Phoenix Real Estate

Looking for Tempe homes for sale?  Chandler homes for sale?  I'll show my clients all homes currently on the market that fit there parameters.  This even includes short sales (Chandler short sales, tempe short sales, Gilbert short sales) - i hear various stories where agents will not show their clients short sales.  Well, short sales make up more than 50% of the listings and some are actually approved short sales.  Gotta show them.  However, there is one type of home I don't like showing my clients.  The ones that we can't get to!

In our Realtor prinouts, we typically have simple directions on how to get to a property.  These directions are put in by the Listing Agent.  A lack of directions, East instead of West, Right instead of Left, etc, etc, etc.  I see this way too often.  Does the Agent NOT want to sell their client's property?  OK - you say - but you have the address, just punch it into the GPS and you're good.  True.  But what if I'm meeting a client at the property and they don't?

The point is, don't make it HARDER to sell your listing than it already is.  And unless it was a one time error...if you really can't tell North from South or left from right...maybe this isn't the right business for you?

Kaushik Sirkar
Your Total Real Estate Solution
480-600-2808 (cell)
480-993-0914 (fax)
www.homesphx.com

What/where/who/when/why/how is Ahwatukee?  Well, Ahwatukee is a region - a part of Phoenix that is bound by South Mountain to the north and west, I-10 to the east and reservation land to the south.  It is primarily composed of zip codes 85044, 85048, and 85045 and located just west of Chanlder.  Considered by many to be one of the more desirable places to live within the Phoenix metropolitan area, the recent market statistics for Ahwatukee homes for sale shows a distinct shift (like a good portion of the market) to a more balanced market.  The data below shows that the Ahwatukee market absorption rate (ie the # of days for current inventory to disappear without any new listings) is just under 6.  An absorption rate between 5 and 6 suggests a balanced market the last 30 days shows an absorption rate of 5.95.

There are still plenty of great deals available if you are looking for an Awhatukee home for sale.  These deals may not last all that long, however!

Kaushik Sirkar
Your Total Real Estate Solution
480-600-2808 (cell)
480-993-0914 (fax)
www.homesphx.com

I have previously blogged in depth about real estate investing.  With the way the Phoenix metropolitan Real Estate market is shaping up - and considering that a fair percentage of my clients are investors (clients after my own heart!), I thought it was time to speak about Real Estate investment methodology and thought processes again.  Sure we could get into a detailed analysis of multifamily properties, apartment complexes and their associated terminology.  But for the prospective novices, lets keep it simple.

There are many angles that one can pursue when investing in Real Estate - be it in Phoenix, Chandler, Glendale - wherever in the Valley.  Cashflow - your net in is great than your net out.  The appreciation play - if you have a crystal ball that predicts the future this is the absolute best way to go .  Pay cash - collect the full rent asap (i'm not necessarily a huge fan of this as it ignores the concept of leverage - something i'll touch on in a future blog post).  And of course - the tax angle.  The government actually makes it beneficial to own rental property!  Look at the table below (and don't worry I'll explain the details below!)

What is all this saying?  Lets start off with the example - we are talking about a $150,000 dollar house in the Phoenix metropolitan area.  You have purchased this home with 20% ($30,000) down and have a mortgage of $120,000.  The home is renting for $1000/month, has a typical occupancy of 90% and assumes you are paying 10% of the gross rent to a property manager.

First, from the perspective of cashflow, the property is relatively break-even.  You are making $420 per year.  Great.  But, thanks to our friends at the IRS, there is an added benefit of residential rental property.  DEPRECIATION!  Yes, the government, despite the fact that property often actually appreciates(obviously not always as evidenced by the last few years!) allows one to depreciate rental property.  The depreciation schedule for residential rental property is currently a 27.5 year straight line schedule.  You can't depreciate the land and assume the land was equivalane to 15% of the purchase price.  This means you can depreciate about $127,500 over the course of 27.5 years.  This results in a cashflow as seen by the government of -$4302!!!  What tax bracket are you in?  28%?  This means that your cashflow after taxes is just over $1600.

