When we meet a new client, especially a first time home buyer, we grab a cup of coffee and preview the home buying process.

Nobody explained the process for me when I bought my first house and I paid for it. It makes a huge difference to know what to expect next in the process; what to be ready for.

You deserve better, and we deliver.

So, it’s high time that I put the home buying process in writing so you can read about it in the comfort of your home, in your jammies with a cup of your favorite beverage.

If you want to start at the beginning, see Part 1 at this link.

Part 2: Agency Disclosures and Buyer/Broker Agreements

A lot of people think that agents just sell you a house and run off to buy a new Mercedes. As we explained in the last installment, there are a lot of responsibilities expected of agents.

A good agent will ask you to sign two documents when you get started with the home buying process: the agency disclosure and the buyer broker agreement.

The Agency Disclosure

This really boils down to disclosing that we have a fiduciary responsibility to you, as our clients. It also describes that, in Arizona, there are buyer’s agents and listing agents. While most agents do both, the disclosure lets you know each agent’s role.

More importantly, it discloses that agents are allowed to represent both sides of the transaction during this process only with your written permission.

So, is it a danger to your interests to have one agent on both sides?

Well, the agent still has fiduciary responsibility to their clients. So, they can’t run off and tell one side what the other side is willing to take for a property, for instance.

The agents in this role really becomes like a courier of messages. They can still advise each side on strategy and approach, but they can’t reveal private or confidential information.

Not comfy with this? That’s okay. You don’t have to do it. We are happy to refer one side of the transaction out to another agent.

The Buyer/Broker Agreement

It is always better and safer for you and for us to have an agreement for employment.

Yes, employment.

Under this agreement you are employing us to do a job for you. The only difference is that the seller is paying our commission.

It is important for you because you have assurance that we officially have a fiduciary responsibility to you. If it is unclear whether you are our client, where does our responsibility lie?

It protects us because it gives us certainty that you are serious about buying a house. We need to allocate our time to respect all of our clients, and ourselves.

Some people get hung up on the language in here that says you must be accompanied by your agent if you want to see an open house. We don’t worry about that. Just let the agent at the open house know that you have a realtor. Easy peasy.

The buyer/broker agreement also outlines how much you are allowing us to be paid. There is no industry standard. You most often see 3%, but be aware that agents, as an industry, cannot get together and agree to all ask for the same commission. That would be anti-trust activity.

You have the right to negotiate whatever commission that you want.

Another thing to bear in mind is that sometimes the seller may only offer us a 2.5% commission, rather than three, for instance. We write in to our buyer/broker agreements that we reserve the right to ask the buyer to make up the balance in this case. We do it because we work very hard and we are worth it.

However, we seldom do apply it –only for really complicated transactions that take more time. For a smooth transaction, we would rather you be happy and tell all your friends about just what wonderful agents we are.

By the way, you might also like to know that you can look up any licensed agent to see if they have any formal complaints against them at this link.

Next month: prequalifying for a loan.

The March 2020 Market Update continues to show a market with a shortage of listings, a condition which is likely to persist until June, at least.

According to our friends at the Cromford Report:

For Buyers:
Supply continues to drop as the market heats up with the seasonal rush of Buyers.  Typically we would see supply rising at this time of year as January is a strong month for new listings to hit the market.  However this year new listings year-to-date are down 17% from last year and January 2020 had the lowest number of new listings recorded going all the way back to 2001.  Combine this with a 21% increase in sales volume and the 4th highest January recorded for MLS sales, and it’s no surprise that supply is plummeting. 

While supply is down in all price points, it’s felt the most between $200K-$250K. Supply in this price range is nearly 60% lower than this time last year and a quarter of sales in the last 3 months have recorded over asking price.

Seller-paid closing cost concessions are also down.  Nearly 22% of all sales in the 1st Quarter to date have included some form of seller-paid or assisted closing costs.  That’s the lowest percentage recorded in nearly 5 years.

For Sellers:
The luxury market continues to go gangbusters in 2020.  Sales over $1 Million in 2019 outperformed 2018 by 10%, which makes it the #1 year for in Greater Phoenix in this price range.  January closings were up 52% in this price and listings under contract are up 43%. 

….and back to Get Your PHX and our comments on the March update.

