Archives for April 2014

5 Spring Home Maintenance Musts By Joe Szabo, Scottsdale Real Estate Team

April 28, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Nothing renews that feeling of pride of ownership more than attending to annual home maintenance tasks (especially once they are completed and behind you). Now that spring has arrived, it’s time to investigate the condition of your home’s exterior — everything from the roof, gutters, siding, and foundation to the lawn, shrubs, trees and garden. The chore isn’t so bad, and with a plan — and the right tools — you can make short work of many of these common tasks:

Inspecting

Spring is a good time to see what damage winter storms, snow and ice may have done to the exterior of your home. Take this time to inspect the roof; you can do it easily and safely from the ground with a pair of binoculars. Look for loose, curled or missing shingles and any bent or damaged flashing around chimneys, skylights or points where the roof makes contact with the house. Note where repairs are in order and make sure to get them done. Next, clean out your gutters and downspouts. With those spring showers on the way, you definitely want to make sure your gutters are clear of debris so that they function properly. Also use this time to inspect your home’s foundation and chimney; repair any cracks or crumbles. Small fixes now could save you money and headaches later.

Pruning

Your trees and bushes will look and grow a lot better if you remove dead, damaged or overhanging branches. The main thing to remember here is to cut the entire branch off at the branch collar, which is the point where the branch connects to the trunk or another branch. Don’t leave little half branches or big stubs. You’ll get the best results using a handsaw or hand pruner, and it’s well worth investing in an extendable pruning saw with clippers if you have some branches that are just out of reach. Be sure to wear safety glasses and a hard hat if you are cutting branches directly overhead.

Cleaning

There’s certainly no shortage of things to clean outside when the spring season hits. A hose attachment like the HYDE PivotJet Pro can help with almost any cleaning task and lets you get the job done with ease since there’s no bulky or noisy engine to cart around or an electric cord to wrestle. Its powerful spray provides superior cleaning without the risk of damage associated with pressure washers. Use it to clean siding, windows, foundations, decks, gutters, patio furniture, grills, driveways, pool areas, fences, mowers and more. The spray wand with a pivot nozzle head gets into hard-to-reach spots, and a built-in liquid cleaner reservoir can be adjusted or turned completely off as needed. It’s much easier to use than a pressure washer, and much more affordable as well.

Touch-up painting

Exterior paint takes a beating throughout the year, so touching up those areas of your house, fence or shed where paint is starting to fail is a good way to avoid long-term damage and make everything look new and fresh. This isn’t a task you want to revisit every year, so it is crucial to follow the proper steps for prepping, priming and repainting.

Garden prepping

If you enjoy growing a vegetable or flower garden, then you have some prep work to do before it’s ready for seed or seedlings. Removing weeds and leaves, tilling or turning the soil, testing the soil and adding the appropriate fertilizers are just a few tasks you can start doing now. You might want to consider adding a motorized tiller to your arsenal of tools if you plan on keeping a good-size garden every year. If you get a jump on prepping your garden early in the season, you will have more time later to enjoy the fun part — watching your garden grow!

Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, [email protected] or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

Tips for Sellers in a Buyer’s Market By Joe Szabo, Scottsdale Real Estate Team

April 24, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Selling your home in a market where there are more homes available for sale than there are buyers means that you really have to work at it. Buyers in a seller’s market are looking for value. They want the best house for the money. Buyers can be picky and simply won’t settle. You have to get in front of the buyers, have your home showing in its best possible condition and have the home priced right from the start. You must know the competition and see your home as a “product” listed on the open market. Make it stand out from the competition, either in how it is delivered to the market or how it’s priced.

Know the competition

It’s common that a would-be seller will receive “comps” from their agent around the time that they agree to work together. As part of the comparative marketing analysis, an agent will show a seller what is on the market, pending and sold. Oftentimes, it could be weeks or months before the seller actually lists his home. A slow market means more inventory and more competition for sellers. A seller must know what other homes are available and price their home accordingly. Hit the open house circuit the weekend before you list or keep a search going online of similar homes. Knowing the competition will help you decide how to price your home. You want to be the home that stands out from the crowd….in a good way.

