Paul Slaybaugh, Scottsdale AZ Real Estate

I wrote an article a couple of months ago which detailed the rise in vandalism & theft across the greater Phoenix and Scottsdale area. As the number of vacant homes have risen steeply along with the spike of foreclosures and total listings, so too have the targets for the scavengers in our midst. The point made was that placing a “For Sale” sign in the overgrown and underwatered front yard of a clearly abandoned house is nothing short of ringing the larcenous dinner bell. Copper, appliances, cabinets, ceilings fans, light fixtures, A/C compressors and anything else that fits in the bed of a ’74 Ford is walking out of vacant properties. Between the absentee owner of record and the agent charged with selling the home, it is imperative that someone removes the telltale signs of lifelessness from the property to deter such criminal enterprise. Far too often, door hanger advertisements are stacked five deep on the knob. The lawn is deceased, but the weeds have never felt better. There are papers in the driveway and not even the thick layer of dust on the front window can prevent prying eyes from determining that the interior holds no furniture.

I maintain that if banks would employ agents who are not already carrying 200 REO listings, they might find someone who will actually pay the property the attention it needs to secure its dwindling equity. Of course, the asset manager for the bank is just as overworked with hundreds of open files stacked upon his desk, so there really isn’t anyone who gives a whit about any one particular house. This is toxic to our market. As these properties are further devalued through negligence, the phenomenon further erodes values of the surrounding areas. It really isn’t all that difficult to make a property a harder target.

However, trimming up the yard and routinely visiting the property (to show signs of life at the home, if nothing else) won’t really cut it when agents insist upon advertising “Vacancy” to any knucklehead with a computer who is looking for a temporary flophouse or a lightly-used dishwasher. I found this snippet in the PUBLIC remarks section of the MLS today:

“Reduced 9/25/WOW. NOW VACANT!!”

I am going to type slowly so that everyone understands this basic tenet of the Arizona Regional Multiple Listing Service:

T h e r e i s a R e a l t o r r e m a r k s s e c t i o n f o r s h o w i n g i n s t r u c t i o n s.

Y o u d o n ‘ t h a v e t o in f o r m t h e e n t i r e p l a n e t t h a t t h e h o m e i s v a c a n t!

The bank, or absentee owner in this instance, may not care if the house is ransacked at this point, but the neighbors will. It doesn’t make the jobs of us agents any easier, but that doesn’t concern me much. Realtors are like cockroaches. We’ll survive a nuclear holocaust. I do worry about homeowners across the Valley, though. The guy down the street who might be forced to sell because he lost his job does not need his value further degraded by a crummy comp that is even crummier than it needs to be.

The banks are sticking it to a lot of people for the second time, and it needs to stop.

What a glorious morning. Now that the mercury in local thermostats has finally receeded from triple digits, Scottsdale residents are free to brave the outdoors again. No longer confined to air conditioned environs, we see neighbors for the first time in months. We've lived in our pools since May, but it's nice to be reacquainted with our front yards as well.

I can imagine no finer setting for attending "Railfair" at the McCormick-Stillman Railroad Park in McCormick Ranch.

Making the mid-morning pilgrimage to our family's mecca of leisure, we met up with some friends. Just in town from Alberta for the week, they planned the trip to their vacation condo perfectly. My jaw nearly hit the floor upon learning they traded 30 degree temperatures for our upper 80s. Of course, that was music to my ears.

Thus beginith the great seasonal migration of 2008-2009

The park was awash in model train enthusiasts, inflatable apparati for the kids and all manner of fun. The train schedules were ramped up to allow for nearly continuous departures. In short, it was the Railroad Park on HGH. Given the tenor of the week's financial and political news, it was a more than welcome reprieve. Credit market freezes and rate indeces do not exist at Railfair.

If you are looking for something to do with the kids in Scottsdale this weekend, and this post finds you in time, you have one more crack at attending Railfair. It runs tomorrow (Sunday, October 12th) from 10 AM - 5 PM. Tickets for the attractions are available on site ($2 train rides, $1 carousel rides ... children under three ride free).

Considering that the park often fills up quickly for special events, you might consider forgoing the parking lot, and parking across the street. There's a place called Starbucks there that serves coffee. You might have heard of it. If you haven't, forget I said anything. I'm reasonably sure they put cocaine in their products. Nothing else would explain my addiction.

This is but one pitstop along our Autumn lap around the Valley. Schnepf Farms is holding their annual Fall festival, the State Fair is in full swing and other seasonal events are popping up all over the place. If you aren't here, get here now!

For more information about the Railroad Park and Railfare, please visit:

http://www.therailroadpark.com

For more information regarding McCormick Ranch Real Estate, please visit me at McCormick Ranch Home. Start your search for your new Scottsdale home today!

Beautiful house.

