Experience Matters – Questions to Ask Your Agent Before Selling

All our clients have presented us with unique situations in the past when looking to sell their Phoenix Arizona Homes. Whether moving out-of-state to take a new job, hoping to buy a bigger home with a pool, needing to be in a new school district, or looking to downsize to a home that is more manageable, our clients all had something very important in common. Each had future plans – plans that depended heavily on how the logistics of the sale were handled and the financial results of the sale.

 Marketing and Selling Homes is Serious Business.

A well planned and executed sale of a home allows the homeowner to move forward with their next phase of life. However, mistakes may cost thousands of dollars and hours of stress when escrows are canceled. Nothing may be more important in the transaction than the knowledge and experience of the agent giving you advice. So, here are a few good questions for you to ask your agent:

  • What do you know about the area? At times, knowledge of the area can be the key to selling a home. Buyers that are new to the area need to know information about schools, movie theaters, shopping and more. An agent who lives in the area can help buyers identify how they will enjoy the area –  and many times, the home will sell quicker.
  • How do you market my home? Believe it or not, some agents think that ordering a “for sale” sign and putting your home in the Phoenix MLS is how to sell a home. This is only the beginning! Great agents should be able to deliver to you a written marketing plan tailored for the Phoenix Real Estate market along with success stories from using that plan.
  • How much are the costs of selling my home? In order to plan for the future all homeowners with Phoenix Homes for Sale need to know the amount of money they will have after the sale of the home. Great agents should be able to estimate the cost of real estate commissions, title fees, loan costs, repair costs, and property taxes.
  • When will the buyer’s loan be approved? Without loan approval, the sale of the home cannot close escrow. In tracking a lender’s process, a great agent should know how to use the LSU (Loan Status Update) form, what “PTD” conditions are, and what is the time needed for a lender to get loan documents to title after full loan approval. Being able to track the lender’s progress is essential for a seller to know whether they will close on time or not.
  • What is breach of contract and how do you handle this? In the Arizona purchase contract, the seller is unable to exit the contract while the buyer retains over five  exits from the contract. However, if the buyer is in breach of contract, then the seller may exit the contract. Breach of Contract occurs when the buyer takes actions that are contrary to the written contract. This is a serious situation that experienced agents should have a plan to handle.

Do you want to learn more about how to make your home-selling process go smoothly? Our knowledgeable Phoenix AZ Realtors are here to help ensure just that. Contact us at www.ThompsonGroupAZ.com or
(480) 776-5214.

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Is My Home Overpriced for this Market?

Has your home been on the market so long that the For Sale sign out front has begun to rust? At some point you probably began to ask yourself if your home may be overpriced for the market. Here are a few things to consider in making that determination before your For Sale sign completely rusts away:

  • Comparables – Is your home priced right according to comparable properties? Comparable Phoenix Arizona homes that have sold recently can give you a great idea of how well your home may appraise. Active, pending Phoenix homes for sale give you a great indication of where the market is and what your competition is as you try to get that next buyer. Pricing considerably higher than the Active, Pending or Sold properties probably will impede a quick sale and extend your time on market.
  • Showings – What kind of showings are you getting each week? Has it been a few weeks since you last saw a buyer’s agent in your home? If so, you are probably overpriced. A good sign that you are priced right is getting 3-4 showings a week from qualified buyers working with Phoenix real estate agents. Sorry, open house traffic and door knockers don’t count.
  • Market Changes and Activity – What is the market doing? Are interest rates higher or lower? What’s new on the Phoenix MLS? Are there a lot of bank-owned properties or short sale properties in your area? Does your area attract lots of first-time buyers or move-up buyers? All great questions to ask when deciding on how high or low to price your home.
  • Do you really want the truth? Many times sellers and real estate agents just are not able to be honest about how bad the situation is. It’s usually far more useful to understand the realistic factors necessary to accomplish a goal than conjecture about what to do with lottery winnings. Assuming that’s your position, ask your real estate agent for the honest truth:  What list price does your home need to be at in order to sell in the next 30 days? Just be prepared for the answer!

