When it comes to selling a home, almost every Phoenix & Scottsdale seller’s goal is to eek out as much money from a buyer as humanly possible. Not that I blame them, but that desire to maximize profits can sometimes sabotage the primary goal.

For the last ~6 mos, I’ve watched asking prices, not home values, increase at a dramatic pace. Conversely, the number of price reductions, and days on market have also increased. The peak for the median sales price in Scottsdale, from the start of January 2013 came in June of 2013 at $254,000. Today, in February 2014, that same stat is $220,000; a reduction of 13.4%. What gives?! FYI- the “median” is defined as a value in an ordered set of values below and above which there is an equal number of values or which is the arithmetic mean of the two middle values if there is no one middle number. This is not the average. The reason we don’t use the average is that high or low sales can skew this figure and make the statistic less meaningful.

While, the media (nationally and here in the Valley of the Sun), until very recently boasted double-digit appreciation gains, not much attention was given to buyer demand and the actual supply of inventory, or actual homes on the market. Unfortunately, demand has declined steadily and supply has increased steadily, which if you are familiar with the basics of economics, does not do so well for home values.

What’s a seller to do?? Don’t despair, it just means the days of “try it, you never know” are probably not your best option. Sure, there will be sellers who will still follow this line of thinking, but it doesn’t usually pan out so well for them. Pricing your home correctly is more than deciding whether the last 3-digits of the price should be $XXX,000, $XXX,900 or $X,999… (in my opinion these options usually make zero difference).

Instead, follow these suggestions for a more expedient sale:

 1- Find a qualified REALTOR® who has applicable experience in your neighborhood (Arcadia, DC Ranch, McCormick Ranch, Paradise Valley, etc.) to represent you through the sale process! I know many of you will be prepared to represent yourself, but what you don’t know can hurt you. Decide whether you want to find out the hard way what our work entails. While you can obtain a real estate attorney to guide you, they may not necessarily be able to navigate you through the entire process (i.e. pricing, marketing, home inspection, transition out, etc.).

2- Determine the market value of your home and price it about 5-10% above that. The definition of “market value” is what a buyer is willing to pay and a seller is willing to accept, not under duress. The way to find the market value of your home is not by going to Zillow.com and seeing what your Zestimate® is. Contact a qualified realtor® (me!) to look up recent comparable sales (called “comps”), not the prices sellers are asking for their homes today. They are not one and the same.

A comparable sale typically went under contract within the last 3-4 months, is within about 1-1.5MI of your home, is ~+/- 10% of your interior square footage, is similarly finished with respect to the quality of construction, flooring, kitchen, baths,  and has a similar # of bedrooms/baths, etc. It should also be on a comparably sized lot. You won’t want to compare a home on a 1/4AC lot to a home on a full AC, unless you know how to properly make adjustments.

Pricing your home above that 5-10% range might get you a higher price, but if that buyer is using financing, remember it still has to appraise!

3- Share every improvement you know of in your home with your REALTOR®, including the costs you paid for said improvements. The small upgrades you made on insulation, or 2x6 construction, are not visible to the naked eye, but can add a decent amount to the value of your home. Have a smart home system that ties into your alarm and can be controlled with your cell phone? For the technophile buyer, this can be huge! The same goes for your soft water system, upgraded A/C units or hot water heaters that were recently replaced, etc.

I personally believe that listing a home with this list of improvements adds tangibility to the value of a home for a buyer and have been able to add 10’s of thousands of dollars to my sellers’ contract sales prices by documenting either improvements or personal items (or both!).

4- Share every drawback to your home. Not disclosing and factoring these drawbacks to your home when setting the initial price will most surely lead to disappointment (and potentially a lawsuit too!).  Some of these drawbacks would include having a home: in a superfund clean up site area (toxic waste), in the proximity of an airport, in an HOA that is going through litigation, a previous flood or fire (yes, these things can be discovered by the buyer without you sharing them), on a septic system in an area that is primarily served by a city sewer, and deferred maintenance, especially if it is not obvious (again, HVAC systems, roofs and other big ticket items).

5- Get pricing feedback from showing REALTORs®. If a REALTOR® is working with a serious buyer, they will usually have some knowledge of how well a home is priced. If they feel a home is priced incorrectly, these REALTORs® will usually let you know. The key is to actually follow up and ask for it.

6- Stay on top of the competition. Did that home down the street from you that’s the same model just sell? You will want to know how much it sold for and whether there were concessions from the seller to the buyer to get the sale done.  Did 2 other competing listings just lower their prices leaving your home as the most expensive option, but not necessarily the nicest? It’s time to take that into consideration. The newer the sale, and the more similar it is to your home, the more relevant it is to pricing your home.

