Archives for May 2014

Protecting Your Home Away From Home By Joe Szabo, Scottsdale Real Estate Team

May 30, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

A vacation home should be a paradise — a safe haven from the bustle and stress of everyday life. For those who rent out their properties for parts of the year, vacation homes also can be an additional source of income. But protecting those assets from natural and manmade disasters takes work and money.

The smart vacation homeowner makes sure the second home doesn’t generate more stress than it relieves. The right insurance coverage can go a long way toward putting an owner’s mind at ease.

Standard homeowners policies won’t do it all

You may think the homeowners insurance policy on your primary residence fully protects you and your possessions. Many standard policies do include some coverage for personal property at an additional residence, but protection for a second home typically doesn’t go any further than that unless you’ve purchased a second policy.

If you took out a mortgage on your vacation home, your lender likely required you to buy a separate home insurance policy. However, vacation homes come with unique risks, so standard coverage may not include all the protection you really need.

Some insurance carriers offer coverage options specifically designed for vacation homes. For others, you’ll have to navigate the fine print yourself. Here are a few of the biggest risks and potential coverage gaps for vacation home owners, as well as suggestions on how to overcome them.

Location, location location

Unfortunately, the qualities that make a location perfect for your dream home are often the same qualities that make it an insurance nightmare. Consider an oceanfront property, for example. In addition to being susceptible to hurricanes — wind and hail damage account for nearly half of all homeowners insurance claims per year, according to the Insurance Information Institute (III) — they also frequently experience flooding, which is not covered under most standard policies.

Mountain homes have a problem, too; standard policies typically exclude all forms of earth movement, including landslides.

Vacancies leave you vulnerable

If your vacation home is not your primary residence, it’s probably safe to assume it will sit unoccupied for several weeks or months every year. In terms of risk, consider the possibility of a small electrical fire or a leaky pipe in an empty house. Both could escape notice until they become serious threats. Additionally, burglars and trespassers are more likely to target homes that appear unoccupied.

Considering the average costs per claim for these three hazards combined (fire, water damage and theft) totaled more than $44,929 in 2013 (according to the III), it’s certainly worth it to take a few easy precautions to ensure you won’t face these costs on your own.

First, make sure your policy’s coverage limits line up with your home’s current replacement cost. Then see that your electrical and plumbing systems are up to date and in good shape. It’s not a bad idea to hire a professional for a thorough inspection.

Leasing liabilities

One way to circumvent the risks of leaving your vacation home vacant is to rent it to tenants while you’re away. But don’t assume you’ll just pocket easy money when you do. Neglecting to take proper precautions as a landlord also could end up costing you in the long run.

Consider this: If one careless tenant leaves the stove on, damages your belongings or is injured while on your property, you could face the entire cost of cleanup, hospital bills and even lawsuit expenses — a tab that could easily top $30,000[1] — on your own.

Homeowners insurance might cover you if you only occasionally rent out your home for short periods of time. However, it’s still a good idea to cover all your bases with background checks and lease agreements. You also should consider investing in an umbrella policy to help protect yourself against the extra liabilities of having tenants.

If your vacation property is occupied by tenants for more than 4 weeks out of the year, it’s safe to assume standard coverage isn’t going to cut it. In order to protect yourself, you’ll need landlord’s insurance. Policies range from simple coverage for things such as fire and vandalism to open peril policies, which cover all circumstances except those specifically excluded in your policy.

It’s not all bad news

If your dreams of enjoying a vacation home haven’t been crushed yet, there is some good news. Vacation homes typically qualify for the same safety discounts as your primary home, so responsible investments such as deadbolt locks, home security systems and other upgrades are typically met with relatively lower premiums.

And don’t worry. Once you’ve taken care of all the paperwork, the hardest part of owning a vacation home is having to leave at the end of the season.

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.

30-Year Fixed Mortgage Rates Fall Below 4 Percent for First Time Since October By Joe Szabo, Scottsdale Real Estate Team

May 27, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Mortgage rates for 30-year fixed mortgages fell this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 3.99 percent, down from 4.05 percent at this same time last week.

The 30-year fixed mortgage rate steadily declined last week, dropping to as low as 3.98 percent on Sunday before rising slightly to the current rate Tuesday morning.

