Sonoran City News

Random New Year's Stuff

My husband and I tend to stay home for New Year's Eve. While I'm confident we would call a cab rather then drink and drive, I'm convinced most people won't. So I guess I'm more afraid of being killed by a drunk driver then the other way around. I'm also not a fan of big crowds of strangers. Call me weird.

So tonight we are staying home and watching movies. We are currently watching the worst movie ever made Alone in the Dark. You've never heard of it? Not surprising...It is The WORST movie ever made! My New Year's gift to you is to warn you to never see this movie.

OK, got that off my chest.

I thought I would share a few interesting sites I've found lately. If you read any of my posts on home inspections, you know I am a huge advocate. There is just not a single good reason not to get one when buying a home. Including (especially) new builds. Go visit This Old House Home Inspection Nightmares. There are three gallery's of pictures with rather amusing comments from the inspector who snapped the photo. A few caused me to laugh out loud but the reality of it all is rather unsettling.

WD-40, that good old squeaky door spray has a fan club. Why do I know this? Well I received a really interesting email on the uses of WD-40 one of which is to keep flies off cows. This naturally caused me to yearn for more WD-40 trivia.

My pursuit for WD-40 info led me to On The House with the Carey Bros. I've seen these guys on TV before (I should be watching them rather then The Worst Movie Ever Made!) and their web site has some interesting home maintenance information. Like most home maintenance sites it is geared more to homes in colder/wetter climates but it still has great information.

Last, and completely unrelated to real estate...I'm a big Phoenix Suns fan. They are having a great year, are a great team, and seem to uphold a decent set of values that many professional team lack. Pat Burke is one of my favorites. He spends a massive amount of time on the bench and will never be a starter but I admire his positive attitude. Last year he made a video which is quite amusing. If you know anything about the Suns and anything about Pat Burke it is good for a laugh.

I hope you have a safe evening. Call a cab if you need to. Start 2007 on a positive note.  Happy New Year!

Turner Dunn Homes - SOLD!

I received a call a few days ago from a Los Angeles reporter who informed me the Turner Dunn Homes property was sold to a California Builder. At the time of her call, I was a bit pre-occupied and was not able to ask her all the questions I would have otherwise.

After doing a bit of research, I found the parcels were sold to Frontier Homes. Based in Ontario, California, Frontier Homes will take control of the property in February. Their company website boasts 40 years of homebuilding experience.

The East Valley Tribune reports Frontier Homes plans to work with buyer's who have existing contracts, possibly renegotiating. Frontier plans to have the homes finished by mid-2008.

Hopefully this sale proves to be a bright spot in what has been a very dark period for home buyer's and Turner Dunn Homes.

Phoenix Area Home Builder Incentives

Or...why you should never buy a new home without an real estate agent.

A quick scan through my email reveals some of the Builder Incentives offered for the month of December. Many of these offers expire at the end of the month. I'm not sure what is offered to an unrepresented buyer who just walks in and wants to purchase a home.

Courtland Homes is offering $18,000 up to $60,000 in incentives on homes purchased by 31 December 2006.

HomeLife Communities is offering discounts up to $50,000 on properties which close by December 29 (better move quick on this).

Cresleigh Homes is offering $7500 off closing costs.

If you are in the market for a new build or would just like to keep informed on the incentives being offered, sign-up for my weekly new build update newsletter.

What Happens When Facing Foreclosure

Let's examine the basics of the foreclosure process and what can be done if you received a Notice of Default. This is aimed at Arizona and the applicable laws as I am a licensed agent in Arizona so it is what I know best. The laws of your state may vary.

Basic disclosure; I am not an attorney nor do I pretend to be one. Every attempt had been made to ensure accurate information but individual situations may not apply. You should consult with an attorney for legal advice. Whew, got that out of the way, let's proceed.

Arizona Foreclosure

Once your mortgage payments become late, the lender can begin the foreclosure process. They must appoint a trustee who will have the legal right to sell your property at a trustee's sale. The trustee will file paperwork with the county recorder. This will be a 'Notice of Trustee's sale'. This will be notice that your property will be sold no sooner then 90 days from filing (recording).

This Notice of Trustee's Sale (also known as a Notice of Default of NOD) must be mailed to the homeowner within five days of recording. It will also be published in the newspaper once each week for four weeks. This information becomes part of the public record. Once it is recorded, the homeowner can anticipate being bombarded with calls, letters and strangers arriving at their doorstep offering to help. Use caution with dealing with these individuals. Yes, there are great people who are actually trying to assist you but there are just as many who are trying to take advantage of your difficult situation.

During the 90 days you have the opportunity to bring your loan current and have it reinstated or sell the property. As I have stated many times, the lender DOES NOT WANT YOUR HOME. They just want to be paid. As much as you want to ignore this situation it will only get worse if you do nothing. See my post on Foreclosure Help.