Buyers are ALWAYS looking for the value proposition. I’ve never had a buyer come to me and say, “I don’t care what it costs. I can pay for it.”  Whether it was a first-time, sub-$100,000 buyer or an astute investor, seeking a multi-million dollar home they’ve usually said, “I/we want a good deal”.

Your REALTOR® should be watching the market for you. If he or she doesn’t, maybe they are not focused on selling homes- they just list them. I’ve personally set receptive clients up on automated searches while their home was listed so they would be aware of every new, competing listing that came on the market or price change. Some of those clients came to me and said, “MLS#:XXXXXXX just lowered their price, should we?”

7- Make adjustments to the price. While it makes more sense to price close to market value the first time than it does to list high and reduce, making no changes after you’ve priced your home incorrectly is a grave mistake.  Buyer won’t usually fault a seller for reducing the price quickly.  However,  a buyer may regard a seller who has never made a price correction throughout the course of a listing, even if the home is clearly overpriced, as “not serious” or “out of touch” and just disregard the home all together.

And though this makes me nuts, many buyers are not willing to offer just what they are willing to pay. Instead, they wait until a home is within a comfortable striking range before pulling the trigger. This completely defies logic in my opinion, but it’s reality.

8- Repeat steps 5-7 every 3-4 wks, again and again until sold or until you are no longer willing to sell.

 I truly believe that you will know if a home is priced well in a few ways- there are multiple showings within a given period of time and offers come in.  If there is no other major objection to contend with (which again can usually be addressed with the price), this will hold true. If 2-3 weeks have gone buy without a showing and even more time has elapsed without an offer, it’s usually time to make a change. Seasonality can have some impact, but if it’s spring, the peak for buying and selling activity, this usually will hold true.

While you can offer REALTOR® bonuses, buyer incentives and change the pictures and listing details a million times, changing the price to be in line with the current market value is usually the most effective solution. If you’d like more detail about any of this info I shared, remember, I’m only a phone call away!

Would you like some more info about selling your home? Please visit my "Seller's" page.

Related articles:

Small Improvements= Big Impact on Your Bottom Line

What to Expect in Spring 2014

5 "Must Do's" to Get Top Value for Your Home Appraisal

It’s been a little over a week since I suggested that the seller’s market we’ve experienced in Metro Phoenix for the last ~2years might be cooling. As of yesterday, Michael Orr, Director of the Real Estate Center at the W.P. Carey School of Business at ASU and the guru behind all real estate stats in our area, has declared, “We are now in a confirmed buyer's market with the Cromford® Market Index dropping below 90. Demand is weak with the Cromford® Demand Index at 78.7, its lowest level since May 2008.”  He goes on to say, “Supply is not high, but it is growing fast and the Cromford® Supply Index stands at 87.7, its highest level since July 2011.”

This means, buyers will have some room to breath a little easier and sweat a little less this spring.  Last year, if you didn’t come prepared with a fully complete AAR Prequal letter (not the one your bank gives you which most of the time isn’t worth the paper it’s written on), a statement showing that you had your down payment ready and weren’t ready to move on a dime, it often meant you sat on the sidelines watching all the pretty houses go by.

This year, if you’re a buyer, you may just be in the driver’s seat. So, here are some tips to get the most of this ride:

1- STILL have your prequal letter ready- Just because there may be fewer people to compete with, do you really want to risk the chance that your dream home might get stolen away by the other buyer, who really did have all of their ducks in a row? Besides that, even if there is no one else, nothing is a bigger letdown than getting all excited about finally being able buying your home in DC Ranch just to discover you really can’t afford to buy it after all…

 2- Ask for the kitchen sink- Don’t be afraid to ask for personal items like furniture, the fridge, washer/dryer, patio furniture, wall-mounted TVs or A/V equipment, etc. Be sure to include language in the contract to suggest that said items are included with the sale at no additional cost.  Just know that if you’re using financing, the appraised value will have to be for the full purchase price.

Last year, I listed a gorgeous condo in a high-rise in Mid-town Phoenix. My seller really wanted to sell, but due to the amount he owed, he couldn’t sell below $X. When a buyer came along, he just wanted a deal, even though we were priced a bit on the high side.

The compromise? The out-of-state buyer would have had to furnish the place from afar and wasn’t thrilled about making the effort, so he asked my seller to include the living, dining & bedroom(s) furniture in the sale.  My seller who was already lukewarm on his mostly Ikea furniture purchases and had a love-hate relationship with his living room couch was more-than-willing to comply.

