Gilbert Real Estate Blog
~ by Randy Hooker of Dreamcatcher Realty
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Archive of "gilbert market conditions" Category
What does AS-IS mean?
With so many bank owned (foreclosure) and short sale properties for sale in Gilbert, Arizona these days, I get this question quite often: “What does AS-IS mean?” The AS-IS terminology is showing up in a lot of MLS listings, and the true meaning of AS-IS continues to be a mystery to many home buyers – and apparently to many real estate agents as well.
In my almost 14 years in this business, I’ve never seen a bank owned listing where the seller would NOT insist on selling the home in AS-IS condition, and their addenda are always loaded with AS-IS language to which the buyer must agree. They declare upfront that the seller will NOT preform any repairs on the property, no matter how major or minor. They also state unequivocally that the buyer will receive absolutely NO disclosures about the property – even if the seller happens to know things.
And then there are the listings that test the very fabric of sanity: Short Sales. It’s become common practice for short sale homeowners/sellers to refuse to perform any repairs on the property, irregardless of the severity. The logic seems to be that if the homeowner/seller is truly in a hardship situation with their lender(s), then how could they possibly afford to make repairs (however reasonable) for the buyer?! So while navigating through Gilbert foreclosed real estate can be a bit tricky and challenging, it pales in comparison to the insanity of short sales.
For those of you that know me well, it will come as no surprise that I can’t write this post without editorializing a bit. But first let’s touch on the meaning of AS-IS. In basic terms, AS-IS means the property is being sold in its existing condition, or as I like say, “What you see or don’t see – is what you get.“ It also means the seller is unable or unwilling to do any repairs on the property, even if we say “Pretty please.“ And to paraphrase the standard Arizona Association of REALTORS® AS-IS Addendum, it also means the seller makes no warranties concerning the condition, zoning or fitness of the property.
For my mini-rant, I’ll say that I know for a fact there have been certain pre-existing property conditions and repairs that were known of and/or done by an asset manager and/or contractor on a bank owned home that could have been and should have been disclosed to the buyer. That doesn’t seem to matter to them, though, so once again we buyer’s agents are left with waiving the ‘Caveat Emptor‘ a/k/a ‘Buyer Beware‘ caution flag. How and why banks are allowed to get away with selling foreclosed properties without having to disclose ALL known facts is still beyond me.
As for short sale properties, there’s absolutely no reason the homeowner/seller cannot deliver a Seller’s Property Disclosure Statement (SPDS) to a buyer. It just makes no sense whatsoever that certain listing agents try to exclude seller disclosures under the guise of AS-IS, and yet I see it all the time.
Word to the wise — it is HIGHLY recommended by the real estate industry as a whole, including yours truly, that every home buyer hires a reputable, licensed home inspector to perform a professional home inspection on the property. Even though you might have signed an AS-IS Addendum, hopefully your buyer’s agent made sure you didn’t sign off your rights to perform inspections. Typically, there is a limited time in which to do your inspections (Inspection Period), but what prevails is what’s in writing. It’s absolutely imperative to do a home inspection as well as a termite inspection. Standard AAR Purchase Contract language gives the buyer an opportunity to cancel the contract and receive a refund of earnest money if anything big, bad or ugly is discovered during the Inspection Period. Please do NOT construe anything in this post as being legal advice, as each contract and addendum is unique to each seller and buyer. If you have doubts, consult with your real estate agent and/or attorney.
I’ll wrap up by telling you that just because a home buyer signs an AS-IS Addendum on a bank owned property, it doesn’t necessarily mean they have no other options. We’ve now negotiated several exceptions to sellers’ AS-IS policies and addenda.
One of my favorite examples is a home that had three (3) covered patios/balconies that on the report of an outstanding home inspector, had little to no life expectancy. The estimated cost of repair/replacement of the patio covers was somewhere in the $15,000 range – much more than the buyer was prepared to suffer. In spite of the AS-IS Addendum, we submitted the inspection report to the listing agent, along with a formal request that the seller repair or replace the patio covers. Guess what –> the seller agreed, and 3 days later all 3 patio covers had been professionally rebuilt, and the transaction closed on schedule. What do you know – a win/win for both parties!
