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Better money sooner for Sun City sellers

Category: Buying Your Home (page 1 of 3)

November 1, 2024

SCUBA: The name of the game for Sun City buyers? “What’s missing? What’s undone?”

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Sun City Real Estate Broker

Author website
Flippers are strippers: They throw away appliances, window treatments, shower bars, etc., on the way in, but don’t always replace them on the way out…

Scio in Latin is ‘I know.’ It’s a beautiful as atoms – both ‘sc’ and ‘io’ denote beautiful ideas – but it’s ‘sc’ in English that lends so much ammunition to my cannonades of wit. We have already had The Screed – Sun City Real Estate Eviscerations and Dismay – and now I inaugurate SCUBA – the Sun City Underground Buyer’s Agenda.

I don’t even represent Sun City home-buyers, but I’m not sure anyone else does, either. Luckily, Del Webb’s homes are the very best of ‘good bones’. If you stay on top of the roof, so to speak, the block home beneath it will last for centuries.

And yet: A retirement home that is itself old enough to retire will have required successive updates to deliver on the promise of its good bones. The buyer’s agenda is to nail those issues down, discounting for anything that is either missing or undone.

So here is my EZ punch list for every home, for every buyer in Sun City:

1. No fridge?
2. No window treatments?
3. No landscaping?
4. Popcorn ceilings?
5. Single-pane windows?
6. Two-prong wiring?

The first two mean time, money and effort before you can move in. For the third, the neighbors are good and ready for you to stop looking like a rental. And if the home needs serious upgrades to remain competitive, you will do them on the way out if not on the way in.

Only a plumber can tell you if the pipes need help, but you can see everything I’m talking about in the photos in the MLS listing. None are deal-killers, necessarily, but they all make a difference, both on what you should pay as a buyer and on what you will reap, in due course, as a seller.

May 22, 2024

Not one but three Sun City golf course homes could make this the Summer of sweat equity in Newlife…

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Sun City Real Estate Broker

Author website

I fell in love with this house yesterday. I liked it on the hotsheet, so I went to see it in person, then I ended up writing about it on Facebook:

It was still bugging me this morning, in the wee hours, so I made a CMA to see if I was right about the price.

The bad news: The house is completely livable as-is, but it will need upgrading everywhere – either over time or all at once. Most notably, the home is clad in vinyl siding that will want a costly replacement.

The good news: The list price is fully supported, which means the house will appraise at list. FHA-ready, too, I should think. It’s not a flipper-scale bargain, but it is a good deal for owner-occupants who are willing to upgrade their way into a truly remarkable golf course home.

As it turns out, two of the three ‘comparables’ I used to price this home – 12471 N. Augusta Dr. – are also actively for sale and and are also good candidates for owner-occupant upgrading.

Newlife is South of Grand Avenue and adjacent to Youngtown, so it’s not quite as tony as other Sun City golf course communities. But these houses are selling for around $100k less than they would go for bestride Palmbrook in Phase Two – kind of a big difference.

Pricing real estate is an art. I’ve always been good at it. But then I was a ‘pricing algorithm’ for Zillow-the-catastrophic-iBuyer for a year and a day, and I came away a house-whisperer, fast and unassailable. And then I started reading all of the Sun City listings…

There’s more to pricing than just math, but the math makes it harder to make mistakes. So to figure out what our subject property is actually worth to the buyer, we need to compare it to other, very similar properties and then adjust for the differences. Here’s my worksheet for the houses we worked with:

The CMA software enables easy adjustment for objective factors – Fireplace, yes or no? – so my notes concern subjective matters and special adjustments. Interior and Exterior adjustments run from -2 to +2, adjusting by multiples of $5k, $10k or $20k depending on the price range of the properties. We’re not adjusting for the presumptive cost of the upgrade, but simply estimating how much the difference might move the needle among buyers.

I didn’t adjust for time, because the past year has been a flat ripple in Sun City, but I did adjust for square footage and lot size, using this calculator I put together in my Zillow days:

The net result, after taking everything into account, is a reliable number:

The list price for Augusta is great, but 10917 W Oakmont Dr and 12601 N Augusta Dr are both good deals at $340k each – the price both are hinting at.

“The Season” is ending, so all three could suffer from a lack of golf course buyers. But all three have an After-Repair-Value of $400k+, so this Summer could be the season of sweat equity in Newlife…

May 10, 2024

From Rainier to Ranchero: Shopping other expressions of our Sun City floorplan.

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Sun City Real Estate Broker

Author website

We live in a modified Rainier. Our Del Webb floorplan is already-here news, meaningless to people moving to Sun City, yet you see models name-checked in listing after listing.

Even so, if you know you know, and the Rainier is a very livable three-bedroom footprint: The kitchen is up front, looking out to the street; if you blow out its interior walls, together with the living room it blooms into a greatroom, so the family is always together.