Consider pre-marketing your home

A generation ago, buyers needed an agent to know exactly how long a home had been on the market. Why? Because that data was locked up in agent-only databases. Today, once a listing goes active, the days on market or DOM starts ticking for all the world to see online. The DOM is the best way for a buyer to gauge how your home fares in the market. If the DOM hits three months and your home is still listed, chances are slim you will get a full-price offer. These days, it’s smart to put out feelers before your listing goes live. Work with a good local agent and have them do some pre-marketing of your home to test the price and the market’s response to it. How does this work? In most communities, it’s not uncommon for agents to announce upcoming listings within their firm or on social networks. In some communities, there are entire websites dedicated to “pocket” listings.

Make sure your home is widely marketed

Buyers are everywhere today and your listing needs to be where they are. Most are online, specifically on mobile devices at all times of day and night. If your home is not listed where buyers are looking, that’s one less opportunity. In a buyer’s market a seller can’t afford to miss one buyer. If your agent doesn’t understand the concept, you should be working with another agent.

Work with the right agent

Speaking of the right agent. Having the best agent representing your home will make the difference between selling and moving on or having your home sit on the market. A good agent is someone who actively sells in your local community. They know the customs and trends, not to mention governing laws. Agents like to work with agents they know. Work with an out-of-area agent or someone not familiar with your area and you risk being poorly represented.

Photos are key

A generation ago, a photo shoot wasn’t always necessary when selling a home. Today, it is potentially the most important part of the home-selling process. A buyer’s first impression of your home today will likely be online, via an email alert online or a text with the listing from their agent. You should spend as much time and attention on your photo shoot as you would for the first open house. Also, make sure that your listing photos are high resolution and optimized for the web and mobile.

Spend the right money to get the home ready

There is nothing worse than an eager seller spending a fortune to renovate their home prior to selling, only to do so in a manner that is not neutral or buyer friendly. A recent survey by Zillow Digs shows that the ROI on these projects isn’t high. If you want to get your home ready for sale, take a step back and spend money the right way. The best thing a seller can do is to clean and de-clutter. Investing in storage is one of the smartest things a seller can do. Also, smart cosmetic fixes like painting, cleaning and changing out some fixtures or finishes is money well spent when getting your home ready to sell.

Succeeding in a buyer’s market is not simply a matter of hiring an agent and listing your home. You need to do your homework: Know the competition and what is selling. Work with an agent who has relationships with the local community and knows your market. Don’t list your home with an agent who doesn’t have a plan to make sure that your home is widely marketed across the Internet and on mobile devices — that is where buyers are today. Be open to non-traditional means of marketing your home. One misstep in the selling process could set you back weeks or months.

Why Being Pre-Approved for a Loan Matters By Joe Szabo, Scottsdale Real Estate Team

April 21, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

So much has changed in the past few decades that the old ways of buying or selling a home simply won’t work today. For decades, buying a home was pretty much the same thing: You shopped around, made an offer and then went to the bank to get a loan. If you were denied or there were problems, you walked away.

Today, a buyer needs to speak to the bank and get approved prior to shopping and definitely before making an offer on a home. Not being pre-approved today won’t get you past the front door. Here’s why:

Markets move faster today

With online listings and so many real estate resources available to buyers and sellers, it’s easy to quickly get a property in front of the masses. Buyers aren’t waiting on a call or fax from their real estate agent like they did in the 1980s. Instead, motivated buyers get push notifications from Zillow or texts from their agents and see homes as soon as possible. It’s more efficient.

Transactions happen at the same speed. If you’re not approved for a mortgage when you make an offer, the seller risks waiting weeks to see if your loan will go through. That’s not good for them. Show that you’re pre-approved, and you’ve eliminated one huge hurdle for the seller.

