The Scottsdale Real Estate Files: Arizona: Scottsdale

My business partner is older than dirt. 

Seriously, he's so old that Metamucil takes him in the morning.

He's so old that when he takes his grandchildren on his knee and speaks of "The Great War," he is referring to The Crusades.

He's so old that it takes 4 hours for his life to flash before his eyes.

Okay, so my business partner is my father, and he's not really all that old.  Just old enough for some good paternal ribbing and to have more years invested into this industry than I do on the planet.  Aside from the advantages that attend living through every up and down market cycle that one masochist can hope to experience, you also tend to wind up with a file cabinet full of lost treasures. 

Let's see ... <sounds of rummaging> ... here's a signed photo of pops with a young Wyatt Earp at the Whiskey-A-Go-Go.  Here's what looks to be a rough draft of the Gadsden Purchase.  Who knew he brokered that one?  And here is the very first scorpion to ever be encased within amber and sold at a downtown Scottsdale tourist shop.  Beautiful mementos all, but not the antiquities I'm after on this day.

Ahh ... here's what I want.  Floor plans.  Old, forgotten floor plans.

Blowing the dust off these lovelies, I have committed to an undertaking that may very well end up with me being committed.  I am uploading all of these ancient gems to the Scottsdale Property Shop site as part of the community service I should have served for youthful transgressions too numerous to count from my formative years.  While many of our newer Scottsdale developments have readily available plans, it can be rather vexing to track down those from the original construction of the 1970s and '80s of such stalwart communities as McCormick Ranch, Scottsdale Ranch and the like.

For the remainder of the year, I will be hard at work augmenting community overviews with rare floor plans on our most excellent Scottsdale Real Estate site.  A project requiring Herculean effort, but we Slaybaughs are of hardy stock.  Did I mention the time my old man bested Hercules, himself, 2 out of 3 in armwrestling?  Just because Homer didn't write a poem about it, doesn't mean it didn't happen.

Whether you are shopping from afar, planning a remodel or simply a fan of 2 dimensional black and white renderings, add us to your bookmarks so you can check back in from time to time to see if my progress has reached the community you desire.  I will also update this post with links to the community pages for those that are up and running. 

Old guy with the goods + Young guy with penchant for usurping content = Victory for the consumer!

Here's where the endeavor stands right now:

• McCormick Ranch Home Floor Plans

• Scottsdale Mountain Home Floor Plans

• Scottsdale Ranch Home Floor Plans

More Scottsdale communities coming soon!

Start your Scottsdale Home Search today!

It’s a daunting task.  Settled in around the bargaining table, you see nothing but pros, chips stacked to the ceiling.  Looking down at your comparatively meager stack, you’re tired of getting bullied out of hands.  Offer after offer you submit, only to fold under the check-raises from predators with pockets the depth of the Mariana Trench sewn into their five thousand dollar suits.  You are being methodically ground out of the main event.

Welcome to the Scottsdale Real Estate Market / World Series of Poker that is 2010.  The buy-in may be cheaper, but the odds haven’t been longer since 2005.  Why’s that, you ask?  The players.  The allure of the investment windfall has brought all of the serious card sharks back into the mix.  Good for the overall health of the market, but not so good for your chances of sauntering into the saloon of your dreams and winning its title on the river with a ten dollar bluff.

The penny ante games haven’t left the Valley, but the table keeps getting more crowded with first-timers, new arrivals, second home buyers and … gulp … professional investors.  It’s that last class of gambler that is making things tough on the buyers out there who can scarcely put together a 3.5% down payment.  Throwing around cash offers like a rousing round of 52 card pickup, the investor has an annoying habit of taking a negotiation and spinning it upwards.  A great property listed at the bargain price $250,000 turns into $267,500 for the lucky bidder in a few frantic blinks of the eye.

When competing with these well-seeded makos, there are several critical mistakes that buyers need to avoid if they are to keep from busting out at the table early. 

For starters, stop reading the papers.  Despite the blanket generalizations you are inundated with on a daily basis, houses are selling.  Especially in the price range you are shopping.  In fact, that 250k range is hotter than John Goodman in a polyester hoody in the middle of July.  Below is a highly scientific composite breakdown of the various market segments.

>$1,000,000:  Harboring enough inventory to choke a disinterested goat for the next two 2 years, this price range is more lifeless than a Jim Jones after party.  With few jumbo loan options and even fewer buyers in a hurry to drop this kind of dough in a schizophrenic economy, the greatest larcenies are to be had here at present.

$750,000 - 1,000,000:  Mostly dead, ala the pirate Wesley in The Princess Bride.  Only the occasional act of a miracle-making Real Estate agent results in a consummated sale.  If you can afford to shop this range, "have fun storming the castle!"