 3- Ask the Seller to help pay for your closing costs- If you’re a first time buyer and are stretching to be able to afford a home, asking for this money may be the difference between eating ramen noodles and tuna fish sandwiches for a few months after closing and having a reserve cushion to sit on.

Talk with your lender about what these actual costs might be and make sure that you do not exceed the total amount (excluding your down payment). If you do, you might forfeit the difference between the negotiated amount and the amount of the costs, which is a huge bummer to give up free money.

Sadly, I recently watched a buyer in Arcadia do this. We discussed the total cost of obtaining financing and asked the lender to detail these costs before we negotiated a seller credit towards the buyer’s closing costs. He didn’t have the time to verify all the costs prior to negotiating the credit and was willing to walk away from the difference as a result, but it was still difficult for me to watch knowing it was easy to detail this amount and thus, completely preventable.

 4- Ask the seller to front the appraisal cost- This can be a tricky one to use, but is a good one to have in your back pocket in a market where the asking price may not be in line with market values. I’ve had buyers with appraisal problems a few times in the last 6 mos. Fortunately, the sellers were willing to reduce the price.

However, not every seller is willing to do a price reduction.  While you won’t get stuck buying a home for more than it’s worth, you may have to eat the cost of the appraisal, which can range from $300-500 (or more!). It really stinks when you know you will turn around and spend money again for the next home’s inspections and appraisal.

By asking the seller to front the money for the appraisal and offering to reimburse him/her upon the home appraising for at least the contract sales price, you give yourself a little piece of mind that you aren’t throwing away good money and you really make the seller “put their money where their mouth is”.

I did this once on the sale of my own home in NE Phoenix. I was confident that the home would appraise, but the buyer who had been burned twice prior was not willing to risk paying for a third appraisal to have issues. It worked out just fine, when the home was appraised and the buyer felt as though he no longer had to keep throwing money away.

 5- Ask for seller repairs in the initial offer- While it’s pretty customary for some repairs to be requested/completed after the home inspection turns up deficiencies, asking for repairs or improvements that you know need to be made up front can defray the cost of making the repair down the road.

Think along the lines of repainting the interior, replacing flooring, changing countertops, replastering pools and things that are obviously out-of-date, eyesores or deferred maintenance. A word of caution, items that still work or that are old (like heating/cooling systems, roofs) can be a slippery slope. Just because it’s old, doesn’t mean it doesn’t work and many sellers who swear that these things are maintained will fight tooth and nail not to have to touch them.

One way to get the seller to agree to make these repairs? Include estimates- actual costs for the work to be done and include the specifics of what you want. Sellers who have access to a home equity line or cash on hand may be able to make these repairs pretty easily. Ask that they be completed shortly before close of escrow, to give the seller piece of mind. Some repairs, like termite treatments, may be able to be billed directly to escrow so the seller never has to make a payment- the cost is taken directly from the sale profits.

 6- Don’t be afraid to move on to the next home- Many sellers are still uninformed about the recent changes in our market. While you may LOVE that home and can envision weekend parties and holiday dinners there, sometimes sellers aren’t in the right mind to actually sell their home. When this happens, instead of succumbing to ridiculous terms, it's better to just find another, and trust me, there always is another.

It just may not be worth the brain damage to buy a home from someone who is truly not prepared to sell for a reasonable amount or reasonable terms. Don’t threaten to walk-away and keep hanging on- make good on your promise.  You never know- that seller just may come calling again…

While all of these tips are helpful to make the most of your home purchase, you still want to be informed about what’s going on in the market and in your neighborhood with statistics (see my Market Stats page for the latest from our MLS) and have good representation. I’ve seen a lot and love lending wisdom to my buyers. Remember, I’m only a phone call away when you need me! Happy home buying!

The last 2 years, 2012 & 2013 were much better years than sellers had seen since the housing bust. While multiple offers and sales for over list price were common even though we hadn't regained all the ground we'd lost since ~2006, sellers who had been watching from the sidelines had the opportunity to sell and move on.

New data signals those seller- slanted days may be winding down. According to the folks at the Cromford Report, our area "go to" for all stats real estate, the number of days on market it took before a seller got a contract that resulted in a sale, increased from 59 days in September to 77 days as of Monday, 1/27/14.

Before you sellers start getting anxious and outright bearish, it may be that we are returning to... gasp... a "Balanced" or normal market. With as much turmoil as we've seen in the last decade, we're seeing pace and pricing that is more commensurate with what we saw in ~2003 or 2004. Many of the areas of the valley have already returned to a balanced market and in some cases we're seeing a buyer's market again. As of today, the only major cities that appears to still be able to boast a seller's market (on Cromford Market index of over 100) are Sun Lakes (117.3), Chandler (113.9), Anthem (112.6), Paradise Valley (108), Sun City West (108) & Avondale (105).

