So I was doing renewal hours so that I can renew my license at the end of the month and I was sitting in a Short Sale class. In the class we discussed the basics around short sales and had an open discussion regarding how the banks operate or don't operate. But I heard something that made my SKIN CRAWL!
First let me make a disclaimer, I can only speak in regards of transactions that occur in Arizona, and you should always have your clients speak with a Real Estate Attorney and/or Tax Attorney to see how a short sale will effect them long term.
As I was sitting in my class, another Realtor spoke up regarding her recommendation to her client during the transaction. She had advised her client to take a $50K promissory note...that's right $50K. The loan was not a Home Equity Line of Credit (which is not covered under the Arizona Anti-Deficiencies Statutes, but can be negotiated and removed during the negotiations with the banks), but rather a second mortgage. So by advising her client to do this, she has allowed him to waive his rights' under the Arizona Anti-Deficiencies Statutes and he has now taken on a $50K credit card bill where he is probably paying around $800-$1000 a month.
So here is the solution, when the agreement letter is sent to the listing agent, there is going to be verbiage in the letter that creates a loop hole for the bank to pursue your client at a later date. This verbiage is almost always in the agreement letter and the agreement letter is usually a form letter. What you need to do as the listing broker, is call your contacts at the respected bank/s and let them know that under AZ Statutes they need to REMOVE THE VERBIAGE. By doing this step, you are protecting the interest of your client. A little negotiation goes along ways. If you are having problems with the bank not wanting to remove the verbiage, move of the chain of command at the bank (this can be fun sometimes, play a game to see how far you can go, I have made it to the Regional President of one bank and I know people who have made it to CEO's of some of the largest banks in America). If you are not making head way at the $10 and hour employee and they won't transfer you, hang up and dial the same number, you will get someone new.
It is scarey to see what some Realtors are advising clients to do. My wife and I only take clients who have talked with a Real Estate Attorney. It usually cost the clients $250-$500 for a consultation, but everyone of our clients come back with a detailed picture of what they getting into. Plus, we now have released a good portion of liability. Lastly, read the bank documents before having clients sign them, and don't let your clients sign a promissory note, but rather work harder and threaten the bank that the deal will fall apart if the verbiage isn't removed from the letter. The bank will remove it, you just need to tell them that this is Arizona and your client is protected under the Arizona Anti-Deficiencies Statutes.
Please protect your clients, if you are not comfortable with short sales, we can help and we do pay referrals on short sales (we have a referral scale that we use do to the extensive work required, please call for details). Our goal is to help over 100 famlies avoid foreclosure this year. Best of luck to you all..
Well, the election is finally over and know all those signs get to come down on every corner of Phoenix. Well, I am not going to talk about the presidental election as that is out of my realm, but I did want to congradulate the citizens of Arizona for pulling the rug out from under the unions by defeating Prop 201 (the so-called Homeowner Bill of Rights). I was pleased to see the Arizonians still stand for values and fairness and don't believe that you should be able to file a lawsuit just because you want too.
But the greatest news is that Prop 100 passed which prohibits the state from taxing us once again when we decide to sell our home. Afterall, we pay yearly property taxes already. So congradulations Arizona. There is a long way to go still, but we have set out on the right foot so far.
What is a Real Estate Transfer Tax?
A real estate transfer tax (RETT) is a state or local government imposed tax that is collected when you transfer ownership of your home, land or commercial real estate. Typically, once the tax is initiated, the rate can be increased by the state, county or city at any time.
Why are Transfer Taxes Proposed?
Too often, this form of taxation serves as a new source of revenue to balance a government's bloated budget caused by overspending. Once this type of tax is put in place, not matter how low the tax rate is in the beginning, it always ends up being raised.
What are the Problems with a Transfer Tax
IT'S DOUBLE TAXATION!
Governments already collect taxes on your property based on the property's value. This new tax would unfairly cause a second tax to impact your home or property.
DAMAGES YOUR EQUITY!
Since the tax is assessed against the total value including the amount you owe on your mortgage(s), the overall equity earned by the seller is decreased.
SLOWS AN ALREADY SLOW MARKET!
In the current slow market, a transfer tax would make it more difficult for people to buy or sell homes. Once a transfer tax is put in place, it can be raised at any time. This costs people buying or selling their homes even more money.
