I’m very concerned about how wholesale buying companies are, in my opinion, creating consumer protection issues. You know the companies I’m talking about. Their ads are everywhere.
I’m not going to give them a free plug. But you know them. These are the guys who promise to buy your house quickly and you pay “only 1% commission,” or some such nonsense.
Watch this short video on how previous clients sold their home, thinking they would pay about 1% commission, but ended up giving up about 9.4% in order to sell.
So, I’m not letting it go here. I’ve published three more videos that go in to greater detail about how these companies are mis-leading consumers.
The first video goes in to the reasons these companies give for you to use them. Hint: they are bogus.
The second video takes a deeper look at what “fiduciary responsibility” is, why a realtor has that responsibility to you and how these companies get around it, all while giving the impression that they are looking out for you.
The third video explains how a “1% commission” can easily result in a 9% loss in your profit when you sell your home, if you are not represented.
“But,” I hear you say, “you’re just a realtor who’s afraid that your business is going away because there is a new business model, and you are not willing to adapt.”
Well, watch the videos and then call me at 602-456-9388. I don’t bite and I’d love to hear how this model in any way protects consumers.
These companies are literally having inspections and deducting repair costs off of the price of the home with little or no resistance from the seller.
They are locking sellers in to a process that goes against their interest after baiting them with the promise of low commissions.
That is about as close to a scam as I can imagine and I’m deeply disappointed that the Arizona Association of Realtors nor the National Association of Realtors (who’s job it is to protect consumers, they say) has not taken action to educate the public.
So, it’s left to me, my little camera phone and my little office.
Oh, and if you are a buyer and you don’t think this affects you, please consider that these houses are being sold with inspections that may not be honest and possibly repairs or renovations that have not been done.
Specifically, if the wholesale buyer does an inspection in order to force the price down, how do you know that they repaired all of those items? You don’t have access to the previous contract, do you? Plus, you will often see these properties sold “as-is.” If it was serious enough to warrant a price reduction, shouldn’t it be serious enough to repair for the next buyer?
If you need a real estate team that takes your interests seriously, please call us at 602-456-9388.
We are seeing upward pressure on prices, as the seller’s advantage strengthens again in the market.
The Cromford Index analysts think that the push upward will continue in to mid-June, although not drastically.
“For the monthly period ending May 15, we are currently recording a sales $/SF of $171.19 averaged for all areas and types across the ARMLS database.
Our mid-point forecast for the average monthly sales $/SF on June 15 is $171.96, which is 0.5% above the May 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $168.52 to $175.40.
The average $/SF has been stronger than predicted over the last 4 months, and this has been largely due to the mix of homes that closed. High end homes were better represented than expected between January through April. The average $/SF for pending listings has risen again over the last month so we are expecting another gain in average $/SF over the next 31 days. The overall price trend continues to move higher, as is normal for the spring season, but we normally peak during the second quarter and then see some weakness for the following 3 months.”
So, in other words, the prices are on a solid incline. No spikes, from what we are seeing.
What does this market update mean for sellers? It means that your position is stronger than it was at the end of last year. The decision to wait is really a function of what your other opportunities are.
Will an increase of 1% on the sale of your home if you wait a month be a better outcome than if you sold now and did something else with your money? Your call.
Buyers, don’t fear a steep price jump, but don’t expect that you can wait forever. Remember, there is still a scarcity of new construction in Phoenix, especially central and downtown.
We are sharing with you the Cromford Report’s mid-May update, in its entirety because we simply can’t say it better.
Here’s the pull-quote take away: “Buyers waiting because they thought prices would fall have been left in the dust.”
We can bring this to you because we subscribe to their product. It is also what makes us better agents. Call us if you have questions about where the market is going at 602-456-9388.