I’ve been taking my wife around to look at vacant Rainiers. It’s like a date, but during the day and with an MLS key. There are a lot near us, in Unit 11, but few-to-none in other parts of Phase Two. But there is a nearly-identical floorplan in Phase One called the Ranchero – 1,679sf versus the Rainier’s 1,699sf, and you’d need a tape rule to find the differences.

We went to look at one today. Very much unmodified, and largely unadapted from 1968, when it was built. But it’s turnkey livable as-is and priced aggressively for its size. Upgraded before move-in or a room at a time afterward, it’s a smokin’ deal – especially if you make the wise-price offer. 😉

April 26, 2024

Counter-marketing Cartman: How buyers can put the squeeze on sleazy and stupid pricing strategies.

by

Sun City Real Estate Broker

Author website

The list price is the most important field in an MLS listing. Everything counts, but if the price is wrong, every other effort will have been wasted. If the price overshoots the market, you risk losing potential buyers to better-priced homes. But, just as important, if the format of your price is wrong, you will at a minimum introduce confusion – and delay – that you cannot afford.

Ignoring the comps and just looking at numbers, home prices can be wise, stupid or sleazy. Listings are almost always stupidly or sleazily priced, but closed prices are typically wise.

A wise number ends like this: x0,000 – where x is an even number. In other words, wise numbers are round numbers in $20k increments. Higher prices move the ‘x0’ leftward – and I won’t quarrel with x being odd there, nor at $250k and under. But: Wise numbers look right to buyers – offered and closed – and they close fine with sellers. The last sentence is the entire argument against ever using stupid prices.

Sleazy prices are even worse: $449,999. Can you hear South Park’s Eric Cartman parroting that number? Sleazy prices are transparent and facile attempts to fool people – which are predictably met with contempt by buyers:

Cheaters never prosper? Then why won’t they stop trying?

Caveat venditor: Wise prices sell fast and close cleanly. The other two, not so much.

But buyers take heart: You see a price like $279,900 and you think: “They’re not sure it’s worth $280k.” In fact, they are certain it’s worth $260k – or less – so you should lowball ruthlessly as Days-on-Market hits double digits.

I use the term ‘Last Call’ to refer to sellers who cave catastrophically at the end of a listing because they started too high at the outset – literally dancing The Desperation Waltz with the only remaining partner. But buyers can be that Last Call opportunist.

I like Tuesday mornings at 10:30 am for Last Call offers. The seller’s last hopes for the weekend will have evaporated; they are at their weakest. Declined or no response? Come back next Tuesday morning – but lower.

Whether sleazy or stupid, inept numbers denote inept agents and misled sellers. Take account of those facts and discount for deceit. Cheaters never do prosper, but you can profit from their delusions.

February 15, 2024

New from me today: Come home to two “impossibles” in Sun City!

by

Sun City Real Estate Broker

Author website

The Bloodhound onslaught of Sun City begins today:

Come see us Saturday. We have no Bloodhounds, alas, but Cleo the Adorable French Bulldog will be out greeting people.

Here’s a 30-day live look into the MLS listing.

This is a great property. Someone you know should buy it. Better still, you should hire me to market your Sun City home with the same thoughtful attention.

March 21, 2012

Don’t you love reading all that good news about the the Phoenix real estate market’s recovery? Guess what? You’re being lied to — as always.

by

Sun City Real Estate Broker

Author website

This is what’s really happening: FannieMae and FreddieMac are holding foreclosed houses off the market, in anticipation of “selling” them to campaign donors.

Meanwhile, the town is being picked clean, with prices being bid up by buyers convinced that houses are going out of style — a story we’ve heard before, yes?

As an example, my BargainBot search, which is shared with hundreds of investors all over the world, is at less than 5% of it’s peak. A search I use to select premium rental homes produces one listing this morning, where it stood at 45 homes in April of 2011.

If Fannie and Freddie “sell” the homes they own to politically-connected “investors,” the rental market in Phoenix will be slaughtered.

And if they release the homes they have been hoarding into the MLS, Phoenix will hit a third bottom before the market can finally recover.

You can call the news media idiots or you can call them liars. But any news from any official source about Phoenix real estate is dangerously misleading.

Meanwhile, if you need to sell, your house will go for top-dollar at blinding speed.

November 6, 2010

It’s 4:15 pm. Do you know where your Realtor is? A consumer’s guide to using social media to supervise your goof-off employee.

by

Sun City Real Estate Broker

Author website

Your mortgage lender just called. The appraiser is standing outside the home you’re hoping to buy, but there is no key in the lockbox. The lender called you so that you could call your Realtor. Your Realtor in turn can call the listing agent, and then someone can get over to the house — pronto! — to let the appraiser in.