A few drywall patches will cover the holes where the surround sound speakers were yanked out of the wall. The sprinkler system is ready to go into the ground out back. That dirt will green up in no time. What’s that smell? Oh, the water’s off. Someone must not have realized that when they decided to test the plumbing.

There are downsides to entering the world of the bank-owned properties, of course, but buyers have little choice in many instances these days. Banks are not only setting the market, banks are the market in many parts of Phoenix. As the floundering institutions look to offload their liabilities, typical mom and pop sellers are having tremendous difficulty competing with the bargain basement prices. Buyers are willing to look past a little ugliness if it means saving a couple hundred thousand dollars.

Where it gets interesting, though, is financing. I’m not talking about the current credit crisis that has made it difficult on many would-be buyers to qualify. This could involve someone with bulletproof credit and cash reserves so ample that Henry Paulson will be calling any day for “a little help here.” The problems that can arise with financing an REO property often have nothing to do with the buyer, but rather the property.

Case in point, a client of mine purchased a bank owned home earlier in the year. Steady, verifiable income. Credit tighter than Chinese fingercuffs. The deal almost blew up because of a leak at the kitchen sink. The day prior to funding, I had to slip my handyman in to make the repair (banks don’t often make any repairs to their properties). Only after I supplied the underwriter with the documentation of the repair (they would later demand a copy of the handyman’s business card, I kid you not) did the deal actually close. Mind you, this was for a leaky sink.

See where I’m going with this?

With most bank properties, a leaky sink is going to be the least of your concerns. There might be all manner of physical conditions which preclude your lender from giving you the loan for which you are approved. Some lenders are demanding copies of inspection reports, and have charged appraisers with reporting observable defects. Once an underwriter has knowledge of certain defects, your loan is imperiled unless repairs are made prior to the close of escrow.

Termite infestation, roof damage, non-functioning major components and systems … all of these things can torpedo your loan. Lenders are fearful enough of handing out money for prime properties at this stage of the game. A distressed property is far from ideal collateral. I get the impression in some instances that an underwriter or funding department will look for any excuse not to risk depleting their coffers further. Even if you want to move ahead with the purchase because you are getting such a smoking deal, you might not have the means.

I showed a property the other day in which two of the three A/C units had been cannibalized for copper and parts. Outside of paying cash or arranging private financing, this steal of a house (quite literally) would be difficult to buy through conventional means.

If the bank won’t make the necessary repairs, buyers can be left with the unenviable decision of either walking away from a dream purchase, or making the repairs themselves. A buyer tackling such expenses prior to the close of escrow is fraught with risk for all parties. The buyer risks losing that money if the deal goes south, and the seller risks the buyer gaining an equitable interest in the property prior to closing. Bad juju all around.

There are deals to be had in bank properties right now, but it’s better to be aware of the potential pitfalls before you sign a contract . Home inspections will reveal many of the non-glaring defects, but I find it’s better to address the obvious loan killers in the initial negotiations. Why waste weeks of your life jacking around with a seller that has no intentions or repairing anything, regardless of whether it affects your loan or not?

Seem stupid of the bank that owns the property not to make the repairs? Counter intuitive? Assume they will do whatever it takes to offload the inventory that they desperately don’t want? Believe me when I say that the depths of a bank’s stupidity can be an uncharted abyss, populated by the freaky, googly-eyed monstrosities that the Discover Channel tells me reside only in the deepest oceanic trenches and asset manager’s offices.

Be prepared for the eventuality that your lender might not be as keen on the property you wish to purchase as you are. Lean on your mortgage professional and your Realtor to help you successfully navigate the purchase of a distressed property.

There’s gold in them there foreclosure hills, but someone needs to lend you a shovel if you don’t have your own. And they’ll want to know what manner of muck you are planning to dig into before giving you the go ahead.

It's shakeup time for one major Valley newspaper. The East Valley Tribune is blaming the current economic downturn and stagnant Real Estate market for a recent decline in readership. According to an article on azcentral.com, the Trib is cutting 142 positions and pulling out of Scottsdale and Tempe in January. The paper will also scale back to a four day delivery schedule.

By and large, slumping advertising revenues are being blamed for the woes of several local publications. As the market has softened with properties becoming increasingly difficult to sell, Real Estate agents and brokerages have largely spurned such traditional forms of marketing for the cheaper, more effective reach of the internet.

As a working Realtor in the Scottsdale, Phoenix and Paradise Valley area, allow me to interject my 2 cents into their depleted coffers.

I have read and heard many mentions over the course of the past year regarding the hesitancy of agents to plunk down advertising dollars in this treacherous market. It is widely theorized that my fellow entrepreneurs have shied away from the expense due to the diminished likelihood of producing the sale that would justify all of the upfront expense. While the logic is sound, it is of flawed construct.

Now, more than ever, promoting a property is critical to the goal of standing out from the sea of competition. Productive agents know that they must not only employ the tools which have been successful in the recent past, but explore new frontiers in the adapt or perish landscape that dots our profession.

