Category: Realty Reality (page 16 of 16)

by Cathleen Collins

Realtor, Staging Consultant

Author website

Greg just posted an email he received from a West Valley broker, Joe Bourland. I want to respond to his last paragraph:

Maybe you should look into your established practices of real estate. There is an immense value in representation. Hopefully, the educated buyer you warn will realize the disservice you promote for clients.

Mr. Bourland,

Specifically, what disservice have you identified? Let’s assume that the base price of the home is $200,000. If the builder is offering me, the buyer’s agent, 6% for bringing my buyer into the community, I could look forward to a $12,000 payday when the sale closes! What is the most effort and money I could possibly do to earn that money? Well, I am in process of such a transaction at this very moment, working with numbers close to these. Let’s see what I’ve done and what I plan to do to earn this money:

At the beginning of this process, I introduced the couple to a few lenders who I thought would be a good match for them. They loved one, and she worked up a couple of Loan Status Reports (a loan document referenced in the Arizona Department of Real Estate’s standard contract language for Residential Resale Real Estate Purchases), depending upon whether we found a free standing house or a condo that the couple wanted to buy. (Ardell did a great job of explaining why this is important yesterday on Rain City Guide.) This filled in an important parameter of what we could look for.

Over the next couple of weeks I researched on MLS, looking for new and resale houses that fit the criteria that the clients gave me. I drove the wife around for about 20 hours total, and during this period I was better able to refine our search, based upon her reaction to what she was seeing. Once we had narrowed our search down to houses that would truly please her, the husband joined us to exercise his veto power. Finally, we found something they could qualify for, which satisfied both of their wants and needs, in a new home development.

The house Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

I’ve written a bunch of these stories, and I’ve got a bunch more in me — I did CRS the hard way. Most of them have happy endings. This one does, too, I suppose, but the middle gets pretty morose. I’m telling the story to illustrate how badly things can go wrong in real estate despite the best preparation, despite the best of intentions.

This is a story about Lou, a long-time client whom I admire very deeply but have never met in person. He found us on the internet, and he’s been with us through thick and thin for coming on three years. In that time we have bought five houses, failed to buy many more, and we’ve sold three. There’s one more out there that we’re trying to sell right now.

Lou is a cop, a detective for a police department in a big California city. He makes a good living in his forty-hour week, then double that or more on over-time that never seems to end. Because of this, he has been able to invest in real estate for years, buying, fixing and flipping properties in California. He came to me when the prices in California got too high.

In the midst of the price boom here, we bought five rental properties — one condo and four single-family-homes. Lou was most interested in buying homes with tenants already under lease, but this put us into very competitive bidding situations. We were careful to buy into properties that were either cash-flow positive or at least neutral, so we wrote a whole lot more contracts than we got accepted.

I was working by myself on my end. I don’t know if Lou has ever been to Phoenix, but I’ve never caught a glimpse of the man. He would review listings I had sent by email and ask me to follow-up on those that seemed promising. I would do drive-bys, taking photos and looking for red flags. Then we would run the numbers on the property, and, if it made sense, write the contract. I have worked with a lot of game investors, but none Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

I’ve known Andy since he was a teenager, and Cathy has known his mother, Sally, since before Andy was a gleam in anyone’s eye. I’ve always liked him, and it’s not always easy for me to like teenage boys. But Andy has been an earnest young man for as long as I’ve known him — a firm and fixed shape to his face and firm and fixed ideas in his mind. At fourteen he had a quiet intellectual confidence that would have been a credit to a man of thirty.

When he was a senior in high school, he read something I had written and convinced his English teacher to invite me in to speak to the class. I gave them ninety minutes on notational systems. That might sound dull, but in fact it is the naked essence of human social interaction. We started with learning to multiply in Ancient Rome, took a grand Mediterranean cruise of cognate terms, touched upon Shakespeare and Plautus, and brought it all back home to real life in modern America. I lecture on real estate all the time, but I think that day was the most fun I’ve ever had talking to a class.

