Hello and Welcome to Baker's Blog! 

Here you can find answers to your real estate questions. Perhaps even real estate questions you didn't know you had. You'll also find thoughts, observations, and commentary on real estate and real estate related issues. Have a question or a suggestion for a post? Message me or give me a call. I'm always happy to answer questions and share information with others. And don't forget to follow me on Facebook and Instagram!

May 7, 2019

What's The Property Status? Delayed, Active, Under Contract, Contract Contingent, and Pending.  What's the Difference and What Do They Mean?

You found the perfect house in the perfect neighborhood, but your Agent says it just went from Under Contract to Pending. But what does that mean? Here's a quick guide to MLS listing status options.

Delayed - Delayed status is relatively new to MLS. It is the MLS equivalent of 'Coming Soon.' This status option lets you know a property will be on the market but isn't just yet. While anyone can put a 'Coming Soon' sign on a listing for any amount of time they wish, a property can only be in MLS as Delayed for 14 days before the listing automatically changes to Active. During Delayed Status, the property is not available to be shown, even by the Listing Agent. 

Under Contract-Backups - This status is shown as UCB and is for a property where the Seller has accepted an offer, but it is still in the ten-day inspection period. During this time the Seller is accepting back-up offers on the property in the event the current offer cancels. A back-up offer cannot take the place of the first offer unless the first offer cancels.

Contact Contingent on Buyer's Sale - This status shows as CCBS and lets us know there is an accepted offer that may or may not still be in the inspection period but is contingent upon the Buyer selling their current home. There's always a chance the Buyer's sale could fall through, and the Seller could accept a back-up offer if that turns out to be the case. If your purchase is contingent upon you selling your current home, this is disclosed to the Seller by the use of a Contingency Addendum. The Contingency Addendum lets the Seller know where you are in the process, and allows for you to provide them with any Purchase Documents for your sale. They will use this information to decide whether or not to accept your contingent offer.

Pending - A listing shows as Pending when all conditions and contingencies have been met or cleared, and the Buyer and Seller are waiting for the transaction to close. During this time the Buyer is typically in underwriting, waiting for final approval and a 'Clear to Close' from the mortgage company. A Pending status means that all Buyer inspections have been completed, any needed repairs have been agreed upon, and the appraisal has come in to cover the contract price.

Unfortunately, third party sites do not always show these different options. You may see a property that is UCB showing as available until it becomes Pending, or a Pending property not showing at all, as it is considered 'off the market.'

The best way to search and keep track of Active listings is with a true MLS search, one that is updated from the MLS database every 15 minutes. Feel free to set up your own true MLS search on my website. You can set up an unlimited number of searches with options not available on third-party sites, like accessibility or other unique property features, like guest quarters with a separate entrance. Need something specific? Find it in my search or give me a call. 

 

April 22, 2019

Seller's Property Disclosures. The Good, The Bad, and The Unknown. What To Expect, and What You Need To Know as a Buyer OR a Seller.

As a Buyer, the information you receive about a property will come from a variety of sources. Among these are public records, a home inspection report, and the Seller's Property Disclosure Statement, in most cases. As a Seller, the information you provide needs to come from you.

The Good.  The Seller's Disclosures Statement says "Sellers are obligated by law to disclose all known material (important) facts about the Property to the Buyer." It is a 7-page document that is one-part checklist, one-part fill in the blanks. Categories covered include Property and Ownership, Building and Safety, Utilities, Environmental Information, and Sewer/Wastewater Treatment. There's also a place for additional explanations and comments. It's pretty extensive and covers items that may not apply to every property.

By signing it, the Seller is certifying they have answered the questions honestly and completely, to the best of their knowledge, as of the date signed. Should the Seller's knowledge change between signing and the closing, they are required to revise it. And this happens. Perhaps they forgot something or received a copy of a Home Inspection from a Buyer who canceled. Anything on a report they did not know about - but now do - must be added to the disclosure statement. 

The Bad.  Things can get missed, forgotten, or overlooked. It can happen, and it is the most compelling reason there is to get a home inspection. A home inspection could reveal a condition the Seller did not disclose - for whatever reason. When the inspection reveals an issue, it is almost always because the Seller was unaware of it. Regardless, the Buyer only learned of it because of the Inspection Report.

