Paul Slaybaugh, Scottsdale AZ Real Estate

I believe it was Confucius who said that he who hesitates gets flattened by an 18 wheeler laden with 10 tons of abject irony along life’s crooked highway. Or was it something about those who dally within the confines of a centrifuge being at great peril of becoming centrifugal? Regardless of the exact phrasing, the veracity of the axiom is never more resplendent in self evidence than in its pertinence to a Real Estate transaction. Get in, get out, and for God’s sakes man, do it on the quick step.

Case in point:

August 8^th, 2009. The night was warm and dry. Once again defying all logic, Phoenix did not burn up upon reentry into this late summer evening, and its denizens scurried out of air conditioned alcoves to forage for supplies as the sun dipped below the White Tank Mountains in the far Western sky. Taking full advantage of the reprieve, I was amongst the throng vying to get sixty eight errands done in a three hour span. That’s when the call came.

A little background. A client of mine purchased a beautiful home in Queen Creek two years ago. One job transfer and complete meltdown of Western civilization later, the home is unfortunately worth about 50% of its prior value. So we attempted to hammer out a short sale. Rife with frustration, incompetence, duplication and other multi-syllabic words, short sales are the very antithesis of expediency. It takes forever and a day just to get a negotiator from the bank assigned to the transaction. Once the negotiator is assigned, it can literally take weeks just to choke the direct phone number to the cave where they hide him out of a disinterested call center employee.

It’s crazy. It’s maddening. It’s 2009.

The upshot is that 6 months and many stops and starts later, the deal we secured was approved by the bank and headed for closing. Loan docs were in and we were set to put a ribbon on the whole shebang in two days. It didn’t matter that the bank had screwed up the first approval by providing an unrealistic closing window. It didn’t matter that it took an additional three weeks and a new set of BPOs (broker price opinions) to get the closing timeframe extended to a reasonable period of time to line up the buyer’s financing. It didn’t matter that the buyer had nearly backed out several times during the interminable wait as concern mounted about the continued erosion in values. Or that we had to sweat through an appraisal in August for a sale that was negotiated in February. We were finally at the finish line.

And then the fateful call came. Had the pool service not been performed? Was there new damage to the property? No, we had somehow managed to ride out the entire escrow without incurring any additional issues with the home itself.

The buyer lost his job.

Called in over the weekend and informed that his services were no longer wanted, months of work went straight down the portal to Real Estate hell that opened up under our feet. More pointedly, months of waiting went down said portal. Had the lienholder acted with the expediency and urgency that actual Real Estate professionals understand is vital to the successful culmination of a transaction, the unfortunate eventuality would be somebody else’s problem. Instead, the hot potato remains firmly in the bank’s seared hands.

Time kills deals.

The glacial pace that most institutions operate with only serves to demonstrate why bankers should stick to banking. The moral that the average consumer can take from this tale of woe is that you never take a Real Estate sale for granted. Things can and will happen between contract acceptance and closing. To limit those things that can sink your battleship, you want to get to the closing table as soon as humanly possible. Death, job loss, a bad night in Vegas … any manner of variable can rear its red inked head to sabotage your sale.

When you have the opportunity to close, close. If that means you have to reschedule the movers and change the turn-off date on your utilities, so be it. A little inconvenience is cheap insurance against catastrophe.

Flattened by the big rig and dizzy from centrifugal force, we limp back onto the market. Nimble as we can be with a 500 pound gorilla in tow.

Everyone wants a piranha.

Whether a professional athlete intent on a signing bonus the size of Madagascar, a victim of a vicious fender bender fixated on the 2.8 million dollar legal prescription for a tender neck or a home buyer/seller whose sole purpose on this earth at the immediate moment is to grind as many Ben Franklins as possible out of the guy on the other side of a negotiation, aggressiveness is typically the hallmark virtue in the professional representation that is sought.

The sports super agent, who we are 95% certain has a life-sized portrait of his bare chested self wearing a boa constrictor around suspiciously well tanned shoulders hanging in his posh downtown office, is universally loathed by all. Secretly, however, we all know he’d be the only guy we’d call if we needed to make a cash withdrawal from the abundant posterior of a team owner.

