Still Looking For Properties

I suppose now would be a good time to remind everyone that I am always looking for birddogs in the greater Phoenix area.

I spend a couple hours today looking for properties with motivated sellers. I found one townhome, but when I called the agent I was told it closed yesterday. The MLS listing said it was still active. As soon as an offer is accepted, the agent is supposed to change the listing status so this doesn't happen. I didn't find much else worth getting worked up over, unfortunately.

While looking for properties, I ran across a couple properties where the buyer's agent's commission was 3.5% instead of the usual 3%. That's typically a sign the seller needs to get rid of the property for some reason. Both places were empty and newly remodeled, so I think they were being sold by some flippers who got caught in the market slowdown.

So Tired

I'm currently going through one of those times when everything seems to happen at once. I've spent the last four days (including the weekend) at work preparing for a big merge of two computer networks. That happened Monday and it was crazy all day with issues that had to be resolved. My in-laws were also visiting last weekend plus, we had some yard work to do that we had been putting off for weeks. I've been too busy to even look at properties. I feel so out of the loop now. But I suppose the good news is that with each day that passes, the market here turns more and more from a seller's market to a buyer's market. The number of MLS listings continues to rise and the number of sales continues to fall.

Foreclosure Market Heating Up

This story on MSN says what I've been saying for some time now - foreclosures will be increasing in the coming year. It also mentions that virtually every real estate guru out there selling books and tapes is advocating buying foreclosures, so the competition will be tough. All in all, it's a pretty fluffy piece with not much substance.

I haven't been doing much property hunting the past week. I'm moving my office at home, so all my files are scattered around. It's also been somewhat busy at my day job, so I don't have much time there either. Hopefully, things will start to free up next week.

Verifying Your Credit Report

It's hard to believe a year has gone by since I last did this, but it is time once again to request an annual free copy of my credit report. Last year, the first year this service was available, I requested a copy from all three agencies, TransUnion, Experian, Equifax, and all at once, just to get a baseline, if you will. This year, I am staggering my requests. Every four months, I will request a copy from a different agency and thus, I will always be on top of the latest changes. I simply made a recurring entry in my Outlook calendar and noted which agency I should request the report from in which month. As I mentioned in my previous post about this, making sure your credit report is accurate will help ensure you get the best possible rates on mortgages and other loans and credit cards.

This time around, I got my report from TransUnion. Thankfully, there were no major discrepancies. There were, however, a couple of pieces of obsolete data that I wanted removed. The report showed some old student loans and old credit cards. They were all listed as paid off and closed, but they were all closed over 7 years ago, so I wanted to get those removed. Technically, they should not be having any affect on my credit score since they were so old, but I still prefer to have as clean a report as possible. I also noticed my employment history was rather skimpy. It showed my current job title and the only previous job listed was "Pizza delivery boy." That was a summer job I held almost twenty years ago during my freshman year of college (when I applied for my first credit card, which explains how it got on there) and, of course, it has no relation to what I am doing now.

TransUnion allows you to submit corrections (or, as they call the process, "dispute" the report) through their website and, I must say, compared to last year, they have greatly improved their website. Submitting the corrections was painless and consisted mainly of checking various boxes to indicate why something was incorrect. If your reason isn't listed, you need to submit your correction via mail, but I think very few people would need to do this, given the variety of reasons they provide for you to choose from. You do need to submit all your corrections at one time however, so take some time to review your report and find all the errors before you start the correction process. Once you have submitted corrections, TransUnion has 30 days to investigate your claims and provide you with a response.

One thing I do recommend is to make a note of your login and password and save that information in a safe place somewhere. Next year, when you request another copy of your report, the system will recognize that you previously created a login and prompt you for that. It will not let you create a new one. If you do not know your login, you will need to call Customer Support and have your account reset. If you do much of your on-line work at home, after regular working hours, this could delay things for you.

Hard Evidence Of Phoenix RE Slowdown

This morning, I was following up on some properties I had previously submitted offers on. One of them has completed the sale process and the MLS listing shows it sold for less than the asking price. It was listed for $155,000 and sold for 148,000. This is the first time in memory that I have seen a property here sell for under the list price and this provides some hard evidence of the slowdown everyone is talking about.

