Some sellers would love to save on the real estate commission and think if they put an ad in the paper or place a sign in their yard, they will be able sell their property and save on the commission for themselves. Oh really? The facts just don't go along with that theory.

According to many arms reach studies over the years, the same conclusion has been upheld. The old studies showed that a seller selling his own property and doing all the work got on average 8% less than asking price. Now that has changed!

Now the current studies show much less since the housing bubble as investors are looking for deals and prey on F.S.B.O.'s (For Sale by Owners) to take advantage of them. The average is now 28% below askng price. Now I believe some of that is sellers overpricing their homes, and agents are experienced at pricing their listings more realistic.

With buyers looking to save the commision and sellers trying to do the same, somebody always loses and the chance for legal exposure rapidly rises too! Both parties cannot save the commission.  The buyer feels they have earned it because they’ve had to find the home, determine its value and negotiate with the seller.  They had to arrange their own financing, title and inspections. One of the most common reasons buyers want to deal directly with the seller is because they feel they can save the commission.  It’s a valid consideration but interestingly, it’s the same reason the seller isn’t employing an agent; they feel they can save the commission.

The seller equally feels that they have earned the commission because they have incurred all of the marketing expenses and have had to research value, financing, title work and make decisions, invested hours upon hours to be available to show the property, hold open houses and answer inquiries. 

The average agent sells a home within 96.5% of asking price. According to ARMLS, my homes have sold for 99% of asking price on average for the last 14 years. Prior to then, ARMLS records were deleted. 

So a Realtor pays for himself, protects your interests from legal concerns, properly executes a successful marketing plan, and frees you to do other things in your life!

The market had some good signs this month of May after a continual drop in sales since the last half of the year. Prices are holding steady with a a 14.4% appreciation with the median listed price at $223,000 since last May 2013. We are not going to see huge jumps in appreciation as activity has extended the Days on Market from 70 days last year to 82 days now.

Foreclosures and Shortsales are at an all time low which is keeping prices up and making investors rethink their quick flip strategies as the smoking deals are gone. 

We are expecting to see home real estate sales through the summer to stay steady yet we will see a widening in the gap between listed price and sales price as there are less buyers looking. Much has been the cause of the Dodd/Frank Bill's Wall Street Reform and Consumer Protection Act making it harder for buyers to qualify. Banks are recognizing this drop of business and are looking for develop new residential loan programs to skirt around the dreaded QRM (Quailty Residential Mortgage) standards. Sales are down 12.5% over last year at this time.

The spring season is in full swing now, which normally means demand should be strong and supply should be falling fast.

Neither of those quite describe the current situation. Demand is indeed getting stronger, but from the unusually weak level at the start of March, it has a long way to go before it could be described as normal, never mind strong. Supply is leveling off and we probably saw the first half-year peak for total active listings on March 29. We saw a lot of listing cancellations in March - the highest number since August 2011. We also saw the highest number for expired listings since June 2011, excluding Decembers which are always abnormally high months for listing expiration. As a result we started April with fewer active listings than we ended March. However, cancelled and expired listings have a habit of coming back as new listings. The overall picture for supply, when adjusted for seasonality, is that it is still growing. It is definitely shrinking for all price ranges under $200,000, but it is also still expanding for all price ranges between $200,000 and $1,000,000. The mid-range buyer's choices are increasing, which is very unusual for the spring. New listings are arriving at a 10% faster rate than in 2013 and they are sticking around longer before they go under contract.

The buyers we do have are mostly taking their time and showing little sense of urgency.

The good news is that sales are picking up as they should between February and April and average and median sales prices are moving higher as the volume mix shifts towards higher end homes and away from entry level homes. This doesn't mean that home values are increasing. These are not moving much. It is just that higher end homes are a higher percentage of completed sales (driving the average up) and the cheapest home sales are getting scarcer (driving the median up).

I hope you're enjoying this great spring weather! The weather has been fantastic and your friends back east are totally jealous! If you know of anyone thinking of relocating to the Valley of the Sun, please refer their name to me, they will appreciate you recommendation to get experienced help, and you can get a gift certificate to the best brunch in the Valley, according to New Times.

Along with the great weather comes tax time. Many first time buyers use their tax refund for bills or a good down payment on a new home. Normally home buyers start looking for new places. Fannie Mae has just annouced an incentive to buyers! They will pay 3.5% ( Basicly all) of your closing costs! You save $7,000 on a $200,000 purchase!