The weaselly ambulance chaser with the slicked back, Grecian Formula enhanced locks is similarly unlikely to find himself on the guest lists of many Bat Mitzvahs and baby showers. That narcissistic predator might eat the baby. When we spill the drive-thru coffee in our laps or stumble over the “Watch Your Step!” sign at a public establishment, though, he’s the guy we call.

Amicable folks are great to have around, but when the conversation turns to business, we don’t want Mary Poppins going into battle on our behalf armed only with a spoonful of sugar to make the medicine go down. We’d rather employ the services of Dr. Jekyll to go all Mr. Hyde on the opposition and cram that spoon straight down their throats.

Easy, tiger.

There is a time to kill, and there is a time to frolic. The problem with the constant grinder is that he often grinds himself right out of a transaction. It is critical that you leave the other guy with some dignity at the end of a tough negotiation, lest all of your efforts collapse under the weight of the other party’s exhaustion. After you’ve knocked the poor bloke to the ground and bloodied his nose, do the smart thing. Extend your hand and help him up.

In practical terms, this is akin to finally saying “yes” after repeated “no’s.” When you win on the key points, you are often in a position to make a small concession on some trivial tangential issue. Too many times, I see lost opportunities for a clear victor to score easy diplomatic points at these junctures in the waning moments of a deal. Want the inspection and other critical aspects of the transaction yet to come to go smoothly? Give up something that isn’t really necessary. Offer something minor, but unexpected.

You’ve bitten his neck on price, drank his blood on terms … time to give him a transfusion unless you want to carry his Doppelganger the rest of the way to closing. For the record, undead weight is quite heavy.

Of course, because you are reading my blog, this advice assumes you were on the dispensing end of said treatment throughout the course of the initial negotiation. If you were unfortunate enough to be on the receiving end, go ahead and drive a wooden stake through the SOB’s black heart.

*Originally posted at the Scottsdale Property Shop.

There is always opportunity in the margins. Unfortunately, margins tend to attract the marginal.

The latest water cooler rumbling to emerge from a recent tour group meeting centered on a purported professional short sale negotiation company. Here in the Valley, short sale negotiation has become its own cottage industry in the past year and a half, and for good reason. Most Realtors had never encountered a short sale before the recent woes in the market. You can include me among those ranks. As such, there has been great demand recently for third party professionals who know the drill and have contacts within the various institutions for expediting the process. While the skill-set required to negotiate with the bank is really little more than gumption, persistence and know-how, the learning curve can be steep, and the time commitment impractical. Many agents would rather enlist the help of a specialist to handle this critical portion of the transaction than practice on their first few short sale clients. The stakes are too high for an erstwhile, but bumbling rube to fumble it all away. For many of us, it just makes good, practical sense for all parties involved.

Now comes the “but.”

Back to the recent tour meeting of which I mentioned, the latest scuttlebutt is that at least one major short sale negotiation company is the focus of an open investigation. It seems there is some question as to whether this outfit was utilizing fraudulent measures to cash in on a much grander scale than the stated fee of their services. Nothing has been proven, and no charges have been filed to my knowledge (hence the glaring omission of the company name here), but the concern is that this company might have engaged in the “double escrowing” of the short sales they were hired to negotiate. Plainly stated, upon receiving an offer that both buyer and seller had executed and forwarded to the negotiator to submit to the bank for review/approval, this company is thought to have tabled said offer and worked to negotiate an even lower sale of their own with the bank. Once accepted, they would orchestrate the virtual simultaneous closings in which they bought the property from the bank and turned around and sold it to the buyers at the higher price. Neither the buyer nor seller would ever know that there were actually two transactions taking place concurrently.

Of course, if the negotiation with the bank failed, the buyer and seller would simply be informed that the offer had been rejected … eventually. Even though the bank never saw it. The buyer wouldn’t be overly thrilled to learn of this, of course, but the seller is the one who really stands to lose in such a scenario. He is the one with the imminent foreclosure and interminable credit limbo on the line while the entity hired to negotiate on his behalf plays Russian roulette with his financial well being.