If you are not able to reinstate your loan, the sale will proceed as stated in the Notice of Trustee's sale. The highest bidder has until 5:00 p.m. the next day to pay in full. When this occurs, title is conveyed to the winning bidder relinquishing any of the property owner's rights to the property.

90 days. This can be an eternity depending on the choices you make. Go get help.

Drop Your Checkbook and Step Away from the Guru

Have you ever had trouble sleeping? You try reading, surf the Internet, neither works so you turn on the TV. You find yourself sucked in watching average people telling stories of extraordinary wealth through a simple real estate system. Casey Serin (who I fear is becoming my muse) is a perfect example of what happens when one stakes his future on a midnight infomercial. Check out iamfacingforclosure.com for a taste of what Casey got himself into.

How does this happen? I watch the infomercials, I don't take them seriously. There is a certain way all the Guru's speak. A certain way they carry themselves. They all repeat certain phrases about success and failure. It all seems so easy. I never really understood the attraction to Guru's. Until yesterday.

Yesterday I attended a seminar on recruiting which was put on by a local real estate organization. I went there with the belief I would learn some new techniques on recruiting new agents. I assumed the speaker would provide 3 hours of good information which I could put to use on a daily basis. My expectations were not over-the-top but I did expect something. I was wrong. Or at least I was wrong about 2 hours and 45 minutes of the presentation. I did get about 15 minutes worth of use.

Within the first 3 minutes I wrote on a piece of paper 'This is a Guru, he will try to sell us tapes" and passed this note to a peer who responded by shaking his head 'no'. After the first hour and a half we took a break. I turned to my peer and said 'we have been here for 90 minutes and he has yet to tell us anything about recruiting', this time he agreed. When we returned from our break there was a flyer at each of our seats with a list of informational DVD's and prices. The entire package could be had for $1300 but if we purchased it today we could get it for the low price of $999.

I considered leaving. After being convinced to stay I gleaned a few tid-bits on retention and a two sentence blurb to use on recruiting materials which should prove useful. The cost of attending this seminar was nothing. Maybe that should have sent up a red flag but because it was hosted by a reputable organization, it didn't.

The last 15 minutes of the seminar consisted of the speaker informing us of his greatness and how he could be had for in-person consulting for the low two-day rate of $5000. As I left the seminar I looked around at the 40 other attendees. Most Broker/Owners. I counted seven who were filling out the form for the DVD's.

I wanted to ask what compelled them to pay for this information but I already knew the answer. The audience was looking for easy solutions to difficult problems, the speaker offered easy solutions. At least the concept seemed easy.

How many people actually achieve the level of success promised?

Turner Dunn Homes Update (again)

Late last night I was contacted by a nice young couple who lives in one of the Turner Dunn Homes subdivisions up for auction. I will be meeting them Monday to hear directly from someone who is living through this situation. This is there first home.

If you have any questions you would like me to ask or if you currently live in one of these properties, contact me I would love to hear from you.

Paul Kaihla, The Real Estate Economy blogger over at Business 2.0 has also been posting updates on the story. Check out his site. Real Estate from an Economics perspective. Good Stuff.

Update on Turner Dunn Homes

A quick check of the site for the Turner Dunn Homes Auction reveals a change in date to December 21. The current high bid is $29 million for all five subdivisions. Having never seen the property I can't judge if this is a great deal or not. With unpaid subcontractors any many lots in various stages I can only assume there is a tremendous amount of work to be done.

The Arizona Republic reports that Charlevoix Homes LLC. has submitted the bid. While Charlevoix plans to complete the homes for the original buyers, the buyers will be paying the original contract price. Based on the recent market changes, this should create an interesting appraisal situation.

View my prior post on the Turner Dunn Homes Bankruptcy Auction here.

What a Real Estate Investor Should Look for in an Agent

Tomorrow I am being interviewed for a magazine article on real estate investing and selecting an agent. I do this with some trepidation as I'm always a bit leery of being mis-quoted. So I thought I would post my list on my blog as a good way to prepare.

Before you contact a real estate agent, know your goals. Yes, I know you want to make money, that is the obvious part. How you want to make money might not be as obvious. Do you want to be a 'flipper'? Be careful, it is NOT as easy as all those TV shows make it out to be. Looking for an apartment complex? How about Land? Single-Family Residences? Are you looking for short term gains, monthly cash-flow, long-term appreciation?

A good experienced investor agent will ask you what your goals are and want to know your background as an investor. A good agent will also tell you what challenges you will face with each type of property. If you are looking at multi-unit properties ask the agent what experience they have with commercial properties. Is the agent familiar with commercial lending?

Ask what type of education the agent has. In Arizona, we are required to take 24 hours of continuing education every 2 years. A pathetically small number. There is no requirement for 1031 Exchange, commercial, income statement analysis. None. This means an agent can call themselves a 1031 Exchange expert having never done a 1031 Exchange let alone attended a class.