“This is the life of the mind in action, as it is actually lived. It’s not some desiccated notion trapped in a dusty book, it is an eager pursuit of new knowledge by reference to what is already known. The more you know, the more you are able to discover.” I don’t claim to have made a lasting impact on those kids, but for ninety minutes, at least, they understood that there are reasons for learning apart from passing a test or getting a job or staying out of trouble with your parents.

When Andy graduated from high school, he elected to join the Army. Sally had money set aside for his college education, but Andy reasoned that if he served in the military, Uncle Sam could pay for college and he could then use the money Sally had saved as investment capital. It was peacetime when he enlisted, so the ratio of reward Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

Sonia came to us from our web site in mid-April, 2005. Young, unmarried, working very diligently at a job that should have paid better than it did. She was pre-qualified at $115,000, which was a very hard number to hit at that time and would be virtually impossible by now. We were just getting to the real fever of the housing boom, with houses at that end of the price range evaporating in hours. What she wanted was something fairly close to her job in North Central Phoenix. Multi-family was okay, but, obviously, safety was a concern.

This is my kind of problem. We love those $700,000 buyers, where the commission check is the size of a brand-new mid-size sedan. But that’s show-horse job, and it’s the work-horse tasks that put a Realtor to the test. One of the things that I think earns loyalty and respect from my clients is that I deliver the goods. If we’re having trouble finding what we want, I will work the MLS like a Rubik’s Cube until I squeeze the right houses out of it.

This is what we did, me and Sonia and Cathy. I would pump out new results, Sonia would drive by the properties on her way to or from work, then Cathy or I would go with her to look at the least objectionable ones. Nothing was easy. North Central Phoenix is the land of the vanishing middle class, and the neighborhoods that aren’t crawling with millionaires are crawling with things you need a special license to talk about.

Eventually we got very lucky, though. A home turned up in the Phoenix Townhouses, a very nice town-home community in the center of town. The home was underpriced, but we saw why when we got there: One owner in twenty years, zero remodels. Everyone wants a bargain, but no one wants what a bargain implies: Less-than-perfect condition. But Sonia had seen a lot of dumps by then, so she could see the value beneath the ugly, old and very dirty decor.

We fast-talked our way into the house by paying a $500 premium — at Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

I had email earlier this year, a warm lead off our web site. “Can you tell me more about this house?” What I had was an MLS number, but what I saw in the MLS was Westwood High School with a pool. So I sent back what I had on the house I was asked about, but I also sent everything active near Westwood High School with a pool. I followed up with our standard buyer’s email, amending it to ask what else I should be searching for.

This, by the way, is the extent of my initial effort with warm leads coming in from the web site. If you want to dance, we’ll dance. If you want to be left alone — I can do that perfectly.

An email comes back, and it’s good and bad. Clearly motivated and a definite timeline, but they were pre-qualified right at the bleeding edge of no inventory of any kind. That’s okay. I like that kind of problem. Westwood High wasn’t essential; they just like the area. A pool wasn’t absolutely necessary, provided the lot was big enough to support one eventually. Still not easy, but easier.

But very, very motivated. I would shoot out listings and they would be out driving by the homes before I could phone to follow up. They had kissed about a dozen frogs before they found one they wanted to go into.

I met them at that house — that motivated — and we took a look. Not right, but everything they said helped me refine their search.

Outside we hit a stumbling block: “We had another Realtor we were working with, but you just keep sending us more and more houses, so we’re switching to you.”

Oops! I treat the people coming in from the internet as being unrepresented. Many are so far from being ready to jump that they might not actually be in the market at all.

Anyway, I said, “Have you signed anything?” This is a bright line distinction. If I have to ask about specific documents, I will.

“Nope, nothing.”

“Well, I wish you had told me sooner, but I should Read more