Anecdotally, we have clients looking daily at every possible purchase that pops up.

There are often multiple offers and don’t get me started on the number of truly terrible flips I’ve seen recently.

We spoke to an owner/agent who bought a house for about $275,000 and put maybe $15,000 worth of work in to it –although he claimed he put twice as much in to it. He had it as a pocket listing. So, it was not on the MLS.

He then said he would not sell for less than about $330,000 because, “we can just rent it to the medical residents downtown.”

Comps showed that the property is not worth more than about $280,000, if you could actually show that they did the work. They bought it late last year! It’s only March, and I’m supposed to believe the price went up $60,000, with little renovation to show for it?

Ugh. Just ugh!

It comes down to this: if you are thinking of selling your property, it is crucial that you have agents who know how to spot the lemons and advise you to stay away from them.

Call us at 602-456-9388 and let’s talk strategy.

Looking for an event or two to entertain and educate? There are so many things in Phoenix these days. Here are a few of the things that we think rise to the top for your attention in February.

1) Local First Arizona if hosting a movie and discussion series on food waste called “Wasted: The Story of Food Waste.” Tuesday, February 11th at Film Bar. Events tickets required.

“WASTED! The Story of Food Waste aims to change the way people buy, cook, recycle, and eat food. Through the the eyes of chef-heroes like Bourdain, Dan Barber, Mario Batali, Massimo Bottura, and Danny Bowien, audiences will see how the world’s most influential chefs make the most of every kind of food, transforming what most people consider scraps into incredible dishes that create a more secure food system.”

“After the showing we will have local business owners to talk about what they are doing in food recovery, food waste reduction and composting to make an impact on their community.”

2) Oh My Ears!

Oh My Ears embarks on their 7th New Music Festival this February 20th-23rd. Oh My Ears, also known as OME, is Arizona’s largest presenter of new and experimental music.

The 2020 Festival brings together over 40 creative music makers, ranging from Phoenix to the Netherlands and Hong Kong.

Oh My Ears has a long history of utilizing independently and locally owned venues, and this year will be no different. The 2020 Festival will take place at Crescent Ballroom, the Carver Museum, Phoenix College, Lunchbox, and the Newton.

3) Tour the Phoenix Recovered Materials Facility, February 27th.

Remember those little videos that Marshall Shore and I did, touring the Phoenix recycling facility? Well, Local First Arizona is doing a tour event of one of those facilities just for you.

“Do you ever wonder what happens to your recycling once it leaves your curbside bin? Meet Local First Arizona’s Green Team at Phoenix’s Material Recovery Facility (aka the MRF) where you will see how recycling is sorted and processed. This eye-opening tour is free and you’ll walk away with a new appreciation for recycling and the people who do it.”

4) Urban Farm U is hosting a Grow PHX happy hour on February 13th at Duck and Decanter.

You’ll get a chance to meet some of the Urban Farming U’s contributors at this event, as well as other folks who are trying to improve our city and our environment through urban gardening.

There will also be door prizes.

5) Phoenix Public Market Turns 15 Years Old!

The Phoenix Public Market, the city’s downtown open air market, is hosting a celebration event on February 22nd.

“To celebrate this occasion we invite our community to the farmers market’s 15 Year Anniversary Celebration.

Dine, shop and discover nearly 100 local vendors. Enjoy live music while you grab brunch with friends in the sunshine.

Chef Kevin Lebron will feature seasonally inspired foods at his cooking demonstration, Maya Dailey (Maya’s Farm) will offer pesto-making activities for families, and sit in on our free workshop.

Guests can enter our event photo contest, write a thank you to their favorite market businesses, and go home with free goodies!”

6) Join the pledge to use less plastic with Attainable AF.

Attainable AF is a sustainability consulting firm that advised us on our attempts to make Phoestivus more sustainable.

They are hosting a challenge for you to commit to using your durable bottle for all of 2020. You can help cut the use of 1 million bottles in 2020.

Did you know that Every ONE minute 1x million disposable plastic bottles are consumed globally—90,000 in the USA every minute.

By taking this pledge, you can help encourage change.