Starting with the basic ARMLS numbers for May 1, 2019 and comparing them with May 1, 2018 for all areas & types:
Active Listings (excluding UCB): 17,513 versus 16,329 last year – up 7.3% – but down 6.1% from 18,650 last month
Active Listings (including UCB): 23,650 versus 21,440 last year – up 5.6% – but down 3.2% compared with 23,399 last month
Pending Listings: 7,326 versus 7,393 last year – down 0.9% – but up 5.3% from 6,958 last month
Under Contract Listings (including Pending, CCBS & UCB): 12,463 versus 12,504 last year – down 0.3% – but up 6.5% from 11,707 last month
Monthly Sales: 9,676 versus 9,185 last year – up 5.3% – and up 13.9% from 8,496 last month
Monthly Average Sales Price per Sq. Ft.: $171.80 versus $162.84 last year – up 5.5% – but down 0.1% from $172.04 last month
Monthly Median Sales Price: $270,000 versus $255,000 last year – up 5.9% – and up 1.5% from $266,000 last month
Last month we saw strong growth in listings under contract. This month we see strong growth in closed listings. This is why listings under contract is such an important number – it gives us early warnings of a change in the market. On this occasion the change is strongly positive for sellers. Sales are not only recovering, they actually exceeded April 2018 by 5.3%. Now those in the know are aware that April 2019 had a 4.8% advantage over April 2018, because it contained 1 additional working day. Many people tend to forget how significant the number of working days can be in retarding or advancing sales counts. But even allowing for that unfair advantage, April returned higher sales per day than April 2018. In fact April 2019 was the strongest month since 2005 for unit sales.
Currently the listings under contract count is almost the same as last year, so we should expect closed sales in May 2019 to be similar to May 2018. Both have 22 working days so this will be a fair fight.
New listings have been flowing a little more freely since March – we know sellers get encouraged by lower interest rates as well as buyers. However the new higher level of demand is making short work of the extra supply and active listings without a contract dropped over 6% during April. Supply is higher than last year, but it is falling more quickly than it did in 2018.
As we predicted, prices are rising, but at a slower pace than in 2018. The median sales price was up 5.9% compared with a year ago, while the average $/SF was up 5.5%.
Buyers waiting because they thought prices would fall have been left in the dust. The market continues to strengthen and the likelihood of falling prices in the near term is minimal. We have extremely low levels of distress, chronic low supply and the best buyers can hope for is that the appreciation rate will trend lower. We think that is a reasonable expectation, but it it shows no sign of turning negative. It would take a very different set of numbers from the ones above for that to be a possibility.
All in all, the market is more vibrant now than almost anyone expected it to be. This is good news for sellers, agents, title companies, lenders and developers. If interest rates start to rise again then we may see another mild slowdown, like we experience from September 2018 to February 2019, but at the moment the market engine is firing on all cylinders once more.
We could not write a blog post quickly enough! This home went under contract in the blink of an eye.
And who’s surprised! It’s a desert oasis: shady and quiet inside with beautifully-manicured landscaping outside.
There is not enough room in this post for all of the beautiful photos, so please check out our listings page here.
This home has been updated and cared for immaculately by the same owners since 1984.
The grounds are as beautifully laid out and maintained as a Japanese garden.
The dramatic front door greets you with stunning, custom stained glass.
The kitchen, updated about 10 years ago, is well-thought out with ingenious space-saving features, deep drawers and a custom pantry that is specifically designed for easy access.
The bedrooms are roomy. The bathrooms were updated with similar space-saving features about 8 years ago.
The home owners designed a back yard pool and patio area with inviting and warm light features. You will want to spend all your time there.
Also, don’t miss the work shop and the sewing room, which are convenient for any number of uses. Solar panels = ave. $40/mo.
Marshall Shore, the Hip Historian, and I visited the George Washington Carver Museum recently to consider it’s unique history, as well as to consider some of the vestiges of the terrible history of segregation that plagued our state and our country.
As as Realtor, I am troubled by the role that realtors played in red-lining in US history. Yet I am proud of the role that Realtors are playing today through the Realtor Code of Ethics to create opportunities for all people.
So, it is with the same concern for history, but pride for current efforts that we considered the Carver Museum, previously a school.
It was the site of segregation in Arizona. At the only segregated school, it was the only option for many African American students, who had to travel often for hours to gain education.
Yet from the school came artists and designers who have left a lasting impression on Arizona.
Watch this first video for Marshall’s quick review of the history of the school.
The museum and its board is now working to play a role, not only for the African American community, but as a beacon for understanding and community participation.
