BlogArizona Category: Buying Commercial PropertyThis page contains all BlogArizona posts related to Buying Commercial Property. Read a specific post by clicking on a title below, or scroll further down the page to read through all posts in this category.Sunday, April 06, 2008Selling a Home in AZ and Not Sure What to Disclose to the Buyer?I recently received an email with this question about disclosure of sex offenders when selling a home in Arizona:
First, I have to say that I'm not an attorney so I can only address this question in the general sense and from a Realtor's perspective. So do not consider my answer as legal advice, and ALWAYS consult an attorney for questions about your own specific situation. Second, don't believe everything you read in the mainstream media! Of course, you can't believe everything you read on the internet either. But I do know bloggers who are much more thorough about checking facts than some of the major media outlets. Arizona legislators are constantly updating our laws, and real estate disclosure is a hot topic. However, I don't think a change to the law is the source of confusion in this case. From my experience, I'd say all of the sources quoted are technically correct. I think this is the USA Today article that was referenced in the question, here's the AZ real estate attorney who was mentioned, and here's the Arizona Association of Realtors (AAR) Residential Seller Advisory form. The AAR Residential Seller Advisory does indeed state, "By law, sellers are not obligated to disclose that the property is or has been... located in the vicinity of a sex offender." But if you keep reading, it goes on to say, "However, the law does not protect a seller who makes an intentional misrepresentation." And then the top of the next page says, "Sellers are required by law to disclose all known material (important) facts about the Property to the Buyer". So what is considered to be "material" or "important"? Generally, anything that may affect a buyer's decision to buy is definitely material and should be disclosed. To be safe, I tell sellers that EVERYTHING is material to the buyer. At least, a seller has to assume that everything is material because they don't know what's material to the buyer. Every buyer is different... what seems minor and unimportant to the seller may very well be minor and unimportant to one buyer. However, that same item may be extremely important, and thus material, to another buyer. If it ends up in front of a judge, I would guess that anything and everything the buyers find out later, that the seller knew and didn't disclose, will be considered material! The AAR Residential Seller Advisory reinforces this idea with it's heading, "When in doubt, disclose!". If the sellers know there's a sex offender living down the street and the buyers ask, I would tell the seller to disclose it, in writing, to protect both the sellers and the buyers. Even if the buyers don't ask, I would still tell the sellers to disclose it, in writing. It doesn't matter if the buyers are older or don't have kids. You cannot assume they don't care about a sex offender living nearby. They may have grandchildren who visit and play outside, or friends that come over and bring their kids. My point is, you shouldn't try to get inside the buyer's head and figure out what is, or is not material. Only the buyer can decide that. Just disclose it and let the buyers make that call... whether it's a maintenance problem, or something you know about the neighbors, homeowners association, schools, etc. Disclose whatever you know. I know many people are reading this thinking, "Disclose it, even if it they don't ask? That would probably kill the deal." Well, it's better to kill the deal now than end up in court later. And actually, being honest from the beginning by making full disclosure reduces the risk of a last minute deal-breaker, 29 days into the transaction. As a seller, if the deal isn't going to close, don't you want to know right away instead of AFTER your house has been off the market for a month? Full disclosure isn't just for sellers either. It's a two-way street. Buyers should also disclose anything that might be material to the sellers, like if they know something which may affect their ability to qualify for a mortgage. The "golden rule" can (and should) be applied to real estate transactions, just like anything else in life. Every transaction is smoother, less stressful and turns out better in the end if both parties are honest and upfront with each other from the beginning. But buyers, don't be naive! You should NOT rely on the sellers to disclose all material facts about the property you're buying. Even if the sellers are honest people, they may not know all the material facts. So buyers must also do their "due diligence" by investigating everything that's important to them. The AZ Department of Real Estate advises buyers to read and investigate the items on this checklist for Arizona home buyers. While the law may require certain disclosures, "Buyer Beware" is a reality!