“Rates continued to drift lower last week, falling below the 4 percent threshold for the first time in months,” said Erin Lantz, vice president of mortgages at Zillow. “In this holiday-shortened week, we expect rates will remain fairly stable unless economic data or Federal Reserve speakers surprise markets with meaningful insights into the health of the U.S. economy.”

Additionally, the 15-year fixed mortgage rate this morning was 2.98 percent, and for 5/1 ARMs, the rate was 2.71 percent.

What are the interest rates right now? Check Zillow Mortgage Marketplace for mortgage rate trends and up-to-the-minute mortgage rates for your state.

*The weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

Lack of Inventory Squeezing First-Time Home Buyers Out of the Market By Joe Szabo, Scottsdale Real Estate Team

May 22, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

After rising at the end of 2013, for-sale inventory has fallen for four straight months to begin 2014. Inventory remains tight nationwide, with the number of homes listed for sale on Zillow down 0.4 percent annually in April and more than half of metros in the U.S. currently seeing a similar downward trend.

In many metros, inventory is tightest in the lower-end of the market, which represents the homes most commonly sought by first-time home buyers. According to Zillow Chief Economist Dr. Stan Humphries this shortage of inventory is driven by a couple of factors, most notably by stubbornly high negative equity, particularly at the lower end of the market, which is preventing many sellers from listing their homes.

National home values in April were also down 0.1 percent from March to a Zillow Home Value Index of $170,200, marking the first monthly decline in more than two years. Among the 35 largest metros covered by Zillow, home values in a dozen were down on a monthly basis and were flat in two more.Year-over-year, U.S. home values rose 5.3 percent in April. The Zillow Home Value Forecast calls for another 2.2 percent increase in national home values by April 2015, further confirming that the market is slowing down.

For a deeper analysis from Humphries, visit Zillow Research.

Want to know which markets saw the greatest change in housing supply this past year? Check out the graphic below.

The Nation’s Most Affordable Homes Also the Most Likely to Be Underwater By Joe Szabo, Scottsdale Real Estate Team

May 19, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

The affordable homes most likely to be sought after by first-time home buyers are also those most likely to be kept off the market because their current owners are in negative equity, or underwater. Underwater homeowners — those who owe more on their mortgages than their homes are worth — have a very difficult time listing and selling their homes, even if they want to, without engaging in a short sale or dipping into their savings.

Among all homeowners with a mortgage nationwide, roughly 1 in 3 (30.2 percent) who owned homes within the bottom third of home values were underwater in the first quarter, according to the first quarter Zillow Negative Equity Report. That’s almost three times as many as in the top third of homes (10.7 percent). Among the middle tier, 18.1 percent of homeowners with a mortgage were underwater in the first quarter.

The national negative equity rate fell to 18.8 percent in the first quarter, with almost 9.7 million American homeowners with a mortgage underwater. More than one-third of homeowners with a mortgage (36.9 percent) are effectively underwater, unable to sell their homes for enough profit to afford down payments on new ones and comfortably meet expenses related to selling, such as real estate agents’ fees and closing costs.

“The unfortunate reality is that housing markets look to be swimming with underwater borrowers for years to come,” said Zillow Chief Economist Dr. Stan Humphries. “It’s hard to overstate just how much of a drag on the housing market negative equity really is, especially at the lower end of the market, which represents those homes typically most affordable for first-time buyers. Negative equity constrains inventory, which helps drive home values higher, which in turn makes those homes that are available that much less affordable.”

Negative equity has fallen for eight consecutive quarters, but fell at its lowest pace in almost two years in the first quarter as home value growth slowed. Negative equity fell from 25.4 percent in the first quarter of 2013 and 19.4 percent in the fourth quarter, while the pace of annual home value growth slowed to 5.7 percent in the first quarter, from 6.6 percent at the end of the fourth quarter. Looking ahead, the national negative equity rate is expected to fall to 17 percent of all homeowners with a mortgage by the first quarter of 2015, according to the Zillow Negative Equity Forecast.

More underwater homeowners are freed from negative equity as home values rise, eventually surpassing the amount still owed on a mortgage. If home values rise more slowly, negative equity will recede more slowly. Homeowners are also freed from negative equity if their homes are foreclosed on, as homeowners’ debt is wiped from lenders’ books following foreclosure.