We also took this opportunity to consider how the school funding mechanisms in Arizona continue to disadvantage poor and minority students through the use of property taxes as a substantial funding source.
In short, schools in areas where property values are higher are taxed less as a percentage of total home value and they generate more money, not only for maintenance and operations, but for school construction.
Further, the School Facilities board, which was intended to level the playing field for school construction, has never been fully funded.
Many people don’t know the basics of how school are funded, let alone about the base-level inequities in the system.
Donna Reiner, a local historian and a good friend of Get Your PHX, has written many articles over the years for the Arizona Republic and others about what came before us. We use her services when we list properties of historic significance to help us tell the stories behind the homes.
We are happy that Donna is allowing us to re-publish some of her articles on a monthly basis. If you or your business ever needs a historian, let Donna know at laydeescholar “at” hotmail.com.
In 1916, a group of Phoenicians came together and decided to establish a church following the tenets of the Congregational Church. And thus, by midsummer of the following year, the First Congregational Church of Phoenix was formalized and purchased some property on the northeast corner of Second Street and Willetta.
A church building was finally built on this property in 1923
in the Mission Revival Style. A style that was quite popular for homes and
other small commercial buildings in Phoenix at that time.
The congregation grew and the church building began to feel
the stress of being “crowded.” While the need to expand was there, the money
was not. But that did not diminish the wishes of the members of the church nor
the pastorate.
By the late 1930s, the congregation was ready to proceed;
but the question of whether to expand the current building or build a new one
arose. One voice, that of Dr. O.A. Smith, the pastor of the First
Congregational Church in Nogales, supported a new style. He felt that a
different and distinct style would attract the numerous Phoenix winter visitors
and new residents, especially those from the Midwest and the East. He strongly
proposed the New England or Colonial style for the building that now serves the
congregation.
The membership agreed and plans were drawn by Harry Pierce, an architect from Los Angeles. The simplicity of the colonial exterior and interior features would stand in sharp contrast to the Mission Revival and Spanish Colonial Revival architecture so common in the nearby residences and commercial buildings.
Whether it was the design of the building that helped increased
the size of the congregation may not be that significant, but it did grow. So,
by 1952, the building was expanded without destroying its unique Colonial
features under the direction of local architect, Harold Ekman.
However, what most Phoenicians do not realize is that the
prominent steeple is not the original one designed by Pierce. Ekman designed
this large feature which was completed in December 1953. Roger Brevoort, a
local historian/preservationist explained, “The addition of the steeple…complet[ed]
the architectural image of the classic New England meetinghouse with the tall
spire that had been envisioned by the congregation, and Dr. Smith, in the
1930s.”
The progressive congregation hired Weaver and Drover, a
Phoenix firm, to design a master plan for the rest of the site in 1956. What
you see today with the courtyard, breezeway, and low midcentury education
buildings arose from that plan.
As we covered in the last market post, it looks like the market is not heading further toward “flat”, as we were thinking at the end of 2018 and the beginning of 2019.
One indicator of that is the Contract Ratio, from the Cromford Report. The ratio measures the number of completed sales contracts relative to the supply of active listings. If this number rises then it is a sign of growing contract activity and a positive signal for sellers.
In a balanced market for normal market segments, the value of the Contract Ratio is usually between 30 and 60. When it lies below 20 the market can be considered “slow” or a “cold market”. Above 60 can be considered a “hot market” and when it moves above 100 we regard this as evidence of a “buying frenzy”.
Well, compared to what we saw happening at the end of last year and the beginning of 2019, it looks like the ratio is strengthening. That’s a good sign, especially if you need to sell.
If you look closely at the chart, you will see that January, February and March of 2019 were significantly below those months in 2018.
In the case of January, it was getting dangerously close to “cold market.”
April 2019 is certainly not where April 2018 was, but we have made up a lot of lost ground in just one month.
So, what does this mean, especially since the high season in Phoenix typically ends at the end of June?
We think that, if you’ve been holding off on listing your house out of fear of a slow market, list it now! Your advantage is stronger and your chance of selling is better.
