Yes, I think the Scottsdale real estate market is insane. And not just Scottsdale, it’s Phoenix, Chandler, Mesa, Gilbert, and all the rest of the Valley of the Sun.

I’ve been working like a maniac for the month of March, and have seen so much craziness.  I feel for buyers who are totally challenged to find a home in our low inventory situation, and then who have to overbid to get one of the very few homes available.

Sellers on the other hand are starting to come out of the closet. And being surprised to find that they may not have to give their home away. That they actually have a product, their home, that’s in demand.

It’s total craziness.

For example:

• One of my home buying clients sent me their short list of homes on Friday afternoon, so I can set up showings for Saturday. I schedule the showings, and then Saturday morning, I check the MLS, just to make sure that all of the homes they wanted to view were still available. Three of the six homes they wanted to see were under contract, overnight.
• This same client now jokes cynically that if a house has been on the market over 20 days, there just must be something wrong with it.
• Another home buyer is telling that searching for her first home is like another full time job. Her frustration level has escalated, too.

Sellers, on the other hand, are calling the shots.  Setting a price to today’s market, one that’s realistic for the home’s condition and location, will almost guarantee multiple offers.

• Last night, I called to set up a showing for a Scottsdale home that went on the market a couple days ago.  The first allowed showings were for today.  As of last night, the selling agent said he had ten showing appointments scheduled for today, and that three buyers were ready to make offers, sight unseen. He was sure that the house would sell for over list price.

If that isn’t insanity, what is?

On the plus side, home prices are appreciating. Sellers who thought they would have to short sale,  and aren’t terribly “under water” can see that some day they may have a home with some value.

• I was able to help a seller last month, who thought she was going to have to short sale her Scottsdale townhouse.  We priced the home so that she could walk away without have to bring any cash to the closing table.  She got her first offer within days, and when the home didn’t appraise, she took a second offer that did appraise over the very same price two weeks later!
• And for another potential home seller, who thought she was going to have to short sell, we found that the estimated selling price of her home increased over 5% in just a couple weeks.

Nuts!

Some of my comments here are tongue-in-cheek. But, seriously, buying  a home should really be a highlight, not a chore, or a battle, or even a second job.

If you’re a home seller, call me! Let me tell you what I think the value of your home is today. And then, give you some ideas of what the market is doing in your neighborhood.

If you are a home buyer, yes, please call me, too. I will counsel you on what you need to do before you start your home search, and then also on strategies to get your offer accepted.

The real estate market is always changing, here in Scottsdale, as well as the rest of the world. We were hoping for a balanced market and looked how quickly it’s changed back to a seller’s market. And in only seven short years.

Amazing!

Scottsdale has more than its fair share of beautiful homes. If you’d like to take a quick look at what a million dollars will buy you in Scottsdale real estate, I invite you to my Facebook page for At Home in Scottsdale.

If you haven’t “Liked” my Facebook page before, you’ll have that option.  Once you Click the Like button, you will land on a page with links to million dollar homes in downtown, central and north Scottsdale.

And, if you’ve already Liked my Facebook page, just click on the Welcome tab in the left hand column, and go to the same million dollar listings page.

Easy. Always available. And current, with only property listings that are really still on the market.

Scottsdale has a serious shortage of homes for sale right now. And cash buyers are out in droves.  In 2011, 47% of the more 100,000 home purchases in Phoenix were cash transactions.

I can talk through the past couple of days with you, just to illustrate the real situations that buyers are encountering.

Buyer made a full-price offer on a bank owned property that had been on the market for a LONG time (over 6 months). However, the bank had just took another major price reduction, so the property finally caught my clients’ attention. We wrote an offer.  The bank received multiple offers, so Best & Final offer was requested,  and while the buyer increased their offer to over list price, but other cash buyer went even higher. 

So we went on to Plan B, which in actuality was more like Plan J, based on the number of houses that they’d tried to purchase.  I call to set up showing for this property, but occupant says that she thinks the house might be under contract.  I call the agent who says, “Yes, we got six offers the first day the house was on the market, three were cash, all over list price.”

Needless to say, my client is now VERY frustrated.