$500,000 - 750,000:  Patient has a nasty hangover, but not incapable of stumbling through the house for a bottle of Vitamin Water.  Given a couple hours and a plate of pancakes, he will return to some semblance of himself.  This price range is seeing movement for homes that were worth twice as much a few short years ago, but still in a bit of a fog.

$250,000 - $500,000:  Now we’re talking.  Especially in the Northern reaches of Scottsdale, homes in this range have their boogie shoes on.  Fortunately for all but the homeliest of homes, there are plenty of willing partners out and about on the dance floor.  Some are even adept at avoiding toes as they clomp about the market in gimungous platform shoes.

< $250,000:  Sold before you have time to jump up and slap your mama.

When you hear the reports and/or anecdotes referring to the “standard” or “average” percentage you can expect to knock off a list price, you need to understand what a ridiculous notion that grotesque simplification proves to be.  In the upper reaches of the price scale, you might very well knock 20-25% off a list price due to the lack of competition.  In the frenzied segments that most cash-strapped buyers are trolling, however, writing offers at 80-90% of list price will acquaint you quite dearly with the following reaction:

“HA! HA! HA! HA! HA!”

Fending off a throng of potential rivals, you will have to push all in when, after sitting through hand after hand of garbage cards, you finally draw the ace that constitutes a genuine housing value.  No point encouraging others to remain in the hand by going in low.  As the short stack, your only leverage is to force the issue early and hope you can stop the bidding before it starts.  Don’t give the sharks time to congregate and subsequently frenzy.  By aggressively moving all of your chips to the center of the table right off the bat, you might just chase some away to pursue easier pickings.  Let the deep-pocketed players linger for the turn and it’s all but guaranteed they will ultimately own you and the house you covet.

Price considerations aside, your next best shot to beat out the better financed buyer lies in the terms.  Hubris can be a damning thing for the guy with all the bucks, and he often fails to seek the additional information that someone in a weaker position must exploit.  Closing date, choice of title company, etc are concerns that Doyle Brunson over there just might expect to force through on the power of his awe-inspiring cash.  If your price is relatively competitive, your financed offer still has a shot at beating him out if you can find the terms that are most advantageous to the seller and include them. 

As to the homes you chase, knowing which table to sit down at is as important as the poker skills you bring to bear.  Bank-owned properties are going to be the most difficult for the novice player to obtain.  Financial institutions will sit on your offer for 3-7 business days while additional offers pile up, and they won't give a fig about any terms other than the ones demanded by their associated addenda.  It's tempting to sit down at these REO tables, given the big payouts, but it's often a fool's errand for the guy just in town for the weekend with his buddies.  You'll have more success if you stick with the slightly less lucrative owner-occupied resales that blunt competition from the pros. 

It’s not easy out there, despite all that you’ve heard, so remember to act fast, act decisively and save the gamesmanship for the slots.  Everyone wants a deal, but you can’t secure a value without first securing the property.  At prices that have rolled back to levels not seen in six to seven years, there’s no need to get greedy.  The well-positioned homes have the value already built into the price.

If you want it, and it comps out, don’t talk yourself into spitting in the wind with an offer predicated on faulty logic.  The national economy and generic offer-to-list-price-percentage paradigms have nothing to do with this one house and those who would buy it out from under you.  Long metaphor short, don’t write a $200,000 offer on a home listed at $250,000 that is worth $300,000.  Only adds unneeded time and heartache to your quest.

See house.  Evaluate house.  Make best offer to purchase house.  Buy Paul expensive, celebratory steak dinner. 

Easy :)

Search Scottsdale Homes For Sale!

Investor. 

The word alone inspires a host of reactions that run the full gamut between antipathy and, well, slightly lesser antipathy, depending on the audience. 

Image From the Hubbel Telescope of Investors Invading Local Real Estate Market

As any semi-interested news watcher and industry blog reader can attest, the Real Estate investor is the greatest scourge to befall our fragile ecosystem since polybutylene plumbing.  What, with the housing supply lines ill-equipped to handle the artificial demand, our flimsy pipes swell and burst when the pump and dump investment surge strikes a hapless market.  Aside from the banks who flooded Wall Street with dubious mortgage backed securities that were chopped and reconstituted in more numerous and indiscernible ways than Joan Rivers' alleged face, the fount of no-money-down investors is the most vocally derided catalyst of the Great Real Estate Bubble of 2005 ©. 

Well, guess what?  The investor is back … and that’s a good thing.

