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Sometimes I laugh at the statistics we come up with in the Real Estate Industry, usually the funny part is when we try to figure out what the numbers mean. Today, I’m going to contribute to this. ARMLS added a new statistic last April (2011) that I really like:
I like this because it gives me a basic feel for how active a week as agents have. Today, it dawned on me that the number or the trend means absolutely nothing without another key piece of information. That key piece of information is number of active listings out there. As of the moment I wrote this post, that number is 17,046. Last week there were 36,104 lockbox opens. Let’s ponder where I’m going to go with this. On average (average, you know what they means right, some are higher and some are lower), each listing was open just over twice this week. The reason I bring this to your attention is because at 17,046 active listings within ARMLS, this is pretty low for us. It’s a seller’s market right now. Add to that a report from ARMLS that last year 47% of the purchases where cash (YES, cash purchases). And that last year we had the second highest volume of sales by count.
So there are two points, first, if you are thinking of selling, nows a good time to sell. Second, if you are shopping for a home, I’m pretty confident that prices are going to be going up quickly.
And my ARMLS staff readers, would you add Average Active listing to the Weekly Lockbox Activity Report? I think it would add another dimension to the data.
I was reading a post over at the Get Rich Slowly blog about alternatives to the traditional Wedding Registry and I was reminded of a story I was told about a young Tucson couple that wanted more than anything to own a home. The bride’s mother knew a very bright agent (in this story, it’s not me), who knew a lot about this type of gifting. The mother’s agent became the couple’s agent and helped transverse all of the IRS and Mortgage company challenges with this type of financing. She knew the Title Agents that knew exactly how to set-up the bank account and track the funds so the IRS would be happy and leave the young couple alone. The Title Agent explained that they had to use the funds given to them within 18 months of setting up the account and that their wedding guests had to be informed that this is a monetary gift that they will use towards a home purchase (IRS gifting requirements).
The wedding day came, and the young couple were very happy and enjoyed a modest honeymoon. When they returned, they had a nice little nest egg that could be used towards a home. While it wasn’t enough to buy a home out-right, it was enough for a good size down-payment in their price range.
The knowledgable agent showed them several homes that met their criteria and helped them to negotiate favorable contract to purchase the home. The Title Agent worked with the Mortgage Officer to make sure the lender was happy and the IRS continued to be happy.
The young couple moved into their new home thanks to the help of their friends and family and the great news was that they didn’t have to move all the toasters that they would normally get from wedding gifts.
I love this article, they talk about all the homes prices in 19 of the 20 cities monitored by the S&P/Case-Shiller report had a steep decline for the month of November (as recently reported), they talk about all the negativity. But then they hit the footnote, Phoenix was the only one that didn’t decline. Yea, been there, said that. And now I’m telling you December will see a bit higher increase as will January. Why, because I’m writing offers and getting outbid when those offers are above list price. We’re smack dab in the middle of a Seller’s Market that is turning hot.
If you were waiting to hit bottom to buy, so sad, too late! It’s true, you missed the boat, but if you get in now, you’ll catch the wave at the beginning. Of course this is just my opinion and I’m not much compared to the big media groups out there saying otherwise, but of course they are pretty slow to acknowledge and report when the market has changed, and since I’m out in the field with this stuff all the time, I really don’t have much knowledge on what I’m talking about, so go ahead, ignore me at your own risk.
I’m a regular contributor to Murphy’s Law Book, this one comes up very often, I’ll work with a buyer and eventually after looking at many homes, we’ll not only find one good option, but two. This is common in the Phoenix area because we have tracks of homes that have similar floor plan. Usually when that happens the question comes up, can I put an offer on both and see which one takes? The idea is a reverse bidding idea, where you try to get one of the sellers to tip their hand and just take the offer to be first.
Well, the problem is that you have to disclose you are doing a multiple offers to all parties and you have to put a clause in the offer that states it’s not a binding contract until the buyer re-accepts the terms after you’ve accepted them. Typically what happens is your offer is held in a lower consideration because you are not truly committed to the purchase of a property. When it looks like an investor purchase, it’s called shot gunning, you make 10 offers and hope to keep one, problem is you waste a lot of other people’s time doing that.
When this occurs, I work with the buyer and try to figure out which property they like just a little bit more than the other, a little pro/con analysis. Then I look at which price would you feel really good about the purchase? From there I can help with the selection and offer that should make everyone happy and I set a tight deadline if things don’t pan out as expected, we pull out and start work on the other property. This is where your agent comes in and helps out with a great plan to get you the home you want.
So I’ve been working on an offer with my client for 3 days with this Phoenix Real Estate agent. When I call on the property, all is great, some interest but no offers. So we write an offer for full list price and I deliver it. ”Well, another full price offer just came in a couple of hours before, so my client will accept that one instead of yours, but if you want to modify your offer I’ll present it soon.” Well, timing doesn’t matter, it’s the terms and condition of the contract and we were offering a large Earnest Deposit and Down Payment as well as quick close, so I felt we had a strong offer, and was ready to present it personally. The kicker was that he forwarded an email from another agent that was withdrawing their offer. So we were left to question if there was in fact another offer or he was just trying to play us. I disclosed the email and concerns with my clients who felt it was better to walk away than to continue. And several notes were added to this agent’s record in my CRM. Not all agents in Phoenix are ethical and this one looks like he is not.
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