That's OK... It means that instead of getting to call all the shots or at the other end of the pendulum taking whatever you can get. Both buyers and sellers will have to negotiate for what they want.  Listings may sit on the market a little longer. You may have to put a little elbow grease into your home before you list it to leave a lasting impression with buyers. You may have to court your potential buyers, but this might really be an end to the madness and a return to a little bit of decency. While it may take a little more effort, that's still a good thing.

Related Articles: Small Improvements= Big Impact on Your Bottom Line

I hate standing over a pot... ALL DAY. If you like chili, but don't want the wait, try this one. My family loves it and asks for more. 15min and done!

Taken loosely from Ortega's Quick & Easy Recipe:  (I apologize in advance because I don't measure ingredients- just feel it out and taste/add till it's *right*!)

Ingredients:

• ~1lb of Ground Beef (I like 15% fat for better flavor)
• 2 cans (~15oz) of red kidney beans (don't drain!)
• 1 jar (~16 oz) of your favorite salsa
• 2/3 cup of water
• a couple of TBSP chili powder
• maybe another TBSP of cumin
• Salt & Pepper to taste
• 1-2 TSP Oregano
• 2-3 cloves of chopped garlic
• Sour cream to serve
• Shredded cheddar or Mexican cheese blend to serve
• Chopped cilantro (optional, but it's yummy!)
• GOOD tortilla chips (our current favorites are Xochitl Stone Ground or My Nana's Chips)

Time to prepare: ~20 min

Serves: I'm not sure how many it serves, but it cooks fast enough that you can make it again! Seriously though, it feeds our family of 2 adults, 2 school-age kids (& a taste for the baby) and usually enough for a bowl or 2 left over for lunch the next day. So, maybe double or triple it if you're having a party.

I really hate using 10 pots to make something that fits in one so I use my anodized stock pot to brown the beef- no additional oil needed. While browning, add some pepper to flavor it. When the beef is no longer pink add the kidney beans (juice and all), the water & the salsa. Stir it up!

Now, add your spices- Chili powder, cumin, salt, pepper (taste before you add), oregano and garlic. Stir it and taste. Add whatever you think is missing- more spice, hot sauce, kitchen sink... Then, cover it and simmer for 15 min. Voila! It's done!

Serve it right away with chips, sour cream, cheese & cilantro.  :)

Tip: this also works great for those fairly often "Crap! I need to make dinner fast!" nights as long as you keep most of the ingredients on hand.

Plan on selling your home this spring in the Valley of the Sun?

After a year or 2 of record low inventory, things are changing. Namely, more people are deciding the time is right to sell their home too. With a myriad of new listings coming on the market, how do you make YOUR home stand out against the competition?  There are lots of ways to do it. You can refresh your home with something as simple as a new coat of paint (in or outside) or you can take on a simple remodel to appeal to buyers wishes and wants.

After the housing crash put tens of thousands of homes in much less than perfect condition on the market, buyers want more. Those sitting on the sidelines have been watching HGTV for the past 5 years watching "Love it or List It", "The Property Brothers" or "House Hunters". As exciting as all the remodeling projects look, the reality is that the majority of buyers though they realize the value in home improvement, neither have the time, nor the money to really tackle those projects themselves. So, the home that has as many of the features in their bucket list as they can get, is usually the winner.  The practical side of it is that it costs a lot less to finance $10-50K of improvements in a first mortgage than it does to save that money or borrow it after the fact.

What's an informed seller to do? Make some improvements. Here are some examples of homes I've listed and sold with improvements. Take a look at the "before and afters" and decide for yourself:

In June of 2007, I listed a pretty updated home with craftsman elements on a larger lot in Scottsdale's 85254 zip code.

While there were lots of things to love, like a remodeled kitchen, 1/3AC lot with a pool and a charming rear yard complete with a 3-tier fountain, most buyers just didn't love the paint:

My client loved the self-expression in her home, but after months of feedback saying repeatedly that buyers couldn't get over the myriad of colors (even with me photo-shopping my pictures trying to "plant a seed" of what the home could look like), I convinced her to spend $2100 to repaint them:

It was still tough to sell the home in a declining market, buy we succeeded not too much longer after repainting. It was just much easier to convince a buyer after the primary objection had been removed. And even though paint is really easy to remedy, you'd be surprised at the number of buyers who are so blinded by bad paint that they can't see anything else the home might have to offer. Mind you today, there is a whole new palette of neutrals that is far beyond the tan and beige that has dominated our market for a long time.  Grays, putties & shades of white are extremely easy to match and have taken new life in our marketplace. Here is some inspiration: Benjamin Moore- Color Trends 2014

In 2009 as the housing crash was well under way, I listed my own home in a very popular area of NE Phoenix (85028).