Rather not figure this out on your own? Our Phoenix AZ Realtors would love to help. Contact us at www.ThompsonGroupAZ.com or 480-776-5214.

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Arizona Home Sellers: Staging Your Home the Quick and Easy Way

Are you planning on selling your home in today’s Phoenix Real Estate market? Home values –  according to the Phoenix MLS – are higher now than any time in the last few years. While the market is seeing new lows in the volume of distressed Phoenix Homes for Sale such as short sales and bank-owned properties, the market is also seeing the traditional home sellers re-enter the market and attempt to sell for top dollar in most areas. With the return to the market of the traditional home seller, many sellers are turning to professional home stagers to prepare the home for sale before listing it with Phoenix AZ Realtors to sell. While your bank account may not allow for professional home staging advice, there are some great tips that will allow you to maximize your selling price.

The Staging rule of thumb to keep in mind: You are trying to help potential buyers feel that your home will become their castle. To do this, just remember that appealing to a home buyer’s five senses – sight, sound, smell, taste and touch – will be the key to successful staging.

Sight – Light, bright homes with neutral colors and a few colorful accents appeal to more buyers. Bold, vivid colors may be more “you”, but remember that you’re trying to provide more of a “blank canvas” that a potential buyer finds attractive now, but can also visualize making their own.

Sound – Ever heard the expression “the silence was deafening” or “quiet as a tomb”? Well, walking into a totally-silent home can be like that – possibly eerie or oppressive, but rarely welcoming. Leave some soft, light music playing to help provide a tranquil, inviting ambiance.

Smell – Make sure to avoid any strong aromas. Of course it makes sense to make sure noxious smells like pet odors, last night’s fish dinner or poker-game cigars are not the first thing to hit a potential buyer as they enter your home – but don’t forget that exotic incense, heavy floral accents and even cleanser smells can be offensive to many. Make sure your home is aired out well, and then provide simple, clean, subtle aromas with the restrained use of potpourri or air fresheners.

Taste – Could a plate of fresh-baked cookies entice a buyer? Maybe, maybe not – but it would certainly make your home more memorable.

Touch – Physical comfort is important. Remember that “Ahhhh!” feeling you get when you walk into a cool building, getting out of the heat of summer? Any Realtor showing your home – and any potential buyer – is going to be much more comfortable if your AC is set appropriately. Be careful not to over-cool (or over-heat!) but do try to make your home feel comfortable to visitors.

Today’s market can be a great time to sell Phoenix Arizona Homes, but keep the competition in mind. Do you need help with staging and showcasing your home before putting it on the market? We would love to help. Contact us at www.thompsongroupaz.com or 480.776.5214.

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Phoenix Real Estate Market 2012 Review

This time last year, the Phoenix Real Estate market brought us very little holiday cheer.  Short sales, bank owned and foreclosures were the dominate focus in the sale of Phoenix Arizona Homes.  But, wow!  What a difference a year makes!  As 2012 draws to an end, the primary seller is no longer the banks, but homeowners  with equity in their homes.  With the Phoenix Real Estate market showing healthy appreciation, this holiday season is sure to bring more joy than the previous one.

Check out some stats provided from the Phoenix MLS:

  • Overall Home Supply – For the entire Phoenix MLS at the first of November, the total number of active real estate listings was 22,826 while the number of sold listings for October was 7,724. One year ago, total active listings were 25,879 properties. So, the active inventory is lower at the end of this year than last.
  • Chandler – For the entire city of Chandler, the number of active listings for single family homes is 487. The number of sold single family homes for October came in at 324 – leaving just a 1.5 month supply of homes for sale. With the inventory of single family homes being well under six months supply, homeowners should continue to see appreciation in coming months.
  • Mesa  – For the entire city of Mesa, the number of active listings for single family homes is 905. The number of sold single family homes for October came in at 495 – leaving just a 1.8 month supply of homes for sale.
  • Gilbert – For the entire city of Gilbert, the number of active listings for single family homes is 569. The number of sold single family homes for October came in at 349 – leaving just a 1.6 month supply of homes for sale.