7) Help Preserve Arizona’s Historic Spaces

Senate Bill 2551 has been introduced this session to fully fund ($10 million a year) to the State Parks Heritage Fund. As advocates for historic preservation, parks, open space, non-motorized trails, and outdoor/environmental education, you are encouraged to voice your opinion on SB2551 to your state legislator. 

8) Walter Hive Hosts a Fundraiser for its Maker Space

Walter Hive is already a maker space, and provides education for young people of all age. You can learn how to weld, do woodworking, metalworking and any number of amazing arts and crafts.

“Our signature workshop, The Design Series, is state of the art and follows a renowned international arts education model. This collaborative workshop, catered towards teens, works directly with other nonprofits who serve the youth. We introduce art/tech skills including welding, woodworking, laser cutting, programming LEDs, and painting. The participants then design and build an interactive community art project.”

The Big Buzz is their upcoming fundraiser event to build their capacity to reach more people, particularly youth, with their inclusive and empowering educational series.

9) Re-think Almonds!

I’m the Debbie Downer who goes to a cocktail party and brings up how bad Almonds are for Arizona’s water supply, as well as for our bee populations. This, after people I just met were talking about how much they love almonds.

No. Really. It happened.

But, I couldn’t help it after I saw this hum-dinger of an article from The Guardian.

It is worth a read, especially as much of the coverage is here in Arizona.

There are other alternatives that we need to consider, and there is lot we can do to cut down on pesticide use, too.

The home buying process seems complicated and confusing if you’ve never done it.

The first time I thought of buying a home, I procrastinated because –and get this– I didn’t trust realtors.

Now I am one. Go figure.

What we’ve found over the last couple decades in real estate is that it’s really important to preview the process before we get started.

Seems elementary. But we’ve talked to people whose agents might as well have thrown them out of an airplane with parts of a parachute and an Ikea assembly manual.

We do better.

Really. Not to sound superior, but we do.

When we first meet a new client (particularly new home buyers), we go through a little Powerpoint presentation on what to expect.

It puts their minds at ease and makes the process smoother.

We also encourage buyers to look over this buyer advisory or this list of tips.

This post is the beginning of an in-depth series of posts that give you a deep dive perspective of the process.

Sure, I could just publish a list of steps in the home buying process. But then I deprive myself a chance to practice my writing skills.

Okay, to start this series off, let’s put things in to context and explain your rights as a client.

Part 1: Fiduciary Responsibility

That is not just a pretty phrase. It means that we must put our interests above the client’s and we can be fined heavily, be sued or lose our licenses if we do not.

This is not nothing. When I bought my first house I had no idea that realtors could be held to such high levels of responsibility for what they do. No wonder I didn’t trust them.

We take on a lot of responsibility when we agree to represent your interests.

Here are the things that define fiduciary responsibility, in understandable language:

Confidentiality – Safeguard your secrets unless doing so would violate disclosure requirements. In short, we can’t tell the seller that you are willing to pay more than you offered.

However, if you are the seller and you ask us to hide the fact that there is a secret hive of little green aliens in the basement, we cannot. That’s material to the sale. Plus, I think hiding aliens from Mars is illegal. I’ll get back to you on that one.

Accounting – Account for all funds entrusted to us by you. To be fair, we don’t handle money much anymore. It used to be that the buyer would give an earnest money check to the realtor to hold during the transaction. I’m so glad it’s not like that anymore! Now, f you are a buyer and you deposit earnest money, it goes to the title company.

Reasonable Skill and Care – We must work within our knowledge and capacity. In other words, we can’t pretend that we know how to sell the Westward Ho or an empty shopping mall if we don’t have experience at that.

Loyalty – Act in your best interest. We have to help you meet your goals in a way that is not harmful to you. We can’t, for instance, help the other side of the transaction if we think it could help us personally. Seems simple, right? We must put your interests first. But, I guess we had to spell this one out, huh? There are some bad agents out there, and we’ve met a few of them.

Obedience – This means we need to follow the client’s lawful instructions. We can’t break the law. But, if you tell us you want to list your house 20% above market level, we have two choices: do it, or end our listing agreement.

Accountability — You can count on us to communicate to you in a timely manner and be respectful of your time. You’d think this one is easy, but really…

Disclosure – Disclose all material facts to you. If we find out, for instance, that there are cracks in the foundation of a home, we must tell you. It is material to the sale of the home. We are not inspectors. But if we see a “red flag”, we gotta tell you.