5 Ways to Dress Up Your Front Door By Joe Szabo, Scottsdale Real Estate Team

May 15, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Ostensibly, a home’s front door is there for one reason and one reason only: to let people come and go while keeping the inside environment secure and separate from the outside. But a front door is so much more than that. It is often the first thing that draws the eye of a passerby or visitor. It also sets the style and mood of your home, welcoming guests with an air of elegance, friendliness, whimsy or warmth.

If your front door is not setting the tone you want, here are some fun, easy and rewarding ways to make it the arresting centerpiece it deserves to be.

1. Decorate it

There are nearly limitless possibilities for decorating your front door. You could simply paint it a different color (or colors), hang a wreath in the center or add a dramatic house number above or to the side. Other options include installing long shutters on either side or adding a playful, historic or decorative specialty door knocker. Online retailer Architectural Depot sells a wide range of knockers, from chili peppers to poodles, that are sure to make you smile when you come home at the end of a long day.

2. Replace it

A study commissioned by door manufacturer Therma-Tru found that replacing a home’s front door can increase the perceived value of the home. In the study, enhancing an entryway upped a home’s perceived value by as much as five times the cost of the new door.

When replacing your door, don’t think only about swapping one door for another — although that alone could dramatically increase the appeal of your entrance. Instead, look to enlarge the entryway by installing a door with windows on either side or above. This will add a sense of grandeur to the front of the house and create a more pleasant atmosphere inside, thanks to the added natural light.

See the others here

April 2014 Paradise Valley Arizona real estate market update

May 15, 2014 Joe Szabo

Happy May everyone! Can you believe we are already on the brink of summer? Summer in Paradise Valley means scorching temperatures but as far as the real estate market goes activity is starting to cool down. The median home price in Paradise Valley Arizona has dropped to $1,200,000, an 18.9% from March. Good news is we are still up from April of last year, which was $1,155,000. Also, the number of listings that came on the market, in April, are down 14.8% from March and closed sales are up a whopping 37.8%, with 51 closed sales in April. Finally, new contracts are down 17.5% from March. What does this all mean? The lower inventory of listings and uptick of closed sales makes for an excellent sellers’ market, however the lower number of new contracts mean less closings in the coming months. During these up and down activity months it is more important than ever to consult a real estate professional that knows the Paradise Valley market.

Paradise Valley real estate update April 2014

Considering a purchasing or selling a property in Paradise Valley? Call Joe and Linda Szabo – The Real Estate Experts!

We hope that you enjoy reading and analyzing the Paradise Valley Luxury Home Report and should you have any questions or comments, please feel free to Contact Joe Szabo at 480.688.2020 or email him directly at [email protected] or [email protected]. You can also visit https://www.AZLuxuryHomes.com or https://scottsdalerealestateteam.com to find out more about Paradise Valley Homes for Sale and Estates for Sale in Paradise Valley and to search the Paradise Valley MLS for Scottsdale Home Listings.

Please note that this Paradise Valley Real Estate Blog is for informational purposes and not intended to take the place of a licensed Paradise Valley Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale and Paradise Valley 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 Paradise Valley, The Szabo group delivers experience, knowledge, dedication and proven results.

April 2014 Scottsdale Arizona real estate market update

May 13, 2014 Joe Szabo

Happy May everyone! Can you believe we are already on the brink of summer? Summer in Scottsdale means scorching temperatures but as far as the real estate market goes activity is starting to cool down. New listings and new contracts in April were down when compared with March 2014, 5.2% and 5% respectively. The hot sellers’ market is slowly shifting and we anticipate the next few months to see less activity. The good news is that the median home price in Scottsdale has jumped from March and now sits at $415,000 (March was $385,000). Also, the number of closed sales has jumped 13.1% from March. What does this all mean? The lower inventory of listings and uptick of closed sales makes for an excellent sellers’ market, however the lower number of new contracts mean less closings in the coming months. During these up and down activity months it is more important than ever to consult a real estate professional that knows the Scottsdale market.

Scottsdale real estate update April 2014

Considering a purchasing or selling a property in Scottsdale? Call Joe and Linda Szabo – The Scottsdale Real Estate Experts!

