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Is Your Realtor Qualified? Part 1 of 4

by Gary Nelson

Is your Realtor qualified to represent your best interests?  Odds are…they are not.  In a recently released study, the National Association of Realtors shocked the industry by revealing that the greatest threat to organized real estate is “marginal agents”.  Released in June of 2015, the National Association of Realtors report was called the “Danger Report” and detailed out that the greatest threat to the real estate industry are agents that are unskilled and lack the knowledge to effectively represent buyers and sellers.

From the Danger Report: “The real estate industry is saddled with a large number of part-time, untrained, unethical, and/or incompetent agents. This knowledge gap threatens the credibility of the industry.”

For Sale Sign

The Danger Report continues: “The knowledge and competency gap from the most to the least is very large, due to the low barriers to entry, low continuing education requirements, and the lure of quickly making big dollars. For decades the industry has held the opinion that it’s a profession, however the reality is that those outside the industry don’t hold the same opinion. Most professions (doctors, lawyers, accountants, and engineers) require thousands of hours of study, beginning with a bachelor’s degree. Even becoming an earth driller requires an average of 704 hours of instruction, and becoming a cosmetologist requires an average of a 372 hours. But to become a licensed real estate agent requires an average of only 70 hours with the lowest state requirement being 13 hours.”  Arizona Requires 90 hours of classroom instruction to become a real estate agent.  

Here is a link to the startling website that was created: http://www.dangerreport.com

Do you think that is scary?  Well, this is worse:  In my opinion and having been in the business for 21 years now, I believe that well over 60% of Realtors have no business being in the business.  And 60% is being very, very generous.  That is of course my opinion, but this echoes the Danger Report and when I mention this to my colleagues, they all agree.   I have not had one single Realtor disagree with my assessment and some think that only 25% of Realtors are actually qualified to do their jobs!  At a recent leadership event that was hosted by the Arizona Association of Realtors, every colleague I asked felt that less than 50% of current agents should be in the business at all.  Several of my most respected colleagues said less than 25% should be allowed in the business.


Transfer Of Keys

And the sad thing is that the number of sales that an agent has in a year (what agents call “production level”) has very little to do with it.  Yes, an agent can learn the hard way, as they say, but unless they are keeping up with trends, changes to law and regulation, changes to commonly used forms and technology, how many houses they sold last year pales.  A Realtor may have sold 50 houses last year, but if they are not properly educated and dedicated, they could get you or someone else into a lot of trouble in this litigious society we have today.

So what does this mean to you?  It means you need to interview your agent.  Even your current one.  Even your friend.  Many agents will suggest and provide you a list of questions to ask a Realtor during an interview.  They are typically good questions, but usually the questions provided are easily answered in a positive way by the person that wrote the questions and then gave them to you!  I would suggest delving just a little deeper and maybe coming up with your own questions.  And how you do that is up to you, but if it was me…I would ask questions in these categories:  Education, experience and technology.  I will elaborate in upcoming blogs, give you some ideas to formulate your questions and talk about different Realtors’ general dedication to professionalism in the industry.  Stay tuned!


Gary Nelson is a lifelong resident of Flagstaff, Arizona and is the Delegated Associate Broker at Realty Executives of Flagstaff.  Find your own part of Flagstaff at www.GaryNelsonGroup.com.

2016 Special Flagstaff Market Update!

by Gary Nelson

Special 2016 Report!  Here is the information you are looking for about what is happening in Flagstaff housing in 2016 and what occurred in 2015.  Inside Flagstaff, the average price paid for a “home” in 2015 was $320,785 and the median price was $295,000. This compares to the 2014 calendar year statistics of an average of $308,500 and the median price for a “home” was $291,900. This is for all types of homes. More accurately, a single family home had an average sales price of $388,288 last year as opposed to our all-time high, which was the 2006 average of $452,200. The average townhouse is at $277,349 and a condo is at $162,209.  It took an average of 94 days to sell a home in the past 12 months. That is down from 112 days on market the year before. Again, this is for the city of Flagstaff for the past 12 months. Rural markets near Flagstaff are slightly different, so please contact me for accurate information in rural areas.