There’s just one problem: You can’t seem to get your Realtor on the phone.

Stuff happens. Your Realtor could be tied up with another client or stuck in traffic in a cell-phone dead zone. Heaven forbid, he might have been in a car accident.

But… There is another possibility…

Do you remember when you first made contact with your Realtor? Do you recall him telling you all about how hi-tech his business is, detailing his presence on all the biggest social media sites?

So: If you’re not getting your calls to your Realtor returned, where might be a good place to look for him?

How about Twitter, for a start? How about Facebook? Foursquare? Tumblr? Posterous? You might have to look in a few places, but there are only two kinds of hi-tech Realtors: The kind who work a lot and the kind who play a lot.

How can you tell if your Realtor is the kind who plays a lot? It’s easy. He’ll be leaving tracks all over the place, Retweeting jokes and commenting on Facebook photos and writing detailed reviews of burger joints and doing — and documenting — just about any activity on the face of the earth — except attending to your real estate transaction.

Here’s the sad part: Even if you’re seeing dozens of Tweets and Facebook comments from your Realtor, you’re probably just seeing the tip of the iceberg. You’re not seeing the direct Twitter posts or the private conversations being carried out on Facebook or in email.

But: If your Realtor seems to be wasting his entire day on social media sites, there’s a reason for that:

It’s because he’s wasting his entire day on social media sites.

I’ve tried pointing out to Realtors that schmoozing on Twitter or Facebook is bad marketing, so far to no avail:

I say that trying to sell real estate via Twitter/Facebook is a waste of time — and it is anti-marketing even if it seems to produce some results. Why? Because the bulk of your chatter is going to look like… chatter. Your clients might like it when you schmooze with them, but your public schmoozing with every other time-wasting Realtor and vendor in the RE.net is going to look to your clients like just what it is: Time-wasting laziness.

Here’s the good news: You have the power to do something about this. Once you’ve discovered that your Realtor is ignoring your needs in order to goof-off online, put him on notice: “You will either service my transaction or I will fire you with dispatch.” You’re the boss. Act like it.

Even better, when you’re shopping for a Realtor, shop his or her online presence. Is your prospective Realtor a big-time Twitter kibitzer? This will come back to bite you in the butt. Is she an all-day Facebook schmoozer? Be prepared to handle your own transaction; your Realtor has another job she likes better than the one you’re offering her.

Why can’t you get your Realtor on the phone? Why don’t your repair issues get dealt with? Why is your lender calling the title company for you? Why is there an appraiser stranded outside your new home?

Part your problem is that you have a lazy Realtor.

The other part is that you have been a lax supervisor.

Whether your are a home seller or a buyer, you’re paying a lot of money for real estate representation. If you’re not getting it, you must either demand better performance immediately or take your business elsewhere.

The beautiful thing about capitalism is that you can always put the bums out of work. That’ll give them something to chat about online…

July 26, 2010

Buying a Phoenix-area rental home? It all comes down to the math.

by

Sun City Real Estate Broker

Author website

Phoenix handyman Mark Deermer and I have been prowling potential rental homes in the western suburbs of Phoenix. I’m looking for all of my usual stuff — all the factors that make the Metropolitan Phoenix rental homes we sell rent quickly and stay rented. And Mark is going through the homes to get a quick estimate of the cost to refurbish the homes, bringing them into rent-ready condition.

This is an easy world to live in right now — for buyers, at least. The quantity of available homes is rising, and the quality of those homes seems to be going up, too.

Here are six properties we’ve seen lately.

This all about strategy: We start with homes that might work and that are not insanely overpriced. Working from a projected rent, we know what the maximum entry cost should be. Mark’s refurb cost is subtracted from that gross number, which yields the ideal purchase price. We make the offer on that basis. If we get the house, we get it. If not, we move on. But if we do get the property under contract, we know that it will be profitable from the first tenant.

Ready to make your move? Send me an email or phone me at 602-740-7531 and I’ll help you buy a Phoenix-area rental home like one of these.

April 26, 2010

What’s the real estate price trend for bread-and-butter homes in Metropolitan Phoenix? Prices are up and down — but mostly flat…

by

Sun City Real Estate Broker

Author website

That chart illustrates sales prices for the past 13 months, as reflected in BloodhoundRealty’s Market Basket of Homes. What we’re looking at are suburban stucco and tile tract homes, the houses that drive the fat middle of the bell curve in the Metropolitan Phoenix real estate market.

That line looks awful spiky doesn’t it? That’s just the drama of charting software. What you’re really seeing is a market that is essentially flat. Prices go up. Price come back down. A home that would have sold for $122,000 in March of 2009 will have sold in March of 2010 for — wait for it — $121,000.