We hope that you enjoy reading and analyzing the Scottsdale Luxury Home Report and should you have any questions or comments, please feel free to Contact Joe Szabo at 480.688.2020 or email him directly at [email protected]. You can also visit https://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.

Making the Most of an Open House Visit By Joe Szabo, Scottsdale Real Estate Team

May 12, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Open houses are the gold standard in real estate. They’ve been around for decades and will be ingrained in the buying and selling of homes for years to come. But as a buyer, are you making the most of your open house visits?

Here are some best practices for buyers at all ends of the home-buying spectrum.

Use the open house to learn the market without committing

For the most part, open houses are just that — open. They make it possible for anyone to see a property in a certain time period, without an appointment or even being a very serious buyer.

New buyers should leverage the open house opportunity to get a feel for the market. In today’s world, using online search tools, mobile apps and the open house, a buyer can start to get a feel for pricing and the market before committing to an agent. Most importantly, open houses are some of the best ways for buyer and agent relationships to start.

You don’t have to sign in (but don’t be rude)

The biggest fear of some newer buyers is that a real estate agent at an open house will be all over them, ask for their contact information and then start harassing them for the next three weeks. It does happen, but it’s also common courtesy to at least recognize and say hello to the agent at the open house. Don’t forget, in addition to trying to sell the home for her client, for safety reasons, the agent is keeping a look out for who is coming and going. It’s polite to say hello and introduce yourself to the agent, but you can also politely decline to sign in.

If you’re an active buyer, you should make yourself known to the agent. Let the seller’s agent know who your agent is and don’t be afraid to express interest. When it comes time to review an offer with a seller, listing agents like to put a face to a name.

Watch the other buyers

You can tell a lot about the activity and marketability of a home by watching the other buyers. If you observe a lot of people walking in and out quickly, the home probably has some issues. Are the buyers hanging around, asking questions of the listing agent and huddling in the corner talking to their spouses or partners? If so, it could be a sign this is a well-priced and “hot” listing. If you’re interested too, observing other buyers at the open house could help you learn about the competition.

Ask the agent questions

The real estate agent is there for a reason. It’s his job. If he is the listing agent, ask him questions. He is a direct line to the seller. He should know more than anyone about the property and the seller. Your agent can funnel your questions to the listing agent. But if you’re there, ask away. Watch the agent’s facial expression and reaction to your questions. If it’s a competitive market, ask questions such as: “Why is the seller selling?” “Is there a certain day to review offers or have you had a lot of showings?” In a slow market, ask how long the property has been on the market and what the seller’s motivations are. A good agent will engage you because it’s good for his seller.

Read more here

Don’t Buy The Best House on the Block By Joe Szabo, Scottsdale Real Estate Team

May 8, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

As the real estate market starts to heat up again in some markets, we sometimes forget what’s happened in the past. We get caught up in the home search and the desire to own. Some buyers even forget the old real estate adage: location, location, location.

So it helps if you step back for a second. Look into the future. Think about the home you want to buy now and imagine yourself selling it years later. What problems might you face then? If you take this into consideration, you might avoid making a mistake that all too many people make: Buying — or building — the best house on the block.

For example, consider the fate of what became a conspicuously large house for sale in an Atlanta suburb.

Don’t Super Size!

A few years ago, at the top of the market, the owners purchased a small fixer-upper, then renovated and significantly expanded it. Once completed, the owners tried to sell their McMansion in one of the worst real estate markets ever. After a year without success, they had to lower the asking price multiple times — and ultimately walked away with a big loss.

The fact that they bought at the top of the market and tried to sell during a decline in values certainly didn’t help. But it wasn’t the only factor by any means. On one side of the house was an apartment building. On the other sat a home that was an eyesore.

The proximity of these two properties should have been a warning to the owners: Don’t super-size your house when it’s surrounded by properties that aren’t at least equal in value. Instead, the owners had gotten caught up in the market frenzy. They didn’t think about what would happen when it came time to sell.

Look at Comps

In today’s market, potential buyers — having weathered the real estate bust and the recession — should take one look at the biggest, best house on the block and say to themselves: “No way.”

From an investment standpoint, owning the biggest house on the block has never been a good strategy. Home values in a neighborhood are intertwined because comps are so important in determining how to price — and what to pay for — a home. So the value of your McMansion will be limited if it’s surrounded by homes of considerably lesser value.