Get it on the market in time to get an offer before things begin to slow in June, as people think more about summer vacation and staying out of the heat than they do about purchasing a home.
In other words, this is about as good a definition of “opportunity window” as you can get.
Give us a call at 602-456-9388 and we can help build a strategy.
It’s been a crazy last few months. At the end of last year, we saw signs that the market was flattening out. You might recall that the Cromford Index took a bit of a dive last year, and in to the beginning of this year.
But, around about the beginning of March, it began a healthy upward climb.
For those of you who follow our analysis, you know that the Cromford Index is a great predictor of where the market is going. It tracks a list of proprietary data, which we know includes things like price drops and seller concessions.
As such, it can confidently predict whether the seller’s advantage is slipping or gaining.
So, what does that mean?
It’s a particularly interesting question when you consider that sales price per square foot ($/SF) is still flat? According to the analysts at Cromford:
“For the monthly period ending April 15, we are currently recording a sales $/SF of $171.31 averaged for all areas and types across the ARMLS database. This is down 0.3% or 57 cents from the $171.88 we now measure for March 15. Our forecast range mid-point was $170.73, with a 90% confidence range of $167.32 to $174.14. The actual result was a little higher than the mid-point but well within the 90% confidence range.”
Part of this has to do with how long it takes houses to close. The homes that went under contract while the Index was dropping are now showing up as completed sales. To quote Cromford again:
“The average $/SF has been stronger than predicted over the last 3 months, but this was largely due to the mix of homes that closed. High end homes were better represented in January through March. The average $/SF for pending listings has fallen back a little over the last 2 months as the mix reverts closer to normal. The overall price trend continues to move higher, as is normal for the spring season, but we see April and May both lower than the March reading which was exceptionally strong.”
So, what does this mean for you? Well, if you were thinking of selling and you were concerned that your advantage was weakening, it is not.
Dire predictions of a flat market (from us, as well), were premature. Just bear in mind that “summer is coming,” and if you are selling you are better off listing before people leave for cooler climates.
If you are buying, you definitely want to get in now before prices go up. This is particularly true if you are looking in CenPho. As we’ve discussed in past blogs, the maddening pace of building of apartments and the anemic construction of owner-occupied properties in this area could create a shortage-like condition.
It is almost impossible to find a home under $300,000 in Cenpho, unless it needs major renovation. There are townhouses and condos, however.
Contact us for more information and targeted market analysis at 602-456-9388.
You may have seen my blog post about how the Chinese government decided earlier this year to stop taking recyclable materials from the US and other countries. The result being that cities all over the country are scrambling to figure out what to do with our recyclable materials.
Phoenix saw the writing on the wall and jumped right in to action to find a solution. While the ideal is re-use of materials made from petroleum, Phoenix found what seems to be a temporary solution: turning low-grade plastics in to diesel fuel.
Now, before you protest, saying that burning plastics as fuel is not a great solution, consider several points.
First, the alternative is to spend all the money to collect the plastics (which we have to do), just to throw them in the landfill. I don’t like the idea of not having a fully renewable economy, but if we are going to reach a zero waste economy by 2050, we need to keep pushing forward, despite this set-back.
Second, there are benefits to transforming materials here to diesel fuel, rather than importing them.
Third, if we are lucky, perhaps the same policy makers at the state level who make it harder for us to collect recycling at the city level will change their minds once they see how we could be generating a massive supply of our own fleet fuels in Phoenix.
Aside from that issue, it is heartening to see that the Phoenix Public Works Department staff was agile enough to adapt to this massive change. This speaks volumes to the potential of this city to continue to build relationships with material recyclers through its Resource Innovation Campus (RIC).
Ultimately, what the China policy has shown us is that the US should have never given up its domestic recycling capacity. Until that returns and until we truly educate the public about the need for waste recycling, efforts like this will continue to push us forward.
The announcement, in its entirety is copied below.
The
City of Phoenix to Begin Turning Plastics into Fuel
The city
of Phoenix Public Works Department is excited to announce a new partnership with
Renew Phoenix that aims to turn plastics destined for the landfill into fuel.