  • Overall Phoenix-Area Year-to-Date Home Sales – During the ten-month period ending in October 2012, the number of sold real estate listings was 63,413. For the same period in 2011, the number of sold listings was 71,982. Although the number of sales are down year over year, that is likely due to the significant appreciation for homes found in the Phoenix market.

A reduction in home inventories, both local and Valley-wide; fewer homes on the market; more homes actually selling – these are all good signs of a reviving real-estate market. We’re finally seeing some concrete relief to the market stagnation – which bodes well.

Are you contemplating selling your home?  Might you be interested in how your home and neighborhood has appreciated over the last year? Give us a call at 480-776-5214 or find us at www.ThompsonGroupAZ.com .

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Signs My Home Will Close On Time

A seller put his Phoenix Arizona home on the market to move out of state. A buyer viewed the home and found it to be perfect for their growing family. The buyer and seller negotiated a contract for the sale of the home. The buyer completed inspections and found few repairs. The seller boxed up a lifetime of memories and loaded the moving truck! The home selling process appears to be going very smoothly… But wait! Will this home close on time, or are there problems ahead? Here are a few indicators to look for:

  • Buyer Qualifications Reviewed – When a buyer writes a contract to purchase a home, the buyer should present a list of pre-qualifications with the contract. In Arizona there is a standard Pre-Qualification form that should be completed by the buyer’s lender. This form is loaded with information about the perspective buyer. Important are items that the lender requires from the buyer in order to start and complete the loan. Completing these items sooner will allow for a quicker close– overlooking them will certainly slow the process. Management of these items is a sure sign of whether the home will close on time.
  • Appraisal Complete – The appraisal should be ordered within the first few days of an accepted contract. While there is no hard and fast rule for completion of the appraisal, all parties agree that sooner is better than later. The appraisal should be good news, but there could be bad news lurking. Certainly, when the buyer’s financing depends upon completion of the appraisal completion, a good sign that the closing of the home will occur is completing this important step.
  • Loan Package Submitted to Underwriter – Another big step for every home purchase is submitting the loan package to the underwriter. Included in the loan package is the title report, the completed appraisal, terms of the loan, the buyer’s application, and a bunch of documentation that none of us think about on a regular basis. The underwriter reviews the loan package for a few days and generally will give loan approval with prior to document (PTD) conditions. If this step is completed early enough in the escrow process, clearing the PTD conditions should not hold up the closing day. However, at times, the PTD conditions may require documentation not readily available, thereby delaying the closing date. At this point all parties should have a clear sign as to when the closing will occur.
  • Don’t Forget About the Home Owner Association (HOA) Disclosures! –While the Arizona contract calls for delivery of all HOA information to the buyer, state law allows HOAs 14 calendar days from the time of the request to delivery to provide all necessary information. Normally, the title agency involved will make the request for HOA documents early, after contract acceptance. However, delivery of these documents may not happen for 19 days. As the buyer receives 5 days to review the HOA documents before closing, the delivery of these important documents may be a sign of an on time or late closing.
  • Buyer Loan Docs to Title – A great sign! No matter how choppy the last few weeks may have been, delivery of buyer loan docs to title is a sign that the closing will occur in 1-3 days. All parties will be in a hurry to complete the last tasks of the transaction. However, be assured that closing of the home generally happens on most Phoenix Real Estate transactions.
  • Short Sale Exception – If you are purchasing a short sale transaction, the seller’s bank may delay the closing date for 1-3 business days in order to approve the final settlement statement. While very annoying to all parties, this is a necessary extra step for most short sales. Some listing agents and title companies are proactive here and initiate the bank approval early. If so, then you have a sign that closing will happen on time!

Do you want to learn more about how to make your home buying or selling process go smoothly? Want to know more about Phoenix homes for sale? Our knowledgeable Phoenix AZ Realtors can help find the gems in the Phoenix MLS as well as make sure that your sale goes as smoothly as it can. Contact The Thompson Group at (480) 776-5214.

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Want to increase your net profit? Control those costs!

My grandfather once taught me “a penny saved is a penny earned.” Nowhere is that more true than in the sale of a home, probably due to the number of pennies involved in the transaction. With sales price being such an important factor for a seller, few stop to think about ways to minimize the costs of selling their Phoenix Arizona Homes. Monitoring and controlling the costs in the sale is key to saving thousands of dollars and to receiving larger net proceeds from the transaction. Here are some costs to keep your eye on.