For similar reasons, you should avoid buying a house on a block with a parking garage, one full of apartment buildings,or rented homes. It is thought that renters don’t care for the properties where they live, as are absentee property owners. Their indifference can only hurt the value of nearby homes.

Buy the worst house on the block best instead

A better strategy, no matter what kind of market, is to buy the worst house on the best block. You can always improve the property and therefore increase its value. And because it’s on a great block, improvements you make to the home will be practically guaranteed to give you a top return on your investment.

Just don’t get carried away and turn the worst house on the block into the biggest and most expensive one.

5 Types of People Who Attend Open Houses By Joe Szabo, Scottsdale Real Estate Team

May 5, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

In real estate showings, the Sunday open house is the gold standard. As the name implies, a property is open to just about anyone who learns of the showing in an online or print ad, drives by and sees the agent’s A-Frame sign, or receives a notification postcard in the mail.

But not everyone who goes to an open house is a potential buyer. Here are five types of people likely to pass through a property during an open house.

1. The real buyer

These people are somewhere in the home-buying process. They’re either testing out the market or they’re serious and fully qualified, ready to take action. For the seller, these are the ones you want coming through the door.

2. The nearby neighbor

This guy or gal has been waiting for years for an excuse to get inside your home, for various reasons. Their home may be similar to yours — maybe even designed by the same architect — and they want to compare their property to yours. There might be other reasons to see it, too: They may have heard late-night music/noise and want to see what it’s all about.

Your open house might also give a neighbor the chance to see how much privacy they actually have. For example, at an open house of a view property in San Francisco, a neighbor came into the house and made a beeline for the back deck. Meanwhile, in the neighboring home across the backyard, the neighbor’s son sat in the window. What followed was a cell phone conversation in which the father instructed his son to move to the right, to the left, go upstairs, and so on. The father’s goal was to determine from exactly which points in his home he and his family were visible to their neighbors.

You’ll no doubt encounter nosy neighbors, too. They live nearby and just want to satisfy their curiosity about your home — or even about you.

3. Agents scoping out the place for clients

Agents constantly check out properties for their buyer clients. The vast majority of the time, they’re professional and courteous. There are exceptions, of course. Not long ago, in the living room of a packed Sunday open house, an agent sat on the couch and spoke to her client on the phone. The agent summarized the property loudly and in none-too-complimentary terms.

“The finishes are cheap, the floor plan is off, and the bathrooms need updating. Don’t waste your time coming over here,” she said. Needless to say, the seller’s listing agent — who witnessed the conversation — was flabbergasted. Even some of the buyers touring the property felt uncomfortable. The listing agent politely asked the other agent to continue her conversation outside.

4. The agent who lost the listing

In many cases, a seller interviewed multiple agents before selecting their listing agent. Sometimes agents spend a lot of time, and even some money, working with a potential seller to secure a listing. Obviously, not every agent interviewed will get the listing.

When the property lands on the open house circuit, an agent who lost the listing may visit. They want to know if the seller took any of their suggestions. Did the seller paint the orange room a more neutral color or renovate the kitchen or bathrooms as suggested? The open house is sometimes the losing agent’s chance to run through the property anonymously, as most agents usually won’t know with whom they competed for the listing.

5. A previous owner, or one of their relatives

Over years of open houses, a busy listing agent will surely run into an old seller, or their children or grand kids who grew up in the home. These people come to the open house to see how it looks and to reminisce. Lots of memories happen in a home, and the opportunity to go back in time can be a real treat.

Usually, there’s no harm done. But you might encounter the former seller’s cousin Steve, who tells the listing agent about how the current sellers did a horrible job on their backyard makeover. Even worse, you might get a relative who starts crying on the listing agent’s shoulder about her grandmother, a previous owner, who recently died.

A good listing agent will let any and all of this roll off their shoulders, keep a professional game face on, and keep their eye on the ball. They solicit feedback from buyers and make notes of their comments, reactions and questions.

If you’re attending an open house with no intentions of buying, keep it to yourself. Be as subtle and unobtrusive as possible and don’t waste the listing agent’s time — unless you have some helpful feedback for the agent or seller.