Not this year as we have had the slowest first quarter in six years in the Phoenix metro area. The market is changing from equilibrium to a buyers market again. There's plenty of inventory with over 27,770 homes available, and interest rates a still attractive at 4%.

Darrell

Most of the movement in mortgage rates over the past week was due to a rapidly changing situation in Ukraine. In the end, though, the tensions caused little net change in mortgage rates. 

A "flight to safety" in financial markets refers to the tendency of investors to shift to a more defensive position with relatively safer assets during periods of added uncertainty. There are many reasons why investors may want to reduce the level of risk in their portfolios. When politicians are divided on major issues such as the debt ceiling, and the outcome is unknown, investors may scale back on risk. Similarly, investors will shift assets during periods of stress in financial markets. A massive flight to safety took place when debt troubles in weaker euro zone countries threatened the global banking system. 

This week, it was the potential for a military conflict which caused the flight to safety. Over the weekend, Russia moved troops into Ukraine. As a result, global stock markets suffered severe losses on Monday, while mortgage rates showed nice improvement. When Russian President Putin backed off from the use of military force on Tuesday, though, financial markets experienced a complete reversal. Stocks recovered their prior day losses, and mortgage rates increased. 

Looking ahead, the next Employment Report will be released on March 7. The consensus is for an increase of 150K jobs in February. Unusually bad February weather again will cause investors to question how well the results reflect the underlying strength of the economy. After the Employment data, attention will turn to Retail Sales. If the situation in Ukraine changes, it could influence mortgage rates as well. 

Commentary provided by MBSQuoteline. For live MBS pricing visit www.mbsquoteline.com.

The month of January has accounted for the lowest monthly sales volume 11 out of the last
13 years. Data for the last 13 years also shows us sales volume in February is greater than
January, and volume is always greater in March than February. This insight validates the adage
that our real estate season begins as the Super Bowl ends.

This year the consensus among most market observers is 2014 sales volume will be comparable
to 2013 with prices increasing 5% to 7%. Over the past couple of years, my outlook has
been far more positive than most local pundits and much more positive than the national experts.
This year, I find myself with a more pessimistic view than my colleagues. ARMLS reported
4,797 sales in January 2014, down 17.1% from 5,789 in January 2013 and 18.4% below our
five year running average of 5,882. We also saw a drop in newly constructed homes purchased
year-over-year with only 565 new builds in January 2014 compared to 743 January
2013.

As the demand side of our housing equal on has been weakening, new listings have been increasing,
up 10.7% over January 2013. When you view the STAT monthly Sales Volume and
Total Inventory charts, you can clearly see the trending disparities between supply and demand
over the past six months. February begins the month with 28,464 total listing which is
below the 30,000 listings we would describe as typical. However, the total number of lis????ngs
by itself is not concerning. Concerns lie on the demand side as defined by the number of
pending sales contracts. Last year at this time there were 9,500 pending sales contracts but
at this moment there are only 5,728, a 40% drop. We have far less momentum going into our
season than last year at this time.

In the November 2013 issue of Stat we stated, “We are presently in what can best be defined
as a balanced market, but with supply increasing and demand rapidly falling, we are quickly
moving into a buyer’s market.” It might well be time to change our market definition from a
balanced market to a buyer’s market. This is good news for buyers, as more choices and less
competition places them in a far stronger negotiating position. Incidentally, the November
2013 sales volume of 5,206 was below the total in January 2013 at 5,789. 2013 and 2007
were the two years where the sales volume in January was not the lowest of the year.
We’ve discussed sales volume and pending sales contracts, but what has this meant to prices?
Both the average priced new listing and the median priced new listing were up month over-
month. The average priced new listing in January 2014 climbed 9.1% over December
2013 to $322,400. While the median priced new listing rose 10.1% to $220,000 from
$199,000 in December 2013. This uptick most likely set sellers expectations and reality on a
collision course. Closed sales in January reported a median sales price of $182,500, down
1.4% month-over-month and up 17.8% year-over-year. The appreciation of home values took
place between January 2013 and June 2013 with prices relatively flat over the remainder of
the year. This trend leads us to expect annual price appreciation this year in the same manner.