Know what you can afford

People today are focused on their monthly payments more than the total purchase price. Why? Because, unlike the typical buyer a generation ago, many of today’s buyers don’t plan on staying in their homes for 30 years. Instead, they can commit to 7 to 10 years and are open to alternate mortgage options that could save them money on their monthly payments.

It’s helpful to know exactly what a $425,000 mortgage will cost vs. a $500,000 mortgage on a monthly basis. Also, in some parts of the country, there are options for FHA loans with as little as 3 percent down. Knowing all your options before you start shopping allows you to shop and buy smarter. There’s no sense looking at homes in the $400,000 range if you can afford more, and vice versa.

Competing with pre-approved buyers

Few buyers today get into the real estate market without forging a relationship with a local mortgage professional. It’s simply smarter to have your ducks in a row. In a competitive market, you may face multiple offers on one property. If you don’t have a pre-approval letter to go with your offer, you have zero chance of getting your offer accepted. Not being pre-approved means you aren’t a serious buyer in the eyes of the seller.

Getting pre-approved means organizing all your documents, documenting your income, debt and credit, and understanding all the loan options available to you. There should never be a cost to be pre-approved for a loan. And you aren’t committed to a mortgage when going through the pre-approval. Got a signed contract from a seller? Then you’re ready to lock in a rate and choose the mortgage that’s best for you.

How to Get Multiple Offers on Your Home By Joe Szabo, Scottsdale Real Estate Team

April 17, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Homeowners hear that the real estate market has finally turned a corner and assume that means multiple offers and bidding wars are back. Even if your town is buzzing with real estate activity and sales are picking up, it doesn’t mean that you’re guaranteed multiple offers, or even one offer for that matter. For a seller to get lots of activity on their listing, there are three must-haves: location, price and presentation.

Must have a good location

One thing is common among all properties that receive multiple offers these days: the home is in a good location. Location is nearly always what drives homebuyers in their search. Before considering price, number of bedrooms or size of home, a buyer looks for location.

If your home is on a busy street, not in the best school district or near a freeway on/off ramp, chances are you won’t receive the kind of activity that a well-located home would. In that case, work closely with your agent to price the home correctly.

Must be priced right

Buyers in any market look for perceived value. Homes priced 10 percent (or more) over their market value won’t get noticed. Pricing isn’t an exact science, and it’s nearly impossible to pin a precise number to a home until buyer and seller sign a contract and close. Then, the price officially becomes the home’s market value. Until that time, agents can provide sellers with a value range. Have a good location? Does your home show well? Are you in a strong sellers’ market? Price your home on the bottom of that price range and you’ll be sure to attract buyers — and possibly multiple offers.

Must show well

A generation ago, sellers simply did some deep cleaning and maybe some de-cluttering before their first open house. Presentation wasn’t as important then as it is today, given online listings. More buyers today develop an emotional connection to a home. They want to imagine themselves in your home and not feel like they’re a guest. What does that mean? Appeal to the masses. If you have a good location and you plan to price your home realistically, then you need to make sure you give buyers what they want. If you can afford it, make cosmetic upgrades; invest in some staging and work to turn your home into a “product.” Emotionally disconnect from your home and try to see it more objectively.

Plan on having the home in perfect condition for the photo shoot. A buyer’s first impression of your home likely will be via the Internet or an email from their agent. Make them want to step inside. The more buyers you attract to your home, the more activity.

Know your market

Don’t assume that national trends apply to your region, city or neighborhood. If you’re not in a strong sellers’ market or you spend a fortune on last-minute upgrades, you could be in for a giant surprise. Just because you hear about bidding wars and multiple offers on the national news doesn’t mean that applies to your market. For example, while properties in San Francisco may receive multiple offers, a town like Port Chester, NY, still sees short sales and homes often spend many days on the market.

Work with a good local agent. A local agent has likely toured all the nearby homes for sale as well as ones that have sold over the past six months to a year. Knowing those homes, having walked inside and personally knowing the agents who have sold them matters. This is market data that an outsider just doesn’t have access to. This knowledge empowers good local agents to educate their sellers.