Posted by Shannon Hubbard, Arizona Real Estate Agent on April 6, 2008 | Permalink | Comments (8) | TrackBack Monday, February 25, 2008AZ Home Inspector Licensing Board going away?Arizona Home Inspectors need your help! Arizona's home inspector licensing agency, the AZ Board of Technical Registration (BTR) is inefficient, expensive and allegedly corrupt. In fact, Arizona lawmakers are thinking about eliminating the BTR altogether (SB1171), and moving home inspector licensing to the Registrar of Contractors (ROC). As most of my readers already know, I'm co-owner of Homewerx Home Inspections, one of the Valley's leading home inspection companies since 1999. As such, I sincerely appreciate your support on this matter. While I do NOT support eliminating the BTR, it definitely needs some change - starting at the top with the guy in charge. It's unfortunate, but AZ home inspector licensing seems to be alot more about money and power and industry organizations than it is about quality home inspections. There are some real problems and conflicts of interest that have just been ignored at the BTR, and we all know that problems don't just go away when they're ignored...they get worse! Now, the BTR is so inefficient and lacking accountability that I think the whole idea of protecting homebuyers got lost somewhere along the line. Home Inspectors don't trust the BTR, consumers kind of laugh at them. And the cost of inefficient government regulation is real... look at how much it costs to be a home inspector in Arizona compared to other professionals licensed by the same agency. And look at how much Arizona home inspectors pay compared to home inspectors in other states. "Wow" is all I can say! Home Inspection companies inevitably pass these ridiculous costs onto the homebuying consumer, who is already strapped for cash in case the BTR hasn't heard. And a home inspection is an out-of-pocket expense - those are the ones that really hurt and will be a deal-breaker alot quicker than borrowed money will. So please Help support the 'little guy', and you will help keep Arizona home inspection prices down plus eliminate government incompetence at the same time. Thank you again for your support!
Posted by Shannon Hubbard, Arizona Real Estate Agent on February 25, 2008 | Permalink | Comments (2) | TrackBack Tuesday, January 22, 2008Subprime Mortgage Problem Goes Global: Federal Reserve Makes 'Emergency' Interest Rate CutBen Bernanke and the Federal Reserve made an 'emergency' rate cut to the key interest rate this morning, rather than waiting until their next planned meeting at the end of January. The .75 basis point reduction in interest rates comes amid global economic fears. The Asian markets have been down sharply in recent days, and European markets have followed (although they're not down as much as the Asian markets). The fear is that America's subprime mortgage problem is now damaging the global economy. Fortunately, the US stock markets were not trading yesterday due to the Martin Luther King holiday. But DOW futures were down over 500 points until the announcement of the Fed's rate cut early this morning. The DOW (futures) has since recovered by a couple hundred points, but it still looks like today will be a bad day for the stock market (which is already down for the year). I guess we'll see when the markets open in a few minutes. Just remember, it's only a paper loss until you cash out!
Posted by Shannon Hubbard, Arizona Real Estate Agent on January 22, 2008 | Permalink | Comments (6) | TrackBack Friday, January 18, 2008AZ Termite Inspector Licensing Agency Going Away
Amid allegations of "cronyism, inefficiency, overregulation and instability", the executive director was recently fired by the seven member Commission. In protest, the 3 Commission members who voted against firing the executive director have resigned. A committee of Arizona lawmakers have since voted in favor of, and are introducing a bill to disband the SPCC altogether. Under the new bill, regulation & licensing of pest control professionals, including termite inspectors, will be transferred to the AZ Department of Agriculture. Arizona lawmakers also considered transferring the SPCC's duties to the AZ Registrar of Contractors (ROC) or the AZ Board of Technical Registration (BTR). However, agricultural pest control is already regulated by the AZ Dept. of Agriculture, so they are the most logical choice. Last I heard, the bill was supposed to be introduced in early January when the AZ Legislature reconvened. While I have not officially seen anything stating the bill has been introduced or approved, I was told by one of my State Representatives in early January that the SPCC's duties will be transferring to the AZ Department of Agriculture. I think he told me a time frame, but I don't remember what it was. So it sounds like a pretty done deal, even if it has not been officially approved. AZ Governor Napolitano mentioned late last year that she would consider the recommendation to get rid of the SPCC, and the State Representative I spoke with did not say the SPCC might go away, he said it was going away. Additionally, the SPCC (like all such agencies) is subject to review every