One of the largest costs is commissions paid to the Phoenix Real Estate agents. Commissions vary from 4%-7% of sales price depending on the type of real estate transaction. While lower costs may seem like a winner, many times you get what you pay for. With so much riding on the selling price, Phoenix AZ Realtors should bring great service, a solid marketing plan and sharp negotiating skills to the table. If your agent is bringing less to the table you may also see a lower sales price.

With every home sale, home owners are required to pay the Owner’s Title Policy and to share in the escrow fee paid to the local title/escrow company. While the fees are not negotiable, the title/escrow company used to process the transaction is negotiable. All title/escrow companies publish their fees in rate books which are readily available to review and compare.

Do you live in a Home Owners Association (HOA)? If so, then your HOA may charge a transfer fee, disclosure fee, or capital improvement fee. Few homeowners understand what their HOA will charge them for the transaction but charges may run from $500-$2000. A quick phone call to the HOA should clarify what fees are charged. While these fees are non-negotiable with the HOA, there is the possibility of negotiating/sharing the cost of these fees with the buyer for your home.

For most Phoenix Homes for Sale a Home Warranty is considered a must purchase for the new buyer. The cost ranges from $325-$600 and is a negotiated item payable by the buyer or the seller. Many times home sellers pick up the cost of a Home Warranty for the first year to protect the new buyer from unforeseen repairs.

Are you in an area where first-time home buyers are known to be moving? The Phoenix MLS will show history of recent purchases in your area if you are unsure. If so, you may want to prepare yourself for requests to contribute to the buyer’s closing costs. These contributions are generally up to 3% of purchase price and could be more. The contribution covers appraisal fees, A.L.T.A. title policy, impound accounts, origination fees and other loan costs. While the contribution to buyer loan costs can be very important to getting a home sold, stronger buyers rarely need such assistance.

Do you want to learn more about ways to control your selling costs and get the most money from the sale of your home? Contact us at (480) 776-5214 or www.ThompsonGroupAZ.com.

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Pricing My Home Right

Pricing a home correctly is defined as pricing a home in a price range of comparable Phoenix Arizona Homes sold in the last 3 to 6 months. A home priced more than 5% under the lowest sale may be considered under priced. A home priced more than 5% above the highest sale would be considered priced high and potentially overpriced.

In contemplating a list price, here are some things to consider:

  • Appraisal – What is the potential appraisal value of my home? One of the main reasons to price a home correctly is to avoid appraisal issues. Even if a seller gets lucky and sells a home above the market value, if the lender’s appraiser will not support the sales price value, the home will only close at a price the appraiser will support.
  • Comparative Market Analysis – Most Phoenix Real Estate agents are able to perform a Comparative Market Analysis (CMA) when a current appraisal is not available. A comparative market analysis should give an accurate idea of how your home stacks up against comparable sales within a mile radius of your home. All comparable sales should be no older than six months to give a correct value of the current market.
  • Pending Home Sales – Phoenix Homes for Sale that are currently under contract waiting to close escrow may indicate where the market is headed. If pending properties listed by Phoenix AZ Realtors are less than previous closings, then the market is declining. If pending properties are higher than previous sales then the market is appreciating.
  • Active Home Sales – More important than the price of these listings is the number of the listings available in the Phoenix MLS in your area and where how your home will compete when coming to the market. This is a list of your competitors who seek to steal your buyer. Generally, for a five-mile radius, the best five properties will sell in the next week.
  • Location, Conditions, and Terms – Keep in mind that if your home has issues in any of these areas, buyers will want a discount to deal with the issue. If you are able to fix the issue up front, your home is much more likely to return market value.

These are just a few thoughts on pricing your home correctly. Do you want to learn more about this or other ways to get the most money from your sale? Contact us at (480) 776-5214 or www.ThompsonGroupAZ.com.

