling of community”, and with the old favorites still around, I think I’ll bop over to Paradise Bakery and have a Latte!    For stats on the Queen Creek Real Estate Market, click on the link below – and if you would like the same information on your zip code – let me know.

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A good place to start this BLOG- VACANT LAND

There is a lot to know about those three words.  Most people would not even know what to ask if they were thinking of a land purchase.   I wanted to start this blog with a topic most people would have questions on, and hopefully you will come back often to see what I am talking about.  I start with land, because that is where Real Estate starts – with bare land.

In addition, I have talked more about land for sale in the last 2-3 weeks than I have discussed for the past 5 years.  What that tells me is that people are starting to look at land again; maybe to build their dream home – maybe as a weekend get-a-way, or maybe even for an investment down the road.   Al and I were up in Show Low this past weekend, and we called on a piece of land.  It was a 7.5 acre parcel that was fenced and ready for horses, with a well on site and a septic already in place for a 4 bedroom home.  The underground electric was buried and a panel was in place on a small shed that stood in the middle of the property – (It was a really nice piece of ground).   OK, OK – we were just tire kicking, but that is my point – A lot of people are tire kicking again, and it occurred to me that there is a lot to know about the purchase of ground – so if that interests you, here are some things to consider:

Is the property serviced by city utilities?
Are the utilities on the property,  or do they run along the property?
Will the land need a septic and if so, have soil/perc tests been performed?
Are there HOA restrictions or deed restrictions that might prevent you from doing what you plan?
Can a mobile or manufactured home be placed on the land and/or adjoining land?
Is there ingress and egress to the site?
Has it been surveyed?
Can I get financing on bare land?
If I plan to build in the future, should my builder assess the site?

The list goes on and on.  These are just some of the things that came to mind.
My dad always said you cannot own too much bare land, and I am not sure that is good advice for everyone – ( He was a farmer and had crops on most of his land) Taxes, HOA fees and other possible holding costs should be considered if you plan to keep the property.

Please give me your feedback or add to the comments

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Thanks for visiting! Welcome to my Real Estate BLOG!

With the industry changing so rapidly, my goal is to keep you informed.  It is my belief that Realtors work in the service industry.  Our job is to be the source of information, so that you can make the best Real Estate decisions for you and your family. That will be my goal here. Please feel free to leave comments and feedback any time.

New Traditions Realty is located in Chandler, just south of the 202 on Gilbert Rd. All of our agents live and work primarily in the southeast valley, however on occasion, will travel to other areas as needed. As owner and Designated Broker for the company, I wanted to bring my mid-western work ethics and training to start a company that treated people right. My experience and knowledge comes from working for 10 years, with one of the best Real Estate companies in Indiana and now an additional 10years of practicing in Arizona.

I hope you will find value in visiting often – Please feel free to contact me or any one of the New Traditions Team members for assistance. “Our Goal is to Earn Your Trust”.

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