Investors

Renting? Food for thought here.

by Heather on July 23, 2010

in Investors,Op Ed

Some thoughts I’ve had lately about being a renter in today’s real estate market.

Landlords usually do a credit check and sometimes even a background check on prospective tenants. If I was a prospective tenant, I think I’d ask the landlord for a credit check on him/her in return. You probably don’t need (and won’t get) a credit check on your landlord, but some information is worth asking for.

Why? Many, many landlords are renting their home because they couldn’t sell it. It’s possible that the rent paid by the tenant doesn’t cover the landlord’s mortgage. If I’m a tenant, I want to know that the landlord is covering that gap, and doing so comfortably. That way, I don’t get a Notice taped to “my” front door one day telling me I have to move out because the house is going to the foreclosure auctions.

I think I’d also ask them if this is their first time being a landlord. If it is, I might want to spend some time talking about hypotheticals:

  • what is the fair thing to do if the A/C breaks in July?
  • what is the fair thing to do if the water has to be shut off for a day? for two days? three days?
  • is there a home warranty in place? if so, who pays for the service call fee when the home warranty is used to fix minor broken things around the house?
  • how often does the landlord plan on coming over to inspect things? will s/he give notice before hand? If so, how much notice?
  • Who’s supposed to change the A/C filters inside the house and how often?
  • Does the landlord keep a key to the house while I’m living in it?

I’m not sure there’s a standard, “right” answer to any of those questions. But – particularly me, as a woman living alone – I’d want to know if my landlord lived in town and kept a key to the house I was planning to live in. I’d probably want to know that too, if I was a parent with small children in the house.

Many tenants work with Realtors to find their next rental home. If you’re looking to rent, I’d recommend it. Personally, Chris and I don’t usually handle rentals. But our broker Thompson’s Realty has a Realtor on-staff that handles rentals all the time, both landlord-side and tenant-side.

If you’re looking to rent, shoot us an email and we’ll hook you up with the Thompson’s Realty landlord & tenant Realtor professional. Or visit them online at SpectrumGroupAZ.com


heather

Heather Barr is a Realtor. She's a chow hound, a gym rat, and a political junkie and a happy workaholic.

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The Shiny

by Heather on June 27, 2010

in First Time Buyers,Investors,Op Ed

Real life observation: women who go to the gym in a full face of makeup with their hair done just so. . . . they crack me up.

This has nothing at all to do with real estate.

Or. . . does it?

Many of the buyers we’ve worked with in the past 2 years or so are shopping in the lower price ranges. Single family homes with 3 bedrooms and 1 or 2 baths. Price range is about $70,000 to $100,000.

Inevitably the selection of houses we see includes something just like the two homes below.

Home Number One

The Realtor’s description reads like this -

A/C replaced 2 years ago, new roof in 2009 with transferable warranty, water heater only 5 years old. Exterior painted last month. Seller will buy 2-year home warranty. This home has been well cared for by original owner. Price reduced to $105,000!

This house has pictures like these:

the shiny, old KIT

the shiny, old BA

. . . and it looks like this from the front:

the shiny, old ext, good curb appeal

.

Then there’s the other option. . .

Home Number Two

Inside, it looks like this:

the shiny, new KIT

the shiny, new BA

But it looks like this on the outside:

the shiny, shiny house bad EF

. . . and the Realtor description on this house says something like this:

Complete remodel! Travertine floors, maple cabinets, stainless steel appliances. New carpet, new paint. Seller will not issue Disclosure Statement about condition or provide CLUE insurance history. Ready to move in at $97,900.

Home number one has all the fundamentals dealt with. The big-ticket, expensive items to replace have all been replaced. The cosmetics are, well, to be kind: dated.

Home number two is an obvious investor fix and flip. The investor just completed a total overhaul of the house but refuses to provide a disclosure statement listing what he or she knows about it. Nice! Plus, that chain link fence in the front makes me reach for the eye bleach. I guess the seller’s message here is “we don’t really like our neighbors much” ?

It’s the curse of The Shiny

Guess which house the majority of buyers make an offer on? Home number 2.

Buyers get stars in their eyes over the fancy, shiny interior remodel and forget that they’re buying a home they know nothing about that could possibly need a roof, A/C unit and water heater in the first couple years of ownership. Plus miscellaneous plumbing &/or electrical problems as yet unknown, because even the best home inspection can’t possibly uncover everything.

Sure, the interior cosmetics of home number 1 are dated. It looks like the Brady Bunch just moved out. I get that. I do, I really do. I don’t want to live in the Brady house anymore than my buyers do.