When reading the above information, keep in mind that I average information over a one year period, not quarterly and not monthly.  Why do I average over a 12 month period?  Because we are an extremely seasonal market and a small market at that!  A comparison of a one month period to that month of the year before may show an increase or decrease of activity, but a minor fluctuation in closed sales would throw the data off to indicate a problem in the market.  Also, sales in Northern Arizona are typically slow during the colder months and heat up nicely during spring and summer.

When looked at on a monthly basis, we are seeing a steady increase in values in townhouses, and in single family homes. Less so for condominiums. Condominium sales continue to remain sluggish due to the difficulty in financing them and most sales are still cash.  This will change in 2016 as FHA has announced changes to their condo guidelines.  I will blog about that later, I am sure.

Flagstaff and its surrounding communities are under what many consider a “Seller’s Market”, with lower inventory of homes than Buyers ready to buy.  That is to price ranges to about $400,000.  Above that is a neutral market and above $700,000…I think is a Buyer’s market.  We are seeing very low inventory in most housing categories, but single family homes are leading the charge here in Flagstaff. 

For buyers looking in the Flagstaff area for a home this all means that there are very few choices when searching for a home and every once in awhile a “good deal” to be had.  Again, we are seeing very low inventory in Single Family homes and townhomes, making for increased demand.  We shall see how this year progresses.

For sellers looking to sell in the Flagstaff area, there is not as much competition depending on location.  Some areas in the Flagstaff market and some price ranges are still difficult to sell in, but we have had much stronger market conditions this past 12 months.  This means that you still have to concentrate on 3 things: price, preparation and presentation. You must be priced at market value. No “fishing” and hoping it sells. Secondly you must be well prepared, in good repair and staged to sell. Finally, you must be well presented with a great internet presence, graphics and a huge MLS (Multiple Listing Service) presentation, etc. Of course you need a top notch, experienced Realtor© to get the job done.

Who Buys?

Having been involved with Realtor association and MLS leadership on a local, state and national level, I continuously have conversations with Realtors from various parts of the state and country.  Realtors and real estate economists from across the nation and across Arizona all agreed that our markets have continued to increase nationally.  However Arizona, as usual, is beating to a different drum.  Almost all Realtors in various parts of Arizona are reporting a change in their market this past few years, of course. We have increased slightly in values and we will continue to experience a Sellers’s market in the outlying areas, but not in the Metro Phoenix market.  There is a change brewing in the Metro Phoenix area.  A HUGE change.  Demand has increased and supply is decreasing.  We know what that means, right? Typically, Flagstaff and the rest of Northern Arizona follows Phoenix by several months.  Also, there are several factors that are leading to the market we see in the Flagstaff area, which is much STRONGER than most in the U.S.

First, we have experienced less inventory on the market for the greater Flagstaff area this past 3 years.  Buyers still have choices, especially in the Townhouse and Condominium markets, but fewer choices.  Also, we continue to enjoy very low interest rates that are still hovering above the 4% mark, and have fallen slightly since January 1st.  In my work with the National Association of Realtors, I have heard many real estate economists that feel that relatively low interest rates will continue for 5 to 6 more years, barring any unforeseen economic disaster which the U.S. Government spent 2009 through 2011 staving off.

Secondly, Northern Arizona is greatly impacted by second home buyers from other areas.  I heard an estimate that for 2006 (Flagstaff’s all time high year for real estate), 57% of Buyers in the Flagstaff area were second or vacation home buyers!  Buyers come mostly from the greater metro Phoenix area and especially the Scottsdale and Sun City areas. The greatest impact seems to be from the completion several years ago of the 101 freeway both east and west of Interstate 17.  When the completion of the 303 occurs in the west Valley, it will have the same effect. This has made Flagstaff and its surrounding areas 20 minutes to a half hour closer to those trying to escape that blazing metro Phoenix weather!

Another impact, although a smaller one, is the buyer relocating to Flagstaff for its weather and lifestyle. This is a great place to live. Clean air, good schools, wonderful forests and tons to do. We are not seeing much of an increase in population (about 2.7% per year), so relocating buyers may be mostly replacing those that are moving out of the area.