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Reasons for Pursuing a Short Sale

Homeowners who purchased Phoenix Arizona Homes between 2002 and 2009 may owe more than their home is worth. Homeowners who refinanced or took out a home equity line of credit are in the same situation. Reports estimate that half of all homeowners in the Valley owe more than their home is worth.

Many of these homeowners want to move, but feel trapped and helpless about their situation due to the Phoenix Real Estate market. For some, their property no longer meets their current needs. Others simply can’t afford to stay in their home due to financial hardship. And for many others, the truth is finally setting in. It simply doesn’t make sound financial sense to stay in their home.

No matter the reason, all of these homeowners have the same question: What is the best way to move forward with their lives? For most homeowners facing one or more of these challenges, a short sale is the best solution.

A short sale is when your lender(s) allows you to sell your home for less than the unpaid mortgage(s). Here are the top reasons why doing a short sale in 2012 is likely your best alternative:

  • It’s easier than ever. Banks are now embracing short sales. Why? Because they now realize that short sales save them money when compared with the expenses involved in completing foreclosures. The process is more streamlined and less stressful than ever.
  • There is absolutely NO cost to you. Your lender pays for all closing costs and commissions for Phoenix AZ Realtors. You may even get additional cash at closing. A recent trend is that some homeowners are getting cash to complete the sale.
  • You can stay in the home until the sale is complete and make no mortgage payments unless you choose to make them. Many Phoenix Homes for Sale advertised through the local MLS have homeowners that choose to remain in the home until completion of the sale.
  • Arizona is an Anti-Deficiency state. In Arizona your lender is unable to pursue you for a deficiency judgment, if you used the borrowed money to purchase or make improvements to a home. That means that your lender cannot sue you for the difference between your mortgage and the sales price of your home. Situations do vary, so consult an attorney about your specific situation.
  • Your debt forgiveness is NOT taxable. Prior to 2008, any mortgage debt forgiven by a bank was taxed as normal income. If you had a $300,000 mortgage and short sold your home for $200,000, then you would owe taxes on the $100,000 shortage that was forgiven by your lender. The Mortgage Forgiveness Debt Relief Act that went into effect in 2008 essentially eliminates this problem.
  • The Mortgage Forgiveness Debt Relief Act is expiring soon. At the end of 2012 this Act expires meaning that any debt forgiveness as in the previous example is taxable income.
  • A short sale is better on your credit score than foreclosure or bankruptcy. You can purchase a new home sooner than with a foreclosure. You will be eligible, under Fannie Mae guidelines, to buy another Phoenix MLS home in 2 years instead of 5 to 7 years. You are also in a much better position to secure lower rates on all types of loans in the future. Additionally, some employers look at a foreclosure as a sign that you are not dependable. As more employers rely on credit reports for hiring practices, it is best to do all you can to avoid a foreclosure.
  • Best of all, you can move on with your life. Get rid of stress. Being upside down on your mortgage is incredibly stressful. A short sale can help you get through the process in a shorter period of time while reducing the emotional and mental stress involved.

Do you owe more than your home is worth? You are not alone. For a private consultation, please contact us at   www.ThompsonGroupAZ.com or (480) 776-5214.

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Do I Have Enough Equity to Sell My Home?

A seller that purchased a home in the last year came to us about selling their home due to being relocated out of state. This Arizona seller asked us, “Do I have enough equity in my home to sell now and not lose money?”  Unfortunately, with the current market conditions in the Phoenix Real Estate market – and this seller’s short time of making mortgage payments – the seller is looking at a loss of $20,000 to $30,000.

In most areas of the country and when selling Phoenix Arizona Homes, the costs of selling a home run between 6% and 7% of the sales price. For example, a home sold for $250,000 would actually net a seller $232,500 after 7% in real estate fees, meaning the cost of sale is $17,500. In order for a seller to break even after expenses of the sale, the seller needs one of two scenarios to break even.  The seller must own the home long enough to make enough mortgage payments to cover the expenses or the seller must be in a real estate market where enough appreciation occurred to cover the expenses.

If the home owner’s financing is a 30-year mortgage at 5.5%, then after five years a home owner has made enough mortgage payments to sell the home. According to www.amortization-calc.com, a seller will have $18,491 in home equity after five years or only owe $231,509 on the home.