The median priced home has been wobbling between $180,000 and $185,000 since last June.
Last month the ARMLS Pending Price Index projected the median sales price in January to be
$182,200 and $180,000 in February. Earlier I mentioned most forecasters are predicting a 5%
to 7% increase in home prices in 2014, I also stated I was more pessimistic. I would not be surprised
if prices remained flat in 2014 or even fell slightly, around 5%. As I stated last month, a
year where prices show modest fluctuations up or down will be a good thing.
I see 2014 shaping up as a transitional year, moving away from an investor driven market to a
market driven by the traditional buyer. Over the last five years we’ve seen homeownership
rates decline as foreclosures and short sales soared, creating a huge demand for rentals. The
investors purchasing these rentals and driving our market have taken a big step back as prices
increased and cap rates declined. Looking ahead, this creates new opportunities. As we move
forward, it will be important to educate renters on the merits of homeownership and assist
them in the process with lending policies being key.

At a recent speaking engagement Frank Nothaft, the chief economist with Freddie Mac, projected
2014 will be the first time since 2000 that most of the home loans made in America will
be for purchasing a house. Nothaft said, “As we get to the spring home buying season, we are
going to see it flip-flop from what it has been in the last few years. So many people have refied
[refinanced] in the last few years there is a dwindling pool of homeowners.” With fewer
refi’s taking place, mortgage lenders will appear as welcomed partners as they begin directing
their advertising efforts towards home ownership and their efforts will be aimed directly at the
large pool of renters and the two groups which comprise it, millennials and boomerang buyers.

I promised all of you from the Talk Blog Radio Show with Brian Jackson the list of waiting periods for those that have had short sales, foreclosures in the past. When can you buy again? You might be surprised! Call me if you fit and I can help you get your next home.

Conventional loan FHA loan VA Loan USDA Rural Loan

Short sales – 2 years with 20% 3 years from 2 years from 3 years from
Down or 4 years Completion Date Completion Date. Completion Date
with 10% down. 3 1/2% down. Immediately if no
Immediately if Late payments and NOT
no late payments. a VA loan.

Foreclosure -7 years from 3 years from 2 years from 3 years from
Completion Date. Completion Date. Completion Date. Completion Date.

Call me for specifics on these qualifications.

I got this letter from one of my past clients. I thought I would share this with you! I work very hard for my clients, and it is so appreciated when someone recognizes it!

From David Bahr, professional racing instructor,
25 Hours of Thunderhill Champion

In your real estate transaction, you want Darrell as your agent. Here is why:

I just went swimming for the first time in my new pool. I knew nothing about swimming pools. Darrell has the knowledge and took the time to educate me about pool maintenance and costs, and even explained the pool mechanicals. In short, Darrell has the knowledge, freely shares it with his clients, and goes above and beyond a “typical” agent.

Darrell has lived in the Valley of the Sun for decades and has made a lifelong profession of residential real estate. So he has amazing in-depth knowledge of the neighborhoods and how they are changing, the current and historical state of the real estate market, and the details of negotiating and closing your transaction. Darrell helped me write an offer that gave me the best position from which to close my deal.

Darrell has a tremendous knowledge of the “bricks and sticks” of residential construction. Darrell understands different insulation ratings, can explain the advantages and disadvantages of tile roofs over asphalt shingles, and knows when double pane windows came in common usage. He knows the advantages and disadvantages of different builders. He also has vast contacts in the business. He was able to recommend a good roofer, the best pool cleaner, and an very good home inspector. Darrell also had excellent recommendations for lenders and I was able to get a very competitive mortgage.

Darrell is immersed in the details of real estate transactions. He knows all the tricks and hurdles and uses all of them to your benefit. As your agent Darrell treats your transaction as if it were his own and will use his knowledge and experience to get you the best possible outcome. Darrell consistently demonstrated the highest level of integrity in protecting my interests, while searching for a house, writing an offer, and throughout closing.

Every real estate deal has its’ hurdles and mine were an onerous, obstinate and unresponsive seller, combined with a seller’s agent that was completely absent from the transaction. Darrell stepped up and aggressively protected my interests. I had an 18 day closing period and Darrell was there very step of the way, shepherding my transaction to a successful conclusion. When closing deadline approached late on a Friday afternoon Darrell stepped in to personally visit the title agency and ensure we closed on time.

Bottom line, Darrell consistently went above and beyond all my expectations, when searching for a house, closing the transaction, and also after closing. At every twist and turn he was there for me and Darrell protected my interests like it was his own deal. I give him my highest recommendation. Darrell is the agent you want, don’t settle for any other!

Posted on January 28, 2013 at 6:24 pm by Darrell J. Covert, CRS, SFR, e-Pro