In my opinion, California has a blown-out-of-proportion impact on home prices here. We do see buyers coming in from California, and many of them over-paying and in cash. However, as a percentage of our market they do not have that big of an impact on demand in Northern Arizona. Scottsdale has a much bigger impact on demand than the entire state of California!

So we seem to be in a more normalized market than what we have seen: A frenzied 2004 and 2005, a somewhat slow, but slightly increasing 2006 and a declining market in 2007 through 2011. The tail end of 2008 and early 2009 had the biggest drop. 2011 through 2015 shaped up to have good activity, less inventory, tentative buyers and deals to be had! The current market value of property in the Flagstaff area is roughly equivalent to what it was at this time 2005. But vastly different market conditions.

Use A Pro

The Crystal Ball:

So, what can we expect for 2016? The beginning of this year should see more of what we saw in the end of 2015 – less inventory of housing product than the year before and better sales, extremely low interest rates and “deals” to be had. As 2016 begins, our market will continue rebounding  with both number of listings available for sale and in actual sales.  Remember, 2011 through 2014 were “rebuilding” years, but each was different.  2015 will be recorded as different again.  And 2016 will have increasing buyer activity, too few homes on the market and great interest rates.

Flagstaff’s demand for housing product will continue to gradually rise driven primarily by the financial strength of the second home buyer and the availability of “cheap money”…very low interest rates in our country.


Gary Nelson is a lifelong resident of Flagstaff, Arizona and is the Delegated Associate Broker at Realty Executives of Flagstaff.  Find your own part of Flagstaff at www.GaryNelsonGroup.com.

Preparing A Home For Winter

by Gary Nelson

With winter fast approaching, I think it is timely that we talk about what needs to get done to your home in order to prepare for freezing temperatures.  For those of us that live in cold climates, it is imperative that you get things done prior to the first deep freeze.  Over the years, I have made a few mistakes and have lost some nice ceramic pots and blown out a few sprinkler system pipes.  So, here are some things to keep in mind before Old Man Winter comes calling:

Clean out the gardens and prepare plants for winter.  You will appreciate this in the spring.  Extra mulch where needed and cutting back dead plants will help ensure that they come back next year.  A very interesting mulch I have found is called Cocoa Mulch.  It is the husks from cocoa plants and in the sun and with a bit of water, your yard has the faint smell of chocolate!  It looks great in large pots, also.

Store the outdoor furniture properly.  This will help you save some money!  All those great pads for your chairs and loungers?  They need to be properly stored.  Even without snow, that sun can be brutal and those pads are expensive. Same thing for umbrellas.   Also, is that a glass table top that you have?  I had one shatter under a snow load and started storing mine on its side.  If you lose a glass table top, good luck replacing the glass. It is so expensive that you will wind up buying a whole new set. That doesn’t have glass!

Ceramic needs to be stored away properly.  If you like those ceramic pots and that chiminea (outdoor ceramic fireplace), they need proper storage.  Make sure they stay dry all winter.  They can be cold, but have to be dry.  So, cover them completely or store in a shed, just making sure that they are completely dry beforehand. It is the water within the clay of the ceramics that causes cracks and then they degrade over time.  For cold climates, fiberglass works great for outdoor flower pots and cast iron chimineas last for years and years.

Drain the landscaping water system.  Remember to open valves up and allow that water to completely drain from the system.  A “stop and dump” valve with a back-flow preventer at the water supply is the best thing for this.  Do it early but not too early.  With fall typically being dry, your yard needs the moisture before the snow falls.  Consider draining the sprinkler system and hand watering for a few weeks.  But make sure those hoses get put away.  Speaking of which…

Unhook that hose!  Quick before any hard freezes come along. Even with “frost free” water spigots, you will wind up with leaks if you let that hose stay hooked up all winter.  There is a small amount of water that is stored inside the valve and unhooking the hose allows it to drain. The expansion and contraction of that water is what causes that valve to eventually fail.

Drain those hoses.  About 5 years ago, I noticed smoke in my backyard early one cold winter morning. Looking over the fence, I found the side of my neighbor’s house fully engulfed in flames!  We called 911 and I hopped the fence, but could not put water on the fire because both my hose and his were completely frozen solid.  I learned my lesson.  If you ever really NEED a hose…make sure you can use it.