Pseudo-Offer Made On Another Property

I found a condo today that is in preforeclosure and is only about 3.5 miles from my office. I spoke with the agent and was able to go over to check it out during lunch. The owner was there, so I got to speak with him for a bit.

On the way to my car, I suddenly realized that the property was about $30,000 over of my price range! Oops.. Well, I decided to go ahead with the meeting anyway, if nothing else to get some experience talking with owners. The property is a condo and, as stated in the listing, it was a bit of a fixer-upper. The listing said they were pricing it about $10,000 below market value to accommodate the repairs. After going through the place and tallying up what I saw, I'd say about $10,000 is what it would take to fix the place up. But of course, I can't pay full price for a property, so I'd need to get it for even less than that.

The owner was nice. I tried to establish some rapport with him by commenting on the drafting table and computer plotter he had. I stated out my professional career as an electrical engineering doing some mechanical drafting, so I had some experience with both of those items. Turns out, the owner is a graphic artist, but I did feel please when he asked for my name again when I left. I didn't mention the impending foreclosure, but I did ask how soon he needed to move out. He said the title paperwork had already been started at the escrow company and he was told it would take about 30 days. I asked if moving out sooner would be a problem. His eyes lit up a bit and said no, that would be fine. There's one plus in my favor.

A strike against me, however, is the fact that the agent said she was expecting another offer on the property by the end of the day today. Now, she could be blowing smoke, but I don't think so. Condos in this development sell rather quickly.

After visiting the place, I came back to my office and crunched some numbers. The agent told me the seller, who is asking $198,000, wouldn't go much below $195,000. My best offer would be in the $160,000 range. Because the discrepancy was so great and because she was expecting another offer, I didn't bother writing up a formal offer. However, I did want to call her and explain my position. Unfortunately, I only got her voicemail, so I left a message explaining that, in order for the deal to work for me, I wouldn't be able to offer much more than $160,000. Because of that, I wasn't going to waste both of our time with writing a formal offer, but I suggested that she talk about my offer with the seller to see if he was interested. I stressed I would be making an all-cash, as-is offer and it would be a sure thing - no falling out of escrow. I also pointed out the seller was in a preforeclosure situation and I could close in a week, if needed. I said if those pluses could overcome the lower price, to give me a call and I would write up a formal offer and otherwise, I thanked her for her time.

I don't expect to get this property, but I do feel I gained some lessons in people skills, which is always useful.

Condo Sold - But Not To Me

I got home last night and did not have a fax waiting for me, so I guess the condo I made an offer on yesterday was sold to someone else. I'm going to watch the MLS listing for a month or so to see what the final selling price was. (That data only shows up once the sale is final.)

Second Offer Submitted On Condo - Updated

Well, the holidays have come and gone and I'm catching up on my sleep, work, and other aspects of my life that seem to get put on hold during the hectic times of late December. Even though I was out of town for Christmas, I still kept an eye on a condo I made an offer on earlier. It remained unsold, which I expected.

Today I submitted my second offer on the property. Since it's been on the market at least three weeks now (after having fallen out of escrow once prior to that) and supposedly, the seller needs a quick sale, I only raised my offering price by $750, which means I'm still close to $40,000 under the asking price. However, thanks to a comment left by OCRenter and some stats on his blog, I also included a table that I asked the listing agent to share with her seller. It shows the number of available properties in the greater Phoenix area doubling since August, 2005 and the number of sales falling, both month over month, and compared to the same month last year. Clearly, I pointed out, the competitive pricing environment of months past no longer exists. Perhaps this table, and the additional month of HOA fees and mortgage payments that the seller has just paid, will encourage the seller to accept my offer. I'll let you know what the response is...

UPDATE: No phone response from the listing agent yet, but I notice the listing status has now changed to "Pending", so either the seller accepted my offer via fax (which I won't see until I get home this afternoon) or they got a better offer previously and the agent was just lax about updating the status in the MLS.