Contrary to popular belief, Sellers are "not obligated to disclose if the property has been (1) the site of a natural death, suicide, homicide, or any other crime classified as a felony (2) owned or occupied by a person exposed to HIV, diagnosed as having AIDS, or any other disease not known to be transmitted through common occupancy of real estate, or (3) located in the vicinity of a sex offender."  If they know, they cannot lie but are only obligated to say "by law, I am not required to disclose that information." As a Buyer, if it is important to you, do your research during the inspection period. 

The Unknown.  Disclosures only cover conditions of which the Seller has personal knowledge. If a property is sold by a Bank, Trust, or through a Probate Sale, the entity selling the home is likely to have no first-hand knowledge of conditions that may exist. This situation is common, and the listing will specify that the Buyer must "waive the SPDS." Unfortunately, this is also a common ask with property flippers who SHOULD be required to complete disclosures, as even though they have never occupied the property, as are fully aware of the work that has been done, and have first-hand information about utilities and property conditions. If you are looking at a property where you are required to waive the disclosures, you need to ask WHY. It could be a logical reason, or it could be a red flag.

 

As a Seller, know that honesty is expected and that you also have rights. But also know that if you forget something, you can revise your disclosures at any time. Revising your disclosures may give the Buyer additional time to consider the inspection period, but that's a small price to pay for compliance. If you don't understand a question, your REALTOR can provide clarification and perhaps an example of when and how that would apply. And if you don't know something, that's ok, too. Just complete the disclosures to the best of your actual knowledge. 

April 13, 2019

Did You Know Arizona Residential Purchase Contracts Are As-Is?

Did you know Arizona Residential Purchase Contracts are As-Is?
Why that's important and what it means if you are the Buyer - or the Seller.


The documents used by REALTORS are updated and revised on a pretty regular basis, and there's quite a lot that goes into the revision process. In February of 2017, the Arizona Association of Realtors (AAR) revised the Residential Purchase Contract in a fairly significant way.

Before 2017, if a property was sold in "as-is" condition, that had to be documented in the Listing Agreement between the Seller and the Broker, specified in the MLS listing, and an "As-Is Addendum" was required to accompany the Purchase Agreement. This process notified all parties that the Seller would make no guarantees or repairs, even to a "Warranted Item." Warranted Items were operational systems required to be working for a sale (unless the property was being sold as-is).  In fact, there was an expression...

"If it flushes or flows, switches or glows, has moving parts or should open or close, it has to be working. Make sure everyone knows".

Sounds simple enough, right? Except there were countless debates and misunderstandings regarding warranted items. And sometimes, questions like "If a built-in espresso machine wasn't working, didn't it have to be? What about a fountain? Sprinkler systems?

So, after much deliberation, the term "warranted item" went away. Now, all properties are sold as-is, and your walk-through inspection before closing declares that any needed repairs that have been requested and agreed-upon have been completed and that the property is in the same general condition as the first time you entered it. 

But, if you are a Buyer using an FHA or VA Mortgage, some systems MUST be in good working order for the property to pass the FHA/VA inspection checklist. These are called Minimum Property Requirements (MPR). Among these are the heater, water heater, and stove. There must be running water from hot and cold taps, and, if the property has air conditioning or a swamp cooler installed, it must be working. There are also a variety of health and safety concerns that must be met that are not relevant to the warranted items discussion. For a full list, click here for FHA guidelines, and here for VA guidelines.

MPRs are also most often (but not always) a reason why a listing may not be eligible to be purchased by an FHA or VA mortgage, and why it may not show up in your MLS search results. Often, I will have a client send me a listing they found online, asking why it didn't come up in their search results because it cannot be purchased with FHA or VA financing.

Not everyone agrees with the decision to remove warranted items from the purchase contract. But one thing everyone does agree on is the recommendation to get a home inspection. Repairs can be negotiated after the inspection period, so if something doesn't work, you can ask the Seller if they are willing to fix it. But know they are not required to. If you don't plan on requesting repairs, a home inspection can help you make an informed decision on whether or not you want to move forward on purchasing a property. Just know that there is nothing that a Seller MUST fix to sell a property. So get an inspection, make no assumptions, and make sure you are aware of the details of your mortgage pre-qualification. And let me know when you're ready to start looking for your next home!