Hold your rotten tomatoes and easy with the pitchforks, if you will.  How can I possibly opine that the reemergence of the buyer subset that sent values through the roof, only to crash them through the basement when they left a valley of foreclosed “investments” in their wake is a good thing?  Is the demand any less artificial now than it was when the previous incarnation of ne’er do wells spiked our collective punchbowl? 

In a word, yes.

The 2010 investor is not the fly-by-night operator who purchased the nearest home for sale at the conclusion of a four hour seminar on how to get rich in Real Estate investing with no money down.  Shoot, who needed money down when you barely needed a pulse and a job to buy a house back then?  No, today’s investor, by and large, is showing up at trustee sales and plunking down cash on a barrel.  He has the skin in the game that his counterpart of yesteryear did not.  He is investing in a very real sense of the word.

In addition to securing an interest in the property with his own bankroll (thus making the prospects of simply walking away from a property that doesn’t return as hoped less palatable), the other crucial dynamic at play is the return of sanity to the overall investment arena.  When investors were driving Scottsdale and Phoenix property values into the stratosphere back in 2005, there was little regard to the initial purchase price.  Our entire market temporarily forgot that you make your money on the purchase.  Buy a property right, and the return will be there when it’s time to sell.  In the throes of insanity, investors were climbing over themselves and each other to purchase property, any property, for 50k over whatever ludicrous price was being sought by an apoplectic seller.  Investors were betting on the come.  Pay whatever now, and the joint will be worth 100k more in two months whether a hammer is ever swung in renovation or not.  With the year long fervor, they got away with it … for awhile.

Today’s investor is not settling for just any property he can get his hands on, but is showing up at the courthouse and robbing the bank blind.  Paying pennies on the dollar and rehabbing a previously dismantled home, his margin is large enough to bring the distressed apple of his eye to market at a price actually supported by recent sales comps.  

The coup de grace?  Today's investor fills a need that the banks won't.  He is essentially financing the fix-up costs that many banks have abandoned in self-defense.  Against a backdrop of tight lending purse strings, consider the difficulty many people have just in coming up with 3.5% or 20% down payments, let alone remodeling capital.  With home equity lines all but vanished from the marketplace, that stripped bank-owned home bargain isn’t all that realistic for the buyer who doesn’t have the available cash to put it back together, regardless of how appealing the price tag.  When you could tap a line of credit to finance improvements, it wasn’t that big of a deal to throw in some new carpet, counter tops and appliances after closing.  Now, you have few options other than reaching into your own pockets.  Thus, there is a sizable buyer pool for a move-in ready home.  The well heeled investor who assumes the risk and fills that need is not to be derided. 

Take the mom & pop homeowners who are unable to price their homes competitively due to high loan balances, mix with the interminable wait of short sales, fold in the distressed condition of much of the bank-owned inventory and bake at four hundred degrees to create a casserole of supreme frustration for many disenchanted home shoppers.  A rehabbed home at an affordable price, if not the outright theft that was envisioned at the outset of their house hunt, begins to look more and more appealing to many buyers after getting an up close look at what the reputed bargains actually look like live and in color.  In essence, by purchasing a property from an investor, a buyer has found an end-around to financing renovation costs. 

If your last nickel is earmarked for your down payment, and you can purchase a renovated home at a fair market value that you can afford, don't begrudge the man his margin.  While the stereotype of the lecherous vulture remains, we would be remiss not to acknowledge the good he can, and does, bring to a market like ours.

Investors:  they’re not just for nuclear Real Estate holocausts anymore.

Read more of my Scottsdale Real Estate Missives or start your Scottsdale Home Search here!

We are all busy. Whether the responsibilities that overwhelm us are professional, personal or, most commonly, a combination of the two, who hasn’t lamented the lack of a clone for accomplishing the myriad tasks that 21st century living heaps upon us?  There are certainly days when I’d give my eyeteeth for an hour in the lab with the scientists who cloned Dolly the sheep.  Here’s my blood sample, now how soon can I get Paulie 2000 licensed by the Arizona Department of Real Estate?

Sharing the overscheduled and understaffed burden with the rest of society at large, one can’t help but find amusement in the march of technology towards supposed convenience.  Why, in no time at all, we’ll eliminate the 6-8 hour period of insufferable downtime that less assertive types passively refer to as “sleep.”  Productive little bunnies that we aspire to be, that precious block of REM is better spent chasing cabbage.  Against a backdrop of planned obsolescence, it is little wonder that we delegate the menial tasks whenever and wherever we can.  Secretaries to answer the phones, grocery delivery service, cardboard cut-outs of our likenesses to attend our kids’ soccer games … we, as a people, are a busy lot.

