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!

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!

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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!

July 25, 2018

IF YOU'RE LOOKING TO BUY OR SELL A HOUSE NEXT MONTH, IT'S NEVER TOO EARLY TO START ASKING THE RIGHT QUESTIONS

So, What Are The Right Questions?

Of course, there are always the basics. "How much house can I afford?"  and "What will I need for a down payment?" Or if you're selling, you might be asking "How long will it take to sell my home?" and "What are houses selling for in my neighborhood?"

Then there will be the questions along the way, like "What does a title company do?" and "How long can I take to decide?" or "How long will it be until we hear back from the Buyer or Seller?" 

Communication is key. And not just in real estate. However, when you're making decisions regarding one of the most significant financial investments you can make, communication is essential. You should be asking questions early and often.

The right questions will not only pertain to the real estate transaction itself but also get the answers you need to help you make the best decisions based on the available information. Knowing what to expect and what could be unexpected can also lower your stress level by helping you feel better prepared.

It doesn't matter if you're looking to buy or sell next month or next year. The right time to ask a real estate question is when you have one. You never know what kind of difference the answer can make. Is there a real estate question I can answer for you?

July 10, 2018

WHEN YOUR FLEDGLINGS FLY FREE, HOW DO YOU PART WITH YOUR EMPTY NEST?

When The Last Child Leaves Home, For Some Parents There Is No Question Whether Or Not To Keep The "Empty Nest." They Stay Where They Are And Remodel A Room (Or Two). Maybe There Are - Or Will Be - Grandchildren. Perhaps There Are Close Ties To The Community, Or It Is An Heirloom Home That Has Been Passed Down From A Previous Generation. There Are Myriad Reasons Not To Move, And It Is A Very Personal Choice Made For Very Personal Reasons. 

But what about the parents who don't want to stay? The parents who want to downsize, travel, or relocate closer to other family members or interests? Letting go of your family home can be an emotional process, whether you've lived there for 5, 10, or 20 years. But you want to move on to the next phase of your life.

Often when I list a home, I consult with the Sellers regarding staging and preparing their home for the market. I give them a plan for packing and purging, and removing personal belongings like photographs and memorabilia. We pare down decor items and sometimes bring in new linens, shower curtains, and occasionally small rugs and sometimes window treatments. I will come in and complete the finishing touches, and sometimes move a couple of last-minute items before the photographer arrives.

When the listing photos are finished, I send them over to the Sellers to preview.  And the Sellers almost always comment that they hardly recognize the place or that it doesn't even look like their house. And that's what I like to hear. Letting go can be complicated, even when change is the desired result.  For some Sellers, the process of transforming their house can be cathartic, as they start to see it less as their house, and more as potentially somebody else's. For some Sellers, a well-executed staging strategy can be the first big step towards stepping away from their old home, and into their new life. 

If you're one of those Sellers, give me a call. I'd be happy to have a conversation with you about transforming your house into someone else's home, so you, too, can spread your wings and fly!