So while nothing is proven in this instance as of yet, it serves as a consumer alert. While I was careful in the selection of the professional I have enlisted to negotiate with the various banks on my sellers’ behalf, some might mistakenly believe that any fly-by-night company that has branded itself as a “short sale negotiation specialist” is reputable. Just as you would exercise diligence and perform your own investigations in the selection of your Realtor, don’t let your guard down when settling upon the service enlisted to actually talk to the bank. Find out how long they have been in operation. Are there any complaints lodged with the Better Business Bureau (though some may be such neophytes that they haven’t been around long enough to incur complaints)? How long has your specific negotiator been involved in either the Real Estate or banking industry prior to their current position?

Maybe I’m just jumping at shadows, but I can’t help but wonder if this is a niche that won’t prove to be populated by failed Realtors, loan officers, car salesmen, financial advisers, taxidermists, Maytag men and arthritic slow-pitch softball umpires in hindsight. There are some good ones out there who are absolutely invaluable to the busy Realtor and desperate seller alike, but I am under no illusion that there aren’t more than a few soulless chasms of dollars and teeth hiding behind the polished veneer of a snappy tagline as well.

When dealing with a property that you are trying desperately to sell before the bank forecloses, the stakes are elevated to financial Thunderdome proportions. If your short sale survives the fight, you will walk away with a limp (credit damage, possible tax ramification, etc), but at least you walk away. A foreclosure will effectively kill your aspirations of future home ownership for the next 5 years.

Choose your weapon wisely.

*Visit the Scottsdale Property Shop for the latest news in Scottsdale Real Estate*

If you are reading this post, I don't need to bring you up to speed on the power of online media. You went to your search bar, whether Google, MSN, Yahoo, etc, and typed in a few keywords (Selling A Home In Scottsdale AZ, perhaps?) and here you are. You likewise understand that today's home buyers perform thousands of similar searches every day with slightly different keywords (Homes in Scottsdale AZ, for example). Gone are the days of waiting for the Sunday paper to clip the classified ads and open house listings to find a home. Gone are the days of waiting for much of anything, as a matter of fact. The internet provides 24/7 exposure for your home on the medium where the overwhelming majority of big game house hunters begin their quest. That's where we come in.

I'll take ... that one!

With a reach that spans continents as well as states, the Real Estate blog that you are riveted to at present is viewed by buyers from around the world. I'd have to check my visitor stats, but I believe the only locale from which we have not received an inquiry from a prospective home buyer is the planet of Zoltar, which lies within the fourth dimension of Saturn's largest moon (Titan, for all of you keeping score at home on earth). Zoltarians are notorious tire kickers anyway.

If there are buyers here, we'll find them!

So how do you harness this power for good (read: to sell your home)? The answer is so rudimentary that you are already rolling your eyes at the condescending simplicity of the pitch.

List your Scottsdale, Phoenix or Paradise Valley home for sale with Ray & Paul Slaybaugh!

In addition to prominently displaying your property in front of an armada of prospective buyers, this Little Blog That Could ™ includes a subscription base of hundreds of Realtors from around the country and Canada. That's what you call synergy, folks. Every contact leads to an additional pool of previously unreachable buyers. The more buyers that are exposed to our propaganda, the greater the likelihood of not only attracting a suitor for your home, but in maximizing the ultimate sales price.

Yes, your home will still be exposed to the market by traditional methods. Flyers, virtual tours, broker tours, enough digital pictures to choke a small animal with mega-pixels and the invaluable face to face networking that makes an experienced agent a prerequisite to the home selling adventure. Your home will also appear on all of those formerly cutting edge sites that aren't so cutting edge anymore (Realtor.com, etc).

When it comes to selling your home, the bottom line is not just what your agent does, but how he/she does it. So scroll through my blog archives, see how we market our properties via the Web 2.0 medium and learn a little about us in the process. Consumers have more information at their disposal than at any other point in the history of man. They are an insatiable collective beast. Hungry to buy, you nonetheless can't feed them until they have seen the menu. Your home may represent the juicy filet mignon to your neighbor's greasy hamburger, but if your waiter never tells them about the specials ...