PUNISHES THE HOME OWNER!
A home is often the biggest and most important asset a person has in life. A transfer tax reduces the equity people have worked hard building. People already pay multiple taxes and fees on their homes. This tax will layer on one more significant closing cost you will have to pay.
IMPACTS LOWER INCOME THE MOST!
This tax imposes the higher tax burden on lower income households that typically spend a larger percentage of their income on their home.
Here is the latest market updates from Sept. 2008. It appears that we are trending to a better market for sellers, but make no mistake, it is still going to be a while, hopefully 6-9 months.
| New Listings | Active Listings | Sold Listings | Months Inventory | |
|---|---|---|---|---|
| Sep/2008 | 14,247 | 54,933 | 6,159 | 8.92 |
| Aug/2008 | 13,588 | 55,174 | 5,615 | 9.83 |
| Jul/2008 | 13,528 | 55,831 | 5,898 | 9.47 |
| Jun/2008 | 13,558 | 57,216 | 5,692 | 10.05 |
| May/2008 | 13,062 | 59,067 | 5,596 | 10.56 |
| Apr/2008 | 13,827 | 60,140 | 4,810 | 12.50 |
| Mar/2008 | 13,521 | 59,868 | 4,256 | 14.07 |
| Feb/2008 | 13,068 | 59,412 | 3,422 | 17.36 |
| Jan/2008 | 16,059 | 56,924 | 2,872 | 19.82 |
| Dec/2007 | 8,976 | 58,569 | 3,342 | 17.53 |
| Nov/2007 | 11,670 | 60,583 | 3,315 | 18.28 |
| Oct/2007 | 14,262 | 60,506 | 3,422 | 17.68 |
| Sep/2007 | 12,921 | 59,574 | 3,377 | 17.64 |
| Aug/2007 | 14,844 | 58,823 | 4,308 | 13.65 |
| Jul/2007 | 13,890 | 57,565 | 4,686 | 12.28 |
| Jun/2007 | 14,335 | 57,506 | 5,401 | 10.65 |
| May/2007 | 14,820 | 56,672 | 5,772 | 9.82 |
| Apr/2007 | 15,269 | 54,993 | 5,475 | 10.04 |
| Mar/2007 | 16,606 | 52,328 | 5,906 | 8.86 |
| Feb/2007 | 13,707 | 50,123 | 4,884 | 10.26 |
| Jan/2007 | 15,944 | 47,277 | 4,352 | 10.86 |
| Dec/2006 | 8,649 | 48,129 | 5,325 | 9.04 |
| Nov/2006 | 11,416 | 50,640 | 5,323 | 9.51 |
| Oct/2006 | 13,822 | 51,295 | 5,548 | 9.25 |
Information deemed reliable but not guaranteed. Data provided by ARMLS.
So the stock market fell by more than 700 points today and I was quite encourage about the outlook for the real estate market. You must think that I am crazy, but let me explain before you judge me. As I was driving to the office this morning I was listening to talk radio and heard a story that made me laugh. See in the North part of Phoenix there is a new development/shopping center that is opening up and needs around 260 people, so they held a job fair and had 700+ people show up. 40% of the people were from the real estate industry. This is appaling. What that number tells me is that a huge part of our industry needs to either get out of the house and go to work on their business or just get out all together.
So let me ask you this if you are still a dedicated REALTOR, are you shifting and getting your unfair share of the market? Has you shifted you business to compete in today's market? Is your office supporting you, or are they waiting for you to quit?
If you are struggling but are dedicated to surviving this market, I would highly recommend reading the book SHIFT by Gary Keller. It is a great book that details the 12 things all agents need to do right now to survive this market. Also, if you are interested Gary Keller is coming to Phoenix on Nov. 11, 2008 to present the concepts in person, so if you would like to go let me know and I will let you know how to registrar. The tour cost $20, but that also includes the book and it is open to ANY agent wanting to improve their business.
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Phoenix Metro Area Real Estate Specialist. Your one stop resource for buying and selling homes in Tempe, Chandler, Gilbert, Mesa, Scottsdale, Phoenix, Ahwatukee, Queen Creek and Maricopa.
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