We spent $4,000 to repaint/repair a few walls & ceilings, add some new appliances, some more landscape rock to fill in thin areas and new recessed (indoor) & landscape (outdoor) lighting. I had no idea whether it would work, but at the end of the day, if it didn't sell, I knew I'd like living in my own home a whole lot more.

We cranked up the water on our sprinklers, added a few tons of landscape rock and replaced the dated and broken landscape lights & post lights.

This L-shaped hallway felt like a dungeon even with 2 floor lights (very mid-80's) and it was nearly impossible to see into what was actually a lot of hall closet storage, so we added 3 recessed lights and a mirror at the end of it to reflect the new found light and added a few pictures to tie it all together.

In the master bath, we primered our dingy white sink vanity and painted on a coat of glossy white to the cabinet base and the trim around the mirror. I don't think we even changed the hardware and note the still-pretty-ugly cultured marble top which now contrasted with the white kind of looked like travertine (kinda). Finally, we spent a modest few hundred dollars for a stager to come in and add/remove a few items and spice up the overall decor (yes, you don't have to spend thousands on staging your home when it's already furnished).

The results you ask? We sold our home in 4 days (June 2009). The "For Sale" sign never made it up. The first buyers that saw it stayed over an hour and loved it. We ultimately sold our house for $20K more than we bought it for in August 2004. We could have eeked out another $10K from our buyers, but we had no house to move to.  So I wrote in contingencies giving us the right cancel the contract if we didn't have another home to close by an agreed upon date, which the buyers kindly extended... twice for a total period of about 45 days!  The convenience factor of that alone was worth it to us and we were able to complete the sale without a hitch.

In 2010, at what we thought was the height of the crash, I helped an investor purchase an absolutely disgusting bank-owned property in Arcadia Lite (Phoenix, 85018) that we aptly nicknamed the "Dog House" because of the smell and various other attributes.

My client spent $70K to renovate this home before putting it on the market about 7 months later. He replaced the roof, gutted the home back to the studs and had a 200SF addition permitted to increase the size of the home. When we listed it, the number one complaint? The kitchen. See for yourself.

It  was all brand new, but what buyers hated was it was boring... nothing really to look at. Natural maple cabinets, laminate counters, no backsplash. There was nothing that made anyone want to stay in there for any period of time or rush out and tell their friends all about.

Let's face it. Kitchens and baths sell homes. If they don't sell them, they can hurt the sale of a home because they are some of the more expensive items to fix with home renovations. After much feedback from buyers that the kitchen was ugly and pleading with my investor to make some specific changes, $2000 later, here's what we had:

We added crown molding to the cabinet uppers, sprayed them with a few coats of white paint, added cabinet hardware and installed quartz counter tops.

Which kitchen would you rather have?

We actually got an offer shortly after this, but my client ultimately decided to rent it for 2 years before making a mint on it at the end of 2013.

(I do have additional examples of what a coat of paint can do to cabinets and how it can dramatically change the look of a kitchen or bathroom- I'm happy to share them, upon request.)

Some other clients bought a home in NE Phoenix mountain preserve neighborhood (85028) when they relocated here from San Diego for work in the spring of 2009.

A year later in 2010, they had to relocate AGAIN to the bay area. The market was still pretty soft, but they had to minimize the loss for holding the home for such a short period of time given the costs of moving and selling expenses as possible to justify the move back across state lines. Even though an unexpected pregnancy kept them from making any inside improvements, the interior of the home was in pretty good shape.  However, their backyard was very neglected. It was essentially a giant dust bowl that their adorable dog, Bitsy, had a blast in.

Knowing it would be a huge selling point for a potential buyer, I convinced them to spend $1500 to resod their back yard. Reluctantly they agreed.

Here's the result:

I sold it in 19 days for only $10K less than they had paid for it a year earlier even though the market continued to decline. Considering we were mid-housing crash, they were happy to keep their losses low.