Don’t forget to clean out the gutters.  Ugh.  I hate cleaning out the gutters. But what would you rather have, a few hours less time on that Sunday afternoon, or replace gutters that got damaged from the ice dam in the worst part of winter?  Leaves and pine needles add extra weight and cause ice dams that will eventually damage those gutters.

Add insulation to problem areas. Sometimes it’s a particular window or door. Other times it is attic access doors.  Hardware stores have some amazing products for the do-it-yourselfer.  From expanding -foam insulation and pipe insulation kits to whole window sheeting, take a look and ask for a recommendation at a hardware store.  And go local if you can!

Test your heating system.  Before hard winter hits, change the filters and run the furnace.  Do it while you can air out the house afterward.  Don’t forget that dusty, burning smell that comes with running your furnace the first time each winter.  Also, don’t forget to make sure the chimney flue is where it should be and that furniture is away from floor registers or heating elements.

I don’t know about you, but these are the things that I have learned living in an area that has all 4 seasons. And season 4 can hit pretty hard at times!


San Francisco Peaks After A Heavy Snow Fall

 

How to leave a home unattended for awhile (not all winter, but for “awhile”):  

  • Turn off the main water supply to the house.  Just in case you have a power failure and the pipes freeze.
  • Turn the thermostat to 58 degrees or higher.  This prevents drywall damage and allows heat to penetrate the walls to keep pipes from freezing. 
  • Open all cabinets that have sinks or plumbing underneath. This allows the warmer air to keep those pipes warmer. This is especially important for sinks located on an outside wall.
  • Open all bedroom doors and closet.  Again, this allows warmer air to circulate.
  • Use a house check service to make sure everything is OK. Contact me for a recommendation.

That’s it!  Stay warm all winter!  Next up:  How to “Winterize” a home and leave it all winter!  Perfect for those that have second homes or are thinking about getting a second home. 


Gary Nelson is a lifelong resident of Flagstaff, Arizona and is the Delegated Associate Broker at Realty Executives of Flagstaff.  Find your own part of Flagstaff at www.GaryNelsonGroup.com.

New Restaurants In Flagstaff!

by The Gary Nelson Group

You may have heard of a few of these…but maybe not.  Flagstaff has gotten a few new restaurants in the past several months!  Here are some new places you may want to check out:

  • Martanne’s: What?! (you may be thinking…)  Martanne’s isn’t new!  True.  But what is new at Martanne’s is that they are now open for dinner.  And it is very, very good.  Good to the point that some established Flagstaff Mexican places might want to take notice.  This is a restaurant that started out years ago as Martan’s Burrito Palace, named for the family that opened it.  It has gone through a sale, an actual move around the corner and has been handed down a generation.  But what hasn’t changed is that it is THE go-to Mexican breakfast place in Flagstaff.  Also, it is quickly becoming THE go-to Mexican dinner house.  It is very well known for Chilaquiles and Enchiladas with Eggs.  It is now becoming popular for Carne Asada and fish tacos.  And trust me on this piece of advice: Order the Chipotle Bacon-Wrapped Shrimp. You’re welcome.  112 Route 66. https://www.facebook.com/MartAnnes​

 

  • Southside Tavern: OK, this is more of a bar than a restaurant, but the food is pretty good too.  We love the décor and the location on South San Francisco Street.  It has a great vibe, great cocktails and bar food that stands up to scrutiny.  It also has quite a few employees that made the jump over from Charlies and the Hotel Weatherford for unknown reasons.  They are an established bar crew that can handle a busy place and, if I was placing a bet….it would be that Southside Tavern will become a Flagstaff staple.  If you have the Bacon Bleu Burger, remember to save room for the S’Mores Dip.  117 S. San Francisco St. www.southsidetavernaz.com

