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Gary and Shannon Kiernan's Blog

By Gary Kiernan | Agent in Anthem, AZ
  • They Love Me, They Really Love Me

    Posted Under: Home Buying in Phoenix  |  May 29, 2011 7:12 AM  |  1,577 views  |  1 comment

    They Love Me, They Really Love Me!    

    They like me, they really like me.Being a real estate professional is never really easy. It's not really that difficult either, truth be told, but the last few years have been quite a roller coaster ride.

    None of this is evidenced more clearly than by how new home builders treat Realtors. Talk about feast or famine! Back in 2005/2006 they were so confident of their ability to attract buyers that they practically dared Realtors to show their homes. "Must be present at initial showing to be eligible for commission, Blah, Blah, Blah..." "Do not pass machine gun towers without obtaining special permit from obergruppenfuhrer..." Well you get the message. Suddenly, it's a brand new day and my inbox is flooded with all kinds of generous offers. All I have to do is swing by, take a look at the new complex (now with highly competitive pricing)and I get a voucher good for dinner and a movie. Or- Are gas prices forcing you to park your fuel-guzzling land yacht in despair? Never fear. Zoom by our new and improved mega-sub-division and we'll give you a $25 gas card. Just for showing up! My how times have changed.

    As I get older, I realize that some of my faculties are not what they used to be. Luckily, my memory isn't one of them. So,you'll excuse me if I don't immediately add these guys to my Christmas card list. I was even offered an I-Pad, whatever that might be. I suppose if I ever get my I-Period, I'll find out.

  • Retirement and Vacation Homes: Are They Worth The Trouble, or Expense?

    Posted Under: Home Buying in Phoenix  |  May 10, 2011 7:37 AM  |  1,608 views  |  No comments

    Recently, I got sucked in by a T.V. show called "House Hunters International" on HGTV. The concept is fairly self-explanatory and involves a family who decide to buy an additional home (although some are actually re-locating) in a country other than their own. So, we are treated to Europeans of every stripe checking out properties all over that great continent, as well as Americans making the trek overseas.
    I must admit that I have never been a great fan of buying a second home and have often advised friends, neighbors and clients against it. I have good friends who travel to Cape Cod from Arizona each summer for three months. They have toyed with buying an apartment back there, but I have generally discouraged it. In my mind, it is very difficult to deal with the maintenance and upkeep when you are 3000 miles away. Quite how these people cope when the 2nd home is in another country (sometimes involving a different language) is hard to fathom.


    My initial thought is why would you want to go on vacation every year for the rest of your life in the same spot? In the same house, even? I can justify it only if your intention is to ultimately retire in that location. Or if your second home is used to escape the weather; to get out of the intense summer heat or get away from the winter chill in Canada or the mid-west.   I feel that a seasonal rental is the better way to go. That way you can visit a different resort, country, locale or region each year and just walk away from the property after each trip. I fully recommend a website that has holiday homes for rent by owner around the world, including entire islands. It is www.vacationrental.com.


    Still and all, it is a fascination T.V. show to watch, especially as it showcases cultural differences between countries as related to buying and renovating homes. However, one American in Paris stopped me in my tracks the other evening. I about dropped my gin and tonic. She was looking for an apartment in the heart of Paris (they call it a Pied a Terne, which I think is French for potato) and found her ideal home priced at $250,000. Except for one thing. It was 85 sq ft! You read that right. Eight and a half feet by ten feet. Slightly less than a quarter of and average two-car American garage. Do you really want to live in Paris that badly? Or , if it is to be a vacation home, do you take your $250,000 and rent a place for $5000 for one week for the next 50 years?

    As they say, you pays yer money and you takes yer choice...

  • Banks Hit Bottom. Keep Digging.

    Posted Under: Home Buying in Phoenix, Home Selling in Phoenix, Foreclosure in Phoenix  |  April 16, 2011 3:56 PM  |  1,836 views  |  No comments