This innovative repurposing of what’s known as “Plastics 3-7,” or low-value
plastics, is the latest venture in the city’s “Reimagine Phoenix” initiative to
increase its diversion rate to 40% by the end of 2020, and ultimately reach
zero waste by 2050.
“I believe in taking bold chances to make big
change. The idea of making fuel with the plastics we are throwing away is
certainly an ‘out of the box’ idea that I am thrilled to say will also bring
jobs and revenue to our city,” said Phoenix Mayor Kate Gallego. “During a time
when cities are giving up on recycling, Phoenix is again leading the way in
setting the gold standard for innovation and creativity.”
The need
to find a way to re-use these materials comes on the heels of China no longer
accepting certain recycled materials from the United States. This forced city
leadership to think creatively to find new solutions for its recycled
materials. Thanks to the foresight of the Phoenix City Council, this new
project is now ready to take shape.
“The
future is all about recycling, sustainability and doing our part to ensure
future generations have a healthy planet,” said Councilwoman Thelda Williams,
who serves as the chair of the Water, Wastewater, Infrastructure and
Sustainability (WWIS) Subcommittee. “I am certain that once others see what we
are doing, they will want to be part of this movement to prevent more materials
from being simply thrown away.”
The plan
is for Renew Phoenix, a joint venture between Generated Materials Recovery and
Renewlogy, to work together to build a facility to process the materials on the
city’s Resource Innovation Campus.
“I am
excited for what this partnership brings to Phoenix,”
said Councilman Michael Nowakowski, whose district is home to the City’s
Resource Innovation Campus. “This new, innovative venture will encourage other
businesses to bring-next generation technology to the Phoenix to help us reach
our diversion goal of 40% by 2020.”
Renew
Phoenix was selected through a competitive Request for Proposal (RFP) process. Their
plan is to use a proprietary chemical recycling process to reverse the plastic
back into its basic molecular structure, which will allow them to convert the
plastic waste into fuel. Renew Phoenix will also bring as many as 15 full-time
jobs to the valley, after investing more than five million dollars in capital
to the project.
“Renewlogy is excited about bringing our
technology to Phoenix and creating a more circular economy around plastic waste
locally,” said Priyanka Bakaya, Founder and CEO of Renewlogy. “Phoenix will
serve as a model for cities around the country looking for local solutions for
plastic waste.”
Once at
full production, the project is expected to divert ten tons per day of mixed
plastic waste, which equates to 60 barrels of liquid fuel. This partnership
will not only help Phoenix, but the Valley altogether. Renew Phoenix will be
able to scale their production to allow regional remanufacturing of Plastics 3-7
to be processed as well.
“We are
proud to continue bucking the trend and pushing forward with innovation,
economic development and repurposing our waste,” said Ginger Spencer, city of
Phoenix Public Works Director. “We are committed to building a circular economy
and achieving our Reimagine Phoenix goals. This new venture to turn plastics
into fuel is eye-opening and we hope it will serve as a model for other cities
to reimagine their own recycling programs.”
About
Reimagine Phoenix: Reimagine Phoenix is the city’s initiative to
increase the city’s waste diversion rate to 40 percent by 2020 and to better
manage its solid waste resources.To achieve this, the city is
conducting community and educational outreach on the five pillars–reduce,
reuse, recycle, reconsider and reimagine—in hopes to increase awareness of the
importance of waste diversion and management. The
city is developing the Resource Innovation Campus (RIC) as a regional circular
economy hub. The RIC is home to one of the city’s two transfer stations, a
composting facility, Palm Silage and the future operations of Renew
Phoenix. Approximately 50 acres of the RIC will be leased to innovators
with market-ready technologies and manufacturing processes that reuse or
repurpose trash materials including recycled plastics, recycled paper, and
recycled boxes and packing materials.
About
Renew Phoenix: Renew Phoenix is
a joint venture between Generated Materials Recovery (GMR) and Renewlogy.
Renewlogy has the innovative technology and operational experience while GMR
has the technical, operation, and local market expertise. Renew Phoenix will
draw on the expertise of both companies to build a showcase facility for
handling low value plastics such as #3-#7s and serve as a model for other
cities around the world to follow.