There are some things we are not required to tell you (especially if we don’t know), such as whether the home was the site of a felony, if somebody died in the home, or if the home is in the vicinity of a sex offender. We can’t tell you if somebody lived in the home who had HIV or AIDS. That is Arizona law. Otherwise, if it could affect your decision to purchase the home, we need to let you know about it if we know.

That’s it. Agents don’t just sell homes and buy big cars. There are actual repercussions if we don’t respect our fiduciary responsibilities.

You might notice, by the way, that those words spell C-A-R-L-O-A-D.

Gee, those realtors are clever.

Next installment: Buyer disclosures and buyer/broker agreements.

Who owns rentals may play a really big role in affordability for families across the country –and maybe even homelessness.

This article, while a little strident in it’s tone, points to a problem that I outlined in a previous post about the number of evictions we are seeing in America today.

Listen to this podcast from On the Media, which aired last year. It gives a very compelling picture of a rental market that is now dominated by large investment companies or even property management companies that are employed by individual property owners.

This automation of the rental process leads to less leniency for renters when they are late on their rent.

This is a problem in a country where lower income workers are having a harder time paying for everything from rent to medical bills on less livable wages.

That lack of leniency leads to situations where renters are tagged with what the On the Media reporter Brook Gladstone called the Scarlett E. That’s “E” for for “eviction”.

That tag follows the renter so that they are relegated to less and less desirable properties, thus destabilizing their lives even further.

The most compelling point in this ownership dynamic is the increase in the number of properties owned by individuals and families from 92% in 1991 to 74% in 2015.

With the rise of mega-buyers like Zillow and other investor groups, this number could be even lower.

I’ve spoken about the problem of these mega buyers. They take homes out of circulation so that they are not available for other buyers, thus creating scarcity and elevating the over-all price of homes. Thus making home ownership even harder.

As we see an increase in homelessness, we need to be aware of those living on the margins. They are the first ones (families and children) who drop from barely making it to living on the street.

The February Market Update is starting to get a little redundant, you know? It looks much like the January update.

We still have a shortage of inventory. Builders are still spending their time on multi-family (mostly rental), with over 11,000 units permitted in the last year. That is an all-time high.

We need builders building single family or condos, especially in CenPho.

“Well, Ken, you are a realtor, so of course you want people to buy properties.”

Yeah, but no. That’s not true. There should be a healthy mix. This is not healthy. When you focus too much on rental construction you do three things.

First, you deprive neighborhoods of people who feel long-term connection to their community. This means fewer people doing block watch, fewer people communicating with their city officials about neighborhood health.

Second, when those people decide they don’t want to rent anymore, there are fewer homes on the market for them to purchase. Thus pushing up prices.

Third, once the prices are higher, it deprives people of the opportunity of home ownership. Their savings goes to landlords, rather than to themselves.

Sorry for going all “broken record” on ya.

So, where does this shortage leave us as we go in to 2020? Well, absent some catastrophic market failure, the market should be strong for the rest of the year.

There are no zero-interest loans out there. But there are a ton of AirBnB homes and corporate-owned single family homes that are being used as rentals.

According to Tina Tamboer of the Cromford Report, if the over-all economy drops and people don’t stay in AirBnBs as much, many of those will be put on the market.

We have no idea how many and whether that is enough to force prices lower.

Regardless, due to the scarcity of new construction in CenPho and the saturation of apartments, home prices may stay high even if the economy slows.

So, if you are thinking of buying, don’t expect prices to drop any time soon.

If you are thinking of selling, consider doing it before the summer comes on. The prices won’t necessarily drop, but there will be fewer people to compete for your home.

Call us at 602-456-9388.

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 Phoenix history. 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.

We generally think of libraries as being in permanent buildings whether they be large, small, or tucked away in someone’s home. But fixed sites have never adequately served those who find it difficult to travel due to distance, disability, or lack of reliable transportation.

Over time, the creativity of librarians and libraries found solutions. If the reader could not come to the library, why not take the books to them? Those moveable libraries came by horse, cart, bicycle, and ultimately a full fledged bookmobile which was often a large bus filled with shelves and shelves of books.