    Part of the fun of being a Realtor is that you are required to attend 24 hours of continuing education in every two year period. The categories covered include legal matters, fair housing and ethics among various others. Some of the presenters on these topics can be quite dry (not always their fault) while others can make almost any subject entertaining. No mean feat when each class is 3 hours long, by law.
    Therefore, like many other Realtors I am sure, I have a small group of "favored" instructors whose classes I am happy to take. One such class occurred just last week. As a Realtor, it is sometimes interesting to get together with other agents to share stories, both good and bad, about the real estate market in general. That day was no exception.
    It began with a pet peeve of mine, and one about which I have posted previously, which is being forced to pre-qualify with "preferred" lenders on REO properties. This led to a general diatribe against the inefficiencies of most banks dealing with both short sales and their own inventory.
    We heard of banks foreclosing on properties on the day before a scheduled short sale that had been approved by their mitigation dept. with full knowledge of that fact. We heard of some banks in that situation that then re-listed the property at a price that was lower than the approved short sale price. Shareholders, are you listening?
    The best tale was a doosy! The buyer was negotiating an REO purchase with a bank. The buyer kept submitting ever lower counter-offers to the bank until they finally accepted the lowest price. Apparently, they thought the market was crashing around their ears. Too funny!
    Remember, these banks are desperate to take over the real estate business, particularly the listing side. Yet, many seem to struggle with just their core business of managing loans.
    I say be careful what you wish for. If banks continue to dump homes (thereby lowering prices across the board) they may indeed end up owning the whole real estate market, inventory included. Of course, at that time it will all be worthless, so they will be welcome to it.
    What say you?

  • Does It Really Have To Be This Hard?

    Posted Under: Home Buying in Phoenix, Home Selling in Phoenix, Foreclosure in Phoenix  |  March 3, 2011 8:29 AM  |  1,863 views  |  No comments

    As any Realtor will tell you, there are times when this profession can really wear you down. Times when you wonder why you bother. Truthfully, I am sure most jobs are like this, but then we remember why we decided to sell real estate, or whatever it is you do, and the moment passes.
    In this vein, and considering the many hurdles that face both seller and buyer in these troubling and difficult times, I have to ask? Why do we have to make this more difficult than it already is, or than it needs to be?
    I came across a listing in the MLS that seemed to be a good match for one of my out of state clients. Good location. Perfect size. And a pretty decent price. And then: there it was. Like a turd in a swimming pool. Hidden away in the private Realtor remarks, "Tenant has first right of refusal." What? So you want my client and I to view your property, go to the trouble of writing an offer in the vain hope that the tenant won't exercise his right and steal the property away from us. If he wants to buy it, then just buy it! Does it have to be this hard? Oh yes, and all for 2 1/2% commission. I wish you luck.
    Also, and I've mentioned this before. I despise the must-pre-qualify-with-my-lender for an offer to be valid listing. Guess what? All my buyers are pre-APPROVED not pre-qualified. In essence, you are saying that you do not really trust our lender, but you insist that we provide sensitive personal info to a lender that you alone deem trustworthy. Better yet; you want us to cough up this info in Phoenix the identity-theft capital of the U.S.A. What could possibly go wrong? "But," they bleat, "The Bank that owns it insists upon it..." they would. Then again, they're the idiots mostly responsible for this mess in the first place. Avoid such listings like the plague and they will eventually figure it out. Or not!
    Finally, an increasing amount of short sale listings require that the potential buyer be on the hook for attorney's fees for "handling" the transaction. Here's a hint. If you are unable to negotiate a short sale as a licensee, don't take the listing. Let's keep the parasites out of our business.
    It really doesn't have to be this hard.
  • Going Into Foreclosure Again? Twice In Two Years, How Is That Possible?

    Posted Under: Foreclosure in Phoenix  |  February 5, 2011 8:05 AM  |  1,653 views  |  No comments
    Part of being a good real estate professional is knowing your local market intimately. It sounds obvious, but it is imperative that you are aware of trends, subtle neighborhood differences or any other factor that can affect value. Education is key.
    Whilst reviewing homes for sale in my town recently, I came across a potential short sale that "rang a bell" with me. Sure enough, it was a home that I remembered had gone back to the bank back in early 2008. Here it was again, just three years later, being offered as a short sale. It was a little jarring so I decided to investigate. I realize prices had not really done much of anything in that time; well slightly down, but how was it possible to be back in trouble so quickly?
    A bit of history. The home sold in mid 2003 for $320,000, and then was re-sold at the end of 2004 for $400,000 even. This is in keeping with what we know of pricing trends back then. Prior to 2004, prices were mostly flat-lined and it was in late 2004 that we began to see "investor" fueled increases in a few states. Flash forward to February 2008 and we see it being foreclosed upon with a total indebtedness of almost $450,000. More than the original sales price. Safe to assume the owner, like many others, had re-financed to release some of his "equity". Which wasn't really there. House-as-ATM strikes again.
    The bank then sold the house some five months later for $400,000. I remember thinking at the time that the price seemed high. And therein lies the problem. That last owner simply paid too much, but as he put down 25% the bank was less than stringent in its appraisal. That last selling price was identical to the 2004 selling price, even though the reality was that prices had dropped to pre-2002 levels. Because of the large down-payment the bank figured they were safe. Well they were wrong! As ever, price is everything.
    It reminded me of another case in 2006. I had a client looking for vacant land to build his dream home. He found a 5 acre parcel priced at $639,000. Wary that the market had likely peaked, we offered $450,000. The seller countered at $539,000 and actually wrote this on the counter-offer, "And not a penny less!" I advised my client against it, given the market conditions, and we walked away. Three years later, the land sold for $272,000. Glad we dodged that bullet!
    By the way, four years later in 2010 he bought a 4000 sq. ft. home with a pool on 4 acres for $850,000. A home that had sold for $1.5 Million when he was looking at land. I love a happy ending, don't you?
  • Market Correct Pricing Is Crucial, And Always Has Been