I just can’t help feeling that I’m not really doing my job 100% when I can’t convince the average buyer to consider for more than a few fleeting moments the incalculable value of a house with the big-ticket stuff already paid for. Even if it’s an extra $7,000 in purchase price and has 15 year old cabinets and counters… The value of having a new roof, A/C and water heater are nearly priceless to cash-strapped first time homebuyers.

Too many home buyers act like the star-struck middle-aged men at the gym: so blinded by The Shiny of a middle-aged woman in Kabuki makeup and a fancy hairstyle they can’t focus on anything else. Not even their own good.

edited to add links below

What is a Seller’s Disclosure Statement?

What is a CLUE insurance report? (scroll down a bit in the article linked here, to about 1/3 of the way through the article)


heather

Heather Barr is a Realtor. She's a chow hound, a gym rat, and a political junkie and a happy workaholic.

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Thinking about being a landlord?

by Heather June 21, 2010 Investors

If you’re thinking about becoming a landlord, The Landlord Protection Agency website is a great resource for you. Besides offering a chat forum, advice and free legal forms, they even have a funny Excuse of The Day feature where website members post their tenants’ most ridiculous excuses for not paying the rent on time. RentingAuthority.com [...]

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90 Day Fix and Flip Rule

by Heather April 1, 2010 Buyer Help

You know how fix and flipping works in a cynical world, right? Basically. . . . investors buy a craptacular house at foreclosure auction or elsewhere and do no substantive repairs. They slap a thick coat of paint on everything and install cheap new carpet, then resell it as “Remodeled!” with a seriously  jacked up [...]

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FHA and Fix ‘n Flip Do Not Mix

by Heather November 29, 2009 First Time Buyers

This is a phrase you’re seeing a lot lately in the MLS listings on entry-level housing in metro Phoenix: This is a property acquired at trustee sale in the past 30 days and will not qualify for FHA due to the cure period requirements. Will qualify for VA or conventional. Well, actually what you typically [...]

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New Listing, Golf Course Getaway

by Heather October 12, 2009 Investors

27617 N Makena Place Peoria AZ 85382 Located in the Active Adult Community of Trilogy at Vistancia Offered At $449,000 Specification, Features and Finishes 2 beds, 2 baths, plus den 2,193 square feet on a golf course lot Sits at the top of the 16th tee: beautiful course views, no golf balls in the yard [...]

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Wrong On So Many Levels

by Heather September 17, 2009 First Time Buyers

Another example of REO lunacy, about which I’ve written before. Our first time home buyer is being required to sign a document containing the following clauses. She must sign before the bank that owns the house will even look at her offer, which is one among many offers they received. These are the most heinous [...]

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More Thoughts on REDC Auctions

by Heather May 19, 2009 Buyer Help

This is a follow up to yesterday’s post about the upcoming June 13-14 REDC auction of bank owned foreclosure homes. Most auction houses don’t use the Arizona Association of Realtors’ (AAR) purchase contract form. They’re national corporations; they use their own forms. REDC doesn’t publish their purchase contract online. However, I’ve seen other auction companies’ [...]

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REDC Auction

by Heather May 18, 2009 Buyer Help

REDC is one of the biggest home auction houses in the country and they’re advertising their upcoming June 13-14 Phoenix area auction heavily on local cable TV channels. Here’s a few things you should know if you’re thinking about attending. Access and Inspections You can tour the homes and do inspections before the auction but [...]

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Where’s The Bottom?

by Heather March 25, 2009 Investors

There’s a painful truth about a market where prices are falling. It looks like this: Every guy who buys pays less than the last guy who bought. That’s pretty much the classic definition of a declining market. If you’re a seller, it’s better to sell now than later. Later equals less money in your pocket. [...]

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Wall Street Journal Quotes The Phoenix Agents

by Heather February 25, 2009 Buyer Help

To readers who found us via Realtor Heather Barr’s quote in today’s Wall Street Journal article “Bargain Hunters Descend, Cash in Hand”, welcome! We’re glad you’re here and hope you enjoy our blog content. Long-time readers who aren’t Wall Street Journal subscribers might have missed our mention.  The story is behind the WSJ’s subscription firewall [...]

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Sunday Stats

by Heather February 15, 2009 Central Phoenix

photo credit to MiamiAmia, courtesy of StockExchange. See the entire series for historical perspective. Time for another edition of the Sunday Stats Background and Color Coding: red is bad, green is good, inasmuch as it means the stats are moving towards a balanced market. Most local experts/forecasters and Realtors use 6 months’ supply of inventory [...]

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