Best Times to Buy, Sell or List a Home By Joe Szabo, Scottsdale Real Estate Team

April 14, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

A common question from a buyer or seller is: what is the best time to buy or sell a home? In the clothing world, it makes sense to get the best “deal” on winter clothes at the end of winter and that you will likely will pay top dollar for a swimsuit in April. Does the same trend hold true for real estate purchases and sales? Not really. But there are some considerations a buyer or seller should make as they enter the market that could have an impact on the transaction.

Spring and fall are better times for buyers

Let’s be clear. You can’t ever time a home purchase. Buying a home isn’t like buying a car or an iPad. The home buying process is a journey, one that happens on your own time and only after you’ve done enough research, seen enough homes and have your financial house in order.

At any one time there is a brand-new buyer entering the market and then another who has done enough research and becomes a very serious buyer. Nobody can control the evolution. But something for a buyer to consider is that real estate inventory tends to fluctuate by season. Each spring and fall we tend to see an increase in home inventory due to the seasons. More inventory means more options for buyers.

Holidays and winter are best times for sellers

It’s not conventional for a seller to list their home before the holidays or in the dead of winter for obvious reasons. But serious, eager buyers don’t care about the season or timing. At any one point of the year, there will be a very motivated, experienced buyer ready to make an offer, no matter the season. I’ve written contracts on Thanksgiving, closed escrow on New Year’s Eve and even had a serious buyer make an offer using DocuSign from a beach in Hawaii. Sellers believe that it’s more conventional to list for the spring “selling” season and then again after the summer. If you go the conventional route, you will see more competition. If you can sell “off season” you might fare better because there are still serious buyers, but less homes for sale.

Best time of day to list a home

The Sunday open house, particularly the first Sunday, is the holy grail of real estate. For decades, agents and sellers worked hard on a listing with a deadline being the first open house. The “for sale” sign, which made the listing official a generation ago, would go in front of the house the days leading up the first open house. In the digital age, the listing goes “live” online. Sellers and agents work hard to clean, paint or prep the home in time for the photo shoot. Agents and sellers tend to rush to the finish and you will see many listings hit the market late Thursday afternoon or Friday morning, with Sunday being the first showing. Instead, try listing on Monday or Tuesday and don’t do any showings until the open house on Sunday. You can build momentum and have a very strong first open house.

As much as buyers and sellers try to strategize the timing of a real estate purchase or sale, its never that easy. Unlike Macy’s or Target, who control inventory and monitory competitive activity, there isn’t one seller in real estate. Sellers are unrelated and disconnected and the types of homes are different making it nearly impossible to “time” a purchase or sale.

7 Things Every Lease Agreement Should Include By Joe Szabo, Scottsdale Real Estate Team

April 10, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Congratulations on buying your first investment property. Smart investors know the best way to safeguard their investment from potential tenant trouble is to craft a solid lease agreement that includes these key things:

1. The basic clauses. Every lease agreement must list the parties to the agreement, which would be you and the tenant, along with the property’s address. You also want to state the term of the lease, which could be month-to-month starting on the first with a particular end date or an automatically-continuing lease that remains in full force and effect.

2. Security deposit clause. Your lease should require the tenant to put up a security deposit that matches one month’s rent or more, depending on the value of furnishings and repair costs if something goes wrong. Some states require you to place the tenant’s security deposit in a separate interest-bearing account and, at the end of the lease, you must give the deposit plus interest to the tenant, less any damages. Make sure to check with your state and judicial regulations and, to save time and money over the long term, check with your real estate attorney to make sure your lease follows the law. Security deposits can be a problem if not handled correctly.

3. Maintaining the premises. The lease should tell the tenant that he is required to maintain the premises, abide by noise control rules and not change the locks without your written approval. You will want to itemize the appliances and furniture that are part of the lease, and note their condition and any other special considerations. Don’t expect a tenant to follow oral requests, such as not parking in the driveway. All requirements must be spelled out in the lease. Also note whether the tenant or landlord will be responsible for utilities. Take the time to clearly write out the details of your agreement.