About
Renewlogy: Renewlogy is a
plastic to fuel technology firm with facilities in the U.S. and Canada.
Renewlogy was founded at MIT in 2011 and started operating its first pilot in
Salt Lake City, UT in 2013. Renewlogy has been recognized by Inc. Magazine as
one of the Top 25 Most Audacious Companies.
About
Generated Materials Recovery (GMR): Generated
Materials Recovery (GMR) is a $10 million waste company established in 1998.
GMR provides recycling services to manufacturing and industrial facilities in
AZ, UT and CO. It currently services municipalities around the Phoenix Metro
area including Mesa, Chandler, Glendale, Scottsdale, Gilbert, Tempe, and
Surprise, and has a 20-year history specializing in the plastics industry.
You might have seen my rant last month about wholesale buyers. These are the people who promise that they have a buyer for your house, cash, and that they will manage the sale for just 1% commission.
In my video, which you can see here, I broke down how one couple paid effectively 9.4% to sell their house.
Don’t get me started…
I’m looking for more examples of this as I am very concerned that people are not only losing their money, but they are opening themselves up to possible future lawsuits because they did not have a realtor to protect their interests.
There are really two types of deals that are lumped in to the term “ibuyers”. The first, covered above, are the companies that buy wholesale with the promise of lower commissions, usually leaving sellers without somebody to protect their interests.
The other type is commonly referred to as “al la carte” websites. Imagine AutoTrader, but for people selling their homes. It’s a different concept. Rather than you selling (unrepresented) to a buyer through their buyer’s agent at a lower commission, these sites are kind of do-it-yourself home sales.
What they promise is that you will pay only a flat, low commission. What you get may be something else entirely.
Before I get in to it, I want to say that ibuyer sites may not be the worst thing in the world if you are selling a home under $200,000 and you’ve been educated about the most important legal aspects of buying and selling a home.
Heck, if I thought I could create a website where I could also empower you while you sell your house, I’d be tempted to make it.
Regardless, if it meets your interests and you are sure you have the knowledge to do it right, go for it.
But, for now, there are important things to keep in mind.
What are you being charged? According to our broker, sometimes commissions from 6% to 13% can be added, as we saw above with wholesalers. Read the fine print! Here’s a summary from our broker.
Does the ibuyer website give you important information about disclosures, your liability and your responsibility. From what I’ve seen so far, they kind of just throw the paperwork at you and say “here are some basic instructions, go at it!” On one site I saw, it just instructed you do meet federal fair housing guidelines. Well, do you know about the six protected classes and how to make certain you are not discriminating against any of them?
Is the valuation correct? What process does the ibuying site use to value your house? Can you set your own price? Licensed realtors are trained to do comparative market analysis and take in to account local expertise, which algorithms don’t necessarily pick up.
What services do you think you are getting and how much will it cost to get better service? The range of services goes from just listing your property with no other service, to getting you to pay for add-ons, such as photography, signage and (probably computer-driven) marketing. What will it cost if you decide that you can’t do it all yourself?
What do you know about the agent you are assigned and how much time does he or she have for you? You will be assigned to an agent, who is probably sitting behind a desk, getting paid a lower wage and helping 20 clients all at once. At the rates the charge, the only way to make a living is through volume, which means your needs matter less. It’s kinda like those 5-minute doctor visits we all love so much. Nope! No more time for you!
Who will have your back if you are up against a more experienced agent? Just because you are assigned an agent on the seller’s side, does not mean you can match the experience or knowledge of the agent on the other side. Some services are so trimmed down that you do all your own negotiating. Even if that over-worked agent can negotiate on your behalf, do you think he or she will really fight hard when there are so many other clients to get through in a day?
Does the agent assigned to you have knowledge of your local market? This is a huge deal, especially in historic neighborhoods and dense urban areas. I don’t care how crafty a computer algorithm is, it probably does now know the word on the street about that big development coming in at the end of your street, etc.
What is missing in all of this is the personal connection with an agent who specializes in an area or type of home and who will spend time with you –not just some limited instructions.
Just beware. You get what you pay for.
If you have experiences with wholesalers or a la carte sites, and you are willing to share, please let give us a call at 602-456-9388.
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