So call us today to see your Scottsdale home up in these virtual lights!

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Ray & Paul Slaybaugh

Realty Executives

(480) 220-2337

paul@rayandpaul.com

Selling Scottsdale Since 1974

It is an inevitable starting point for many buyers right now. Before I can finish saying hello, I am bombarded with requests to see bank-owned and short sale housing. Frankly, were we to change places, I would most likely do the very same. I am aware enough of the opportunities this market has created in the foreclosure arena to dedicate a more or less weekly post to bank-owned property spotlights, after all.

However, there are values everywhere right now. Resale homes have been dragged inexorably closer to the shallow end of the pool by the bank properties, and builders have been forced to sell off their inventory homes at even deeper discounts than usual. There is no part of the market that isn’t coughing up a bit of water.

Ah, brand new construction at foreclosure pricing … can it be?

In some cases, yes, it can.

Builder spec homes just might provide the alternative to bank-owned property that Phoenix area value hunters seek. A spec home is either one which the builder constructed without a waiting buyer in the wings or one in which the original buyer bailed out on the transaction after construction commenced. These homes make great options for buyers who prefer brand new construction, but don’t want the lengthy wait involved in having their new home built from scratch. A buyer can typically move into a completed spec home within 30 days. Of course, if construction is complete, the new buyer will not be able to make any cosmetic choices in regards to flooring, cabinetry, etc. The big discounts, however, are often very persuasive arguments for that sacrifice.

Eager to dump existing inventory in the best of times, builders are even more anxious to get their specs off the books in this market. As evidenced by the near standstill in new permits being pulled by builders for new projects, it is cut and run time for many. I am seeing completed spec homes with significant levels of upgrading being advertised for sale well below base price. In other words, if you signed a contract to build from scratch, you would pay more for a home with absolutely no upgrades than you would for the completed home with cherry cabinets, slab granite countertops, stainless steel appliances, premium culdesac lot, etc.

Another advantage that a builder can offer a prospective buyer right now is tough to beat in-house financing. Not usually a fan of running my loan through the same guy who is selling me something, any conflict of interest concern tends to melt away when they disclose the cheap rate blocks they have purchased for their customers. In addition to the low sales prices, I have isolated several builders who are paying up to the maximum allowable buyer closing costs. A recent client is getting a fixed rate in the 4’s with an additional buydown for the first two years. At no out of pocket cost. All he has to show up to closing with is a downpayment. Not too shabby. *

You have to be careful, however. As I mentioned in a previous post, there are many struggling builders throughout Maricopa County. While a little financial pinch works in the buyer’s favor, too much can lead to unfinished subdivisions, mechanic’s liens and other fun stuff. You want to do your research (or better yet, work with a knowledgeable Realtor ;) to ensure you are not walking into a doomed project. I recommend national builders with ample working capital and developments that are nearing close-out.

You don’t want to get stuck in a ghost town.

Bear in mind that you may have to venture a bit further from your desired location if brand new construction is your bent. Scottsdale is largely landlocked, with only the valuable land in the North remaining open to development. There is infill construction in central Phoenix, but the majority of new home projects are located in South Phoenix (Baseline corridor), North Phoenix (I-17 corridor) and pushing ever Westward towards LA. For those in the Southeast Valley (Mesa, Gilbert, Chandler, Tempe, Queen Creek), there are still plenty of options.

I spent the last week looking at a fair amount of them, as a matter of fact.

I had one of those purported foreclosure buyers who ended up buying a brand new spec home from a quality home builder instead of any of the bank-owned homes in the same price range that needed work, had no available warranty and disclosure information and no special financing incentives.

The moral of the story is not to rule anything out. Look less at the property label (bank-owned, resale, new) and more at the property itself. You just might be surprised at the unexpected bargains that are available to be had across the full color spectrum of the 2009 Real Estate market.

Give me a call if you want to find just the right shade of perfect.

* I always advise speaking with a reputable outside lender to compare programs/costs

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Paul Slaybaugh

Realty Executive

Your Source for Scottsdale AZ Real Estate

(480) 220-2337