Month: October 2006 (page 1 of 7)

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

From The Business Journal of Phoenix:

The housing market could bottom out during the next six months, according to Metrostudy’s latest report on local real estate markets.

“Cutbacks in new production, aggressive incentives by sellers, the exit of the majority of investors and the fundamental demographic support for housing demand are positive indicators for a housing turnaround by mid-2007,” said Mike Inselmann, president of the Richmond, Texas, company. “The Federal Reserve has ended its series of rate increases, and mortgage rates have dropped notably in the last few months,” he added.

Phoenix continues to have one of the nation’s strongest economies, said Ben Sage, director of Metrostudy’s Arizona division. Even though job growth declined from a peak of more than 100,000 new jobs for the 12 months ending Sept. 30, 2005, the 91,900 jobs posted at the end of September 2006 puts the state at the top of the nation, he said.

It will take a few days for the errors to shake out of the MLS, but October’s Market Basket looks pretty weak: Sales down, prices down — but inventories continue their downward trend. Given that we’re headed into the holidays, it’s reasonable to expect the rest of the year to be slow.

Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate marketing

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

The Republic is all atwitter today because “Prices of new homes slip by largest amount in nearly 36 years”. What’s the real news: Nationwide (a non-existent real estate market), year-over-year median prices for new homes were down 9.7%. Not great, not awful, and not really news at all. We need to know which houses, where, and why to know anything. The news hook — “36 years” — just means that the non-news have been very, very good for more than a generation. Without context there is no knowledge.

Witness: “County wages up 10.5% in a year”. That sounds like good news, although the Republic tries to spin it negative. I have never believed the complaints about low wages in the Phoenix-area, and our perpetually low unemployment rate is hard to dismiss. What this actually means in the long run is for you to decide. I would be much more impressed to hear about how Phoenicians are improving their job skills. Human capital is all the capital there is, ultimately, and people who take the trouble to learn something useful make good money.

Here’s my favorite fake number story of the day: “Light rail subsidies calculated”:

Overall, Metro estimates its total operating, maintenance and administration costs at $28.2 million in the first year and plans to recoup a quarter of that money from fares. That leaves Phoenix, Tempe and Mesa to come up with a little over $21 million among them.

So that means the subsidy will be $3 from the taxpayers for every $1 paid by the rider, right?

Wrong.

What is missing from the calculations? The cost of building the ding-dong trolley system, billions of dollars before we’re done.

The actual subsidy will be at least $13 from the taxpayers for every $1 put in the fare box — and possibly a whole lot more.

Best “news” of all: You will never ever know how much you are paying in subsidies. Whatever number you are told, you will know with an icy certainty that you are being lied to.

Now a thoughtful person might think to say, “Anything worth doing is worth doing for profit.”

But the BoosterDogglers and the Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

Behind the Curtain:

House on the river in Boise – $3-500K.

Drinks on the patio watching the sun set over the water – $10

Getting rid of that pesky Aspen tree in your backyard courtesy of the beavers- priceless.

Technorati Tags: real estate marketing

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

From my column in today’s Arizona Republic, a familiar theme. The permanently linked version uses a somewhat longer version of the text.

 
Negotiate agent commission

In past weeks, we talked about using the simple question “How much do you charge?” to negotiate a more reasonable buyer’s agent commission. Buyers traditionally have not known to ask this question, but here’s the really cute part: “Your” agent is not required by law to disclose the amount of the sales commission. You are entitled to know an infinite number of facts about the property and the transaction, but you are not entitled to know how much you are paying for representation.

The buyer’s agent commission is set by the listing agent, generally in consultation with the seller. The listing agent does not have to offer any commission for the buyer’s representative. This is the essential component of an “exclusive” listing – only the listing agent will be compensated upon the sale of the property.

But if the listing agent wants to advertise the home in the Multiple Listings Service (the MLS), an offer of compensation, a “co-broke” commission, must be included with the solicitation of cooperation. This coupling of cooperation with compensation is what makes the MLS work so well as a tool for marketing real estate.

How much will the co-broke commission be? For a resale home, it will usually be 3 percent of the purchase price of the home. For a $100,000 condo, that’s $3,000. For a $1 million mansion, that’s $30,000.

Does it take 10 times more effort to sell a mansion than it does a condo? Ten times more expense? This pricing structure is completely absurd, mostly because, until lately, no one thought to change it.

In fact, the listing agent might be getting 2 percent or less. Why? Because the seller asked the magic question: “How much do you charge?”

Buyers need to learn that they, too, have the power to negotiate the fees paid for their representation.

Technorati Tags: arizona, arizona real estate, compensation for buyer representation, phoenix, phoenix real estate, real estate marketing