April 5, 2019

Why is there an Inspector and an Appraiser? Don't they do the same thing? Absolutely not!

At first glance, it's easy to think that the Home Inspector and the Appraiser do the same job. This is one of the most common conversations I have with new Home Buyers.

While both the Inspector and the Appraiser visit the property on behalf of the Buyer, they are hired by different people for different outcomes. 

When a Seller accepts a Purchase Offer from a Buyer, a 10-Day Inspection Period starts for the Buyer. During those ten days, the Buyer can - and should - have any inspections done that they wish. Typically the start with a Home Inspection. For that, they hire a Home Inspector. The Home Inspector goes through the property and creates a report notating a variety of things from the age and working condition of major systems to general conditions, to recommendations for current and future repairs. This report is delivered to the Buyer and belongs to the Buyer (in AZ, the Seller also gets a copy). The report may even recommend further inspection of an item, like the air conditioner, plumbing, or pool equipment. Regardless, the Home Inspector's report is designed to give the Buyer a good idea about the general condition of the home they are purchasing, without any regard to the value of the home itself. 

Because that's the Appraiser's job. While the appraisal is typically paid for by the Buyer and is performed on behalf of the Buyer, the appraisal is ordered by the Buyer's mortgage Lender.  The Appraiser also goes through the home and may notate if an item is working or not (especially if the Buyer is purchasing with an FHA or VA loan), but they are also looking at the general condition, fixtures, and finishes in the property, in relation to other homes that have sold in the area (Comparable Properties, also called Comps). The Appraiser calculates a report (the appraisal) stating their opinion of whether or not the purchase price of the home is in line with the sales prices of comparable homes in the area. The appraisal report gives reassurance to the Lender that the property is worth at least the same amount of money they are lending to the Buyer to purchase it. This report goes back to the Lender, and may, or may not be shared with the Buyer or the Seller.

Cash Buyers routinely waive their right to an appraisal, and often to a home inspection as well. It is their right to do so, although typically not recommended. However, an appraisal cannot be waived on a home being purchased with financing of any kind, since the Buyer does not have the right to waive the appraisal on behalf of the Lender.

And it's a good idea to start checking out Home Inspectors before you write an offer. That way, once your offer is accepted, you don't waste any time of your 10-day inspection period researching Home Inspection Companies. Need a recommendation? I've seen an inspection or two in my day, and I'm happy to help.

March 29, 2019

Spring Cleaning for Buyers

SPRING CLEANING FOR BUYERS

1. Sort out your financials - If you've already prepared your taxes, you probably have everything your Lender will need to get you pre-approved for a mortgage. Get pre-approved, so when we find a home you love, we can move on it quickly! Need a Lender? I have professional, experienced Lenders ready to provide you with excellent products and top-notch service.

2. Sort out your belongings - The truth is, moving boxes are expensive. While you're spring cleaning, make sure to sell or donate items you no longer use or need. There are so many places to advertise items for sale and so many worthy organizations that can do good with your items. If you're also selling a home, check with me before you get rid or any furnishings we might use for staging. Then, once your house sells, you can dispose of them as you wish.


3. Start your search - If you've already been receiving search updates from my website, then you have a good idea of what's available in the area you're searching. If you haven't set up your search, you can do it here https://www.lisarbaker.com/search/advanced_search/. You can set up as many searches as you wish, and also receive Market Reports and an automated valuation estimate for your current home. 

4. Schedule your time - Even if you're a couple of weeks from looking, let me know when you want to get started. I'm happy to get you on my calendar, to make sure we don't miss out on any search time when you're ready.

5. Select your vendors - Once you write an offer on a home, you know you'll want to do a home inspection. Feel free to start looking early for vendors like Home Inspectors and Home Warranty Companies. Having a home inspection company selected in advance will save valuable time during your inspection period! Don't know where to start? Let me know, and I can point you in the direction of experienced and trusted providers.

So let's get started! Wherever you are in your home buying process, it's never too early to start getting educated on what to expect and what you'll need. And I'm here to help you through it. And I'm looking forward to being of service.