Lets extrapolate.  You have a house that a tenant is paying for.  At the end of the year, you actually get cash back thanks to depreciation.  Imagine if you owned multiple properties.  That someone else was paying for.  And the government helped you along the way.

PLEASE consult your CPA or other tax professional for accurate tax advice.  This is a somewhat simplified example.  But I hope you get the point.

Kaushik Sirkar
Your Total Real Estate Solution
480-600-2808 (cell)
480-993-0914 (fax)
www.homesphx.com

I continue to receive this question - so I thought I'd post the answer for everyone to see.  If you already know the answer - feel free to ignore this post.  Otherwise, pay attention.  A short sale situation occurs when the selling price of a home is less than the amount that is owed to the bank.  This is not an uncommon scenario at all in the current phoenix housing market where we have seen price drops on the order of 50% (or more in some areas) from the highs of a few years ago.

You are planning on listing (and selling) your home for $200,000.  The problem is, you bought it a few years ago at a much higher price and still owe, say, $300,000.  If you have an extra $100,000 lying around to cover the difference, great!  If you don't - then you are a candidate for a short sale - where the lienholder (bank) will have to agree to the transaction and "eat" the difference.

There are typically credit implications to doing a short sale, especially when the owner falls behind on mortgage payments.  Can everyone do a short sale?  Depends.  If you are up to date on your payments, rolling in excess income and have no quantifiable hardship....easier said than done.  Lost a job?  Suffering some other financial hardship?  Potentially easier to convince the bank to play ball.

Why should you care?  Well, well over half of the listings in the MLS are currently short sales.  As a seller, understand what is required.  As a buyer - expect to wait for a while...potentially MANY months before getting an answer on a short sale offer.

 Ain't Real Estate just grand?

http://www.inman.com/news/2008/04/15/jury-sides-with-realtor-in-dispute-over-sales-price

See this article.  Do I know what went on behind the scenes?  Nope.  Did this Realtor act ethically?  Did they fulfill their fiduciary duty to their clients?  I have no way of knowing.  But it is an opportunity for me to bring up the topic of Fiduciary duty as it relates to Realtors.  A Realtor has a Fiduciary duty to his/her clients - that is to do what is in their clients best interest!  There are certainly many implications to this....showing ALL properties that fall within their clients parameters, not just those with higher commissions.  Being truthful about current market conditions and not "painting a picture" the might artificially promote a transaction.  You get the idea.

Is your Realtor concerned with your best interest?  Or are they looking for the biggest/quickest buck they can make?  Certainly something to think about....

As I have stated before, the majority of my blogging has been done on the Active Rain network.  Its where I got my start and I will of course continue contributing.  But I also think its time I started venturing out on my 'own' a little bit.  And here we are - I am writing a blog post on my own website!  And what is my topic today?  Its a simple one yet one that can't be emphasized and/or discussed often enough - tip for the first time buyer!  First time buyers are always out there and are always, always looking for information.  Its our job as Real Estate Professionals to provide that help :)

I found this article very interesing at msn.com.  Its some fundamental advice geared towards first time buyers that IS solid and bears REPEATING!  Please click the link for details, but in general they touch upon 8 topics which I will highlight below :

1) Have a budget!

2) Have a big downpayment, ideally 20%

3) Have a steady stream of income (unless you are buying all cash, you'll need to pay a mortgage!

4) Have an emergency stash of money.  You never know when your call will die, an appliance will break or you'll need medical treatment.

5) Don't have a whole bunch of debt - ideally your debt-to-income ratio should be no worse than 38% (factoring in your proposed mortgage).

6) Have good credit.  In today's lending market, sub-prime folks aren't getting the loans they used to...

7) Plan on being in the house for a while.  At least 3-5 years.

8) Be ready to become your own landlord.  You have to take care of your own leaks, lawn, etc.

Hope you find this informative and thanks for reading!!!

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