I have many more examples where other clients did the same thing with dramatic before and afters. The bottom line is, it DOES pay to improve your home before you sell it in any market. BUT I don't always recommend making lots of improvements. There are situations that warrant doing nothing at all. In the fall of 2012, I had a client who had a gorgeous little home in the heart of Scottsdale (85250) that was in great shape. She wanted to swap out her existing stainless steel kitchen appliances and front loading washer/dryer with newer models to make it shine even more. I talked her out of it.  The impact would have been minimal and the cost was thousands of dollars to accomplish. Good thing we didn't- I was able to sell it in 20 days and we closed with 96% of the original list price. I actually believe the buyer would have paid more for it, but my client, an extremely generous woman who was just eager to move on, simply chose not to push the envelope.

It makes sense to consult your REALTOR® (me!) prior to listing. This way, you will determine which features buyers want, and determine which improvements will bring the biggest bank for your buck.  I'm only a phone call away and can help you navigate this too!

Related Articles:

8 Steps to Price Your Home For a Quick Sale

5 “MUST DO’s” to Get Top Value for Your Home Appraisal

8 “Must Do’s” to Sell Your Home Now

Anyone who knows me knows I'm no product girl. In fact, I rarely mix business with pleasure, or beauty or... well, you follow me. But, anyone who lives in the Valley of the Sun knows that at some point or points during the year, it gets so dry that dry hands, faces, skin, lips (insert any body part, or furniture for that matter) will dry out and we could all benefit from a few inexpensive ways to stay hydrated aside from guzzling gallons of water, having a water softener or humidifier (or both!) and taking stock in a lotion company.

My beauty regime consists primarily of products that you can find at Walgreens. After a particularly dry spring, we're about .75in behind in rainfall & humidity is still low.  I think I've maxed out on the benefits of my drug store face creams. I've woken up coughing, completely stuffy or with a completely parched mouth every morning or in the middle of the night for about a month now and I'm finally to the point that no matter what I eat drink or put on my face, I can't get my lips to stop feeling rough dry and like I've walked through the desert all day. OK- so I get it. I do walk through a desert all day, but it's the Sonoran Desert, not the Sahara, for goodness sakes!  My lips are so chapped, I haven't been able to wear lipstick for about a week now.

My darling husband did agree finally agree that my lips were rough after he assured me I was making a big deal out of nothing. So, I set off to my bathroom to find what few products I had might do something to help. After finding something with pineapple enzyme that I seemed to recall had salicylic acid, I read the label (of about 5 vague lines) to make sure I wouldn't poison myself and rubbed some on. After about 30 seconds, I got maybe a few flakes and it stopped. By this point, I was trying to keep the goop from going in my mouth while maintaining a vigorous rub to slough off as much dry skin as I could.  Then, I washed off the stuff to reveal my handy work. It looked... the same, minus a few more flakes.

So I set off to the wonderful world of Google to see what I could rustle up. Given that it was about 10:30 at night and Sephora, Origins and all the other department stores wouldn't be an option, I looked for the DIY, homemade options to see what I could find. After praying I wouldn't be forced to procure items like jojoba oil, witch hazel or lord knows what other random, granola ingredients the earth mamas out there use to keep their organically-fed skin ravishing, I was pleased to find not 1, but 2 sites proclaiming that just 3 simple, keep-in-your-pantry ingredients would do.

Honey. Olive Oil. Sugar.

Check, check & check. I had all 3. So I went off to my kitchen to start making my brew. I put a dot of the honey and the olive oil in a little glass bowl and a tiny scoop of sugar (about the same amounts of each- and no, I didn't measure!).

Supposedly, white sugar is a little more exfoliating than it's healthier, brown variety. I stuck my finger in and mixed it up. The honey is very sticky and makes it tough to mix the olive oil in. Just be persistent and you'll get the right consistency.

I gave it a sniff to make sure I was actually willing to try it and headed back to the bathroom. I rubbed a little on my lips and started scrubbing. It felt OK. After about 30 seconds, I stopped. Then I added some more. As it started to pile up on my lips and after some hesitance to taste it, I did. It wasn't bad. It was a little like Mediterranean-flavored, grainy, honey. I kept rubbing until it was all gone. It didn't feel like it was all gone, but I was ready for bed, so I called it a night, slathered some Vaseline on and went to sleep.

In the morning, I woke up parched like I usually do, but my lips no longer hurt and flaked. I got dressed, did my normal routine and tried some lipstick. It didn't look great, but it was better than nothing. Fast forward all day. I haven't reapplied my lipstick, but I'm still not chapped and flaky. I think it worked and that is good enough for me! Give it a whirl and let me know what you think!

36 hour follow up: My lips really are back to normal. Yay!

If you're buying or selling real estate in spring 2014, there are a few things you should know.