Feb. 21, 2019

Get Out Of The Rental Race!

Are you having trouble finding a house to rent? Rents are high, and inventory is low. Chances are you could be paying the same amount every month - or less - if you owned that home. Let me put you in touch with a mortgage specialist and get you on the road to home ownership. Get out of the rental race!

 

Check out these houses that were recently for sale and for rent:

 

16094 W Winslow Dr. Goodyear, AZ 85338 3+2 1845 sq. ft. Built 2006

For Rent: $1,375/month  

For Sale: $219,999  

If you purchased this home with 3.5% down, with today's FHA rates, your mortgage payment INCLUDING insurance, PMI, and HOA Fee would be $1,360/month

 

24607 N 38th Ln Glendale, AZ 85310 3+2 1313 sq. ft. Built 1996

For Rent: $1,720/month

For Sale: 269,000

If you purchased this home with 3.5% down, with today's FHA rates, your mortgage payment INCLUDING insurance, PMI, and HOA Fee would be $1,590/month

 

15739 N 172nd Ln Surprise, AZ 85388 5+3 3166 sq. ft. Built 2005

For Rent: $1,850/month

For Sale: $275,000

If you purchased this home with 3.5% down, with today's FHA rates, your mortgage payment INCLUDING insurance, PMI, and HOA Fee would be $1,674/month

Do you want to move ahead of the pack and into your own home? Just click on the email or the phone icon in the top right corner to get started. And feel free to set up a search to see what's available. Ready, set, GO!

 

Feb. 8, 2019

Under Contract But Not Out of the Woods

So you saw a house you liked, but it went under contract before you could see it. Or perhaps you put in an offer, but there were multiple offers, and the Seller accepted another Buyer's contract. So you think it's gone forever?

The first 10 days after a contract has been accepted is the INSPECTION PERIOD. During this time, the Buyer finds out all they can about the home; property inspections, disclosures, five-year insurance history, and HOA CC&Rs. The inspection period starts the day AFTER the contract is accepted, and ends at 11:59 PM on the 10th day. (If your contract is accepted on Sunday, Monday is day ONE, and the following week Wednesday is day 10). During this time the Buyer can reject the premises, cancel the contract, and have their earnest money deposit returned. 

So, keep an eye on that property, even if it goes under contract with someone else. It may go back on the market, and you may have another opportunity to make it your own. I'm under contract right now with a Buyer who missed out the first time and is getting a second chance at her dream home. Just make sure your REALTOR knows if you want to submit a back-up offer or to be kept informed about the status of the home.

And if you're a Seller, celebrate cautiously during those first ten days. Sometimes things happen with Buyers, and they cancel. If they do, you'll likely be back under contract again in no time! 

 

Feb. 1, 2019

Curious About Local Real Estate?

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Curious about local real estate? So are we! Every month we review trends in our real estate market and consider the number of homes on the market in each price tier, the amount of time particular homes have been listed for sale, specific neighborhood trends, the median price and square footage of each home sold and so much more. We’d love to invite you to do the same!

Get Local Market Reports Sent Directly to You

You can sign up here to receive your own market report, delivered as often as you like! It contains current information on pending, active and just sold properties so you can see actual homes in your neighborhood. You can review your area on a larger scale, as well, by refining your search to include properties across the city or county. As you notice price and size trends, please contact us for clarification or to have any questions answered.

We can definitely fill you in on details that are not listed on the report and help you determine the best home for you. If you are wondering if now is the time to sell, please try out our INSTANT home value tool. You’ll get an estimate on the value of your property in today’s market. Either way, we hope to hear from you soon as you get to know our neighborhoods and local real estate market better.

Posted in Market Updates
Dec. 27, 2018

THE SEVEN THINGS YOUR QUICK-CASH SALE INVESTOR DOESN'T WANT YOU TO KNOW ABOUT THEIR OFFER. AND WHY NOT.

Girl with glasses shushing

If you're a property owner, you are no doubt inundated with unsolicited quick-cash offers to purchase your property. You receive handwritten letters and postcards, text messages, and phone calls.