ten years. I believe the SPCC's sunset review is due in June of this year, and even in the absence of other legislation, I don't think the SPCC is expected to be re-authorized or renewed. So, the "good ole boy network" at an Arizona licensing agency...could it really happen? Of course, I'm being sarcastic - yes, it really happens and probably more than you'd ever believe. I have personally witnessed the type of abuse of power alleged here at another AZ licensing agency. Luckily, it was not not directed at me personally. However, I would bet that it's much more widespread than the public really knows. That's a real shame since these licensing agencies are intended to protect the public. But when the agency is corrupt, it doesn't protect anybody - it just raises the cost of doing business. And that cost is ultimately passed on to the consumer, which means the licensing agency ends up hurting the very consumers it was supposed to protect. By the way, I want to apologize to my loyal readers for my recent "vacation" from blogging. Between the holidays, visiting relatives and another project I've been working on, the time has just gotten away from me. But I promise to post again soon. In fact, my friend the AZ Mortgage Guru recently sent me a very interesting article, which got me doing some research on another Arizona licensing agency. And what I found is definitely worth coming back to read. So be sure to check back in a few days and read all about it! Related articles:
Posted by Shannon Hubbard, Arizona Real Estate Agent on January 18, 2008 | Permalink | Comments (2) | TrackBack Wednesday, December 12, 2007Fed Lowers Interest Rates Again - Investors UpsetThe Federal Reserve met yesterday and lowered its benchmark interest rate again, in hopes of alleviating some of the economic pain caused by the current mortgage crisis and slow housing market. The federal funds rate was lowered by a quarter point (to 4.25%), and the discount rate was also cut by a quarter point (to 4.75%). The discount rate is the cost of direct loans from the central bank. The federal funds rate is now at its lowest level since January 2006. But apparently the rate cut was not enough to satisfy some Wall Street investors. Since most stock market investors had hoped for a .50% rate cut, many were disappointed by the .25% rate cut. As a result, the Dow Jones dropped about 300 points after the rate cut was announced. Today however, investors seem to have gotten over it since the Dow, NASDAQ and S&P500 are all up quite a bit (so far). Perhaps investors are comforted by the fact that the Fed also indicated a willingness to make additional future rate cuts if necessary. I think Bernanke is just being cautious after seeing his predecessor, Alan Greenspan, criticized for dropping rates too much, too fast. Besides, the most immediate positive effect of a rate cut is not lower mortgage rates, it's the boost it gives to consumer confidence. Therefore, maybe making smaller rate cuts more frequently is a better strategy than making bigger rate cuts all at once. Only time will tell!
Related articles: Posted by Shannon Hubbard, Arizona Real Estate Agent on December 12, 2007 | Permalink | Comments (2) | TrackBack Saturday, December 08, 2007Indoor Air Quality & Pollutants in Your HomeDuring the last 20 years, many homes have been made tighter to conserve energy, to decrease the amount of heated air that leaves the house in winter, and likewise, decrease the amount of cooled air that escapes in the summer. At the same time, of course, there is less fresh, cold air getting into the house in the winter and less fresh hot air entering the house in summer. This may seem like a good idea; it isn't. Because the air inside your house is in an enclosed space, the concentration or level of pollutants can be much greater in the air inside than outside. A tighter house has a lower ventilation rate. As a result of ventilation decreases, the concentration of pollutants inside the home increases. Indoor air pollutants pose the greatest risk to people who are at home the most; babies, children, the elderly and chronically ill. Ironically, these are the very same people who are most susceptible to pollution in the air. Some indoor air pollutants like radon and asbestos are life threatening. While others may not be life threatening, they can make your life miserable causing eye, nose & throat irritation, shortness of breath, dizziness, lethargy, fever and digestive problems to name a few. There are three basic ways to reduce and alleviate indoor air pollution:
There are many different types of indoor air pollutants: the by-products of combustion, including environmental tobacco smoke; respirable suspended particles; carbon monoxide; nitrogen dioxide; volatile organic compounds (VOC's); biologicals; and electromagnetic fields (EMF's). Carbon Monoxide (CO) is a colorless, odorless, tasteless and nonirritating gas that can interfere with the supply of oxygen to the body tissues. Its sources can include unvented kerosene & gas heaters, leaking chimneys & furnaces, car exhaust, gas stoves and tobacco smoke. Volatile Organic Compounds (VOC's) refer to a large number of organic vapors that contaminate the air. It's common for VOC levels to shoot up temporarily, during and following new construction, renovation or refurbishing. Therefore, it's important to increase ventilation as much as possible during and following any renovation. Some VOC's are carcinogenic and there are numerous sources of VOC's including: household products (paints, paint strippers & other solvents); new carpeting, drapes & furnishings; wood preservatives; aerosol sprays; cleansers & disinfectants; moth repellents & air fresheners; stored fuels & car supplies; hobby supplies; dry cleaned clothing; and environmental tobacco smoke. When present indoors, tobacco smoke can be a major source, or significant part of indoor air pollution. Biologicals include things like fungi, molds and dust mites. Higher levels of humidity tend to encourage their growth. The two major actions to control biologicals are controlling the moisture and keeping your home as clean as possible. Electromagnetic Fields (EMF's) are a combination of electric fields and magnetic fields that radiate from electric cables, wires, fixtures and appliances. They include any appliance that either: uses electric bulbs; has an electric motor, such as a refrigerator, freezer, clothes washer, hair dryer, shaver, food mixer, blender, vacuum, etc.; or has an electric heating element, such as a clothes dryer, iron, electric blanket, stove/oven. The data is not conclusive regarding EMF health hazards. It seems to indicate that the most likely health effects of exposure to EMF's would be in the areas of cancer and reproduction. While a cause and effect relationship has yet to be established, a statistical association has emerged between exposure to EMF and cancer risks and reproduction malfunctions.
Here's one (probably unknown) step to control and mitigate EMF in your home: If you have an electric blanket, use it to warm the bed and turn it off before you get into the bed!
Posted by Martin Spilo on December 8, 2007 | Permalink | Comments (2) | TrackBack Friday, December 07, 2007Subprime Mortgage Interest Rate Freeze - Private Sector Solution or Government Bailout?Yesterday, President Bush announced a plan to address the current mortgage crisis. The plan, which includes a 5-year freeze on certain subprime mortgage interest rates, was a result of the Hope Now Alliance. According to the President, "Hope Now is an example of government bringing together members of the private sector to voluntarily address a national challenge without government subsidies and without government mandates". The freeze is not a government mandate - it's an agreement by many mortgage industry leaders to freeze the interest rates on certain subprime mortgages for 5 years. The hope is that during those 5 years, real estate sales and values will increase allowing these borrowers to sell or refinance their homes. Not all mortgage companies are onboard, but many of the major players in the industry are involved. And not all distressed borrowers will benefit from the program. In order to qualify, the borrower must meet the following minimum criteria:
But there's more to the plan than just a subprime rate freeze for a few lucky borrowers. Bush also announced:
Many criticize the President's plan as a "bailout", but the President insists his plan is a private-sector solution. I agree this freeze on interest rates is not a government bailout. And although I'm a real estate agent, I can even applaud the idea of tighter lending standards and a more transparent mortgage industry (but personally I think the 20+ pages of disclosures already given to borrowers is quite sufficient as long as they read them - and adding more disclosures would probably make borrowers even LESS likely to read the fine print). But the FHA Secure program has me totally baffled. I just don't get how helping (risky) borrowers to refinance loans they couldn't afford to begin with is going to help anybody...except the subprime lenders who get to pass these risky loans off to the taxpayers. You see, when these loans get refinanced as FHA loans, they'll be government insured and then the taxpayers will eat the losses when these borrowers foreclose. And many of these borrowers will foreclose eventually - FHA Secure will simply prolong the agony and shift the financial burden of these foreclosures from the subprime lender, to the American taxpayer. I'm especially confused by the idea that FHA Secure is supposed to "enable FHA to be more flexible in how to offset the refinancing". So in other words, our government is planning to help these borrowers by using the very same type of "creative financing" that got these borrowers into trouble in the first place? At least the lenders who originally made these risky loans stood some chance of making a profit. But what do American taxpayers get in return for guaranteeing these risky loans? We get nothing, except possibly higher taxes to pay for the bureaucracy and resulting foreclosures. As far as "reforming FHA" goes, does that mean changing the rules so the government can guarantee even more risky loans? I can definitely agree that maximum FHA loan amounts need to be modernized after the recent run up of real estate prices, but