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  • SoSoBa: Have you ever been to one of those great noodle shops in San Francisco where you get those big, fat Udon noodles in a rich broth with a mix of meats and veggies over the top and it’s the best thing you could possibly get on that cold, blustery day?  Yeah…this is better.   SoSoBa is a noodle shop with attitude.  It has something for vegans and omnivores alike.  And best of all, it’s in downtown Flagstaff.  And here is what you order when there: The Mic Drop.  The name says it all.  12 W. Route 66, #104.  http://www.nonstopnoodleshop.com

 

  • Street Side Saigon:  This is another great addition to South San Francisco Street that brings Vietnamese street food to south Flagstaff.  Located near the University and other similarly good eateries, this nice spot should gain a foothold and a following pretty quickly.  Try the Pho, of course which is what everyone wants!  But, you may want to go early because they do run out of this popular Vietnamese soup pretty quickly.  121 S. San Francisco Street. http://www.streetsidesaigon.com

 

  • Agave: This is Flagstaff’s newest Mexican fair, and I have to say, it is pretty good!  It has been around for about 6 months or so, so it may not be new to some of you, but may be to others.  It is located in the Western Hills hotel, which has seen a lot of change over in that restaurant space over the years.  Several restaurants have met with their deaths in that location, which is very strange since it is right on Route 66.  However, Agave is good enough that it should be here for many years to come!  Try the chicken mole!  1580 E. Route 66
  • The Oakmont: Another restaurant that is now several months old, but I felt like it needed a mention.  This is the newest incarnation of the restaurant at the club house at Continental Country Club.  It takes the place of Jakes On The Green or Jotini’s before that.  The location has benefitted from the facelift that the new owners have given it, a more relaxed atmosphere, better use of the patio space and a pretty good menuBrought to Flagstaff by the guys that own Taverna, Field House and most recently they purchased Busters.  The Oakmont features a very well rounded menu, great views and great Country Club crowds. 2380 North Oakmont Drive.  www.oakmontflagstaff.com

Rumor has it that there is a new sushi restaurant going in Downtown at 106 North San Francisco Street.  This is the building just north of Pa

To Thai that used to house the Seasoned Kitchen.  Both the inside and the outside of the building are being spruced up right now, so we shall see what progress brings.

 

A second and even stronger rumor is about a new place going in at 409 South San Francisco.  This is the building that housed El Charro since God was a baby.  El Charro closed and was replaced by The Patio.  Unfortunately, The Patio only lasted a short while, so it will be interesting to see what is going in at that spot.  As of this writing, remodel work is in progress and a partial Airstream Trailer is being installed in the patio area.  Supposedly this will be an outdoor bar area.  That sounds great!  I will try to update you on that in another future blog.

Flagstaff has some great places to eat! Stay tuned and we might take you just a bit further into Flagstaff’s culinary gems!


Gary Nelson is a lifelong resident of Flagstaff, Arizona and is the Delegated Associate Broker at Realty Executives of Flagstaff.  Find your own part of Flagstaff at www.GaryNelsonGroup.com.

 

What To Know When Buying A Foreclosure

by The Gary Nelson Group

There are many intricacies when purchasing a home that has been foreclosed upon and up for sale by the lender. These properties are known as REO’s,  which means “Real Estate Owned” or Bank Owned. REO’s can be both a very good deal and a potential nightmare.

Most lenders have the home appraised prior to putting the home up for sale and typically price the home below market value in hopes of attracting buyers quickly.  So while you can get a home for below market value there are trade-offs.  Here are some things to keep in mind:

The bank will not inform you of any known defects in the home. As a matter of fact you will likely get no information at all and will have to waive your rights to all disclosures.  All bank owned properties are sold “AS-IS, Where is”, meaning they will not make any repairs to mechanical items as in a normal transaction.  Therefore, Home Inspections for bank owned properties are imperative. I recommend using a licensed home inspector AND a team of a contractor, roofer, plumber, electrician, etc.  The bank cannot take away your right to inspections.  In this case they are imperative.

The bank may not supply or agree to sign paperwork required by law.  Some banks refuse to fill out or supply forms that are required under state law. Most of the banks operate on a national level and are not familiar with state to state customs. From subdivision disclosures to rural property forms, some banking institutions think that some of the forms are liabilities and will not supply them, even if required to do so.