The moral of this story is that in spite of all the attempts by sellers to avoid any responsibility for any property condition(s), AS-IS is not necessarily set in concrete. If you as a home buyer are ever faced with a seemingly frustrating and bitter situation, be sure to have your buyer’s agent at least ask! After all, at that point what do you have to lose?
Exceptionally Low Interest Rates for an Extended Period Of Time?
Yesterday the Fed announced that they would like to see ”exceptionally low interest rates for an extended period of time.” They have committed to purchasing long term securities that directly impact mortgage interest rates. Experts see a need to help our economy recover and low interest rates are one tool in the Fed shed for promoting economic activity.
The last time the Fed did this was in early 2009, right around the time interest rates for long term mortgages went into free-fall! Rates dropped because the Fed’s purchasing presence spiked both the demand and price of mortgage bonds which directly lowers mortgage rates.
This latest development will likely provide reinforced support for what are already historically low mortgage rates. It may even provide enough pressure to push rates a bit lower. I don’t expect the dramatic decrease we saw when the Fed initiated this type of buying in early 2009. Overall, I do expect our interest rate market to flirt with historically low levels for some time.
Stay tuned, as I am sure there is more to come.
Greater Phoenix Real Estate ~ May 2010 vs. May 2009
Courtesy of the Arizona Regional MLS, the below two charts offer up a quick overview of the current market conditions in the Valley of the Sun. Whether you’re into comparing consecutive month over month stats (like May 2010 vs. April 2010), or year over year (like May 2010 vs. May 2009), the charts are provided to help us grasp the overall picture.
Greater Phoenix Market Conditions
Greater Phoenix Market Conditions
I’m always extremely cautious about using real estate “averages”, as they can and do often skew the true picture of individual communities and areas. Nevertheless, there are a couple of points that are worth noting in the above charts.
It’s interesting that normally at this time of year we experience an increase in listings – and yet the past 2 months has seen a decrease in listings. Anybody care to speculate on the reason(s) for this anomaly?
The next observation is that the greater Phoenix market is holding fairly steadily in the number of Active listings as well as sales.
Additionally, at roughly 4.5 months inventory, the greater Phoenix market appears to be showing some consistent stabilization. As always, time will tell.
NOTE: The information and statistics contained in the above charts are deemed reliable, but not guaranteed. If you’re contemplating a major financial decision regarding residential real estate, please do yourself a huge favor and consult with a reputable real estate broker, attorney and/or accountant.
Greater Phoenix Real Estate ~ December 2009 vs. December 2008
Here ya go, boys and girls. Take a look at the charts below, courtesy of the Arizona Regional MLS. They provide a quick overview of the greater Phoenix real estate market for the past year, with particular interest and focus on the period of December 2009 as compared to December 2008.
I have a personal conviction that real estate should not be micro-analyzed, so I’m electing to not draw any conclusions or speculations from the latest “averages.” It’s clear that prices, on the average, are on the rise. Other than that, all indicators point to a bottoming of the residential real estate market in greater Phoenix.
As always, the information and statistics contained in the above charts are deemed reliable, but not guaranteed. If you’re contemplating a major financial decision regarding residential real estate, please do yourself a huge favor and consult with a reputable real estate broker, attorney and accountant.
Gilbert Real Estate – June 2009 vs. June 2008
GILBERT, ARIZONA
…a shining star in the Valley of the Sun!
June 2009 vs. June 2008
443 single family detached houses were purchased last month vs. 329 last year (June 2008).
The average price paid was $226,660 vs. $284,343 last year.
The median price came in at $199,500 vs. $252,000 last year.
The ratio of purchase price to list price was 98% vs. 97% last year.
The average time on the market was 84 days vs. 96 days last year.
There were 2,175 Active single family listings vs. 3,065 last year.
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All data is derived from the Arizona Regional MLS and is deemed reliable but not guaranteed.photo by Miguel Folch
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