4. Warning of concealed defect. In some jurisdictions you have a duty to warn of a concealed defect known to you, or a defect that it is reasonable for you to know about. If you know the deck is crumbling and you fail to warn your tenant, then you may find yourself explaining the situation to a judge. Better to disclose the known defect in the lease and, best of all, fix it before the tenant moves in.

5. Subleasing clause. At some point, most landlords have a tenant who wants to sublet the apartment to a friend or stranger. To avoid trouble make sure your lease includes a subletting clause that requires the tenant to obtain your written permission before turning the property over to someone else. When the tenant asks to sublet the property, you will be in a position to decline or accept their offer. But heed this caveat: If you want to agree to having the new tenant move in, then it’s best to end the original tenant’s lease and start the process from scratch with the new tenant. You should go through the entire background check with the new tenant, including a new security deposit and lease. Do not get stuck trying to enforce your original lease against a new tenant who was not a party to the original lease. That situation is a risk you cannot afford.

6. Termination. The best practice is to know your jurisdiction’s rules on terminating a lease and include those details in your lease so your tenant will not be surprised. Terminations occur at the end of a non-continuing lease and also when there is an eviction. Evictions are one of the most dangerous areas for the self-advised investor. You may think you know the rules, but if you improperly notify your tenant of a coming eviction and lock out, you may find yourself on the wrong end of a lawsuit. You can find free eviction paperwork online, but if you are planning to evict a tenant, you would be wise to consult with an attorney.

7. After the tenant leaves. Would you ever hold a tenant’s personal property for unpaid rent? In some states it’s against the law for a landlord to confiscate a tenant’s property and demand rent money in return. Other jurisdictions consider the property abandoned and allow the landlord to dispose of the items. Most states require a landlord to hold the tenant’s property for a short period of time and give notice to the tenant, and some allow the landlord to claim a storage fee for the hassle. The key is to check your local laws and spell out in the lease what you plan to do with personal property left behind by the tenant.

Include these important clauses in your residential lease agreement and you will be well on your way toward building a successful real estate investment empire.

Offer Accepted: What Happens During Escrow? By Joe Szabo, Scottsdale Real Estate Team

April 6, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

So the past few months you’ve shopped properties, submitted offers on many and gotten your hopes up, only to be let down. But you haven’t given up, and finally you get the call from your real estate agent: Your latest offer has been accepted!

You might think it’s the end of the road to property ownership. But really, it’s just the beginning of the hard work.

Once you go into escrow, many items still need to be reviewed, discussed and inspected as you move forward in the process. Here are several that you’ll encounter for the next 40-50 days until you finally close escrow.

Home inspection & renegotiations

First you’ll need to schedule a home inspection and have an independent, licensed and insured inspector go through the property to look for problems. Make sure to join the inspector at the inspection and ask a lot of questions, write down everything that needs to be addressed and get with a contractor to determine how much it will cost to make all those repairs. Then have your real estate professional negotiate with the seller for, hopefully, some additional fixes and/or cash credits at closing.

Mortgage financing

Hopefully you’ve kept your lender apprised of where you are in the process. Now it’s time to get into full-speed motion. Get your appraisal ordered and start resubmitting pay stubs, mutual fund statements and other document the lender requests. And lock in your interest rate, points and loan terms — and get those terms in writing.

Title insurance, plat/survey, schedule of exclusions

You’ll also get a thick packet of documents that you’ll need to review. Most people do not review them, and that’s a really bad idea. You need to look through the estimated HUD-1 costs, the title abstract, the title insurance policy schedule of exclusions and all other documents. Also review the plat or have a survey done and then walk the property to see if there are any encumbrances (get the title company to plot the easements). This is the time, before you close escrow, to figure out if there are title or physical property issues that pose a problem.