We have adapted, and the periodicals have not. That is why they will continue to perish.

Newspaper advertising has not been a successful medium for marketing property in the 10 years I have been a licensed agent. Forget a measure of "bang for the buck," as there is, and was, virtually no bang. The papers were artificially propped up during the heights of 2004-2006 because agents were making money hand over fist. Knowing that properties were going to sell in a heartbeat, thus negating lengthy marketing expenditures, it was a no-brainer to offer weekly advertising to sellers as an appeasement, even though it was well known to be an ineffective medium. Buyers simply do not go to the morning paper to look for homes anymore. Everything they need is available online, 24 hours a day.

To be sure, the advertising rates in the local rags have become exorbinant to the point of hilarity, but it is not the price tag that has driven Realtors away. It's the value. There is none. Quarter pages, full color pages ... we've tried them all. None make the phone ring. Believe me, agents are always looking for the new mousetrap to catch buyers. While preferably that would entail a medium that doesn't require so much sharp cheddar, I hazard the assertion that my fellow agents and I would shell out even more than the barbaric rates currently charged if the medium proved effective in any way, shape or form.

Buyers want digital pictures. They want virtual tours. They want a fully searchable multiple listing service which allows them to browse at their own leisure. They want maps and tax records. And they want it all in one place. As such, the agents who are truly earning their keeps have pulled their resources out of failed avenues and reallocated expense to the more fruitful virtual world. We engross ourselves in SEO and we churn out post after post to keep ourselves and our properties front and center before the eyes of our intended audience.

Most papers have spawned online versions of their publications. I urge them to pursue this medium fully, and gradually phase out antiquated physical delivery. A recurring internet ad is one which is much more palatable to agents like myself who intend to reach beyond the borders of local readership. Even those ads will remain prohibitively costly until the revenue stops subsidizing the dead medium of the paper version. Streamline operations to make costs more manageable, and the advertising department can bring fees more in line with results. More to the point, the efforts will be geared towards actually reaching buyers where they lurk: online.

We'll spend the money if it produces results.

Especially in a city like Scottsdale, with our high volume of tourism, we need to reach those potential new residents in other parts of the country/world. I've always liked to sit down with the morning paper as part of my ritual, but I finally halted my subscriptions a few days ago. Everything I want to read is free online, and I don't have to murder any more trees unnecessarily. I offer that a radical departure from the fundamental circulation strategy is necessary if periodicals are to survive this 2.0 world into which we have all been dragged.

The papers aren't failing because agents aren't spending any money. The papers are failing because agents aren't spending any money on frivolous, nonproductive means.

Anybody still buying ribbon for their typewriters?

Continuing the Unique Architecture in Scottsdale series, this edition focuses on the mid-century modern designs of famed local architect Ralph Haver. If you enjoyed the style of the Frank Lloyd Wright inspired homes of Mountain View East in McCormick Ranch, but are operating with a lesser budget, the South Scottsdale subdivision of Town & Country Scottsdale might be for you.

A small neighborhood of 62 homes, Town & Country Scottsdale is coveted as much for its downtown Scottsdale location as it is for its classic lines. Featuring the clerestory windows and sharp angles that make enthusiasts of contemporary design swoon, Haver homes are always in high demand. There are other Haver subdivisions scattered throughout Phoenix, but Town & Country Scottsdale is the only Haver neighborhood that has been designated “Historic.” Besides, it’s as Old Town Scottsdale as it gets.

These homes range in size from just under 1400 square feet to nearly 2400 square feet, and were constructed between 1952 and 1960. All properties are single-level and feature block construction. 35 have private pools. Some remain virtually untouched by time while others have been renovated from top to bottom. As such, the prices can fluctuate wildly between the upper $200,00s and the low $400,000s (as of the time of this posting).

For those who want their unique architecture on a budget, it is tough to beat this charming neighborhood. While this older area of Scottsdale has less flash than the new developments further north, it makes up for it in character. With the direction the cost of gas is heading, it’s hard to argue with the central location which allows residents to walk or bike to all of the downtown attractions (restaurants, nightspots, art galleries, etc).

South Scottsdale is typically thought of as entry-level housing to our community, but that doesn’t mean it has to entail a small, boring shoebox of a home. Town & Country proves that. With a resurgence of appreciation for this mid-century modern design, the future is bright for this neighborhood.

Leaving modern architecture behind, the next installment will also leave the cozy confines of Scottsdale. Defying the very title of the series, how could any overview of architecturally significant homes be complete without visiting one of the historic downtown Phoenix districts? No point dilly-dallying, we’re going right to the granddaddy of them all: the Encanto-Palmcroft district.

Contact Paul Slaybaugh with Realty Executives to find the Scottsdale home that is unique as you are.