I'm very skeptical of other potential FHA reforms. I also totally disagree that these borrowers who get out of paying part of their mortgage should also get out of paying taxes on the forgiven amounts. If someone gives you free money, the least you can do is pay the taxes on it. If nothing else, these borrowers should be paying a fee to the government for negotiating them such a good deal. And if these borrowers who benefit from the plan are getting tax breaks, who's going to pay for the cost of this mess? Should the 98.5% of American homeowners who are NOT in foreclosure be the ones to pay? Life is not fair, and we have to take the good with the bad. So I guess the term, "lesser of two evils" comes to mind here. I don't feel it's the government's responsibility to help homeowners escape loan payments they agreed to pay, nor is it the government's job to help homeowners keep real estate they can't afford. But I also don't believe in cutting off my nose to spite my face. If the problem is ignored, the mortgage fallout and its affects on both real estate and Wall Street could put the entire U.S. economy into a recession. Obviously, then we would all suffer. I'm generally leery of any government interference in the free market, but the President has negotiated a voluntary plan with leaders of the mortgage industry who realize it's better to get paid less interest on a loan, than to have the loan foreclose and get nothing at all. Quite frankly, I haven't heard any better ideas and while I disagree with parts of the plan, I'm optimistic it will help some borrowers. But more importantly, I think it will improve consumer confidence in both the mortgage industry and the real estate market. The President acknowledges "there is no perfect solution" to the mortgage problem, and this problem will require a multi-faceted solution. I definitely give the President credit for taking action and attempting to resolve the subprime meltdown, especially during this extremely political season when President Bush is being attacked from every direction, for everything he does or says. On a lighter note, when announcing this plan, the President accidentally gave out the wrong phone number for the mortgage help hotline - he even repeated the wrong number twice! You gotta love a guy who has good intentions, but constantly gets tripped up on the little details! The incorrect phone number announced by the President actually belongs to the Freedom Christian Academy in Texas, who were apparently good sports about the mix up! Hopefully, BlogArizona readers don't need to call the mortgage help hotline, but just in case, the correct number is 1-888-995-HOPE.
Related article from August 31, 2007: "President Says Reform FHA & Fannie Mae - Is there a Mortgage Bailout Coming?" Posted by Shannon Hubbard, Arizona Real Estate Agent on December 7, 2007 | Permalink | Comments (4) | TrackBack Thursday, November 15, 2007Is Your AZ Realtor® a CRS, SRES, ABR, GRI, ALC or CIPS?November is Realtor® Designation Awareness Month... I know, I know - as if anybody really cares! But I have actually received emails in the past from home buyers and sellers who've asked me, "What does the ABR after a REALTOR's name mean?". So I thought it might be interesting to blog about the different designations and certifications Realtors® can earn. There are many different designations and certifications awarded by the National Association of Realtors® (NAR) and its nine affiliated Institutes, Societies and Councils. Surprisingly, not all Realtor® designations and certifications are for Realtors® - some are for appraisers, brokerage managers and even office assistants. Here's a summary:
The Arizona Association of Realtors® also recently introduced a program to earn the Certified Risk Management Specialist (CRMS) certification. In addition to the national and local Realtor® associations, there are also other organizations that offer designations and/or certifications for real estate professionals. For example, RealtyU.com offers the following designations:
Some real estate agents and brokers take Realtor® designations very seriously, and are determined to earn as many as possible. Other real estate agents and brokers never earn any. So, should you choose a Realtor® based on their designations and certifications? It certainly doesn't hurt, but I wouldn't make a decision solely on their designations. I've known many extremely knowledgable and experienced real estate agents with no designations at all. On the other hand, I've known some very inexperienced agents with many certifications and designations. Anybody can take a class and pass a test, but there are some tough and important lessons that can only be learned through experience. So if you're impressed by your real estate agent's designations and certifications, be sure to look at what they actually mean. Some designations and certifications are very easy to earn by simply paying a fee and taking a class/test, while others are only awarded to those with significant relevant experience. Now that you understand the meaning of all those 'letters' after your real estate agent's name, I'm sure you'll sleep much better at night ... I know I will!