Our friends at the Cromford Report recently reported a new low on 1/14/14 of pending listings of -42.1% (year over year). This means the number of homes going under contract is shrinking when you compare it to last year at the same time. Along with this, demand is also at a point lower than we've seen in some time.  Typically, demand spikes in the spring once everyone shakes off the holidays, starts thinking about tax season and planning for the year ahead.

For SELLERS, these details are something to watch for a few reasons. 1) If you have a cream puff home (up to date, well-maintained and in a good area), by putting your home on the market ahead of the usual rush in February and March, you might have less competition. You also want to be really conscious of your list price. Since demand is lower than it's been, pricing competitively (being mindful of the list prices of competing homes and STAYING ON TOP of prices) is really going to be important for you.  If your home is in less than stellar condition or location, really consider making improvements so your home will stand out, or again, adjust the price accordingly. The longer you stay on the market, the more buyers will perceive desperation, whether  you're desperate or not.

If you're a buyer, you also want to pay attention here. Having fewer homes to choose from isn't better for you, but list prices have been coming down, which means that a home that seems out of reach, may actually not be that far off from your reach. The key here is having your agent know the value of the home (not what you want to pay for it) BEFORE you write an offer.

For example, one of my buyers haggled for a week with a seller at the end of November. We settled on a price knowing that the home likely wouldn't appraise. It was a bit of a gamble, but when all was said and done, the home appraised for 3.2% less than the contract sales price and the seller lowered the price. So, if you're financing a home, know you have that safeguard in place. Even if you buy with cash, you still have the right to have an appraisal, you just have to know when you can do it.

Whether an influx of homes appears in the market will be a big piece of the puzzle. The numbers are ticking up steadily, but we have to take things one day at a time. Just know, if you need to make a move to buy or sell a home in the next 30 days, be armed with all of this info, make sure you have a very competent REALTOR® (ME!!) and check back for developments!

If you are like millions of other American's you may have purchased a home during our housing boom with an ARM or adjustable rate mortgage to save a little money on your home payment given the high prices during that time.  This means that your interest rate was fixed for some period of time (1, 3, 5, 7 years) and it resets after that to some new rate. If you have this kind of mortgage and aren't familiar with the details, you should get out a copy of your mortgage or call your bank immediately for the details.

I've had a few clients with their 7-year adjustable mortgage contact me just becoming aware of the details of their rate reset. Especially shocking to some of my clients who may have paid interest-only loans is the sticker shock of the reset.  Many of these loans are based on some interest rate index (i.e. Libor; 12-month LIBOR, currently 0.626%, but has been as high as 0.973% in the last 12 mos) plus some margin (2.5% for example), making your effective new rate 3.13% (2.5%+.63%).

When your rate resets, it will do so again at some fixed period of time- 6 mos and 1 year are common. However, if you paid interest only, you are now paying this new rate which may be higher or lower than your current rate PLUS the principle amount which is likely now due but based on a shorter amortization table (principle & interest based on 23 years as opposed to 30 years for a 7-year ARM).

Run, don't walk, to your file cabinet and pull your deeds of trust (otherwise known as "your loan documents"). OR, if you have no idea where you put them (paperwork schmaperwork, right?), go to your county recorder and search for them there (in Maricopa County: http://recorder.maricopa.gov/recdocdata/getrecdataselect2.aspx). Look closely for your Adjustable Rate Rider and find the terms in there for the following:

• The initial rate
• The first reset date and future dates
• The interest rate index that the rate is based upon, i.e. Libor 1-year rate
• The rate margin ceiling (highest it can be) and floor (lowest it can be)

Then google the current rate. Bankrate.com or the Wall Street Journal (wsj.com) usually have most of indexes and use a mortgage calculator (again Bankrate.com is a great source) and calculate your new payment. If this is still just too much to do, look on your mortgage statement for the contact number for your bank and ask them to help you calculate it. What you find out, may not be anything to fret over but you'll know where you stand and how to plan accordingly.

Either way, plan ahead. Is your new rate better than what you're currently paying? If so, for how long and what is your next step? If it's worse, call your REALTOR® or me and we can see whether you have enough equity in your home to refinance or whether it may be time to make a move if you've been holding off. Based on market gains over the last year or two, you just might be surprised at what your home is worth. Knowledge is power!

If you plan to buy or refinance your home this spring, I applaud you for taking advantage of historically low rates.

Sure, getting the financing may not be as quick or as easy as it once was during the housing boom because lenders and banks who lost billions from borrowers inability to repay loans they could never really afford aren't willing to repeat their mistakes. But, if you CAN afford the loan, there has never been a better time to get a rate that may just get you the home you've always wanted or an even better rate on your existing home.