Phoenix started using bookmobiles in the late 1940s to serve outlying readers of the rapidly growing city. Initially the head librarian started with two “retired” city buses and the Arizona Republic always posted where the buses would be.

If you are old enough, you may remember the bookmobile. It would be conveniently stationed at set places on a specific day of the week and with set hours. Young readers and old anxiously awaited that day and hour.

One enthusiast commented, “Before we had a library in our area, the bookmobile would come to Maryvale Mall every Saturday!!! Each week my friends and I would go to check out books.” Michael Ging recalled riding his bike to West Plaza at 35th Avenue and Bethany Home Road to get books in the summer from the bookmobile. Early versions of the bookmobile were probably not airconditioned, but by the 1980s they were. A welcome relief for youngsters coming in out of the heat during the summer.

Today there are 16 branches of the Phoenix Public Library plus Burton Barr Central Library. Not much need for a bookmobile.

Ten years ago, the Little Free Library movement began. And with that program, one can find various sized “stands” offering books (no check out or overdue fines). Some neighborhoods, like Coronado Historic District, sponsored such libraries for the benefit of anyone who happens to want a book. It’s all in the name of promoting literacy.

Bibliophile, book worm, lover of reading, bookish. Finding the best and/or appropriate word to describe one’s passion for reading is not that easy. All I can say is that I don’t leave home without one!

In December I wrote about how I calculated my carbon footprint again for the first time in years.

The end result was that I sent $315 to the Arbor Day Foundation in the hopes that they could put that right in to the purchase of trees.

The thinking was that, rather than buying renewable energy credits, I would invest in trees, which collect many tons of carbon over their lifetimes. It does not reduce my current carbon footprint, but it’s kind of like paying to clean up what I spilled this year.

Renewable energy credits, while laudable, really only go toward installing future renewable energy –thus avoiding future carbon emissions.

That’s great, but each and every one of us needs to find a way to do two things:

First, pull carbon out of the air that we put up there over the last 100 or so years.

Second, cut our personal carbon emissions by about 8% every year for the next ten years if we want to avoid the worst effects of climate change.

That is the difference between future carbon avoidance.

Thus, trees.

By planting trees, I’m helping to pull carbon out of the system while at the same time I am taking other steps to support renewable energy use today, or cut my emissions personally. We have to do both.

Okay, so here’s the report: it was a little disappointing.

The Arbor Day Foundation annual report was not exactly clear as to how much of each donation goes toward trees or the planting of trees. I’m okay with standard over-head, but I don’t want half of my donation going toward staff or high rent.

I heard back from a staff member who told me that it breaks down like this:

87% – Program Service expenses
9% – Fundraising expenses
4% – Management and general expenses

When I sought clarification about whether the programs within Arbor Foundation (Arbor Day Farm and Trees for America) had, I got this response:

“The overhead for Arbor Day Farm is included in the 20% for Arbor Day Farm and the overhead for Trees for America is included in the 39% for Trees for America (not the 11% for general and administrative).”

What? Is that not redundant?

They then referred me back to the annual report and their federal 990 form.

Circular, huh?

I thought by giving to such a large group, I could take advantage of their buying power and thus plant more trees than if I just went out and bought trees, retail, and planted them.

Later a friend told me about Charity Navigator, a website that tracks and ranks how good charities are at spending your dollars. They gave Arbor Day Foundation a 86.78 score out of 100.

This is not what percentage of their budget goes to programs. It’s a mix of their accountability and how they spend their money.

It looks like about 94% of their budget goes to programs. But even that is not clear.

This points to the general problem with trying to help in this way. I could spend a couple hours trying to figure out what portion of their spending goes to trees, and which to overhead. But, that should be easy for a busy person.

Well, folks. We just completed our tenth year of Phoestivus. It was hard to believe we’ve been going so long!

Here are some of the highlights:

We counted about 12,000 attendees over two nights. That’s about a 20% increase over last year.

Early numbers from Phoestivus indicate that we raised over $17,000 for Community Food Connections, the organization that puts on the weekly farmer’s market, and which works so hard to provide fresh and local food and crafts to our community.

This is an all-time record!

Anecdotally, I heard many vendors say that they brought in significantly more than last year.

Our sponsors, as usual, are amazing. There seem to be more every year and we appreciate each and every one!