The buyer will assume all repairs and defects once the transaction is closed. So knowing what you are getting into is very important.  A lot of the homes have sat vacant for long time periods of time and have had deferred maintenance and some will have damage as a result. If an item comes up on the home inspection be sure and investigate it further.

Thermal imagining may be a way to further investigate behind walls and under flooring.  Home Inspectors are not allowed to cut into walls or pull up flooring during the inspection. No “destructive testing” is allowed. So to insure that the property is in the condition you expect, a home inspector that does thermal imaging can investigate water leaks inside walls.  

Be sure and check into the chain of title on the property.  You can check with the title company to make sure the bank has proper ownership of the home.  Sometimes Foreclosure Deeds and Deeds in Lieu of Foreclosure (where the previous owner just turned the house back to the bank) do not get recorded properly. This can cause major delays in closing the sale.

Check to see if monies are owed to a utility company. In Arizona, municipalities cannot charge for services that were ordered by the previous owner or tenant. However, cooperative or private utilities such as rural water companies, can and sometimes do charge the new owner for what services that the previous owner or tenant received!

Check to see if past homeowner association dues are owed.  As with utilities, it is always better to be safe than to be sorry.  The purchase contract addresses liens and dues by homeowner associations, but at times past fees and transfer fees don’t show up for months.  Also, some home owners associations address past fees on a case by case basis, meaning they will waive fees for some individuals, but not for others.  Check the bank addendum thoroughly regarding HOA past dues.

Some Deeds are not as guaranteed as others.  Do your homework and check into how the Bank/Owner will Deed the property to you. Quit claim deeds and Special Warranty Deeds are not as protective as a Warranty Deed.  So the title policy insurance that they provide you could be insufficient if there are claims later. You may choose to pay the difference to the title company, to absolutely insure clear title.

Patience will be needed. Delays and repairs may be encountered during the purchase process, thereby delaying the close of escrow.  Counting on a foreclosed home to close escrow by a certain date may be a mistake.  If there are delays, it is typically the fault of the bank that owns the property and the Buyer may be waiting for weeks or sometimes months for documentation, signatures or clear title.

A REALTOR can be especially helpful in guiding you through these details. Buyer representation is very important in the purchase of a bank owned home and can save you a lot of time and heartache. During the process you are required to sign lengthy bank addendums that can negate some of the protections built into the state purchase contract and assign fees to buyers that are typically seller fees. A REALTOR that is experienced in foreclosures can save you much of the frustration and heartache.

 

Buying a foreclosure can be a steal but know what you are giving up for the fantastic price!


Gary Nelson is a lifelong resident of Flagstaff, Arizona and is the Delegated Associate Broker at Realty Executives of Flagstaff.  Find your own part of Flagstaff at www.GaryNelsonGroup.com.

Gary Nelson Wins REALTOR Vision Award

by The Gary Nelson Group

At their annual Leadership Conference on October 7th, 2014, the Arizona Association of Realtors awarded the 2014 Vision Award to Gary Nelson of Realty Executives of Flagstaff.  Gary was presented the award from Evan Fuchs, the 2014 President of the Arizona Association of Realtors. 

From the Arizona Association of Realtors:

“The Tyler Strout Vision Award recognizes an Arizona REALTOR® who best exemplifies the AAR vision: REALTOR®… the best prepared real estate practitioner with the highest standards. Participation in association activities is not a significant criterion for this honor. This recognition emphasizes quality service to the ultimate association customer: the buying and selling public. Members do not apply for this award. To be considered, members are recommended to the president of AAR for consideration, and honorees are selected annually by AAR leadership.”

HISTORY

In 2005, the award was given to Ty Strout, RCE, CAE, CEO of the Arizona Association of REALTORS® in recognition of his vision, leadership and integrity in leading the Arizona Association of REALTORS®. In honor of his commitment to the association’s vision, the name of the award was changed to the Tyler Strout Vision Award.

Displaying blog entries 1-6 of 6

Contact Information

The Gary Nelson Group
Realty Executives of Flagsaff
15 E. Cherry Ave. Suite 101
Flagstaff AZ 86001
Direct: 928-225-3510
Office: 928-773-9300
Fax: 928-774-1102