    Posted Under: Market Conditions in Phoenix, Home Selling in Phoenix  |  January 25, 2011 10:36 AM  |  1,743 views  |  No comments


    Now, perhaps more than ever, a sensible approach to pricing is imperative in today's difficult market. With more restrictions on appraisers keeping a tight rein on their work, it is important that both buyers and sellers are reasonable in their expectations.
    Some weeks back I received a phone call from a gentleman whose home was currently listed by a friend (not always the best situation, in my opinion.) "Why," he wondered, "is my house not selling?" A quick search revealed the truth. His home was a plain Jane, builder-basic Formica and vinyl house in a large sub-division. There were many other homes with updated kitchens, granite counter-tops and top quality flooring on the market. He was asking $269,000 even though a near neighbor with a much nicer home was listed at $249,000. The only fix was to lower the price to a point where a potential buyer could perform the upgrades and be rewarded financially for doing so. He thanked me and I noted that a week later he had reduced the price. To $264,000! Clearly, he did not get it and his friend was not helping him. A month later, however, I noted that he had lowered it to $225,000 and now it was in escrow. A bit of a slow learner, but he got it in the end. You're welcome.
    In a similar vein I got to talking real estate with a gentleman whilst on a hike recently, after he discovered I was a licensee. We were discussing recent sales on a particular street, one of which I participated in, at prices that were close to one million dollars. He opined that to him they were only "worth" half a million. To back it up he trotted out the old saw that something is only worth what someone will pay for it. Sure, except that people were paying those prices in many cases. I tried to explain that more accurately something is worth what the "market" would pay for it, not what a misguided individual my want to pay for it. It all fell on deaf ears. He then went on to say he thought that it was a good time to build his own home (???). However, he was having trouble, even in this down-economy, finding a contractor willing to discount his services enough to satisfy his needs. I wonder why.
    Ultimately, I walked away and, unusually for me, decided not to offer him my business card. I have worked with difficult folks in the past, but as Ron White memorably stated, "You can't fix stupid!"
  • Real Estate Predictions for 2011

    Posted Under: Home Buying in Phoenix, Home Selling in Phoenix  |  January 11, 2011 8:50 AM  |  1,782 views  |  No comments

    Well it's going to be a question of good news and bad news, depending on which side of the fence you stand: buyer or seller. 

    If you are a seller, I expect that prices in the Phoenix metropolitan area will remain flat, with a possibility of some areas losing another 10% in value.  This is because we are not done with distressed properties.  In fact, Bank of America's recent moratorium on foreclosures, since expired,  only served to kick that can down the road.  Add in the fact that the state of Arizona is suing them, and you can deduce that 2011 will also be a rocky year.

    At this point I must add, and I have said this before, that the banks are also their own worst enemy.  Their languid responses to short sales, (anywhere from two to twelve months) is costing sales and delaying the possibility of a return to a normal market; whatever that will mean in the future.  Their utter disdain for the conventions and customs of the real estate market is certainly not winning them any friends among the ranks of real estate professionals.  So, keep offering insulting commission rates for what are arguably more difficult transactions and see the caliber of agent you will attract.  Keep insisting that potential buyers MUST pre-qualify with your Aunt's second cousin at Billy-Bob's Ammo, Pizza and Mortgage Emporium.  Let me know how it all works out for you.  Many real estate pros have long memories so your future will not be bright.

    I think the main problem with the banks, due to their corporate culture, is that few of the people tasked to approve a short sale have the stones to actually sign off on that loss.  Too often they are scrambling for excuses to kick it upstairs, or off to another lackey, so as to avoid responsibility for any decision-making.  This further exacerbates the problem.

    On the positive side, it won't be a bad year for buyers, price-wise at least.  For those who saw prices sky-rocket in '05 and '06 and who thought that the dream of home-ownership had died for ever, the reprieve has been extended.  It will be a demanding and possibly fraught experience due to the above-mentioned reasons, and the cautiousness, understandably, of the appraisal community.  However, for those buyers with a steady job and a good credit score there will be some good deals to be had. 

    Here's hoping that everyone enjoys a happy, prosperous and most importantly, a healthy 2011.

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