We were particularly thankful for our title sponsor, Hownd. They have a unique way to help locally-owned businesses compete in a saturated advertising market. So, we love where their heart is.

The mayor declared December 19th as “Phoestivus Day” in Phoenix. It was such an honor! Then she went over to say hello to Hipster Santa.

Y’all might not know this, but Mayor Gallego has been going to Phoestivus for years, long before she was mayor. So, she deserves the “hippest mayor” badge from us.

We created new relationships this year, too. Walter Productions, famous for their massive art cars, were kind enough to bring Big Red and Walter the Bus over to for people to explore.

Rent.Solar, a mobile solar energy start-up, helped power a bunch of tents and features, thus helping us cut down on noise and carbon emissions.

We introduced re-usable cups for Phoestivus Ale this year and cut down on our waste. We will be partnering with new friends in 2020 to do even better in our vision to reduce waste.

So, every year, we grow a little and improve a little. We love that you love Phoestivus and we look forward to 2020.

Remember, announcements for vendors will come in about September. If you have friends who might like to be vendors, please ask them to sign up for this newsletter on the side panel of the front page of GetYourPHX.com.

See you next year!

You asked for it and we will deliver: more local events and news. There are plenty of events around Phoenix to keep you busy. Here are some of the ones we noticed and we think you might like as well.

1) The fine folks at Local First Arizona are hosting another Good Business Summit on January 22nd and 23rd.

“The 2020 Arizona Good Business Summit will bring over 500 businesses and community leaders together in Downtown Phoenix to discuss the dynamics and complexity of doing business in today’s world. Over this two day conference, experience 35+ keynotes, workshops, business trainings, panel discussions, networking opportunities, and presentations featuring more than 50 local and national experts redefining what it means to do good business.”

2) Our friends at Urban Farm U host events all the time.

On January 16th – 18th and also January 23rd – 25th, they will be hosting pop-up nurseries where you can pick up deciduous trees, bushes and vines.

You could pick up trees anywhere. The difference with Urban Farm U is that they wrap you in a warm blanket of education through podcasts, seminars and library tools.

3) The City of Phoenix is considering rate changes to trash and recycling.

Remember how recycling nation-wide took a punch to the gut last year when China stopped taking our boat-loads of recyclable materials? And, since the US spent the last 40 years out-sourcing recycling to other countries rather than building our domestic recycling industry, we were left in a lurch.

Well, that has led to hard decisions in cities all over the country. Do we charge more to pick up your recycling? Do we stop collecting recyclable materials?

It’s a shame. We spent so many years correcting people when they said that cities don’t really recycle, and then it turns out we may not be able to recycle until the US re-builds its domestic industry. Then we have to start the education process all over again.

Anyway, my belly-aching aside, the City of Phoenix has some hard decisions to make and they need your help. Please see the website announcement here and look for the link for the survey. Please take 3 minutes to fill that out.

4) Americano!, at Phoenix Theater Main Stage. January 29th – Feb. 23.

Stories like these, which humanize the lives of refugees, are not told enough. See the Phoenix Theater site for ticket information.

“This true story world premiere musical follows Tony, the child of immigrants who discovers his undocumented status when he tries to enlist in the Marines. With his lifelong dream of serving in the military vanishing quickly, Tony must confront his family, his heritage, and a deeply divided country. With a sumptuous original score of new songs, Americano! casts a deeply human light on what it means to be a Dreamer.”

5) The Arizona Wine Festival, January 25th and 26th

Over the last 20 years, the wine industry has exploded. I remember hearing stories as a kid in Sierra Vista about mythical vineyards in Cochise County, but “you probably would not want to drink that stuff,” they said.

Well, the wine industry has attracted dollars, tourism and rural economic development, all with a crop that uses significantly less water than other imports such as cotton, alfalfa, almonds and pistachios.

So, tip a glass to that at the Arizona Wine Festival in downtown Phoenix.

“The Cochise Graham Wine Council, Inc partners will present the largest gathering of Arizona wineries. This festival will feature over 25 Arizona Wineries pouring over 200 different wines. The festival will have 5 to 7 food trucks, a vintage village and numerous other non-winery vendors. There will be live entertainment throughout the festival.”