Posted by Shannon Hubbard, Arizona Real Estate Agent on November 15, 2007 | Permalink | Comments (0) | TrackBack Tuesday, October 30, 2007Low Interest Rates + Lower Prices + High Inventory = Time to Buy Arizona Real EstateMany are waiting with anticipation as the Federal Reserve meets (today and tomorrow) to discuss a A lower Federal funds rate won't immediately affect mortgage rates, but it will (almost) immediately boost consumer confidence, and eventually it will lower mortgage rates. Those homeowners with Adjustable Rate Mortgages (ARMs) will get some relief as their interest rates adjust, hopefully preventing some foreclosures. We're nearing the bottom of a slow real estate market, with high inventory (supply) and lower than normal demand. While some people are scared by the current real estate market, it's actually an incredible buyer's market with great deals just waiting to be made. If you're thinking of buying real estate, the rest of this year is going to be perfect buying time - crazy deals and incentives are being offered. After mortgage interest rates have decreased and the real estate market begins its recovery is NOT the time you can make your best deals. If you're buying for the long term (3 or more years), you really don't need to worry about buying at the very bottom of the market. But you do want to buy before the market starts to recover since that's when the best deals can be negotiated. The real estate market is cyclic - it goes up and down. Here's why you should buy real estate before the market starts to recover (I stole this explanation from my friend and fellow Arizona Realtor, David Thomas, who read it on a blog!). Think of the real estate market as a "V", the current trend is definitely downward, toward the bottom of the "V". We don't know exactly how close we are to the bottom of the "V" right now, but most think we're pretty close. As we approach the bottom, inventory is at its highest and sellers are most willing to negotiate. But once the market reaches the bottom and the upward trend begins, deals begin to diminish. Inventory (choice) decreases, prices begin to increase and incentives go away. As the market recovers, interest rates are also likely to increase which will make it even more expensive to buy a home. So when do you want to buy - near (but before) the bottom? Or do you try to wait until the very bottom and take a chance that you'll catch the upward trend instead? It's impossible to know exactly where the bottom of that trend is, until after the upward trend begins. So if you wait, you might wait too long. By the way, don't believe anybody that claims to know exactly where the bottom of that "V" is!
Posted by Shannon Hubbard, Arizona Real Estate Agent on October 30, 2007 | Permalink | Comments (4) | TrackBack Monday, October 29, 2007Inspecting an Asphalt Shingle Roof in Phoenix, AZTo the untrained eye, the roof on this home looks pretty good. While most roofs have To an experienced Home Inspector, this roof does not look good at all. Although it's a fairly new roof, it was not properly installed. The nails used to attach the asphalt shingles to the house are too short. Therefore, the nails are starting to come out and the shingles are not securely attached. So this roof is really just waiting for the right wind storm to come along and blow it off the house. Additionally, as the nails come out, they leave damage (holes) behind where water can penetrate the shingles and cause damage to the materials underneath. Be sure to have a home inspection before you buy or build a house. Don't inspect it yourself or have a friend who's handy look it over. Call someone who inspects houses every day and knows exactly what to look for. Call a licensed AZ Home Inspector.
Posted by Scott Hubbard, Arizona Home Inspector on October 29, 2007 | Permalink | Comments (0) | TrackBack Thursday, September 20, 2007Do I Need Title Insurance When Buying a Home?Whether you know it or not, when you purchase a home you are required to obtain title insurance. This insurance pro |
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If you haven't already heard, the licensing agency for 
possible cut in interest rates. After lowering rates a half a point in September, the Fed is still concerned about the 'credit crunch' and a slower than normal housing market. However, with extremely high oil prices, the Fed is also concerned about inflation (which could prevent them from lowering interest rates). But most analysts think the slow housing market and lending problems are currently a bigger concern than inflation, and most are predicting a quarter (.25) point reduction in interest rates tomorrow.