That’s right. For the past year, the Arizona Republic and half the faculty at ASU has been bellowing that the market has turned. It has. Slightly downward. And now that the home buyer tax credit is about to expire, it seem plausible that the near term trend will be still further downward.

Prices will probably decline gradually, mind you, and investors have clearly thrown a floor under our market. I would be surprised to see dramatic drops in values, but the segment of the chart documenting events from August through December of 2009 illustrates the impact of the tax credit. Without it, I expect this chart to grow even flatter in the months ahead.

Means what? Jump. Interest rates are still low, and cash is still king. Inventories will grow — nudging prices downward — and the quality of the available homes is gradually getting better. If you have the means to buy a home in Phoenix now, this may be the perfect storm. If we’re at the bottom, we’re going to be here for a while. But if you can afford to wait out the market, you can buy a whole lot of home for your money.

December 28, 2009

Why are lender-owned homes so much easier to buy than short sales?

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Sun City Real Estate Broker

Author website

An extended answer to a question from a buyer client, the short film linked below goes into the in-house procedures that result in the observed effect: Lender-owned homes are much easier to get under contract and to get through the closing process than are short sales.

We also talk a bit about strategy, particularly for mortgage-financed transactions.

Click on the link below to watch the video.

September 12, 2009

Are banks “warehousing” foreclosed homes in the Phoenix real estate market? If so, sooner or later something will have to give

by

Sun City Real Estate Broker

Author website

This from my Arizona Republic real estate column (permanent link):

Break out the champagne! Prices for bread-and-butter resale homes in Metropolitan Phoenix were up for the month of August! Hurray!

“Up by how much?” you ask. Well… Not very much, alas.

The average price for a three-bedroom, two-bath, stucco-and-tile American Dream home was $119,666 in July. In August, that number had risen to the lofty sum of — wait for it — $119,872.

In any other business, a difference like that would be written off as noise, but in real estate — hot dang! — it’s a bonanza!

Here’s what’s really happening: Banks are foreclosing on many, many houses, but they’re only dribbling a few at a time into the marketplace. In conjunction with added demand caused by the $8,000 first-time home-buyer’s tax credit, we’re seeing what looks like a shortage of available homes.

And yet, even in these straightened circumstances, prices are essentially flat. As an example, the average price for these homes was $121,898 in March.

One theory has it that the banks are releasing just enough inventory to maintain stable prices. That’s a satisfying explanation — given that it conforms to the observable facts — but who knows if it’s true.

Meanwhile, if the banks are in fact warehousing ever-increasing quantities of homes — foreclosed upon but not listed for sale in the resale market — eventually something will have to give.

Even though the banks might own those homes “free and clear,” there are still carrying costs associated with warehoused homes. Lawns must be mowed — or at least weeds must be chopped back. Roofing tiles will crack and break away, exposing the home to water damage. Pests of all sizes will invade the home, some to eat the wood, some to steal the appliances, the piping, the wiring — whatever is left undefended.

If we assume that this is true — that banks are acquiring foreclosed homes at a faster rate than they are releasing them into the resale market — then sooner or later something has to give. The banks simply cannot warehouse those homes long enough for the market to recover.

August 13, 2009

The buyer’s agent is the unsung hero of the home-buying process

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Sun City Real Estate Broker

Author website

This from my Arizona Republic real estate column (permanent link):

When we list a home for sale, two-thirds of everything we will do for the seller will have been done before we hit the MLS.

There is a similar disparity of effort on the buying side: Of all the work your buyer’s agent undertakes in your behalf, two-thirds of it will happen after you have put a home under contract.

That seems counter-intuitive. After all, you depend on your buyer’s agent to shop listings for you, and then to take you around to see them. When the showing is done, the work is done, too, isn’t it?

Far from it. You’ve found the home of your dreams and it’s all you can think about. But your buyer’s agent is busy figuring out how to write exactly the right offer, to make sure you get that home. And once you’re under contract, your agent will start to chip away at a long checklist of tasks that need to be taken care of to successfully close escrow.

There are so many things that can go wrong in the purchase of a home, it’s a wonder anyone ever gets to move. But, more than anyone else in the process, it’s the buyer’s agent who keeps things moving, who organizes all paperwork and gets it where it needs to go, who coordinates the inspectors, who keeps everyone informed and keeps the documents flowing.

And it’s the buyer’s agent who tends to keep the escrow process civil — and civilized. The seller may not want to do repairs or to bring the price down to reflect a low appraisal or to move out in time to permit a thorough final walk-through. It’s the buyer’s agent’s job to smile and sweet-talk the seller and the listing agent, to keep the transaction in motion when it seems always to want to grind to a halt.

You found a home you love, and that’s great. But if you make it all the way to close of escrow, it’s because your buyer’s agent was plugging away behind the scenes, day after day, to make it happen.

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