If a seller is in an appreciating market where annual appreciation is 3%, then a home owner will gain enough appreciated value in three years to sell. In our case, with a $250,000 purchase, the three-year appreciation will bring the house value to over $273,000, allowing for $23,000 in costs to cover the sale.

Unfortunately, appreciation is a rare occurrence in the Phoenix MLS since 2005.  If cases arise where the homeowner can no longer continue to make mortgage payments a short sale is a good option to consider.  Many Phoenix AZ Realtors are now capable at processing such transactions and many Phoenix Homes for Sale are closed as short sales.  More information can be found at www.MyAZHouse.com on short sales.

Are you considering a sell of your home soon?  Here at the Thompson Group our goal is to equip our sellers with knowledgeable and professional promotion of their home.  Would you like to learn more, or do you need Market Analysis of the value of your home?  Contact us at www.ThompsonGroupAZ.com or 480-776-5214.

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Does Your Realtor Understand Short Sales?

In most situations, well-planned short sales of Phoenix Arizona Homes have significant advantages over foreclosures. Indeed, a close look at the Phoenix MLS shows a relatively high percentage of short sales among all Phoenix Homes for Sale. However, a short sale is not to be taken lightly – preparation and experience is essential. Among the important questions to consider when pursuing a short sale is the big question: Does my Realtor understand short sales?

To help you evaluate how well prepared your Realtor is for handling your short sale, have a discussion with him or her about the short-sale process, and be sure to ask the questions below. If you don’t hear the answers or the knowledge and familiarity you’re looking for, be prepared to keep looking for a Realtor that’s equipped to help you.

  1. Who is the service company and what do they do in the process? In general, the service company of the mortgage is the name on the mortgage statement you receive every month. Bank of America, Chase and Wells Fargo are common service companies. In most cases, the service companies are only in charge of processing the file and have very little to do in the decision-making process and negotiation of the sale itself.
  2. Who is the investor? Fannie Mae, Freddie Mac and Ginne Mae tend to be the investors of the majority of loans. Large service companies such as Bank of America, Chase and Wells Fargo may also be an investor on a mortgage. The investor is usually the decision-maker on each loan and has specific guidelines to follow in negotiating a short sale. Experience in negotiating with different investor guidelines is essential experience for a Realtor to have in order to have a successful close of escrow.
  3. Who is the MI company? Not all loans have MI (mortgage insurance), but some do. In the event that there is MI on a loan, you be certain that the MI company is going to negotiate with you (the seller) before allowing a close of escrow. The MI company is generally covering the loss in the short sale and paying out the investor for the loss on the mortgage, so the goal of the MI company is to reduce the lost payout as much as possible.
  4. How will each be negotiating with me? This is a great question for an agent. Negotiating with service companies, investors and MI companies is not like negotiating a normal purchase contract. The process is bureaucratic, paperwork-intensive, and detailed. Experience really pays here and a good Realtor will know how to get it done and cost you very little at closing. However, a lack of experience and less-than-thorough paperwork by your agent could result in you writing a large check at closing, or worse, a foreclosure.
  5. What are the potential tax consequences? In every short sale, there are potential tax consequences that a seller must deal with. Asking your CPA or tax advisor about your particular situation and possible consequences is a very important part of planning for your future. A Realtor should have some general knowledge of the potential consequences as well as a good reference for you to get further help, but should also encourage you to discuss with your CPA or tax advisor.
  6. What are the potential liabilities after closing? Most loans are written as “non-recourse”, meaning that the lender will not be able to pursue you in the future for a loss incurred. However, some loans are recourse loans in which the financial institution may choose to pursue legal and collection avenues for the loss. When working with a recourse loan, there is always future potential liability where you should consult an attorney about the situation and again, a competent Realtor experienced with short sales in the Phoenix Real Estate market will encourage you to discuss the situation with your attorney.

Remember – a short sale is truly a “double-edged sword.” On one hand it can usually offer significant advantages over foreclosure, but on the other hand it requires specific knowledge and expertise to successfully complete. Our Phoenix AZ Realtors have the short sale knowledge and experience to help you succeed – give us a call today!

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