With home values strong and competitors like OpenDoor and Zillow purchasing properties, it's becoming more and more difficult for Fix-and-flip and Wholesale Investors to find profitable investments. So they are calling, texting, and mailing every homeowner and their relatives trying to buy homes before they get listed on the open market.

There are seven things Investors don’t want you to know.

1.    They are offering you far less than your home is worth, so they have a wider profit margin to fix and flip it. The cheaper they can buy your home, the more money they can make.

2.    They are offering you far less than your home is worth so they can wholesale it to someone else. Again, cheaper…

3.    They buy and sell homes all day, every day. You know your job far better than someone who has never done it. Wouldn’t you feel like you had an unfair advantage over someone who doesn’t do it every day?

4.     They have no obligation to look out for your interests. Cash-Offer Investors are purchasing for themselves and don’t represent you or your interests. While still legal, their attorneys have written their own contract that heavily favors the buyer-investor and not the unrepresented Seller (that’s you). Investors are not REALTORS and are not bound by the National Association of REALTORS (NAR) Code of Ethics and Standards of Practice.

5.    You don’t have to automatically discount your purchase price or give them a credit at closing for repairs for items they find during the inspection period. While everything is negotiable, the standard AAR Purchase Contract your REALTOR utilizes allows for the Seller to have the opportunity to make any requested repairs, if they choose, instead of automatically giving the option to renegotiate the terms of the agreed upon price and contributions at closing. You don’t have to knock dollars off your sale price – or your bottom line – for an Investor’s exhaustive wish list.

6.    Inventory across the valley is LOW in most markets, and it is highly unlikely your home will sit on the market for an extended time. According to MLS Market Summary reports, for the last half of 2018, the average Cumulative Days on the Market (CDOM) has ranged from 60-65 days. When you consider most closings take 30 days from the time a purchase contract is accepted, that’s a pretty remarkable timeline for getting full market value for your home.

7.    They don’t want you to hire a REALTOR. They may suggest it’s easier if you don’t get ‘professionals’ involved, but full-time Investors are professionals. They don’t want you to have someone on your side who understands the purchase contract and real estate laws in Arizona, and who will represent and leverage your interests in the transaction.  Some offers claim to save you money in commission (by only charging you a commission for THEIR REALTOR) but then can cost you more in the end in listing and 'convenience fees’ - in addition to the repair credits — all without the benefits that representation by a licensed REALTOR would provide.

I understand that for some Sellers the quick-cash offer is a great way to go. But please keep in mind, the priority of the Investor-Buyer is their profit margin. So, before you entertain the idea of a quick-cash offer, from either a private investor or a large company, know your position. And give me a call. I’m happy to run some numbers and give you the information you need to make an informed decision that’s right for you.

 

Aug. 9, 2018

WHEN MY HOME IS FOR SALE AND MY KEY IS IN A LOCKBOX, HOW DOES MY REALTOR MAKE SURE ALL THE OTHER REALTORS CALL BEFORE SHOWING MY HOUSE?

You've Staged The Rooms And Taken The Photos.  

You wonder how many potential Buyers will come looking before the offers start rolling in. Will the showings begin during the week? Will they wait until the weekend? You've asked for a couple of hours notice before a showing, but are willing to be flexible. Just enough time to clear the dishes and grab the dog.   

What if an Agent is driving around with clients, and decides to pop in and take a quick look unannounced?  A Real Estate Agent can face fines for using a lockbox without following the showing instructions, but sometimes mistakes - and accidents - happen. Everyone has likely heard a variation of an embarrassing story about a Seller being surprised by a REALTOR. But it can be avoided.

The most common electronic real estate lockboxes (the ones I use) have a feature titled Call Before Showing, or CBS. A CBS code is a 7 digit code that can only be obtained from the Listing Agent, who sets the code on the box itself. If the CBS feature is enabled, an Agent trying to access the lockbox who doesn't have the additional code will be told they do not have permission, and the box will not release the key.  And the CBS code can be changed by the Listing Agent at any time. It's an extra layer of protection, and I don't put a lockbox on an occupied listing without it.

You have enough concerns when you're selling your home, and a showing mishap shouldn't be one of them. So clear those dishes and grab that dog, you've got a house to sell!