Many of the certifications available to real estate agents have little, if any, education in investment properties. So the agent you choose might be very well versed in residential and have lots of designation but have absolutely no education in investment properties. Basically, if an agent wishes to learn more about investment properties they must make a special effort to gain this knowledge. Personally I have traveled to both California and Florida to find accredited classes in real estate investment.

The agent you select needs to be aware of the investor market in certain areas. In Phoenix and Arizona in general there are pockets of developments where 30%-60% of the owners are investors. This translates to a saturated rental market in that area. It is important that your agent know this or know how to obtain this information. Your agent should also provide you with a copy of the Landlord and Tenant Act prior to you making any sort of purchase.

Your agent should be able to discuss with you the difference between residential and commercial multi-family properties. He or she should also be well versed in the challenges of each.

Pay attention to the answers. This is when you will know if you have found the right agent. It is OK for the agent to tell you that they don't know the answer to some of your questions. How he or she follows up is important. It is also OK if the agent tells you they have no experience with certain types of properties. If you were to ask me to assist you in purchasing a liquor store, I would tell you I know little about it and we should find an agent to can better assist you.

Your agent should always work in your best interests. This is not all-inclusive but it is a start. I will add more tomorrow after my interview.

Can't Pay Your Bills?

OK, you know I have been following the story of Casey Serin over at his 'yes I am admitting to fraud' blog Iamfacingforeclosure.com. Yesterday, I thought he might need therapy. Today I am totally convinced he does need therapy. Casey has come to the conclusion that he needs to make some serious money soon. This is after having to borrow money yet a gain just to cover his basic living expenses. Yesterday he blogged about going to Jamba Juice as a reward for waking up early. Based on Casey's way of thinking I deserve a Porsche because I wake up at 5:00 a.m. each day.

There is nothing easy about controlling my urge to flog Casey in a public forum as so many have or reduce him to a bunch of unsavory labels. The reality is there are a lot of Casey's out there. I'm dealing with a client currently in a similar situation.  As I blogged in my Rose Colored Glasses post, there are many seller's who are refusing to budge from their current pricing believing they just have to wait until the right person comes along.

In the same vein many facing foreclosure have a hard time grasping the gravity of the situation. Recently I spoke with an individual who has received a notice of trustees sale. This person truly felt at first that their home would sell quickly for market value despite it being in desperate need of updating. Foreclosure looms just a few weeks away and no offers have been received. Difficult awkward conversations have occurred over the past few months about the need to price correctly and to clean the property as thoroughly as possible. Neither happen.

The question is why?

Really, I wish I knew. Well, I do sort of know. At least I ask the question, as delicately as possible, because I truly do want to understand what a person goes through. Hopefully it will help me help others.

What it boils down to is they didn't think it could actually happen to them.

Keeping up appearances...Or, Why living in Ahwatukee can cause you to lose your home

From the moment you enter kindergarten you realize how important appearances are. Wear glasses? Get called four-eyes. Have red hair and freckle's? Be the brunt of years of abuse and being called 'red'. Have out-dated clothing? Be shunned from lunching with the 'popular' kids.

As adults, we are supposed to be above this. We should know better then to judge a book by its cover. We should also know better then to go into debt just to keep up with the neighbors. But we don't We've all done it. Felt the need to buy a new sofa before having guests over. Traded in a perfectly good car because the neighbor bought a new Lexus. Even though common sense tells us better, the need to appear 'better then other's and be envied is an extremely magnetic force.

Last night while watching the news, something caught my attention. Ahwatukee ZIP code: 85045, is experiencing an above average rate of notices of trustees sale (pre-foreclosure). Way above average.   The Arizona Republic speculates that part of the reason for this is high credit card debt. The reason for the high credit card debt is the need to keep up with the neighbors. Designer clothes, new cars, dining-out, etc.

All of this made me think back to the last time my husband and I bought a home. Our kids were quite frustrated with us for not wanting to move to Scottsdale. We have always lived in the West Valley of Phoenix and love it here. The kids wanted Scottsdale because of the address. They wanted to be able to say they lived in Scottsdale. We explained to them we could 'not afford' to live in Scottsdale. They protested that we were looking at homes that were comparably priced to those in Scottsdale. They were correct. What they didn't understand was we were afraid of being sucked in to having to compete with our neighbors (something that doesn't occur where were live now). The new cars and clothes and constantly have to be better then everyone else was something we could not afford, more emotionally then financially.

When I deal with a home buyer I always urge them to purchase less home then they are qualified for. To have cash reserves for those unexpected things that always pop-up after the sale. I'm not a financial adviser nor do I pretend to be. Sometimes using a little common sense is all that is needed.

I recently posted some resources for those facing foreclosure. If you have received a notice of trustees sale or if your adjustable rate mortgage is about to change, contact me and I will be happy to direct you to some of the options available. Do it now before it is too late.