HOA documents review

If the property is in a common interest development, you’ll need to review all the relevant homeowners association documents — board of directors meeting minutes and notes, financial statements, state disclosures, reserve study, bank condominium certification, HOA unit demand statement, etc. This is a really time consuming, confusing and tricky process. Many people fail to do even the most basic HOA analysis, and if you don’t adequately review the documents, you might feel some pain down the road when issues occur — and they will occur.

Property and liability insurance

You also need to get with an insurance agent and make sure to discuss and procure the proper type and amount of insurance that you’ll need. This is especially true if you’re paying cash, as you don’t have the bank personnel to double-check that you are properly insuring yourself. Your best bet is to go meet with your insurance agent and get the appropriate coverage.

Sign documents, fund down payment, verify GFE

As items move forward, you will eventually be ready to sign documents, fund the down payment and verify the lender costs match the good faith estimate you were given. Make sure to read and review all these documents before you sign off that they are acceptable to you.

Close escrow

Finally, you will fund your down payment, the bank will fund the mortgage loan, escrow and title will prepare all documents, properly account for all the funds, then go record your purchase documents at the county courthouse. And you are now the proud owner of a nice piece of dirt!

5 Smart Moves a First-Time Buyer Should Consider By Joe Szabo, Scottsdale Real Estate Team

April 3, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

As a first-time real estate buyer, you probably have no idea how the overall purchasing process works or how to make sure you’re making a smart decision to purchase. And you’ll probably be very surprised to learn how much work it really is just to buy a home. To get you started in the right direction, and this is just a start, here are a few tips that you should consider.

Get lender-qualified and find a good real estate agent

To start off, you should get qualified by a lender to see what price range you can realistically afford and interview some real estate agents to find the right person to represent you in your transaction.

Once you’re qualified and have your price range estimate in hand, you’ll be able to spend your time shopping in neighborhoods that you can afford. But remember: Just because the bank says you can qualify for a certain amount, that doesn’t mean you should spend that amount. Make sure you can actually afford the monthly payment, along with all your other bills.

For real estate sales professionals, you should get referrals for a full-time agent or broker who sells at least five or more properties per year and is well-educated on the process and location where you plan to live. You should call references, check that the agent’s state sales license is up to date and interview them to make sure you’ll be comfortable working with them.

Make sure you plan to be a long-term owner

Once you know your price range and have looked at some properties, it’s time to make sure that you believe you can find a property that you will own for a minimum of five years. If your price range doesn’t match where you want to live, you’d be better off staying a renter and saving some additional money until you can afford where you want to live. This is because an owner really doesn’t earn any equity, on average, in a property for at least five years. That’s the general breakeven point, and you really need to shoot for longer than that as an ownership strategy. The truth is, long-term real estate ownership can be a great way to earn wealth, but short-term ownership usually will diminish your wealth.

Educate yourself

Buying property is probably the most complex, riskiest and expensive thing you will ever do. Do your homework: Talk to real estate owners, go to first-time buyer seminars, check out online material and read some books to learn what to avoid in the buying process. The more you educate yourself, the better the chances that when things go wrong — and they will go wrong — they will only be minor issues, not major headaches.

Find a nice affordable property

The real gems in real estate are the nice, decent shape, moderately priced, boring houses, town homes and condominiums that are within your budget. Most buyers stretch to purchase the most expensive property they can afford. What if you lose your job? How about saving some of your money for retirement? You want your home to be an asset you can afford, not a liability that leaves you with no additional funds over the cost of homeownership. Also, skip the fixers, prize properties or anything that sounds too good to be true: Those always end up having issues, and owners realize, after the fact, that the deal they thought they were getting really was just too good to be true!

Take your time

Realistically it should take you six months or longer to buy a nice quality property that will add to your long-term wealth. Make sure you have a full understanding of what the marketplace has to offer in your price range and that you know what you’re doing.

Those are a few tips to get you started in the right direction. Real estate is buyer beware, so try to make sure you’re one of the buyers who is “aware” of how to make quality wealth-building real estate decisions. Down the road you’ll pat yourself on the back when things work out well.