As the parental doppelganger is not recommended, there are a host of tasks that require eyes-on commitment.  Tucked neatly between personal attendance at an anniversary dinner and showing up for your own open heart surgery is viewing property.  While many aspiring titans of industry can likely conjure numerous higher and better uses of their time than knocking around houses for two hours on a Wednesday afternoon, this is one of those tasks that really does not translate well to delegation.  Enlisting an assistant to go in your stead is not only a mild affront to your chosen REALTOR (putting the value of his/her time on a par with said assistant), but much more significantly, a form of sabotage to your own interests.

Sure, who wouldn’t want someone else to fight through the forest of current inventory with a machete to blaze a clear path to the penultimate home?  In theory, the lackey can contend with the clingy vines and pit vipers while you focus on more important matters.  Let Indiana Jones return with a map to the treasure, and you can take it from there.  Simple.

Not so simple.  The problem with joining the adventure late in the game is that you lose the context, the knowledge gleaned along the way.  Even if your stunt double has your taste completely wired, and returns with an appropriate assessment of which home(s) is (are) worth your time, you will have missed out on valuable comparison shopping.  Stacking up neighborhoods head to head, comparing current values … every advantage gained through the cumbersome experience squandered.

Shopping for a home is a serious endeavor.  If you are not ready to commit to the process, you would really be better served to wait until your schedule opens up enough to permit a generous allocation of your time and energy.  With the advent of Internet home shopping, consumers have more ability than ever to research from the comforts of their own cramped apartments.  Agents, likewise, are better equipped to screen and vet properties before dragging their busy clients out of the office to see the latest hot bank-owned property.  Don’t miss the good ones (which still sell quickly, by the way) by adding a 4th layer to a 3 layer cake.  Glean what you can from the listings that don’t quite fit so that you are ready to act in a direct, unequivocal manner when you do see the right one. 

By committing to the effort now, your hunt will resolve itself sooner.  Don’t turn a 3-6 week tour into a 3 year search party by treating it like an adjunct to your day, rather than a primary component.  This is your new home we're talking about here, not a pair of relaxed-fit designer jeans.

See you at 3 PM, sharp. 

The assistant can patch any urgent calls to your cell while we’re out.

You have something to say, some timely tidbit to impart, but don’t relish the specter of an ensuing dialogue.  You’re not interested in the entanglements of conversation, what with the awkward pauses, opinions other than your own and … gulp … small talk.    Too much commitment.  What you want is a one line fling.

<<Tell them 256k firm>>

A one-way communiqué is a powerful thing.  Authoritarian in nature, the modern day smoke signal of the text message is the chain of command envy of parents and military command alike.  Raw, unladen directive.  Dig it.

<<258K.  No home warranty>>

Who needs a tete a tete when a simple tete will do?  Time is saved, insubordinance averted and miscommunications only cropping up when you fat finger the occasional key.

<<257KK an homed warranty!>>

This really cuts to the quick as to why agents are necessary middle (wo)men in a transaction.  To take (and translate) such directives and finesse a meeting of the minds with someone of antagonistic purpose.  While we rightly prattle on about the years of experience and know-how that we bring to the bargaining table, our basic service is to take careful aim and coax out of the other party the terms that our clients shoot from their respective hips.

<<Ill do 257 but earnest money non-ref.>>

Haggling is easy when you don’t have to personally make the proposals.  No matter how outlandish a demand or ludicrous a price, the client never has to handle the delicate delivery of said offer.  Without the interpersonal drama inherent in a vigorous and ongoing negotiation, the principals are loosed to think only in terms of their own best interests.  The precise moment people sit down with their actual counterparts to talk turkey is when many start conceding too much.  An odd quirk of we humans is a tendency to sabotage long-term interests in the name of getting along, no matter how fleeting the temporal relationship.

<<hmm … I’ll make ½ the earnest hard after inspect>>

My job is to be friendly with the other agent so that you don’t have to be friends with the other party.  Aside from my counsel, the only thing driving your ship is the pursuit of the right property at the best possible terms.  Cold, clinical and ruthlessly ambitious in your demands, let me worry about how to peddle it to the other side.  Getting what you want without having to directly engage your counterpart in transactional Twister is both a financial and emotional boon.  Leading your own troops in battle is noble, but few field generals live to meet their grandchildren.  Put your feet up, send in the orders and let your foot soldier bring back the scalp you covet while you bounce that bundle of joy on your good knee.  When personalities get out of the way of the terms, positive things tend to happen.

<<Sold!!!>>

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About the author: 

Paul Slaybaugh is currently working on installing smartphone technology, capable of receiving and obeying SMS messages, within the cerebral cortices of his children.  The prototype has an auto-responder set to "Because I said so" for every articulation of the word "why."  Results, thus far, are ... mixed.