I get an email and a call yesterday afternoon.  She says, “New house on the market today. We want it. Write the contract now.” I did and we negotiated to acceptable terms within the next six hours. Today, I hear that property has a  cash offer in backup position.

When we were in the boom years, people threw contracts at houses, with escalation clauses, and more and more money. And it’s not much different right now, and that seems really odd.

Interest rates are incredibly low.

There aren’t many houses on the market.

Prices are in almost the same place they were before the boom.

People still want to buy houses, yet have a much more conservative mindset.

Buyers are wanting to make sure they get a good value, but finding very quickly that values really are appreciating, and demand is very, very high for an inventory that is very, very low.

Sellers are getting savvy, and removing the appraisal contingency on purchase contracts. When this happens and the buyer is getting a loan, they must come up with any difference between the appraisal and the purchase price, if there is one. And in some cases, buyers are complying.

We’ve all been wondering when home prices would start to appreciate. Last year, we saw just over 6% appreciation in homes priced under $100,000.

Based on the dramatic change in buyer and seller perception over the past several weeks and months, it sure looks like me may see that appreciation creep up into higher price ranges.

As prices increase, more sellers will consider selling which will add to a desperately low inventory, and give some of these buyers who have been writing 5-10 offers, just to get one accepted, some hope that they may actually be able to buy a home. 

And in part, they will have some of the cash buyers who beat them out of their first home buying attempts to thank. Odd, isn’t it?

Use the Internet. Drive neighborhoods.

Categorize your “Got to have’s” and “Want to have’s”, because really there is no such thing as the perfect house. Ask someone who has built a custom home, if there’s anything they’d change!

If you’d like to see how the various zip codes and areas of Scottsdale match to your preferences, try the home search tool I mentioned in the video, the Scottsdale Neighborhood Suggestor.

If you are thinking about buying a house, there are a couple good reasons to have your representation, a buyer’s agent:

1. You have an advocate looking out to YOUR best interests.
2. A buyers agent will focus on YOUR home search, not selling their listing.

After you choose your agent, searching on-line plays a big part in finding your next home.  One of the most helpful tools is a custom home search web site where get the latest updates on properties that match your preferences.  You can also make notes of your favorite homes, and we can communicate (message) privately about each home. 

Once you have your loan approval (or proof of funds for cash buyers), we get in the car and start looking. The first time out is really a time to calibrate. You’ll see in real life, what you’ve been viewing in listing photos. You’ll get the feel for floor plans you prefer. You’ll get a good sense of pricing and value.

From there, you home search begins in earnest. It may take a couple times, out, or more, but for most buyers, getting in the car is the next step in the adventure of buying a new home.

More home buying tips:

• First Steps for Scottsdale Home Buyers

• How real estate agents get paid

• You found the perfect house – now what?

• Home buyers ask: “What happens after my offer is accepted?”

More video tips for Scottsdale home buyers:

• You found the perfect house – now what?
• Home buyers ask: “What happens after my offer is accepted?”
• What to expect in the Arizona Seller’s Property Disclosure Statement

My short answer is that “It’s crazy upfront, quiet in the middle, and then gets busy again before closing.”

Basically (in a typical Arizona home sale):

• Escrow is opened. The buyer’s earnest deposit check is deposited with the title company.
• The title company will mail or email a packet to the buyers and seller, that could be completed and returned ASAP.
• The seller provides a seller disclosure and an insurance claims history, within 5 days of contract acceptance.
• If the buyer is getter a loan, the lender will prepare a Loan Status Update (LSU) for the buyer’s signature, which also must be delivered to the seller within 5 days of contract acceptance.
• Home inspections are to be completed within the first 10 days, unless the time period has been changed in the contract. The buyer requests repairs (if any), and the seller responds.
• The buyer’s lender orders an appraisal and processes the loan.
• About a week before closing, buyer and seller’s order the utility transfer.
• Several days before closing, the buyer and seller sign documents, most often at the title company. In Arizona, buyers and sellers do not necessarily ever meet. Signings are done individually.
• Buyer and bank funds are wired into the title company.
• On the day of closing, the transaction occurs electronically. The title company notifies the real estate agents, who then notify the buyer and seller.
• Keys are delivered!