Today, an informed borrower is an empowered borrower.  Knowing what you will need to provide to start the process and to complete the process or even having familiarity with the process are key to your success.  There are many lender out there who are ready and waiting to take your application and process you, but not all take the skill and care needed to make sure you 1- get the best rate, 2- are utilizing the best loan program for your needs, 3- anticipate potential detours or all out road blocks to prevent you from getting your loan.

Knowing what to seek and steer clear of is half the battle. Here are 12 Tips for Getting the Best Loan for YOU:

Know what you want to accomplish.

Not all loans are created equally, but if you don't know what you want, it's much harder to get the correct one for your needs. Know your short-term goals. Then, know your long-term goals. Someone who plans to spend only 2 years in their home will probably benefit from something very different than what someone who plans to spend the next 30+ years in their home. The same goes for the borrower who just got married and wants to start a family, vs. the borrower whose kids just all went off to college and will be thinking about retiring in the next 10-15 years.

Have the documents you will need to provide to get started.

Every lender has a minimum list of documentation they will need in order to take your application for a home loan. It doesn't matter how much or how little money you make- if you plan to finance a home, this is what lenders need to document your ability to repay a loan. If you're a small business owner, as I am, be prepared to pull together more paper than you would really like to imagine, especially if you take a much smaller payroll than you do in gross business income. The lender will want to know why you claim to make so much money, but show so little of it on paper.  More may be required to go through the complete underwriting process, but be prepared with your:

• 2 most recent years of tax returns (personal & business, if applicable)
• 2 years of most recent W-2s or 1099s, if self-employed
• 60 days of most recent bank statements- if you have lots of accounts and don't want to document every little detail, you might ask the loan officer to give you an amount of funds that you need to show liquid (readily available).
• 2 most recent pay stubs
• You may be asked to provide statements of 401Ks, IRAs and/other securities
• You may be asked to document other sources of income if they are substantial (disability, social security, alimony, child support, etc.)

Know what info you really need to provide to give the loan officer a clear picture of your financial situation.

Being able to dump off a bunch of paperwork to your loan officer is just the tip of the iceberg.  They have your credit report, which also shows your employment history and any/all loans you have outstanding can open a can of worms. Being upfront with him/her can save you a lot of hassle. I've seen all of these instances be game changers in the financing process.  Be prepared to share info like:

• I've been at this job for less than 1-2 years
• I'm considering changing jobs
• I just bought a big-ticket item (car, motorcycle, engagement ring, vacation home)
• My compensation plan just changed and is substantially more or less
• Bonuses or stock options/grants make up a significant portion of my income

Start with recommendations for loan officers as opposed to walking into your nearest bank branch or hopping online.

You might ask why  not walk into your local bank branch, since that's where your banking relationship already is. The reason is simple- though you may know your banker, he or she may not be the one to start you and finish your loan.  You may be transferred to a processor or a closer somewhere else who you have no relationship with, or trust in. This is especially an issue if you are purchasing and have limited time to complete a sale. A recommendation from a Realtor, your attorney, an accountant or CPA or a trusted friend or family member who have had a good experience are often a better way to go.

Consider finding a lender who can process your entire loan locally.

When you relinquish your loan to an out of state lender, they may not be familiar with local customs. For instance, a pre-qual from a bank might cut it in CA, but here in AZ, if you don't have an AAR pre-qual letter, your purchase offer may not even be considered by a potential seller. Also, a NY or NJ lender may be waiting for contract details to come from an attorney as is required in those states, but in AZ, we rarely use real estate attorneys to handle purchases.  Also, the closing process varies from state to state. In many states, a loan is considered "closed" when all parties sign the loan & final deed. That's not the case in AZ- here, the loan is not considered closed until the county recorder records the file. If you have a deadline by which to close and these details haven't been ironed out, they may have devastating consequences for a buyer.

Be wary of loan officers who slow to give you details, but quick to ask you to sign on the dotted line.

If you don't know what their process is or what to expect, how can you be sure that you are getting the best loan for you? Sadly, too many borrowers trusted their loan officers to take good care of them during the housing boom and were left holding mortgages they didn't understand and eventually couldn't pay. As a borrower, you have to look out for yourself to some extent and understand what your obligations are when you sign for a mortgage. If the terms doesn't work for you, don't do the mortgage.

Ask your loan officer to give you an assessment of your ability to get the loan.

Just because you find a lender and turn in all your paperwork doesn't mean you are guaranteed to get the loan! Loan officers are able to analyze your info by running an automated desktop underwriting (DU) report or even having an underwriter evaluate the file long before you start the process to give you an idea of whether you stand a chance or might want to hold off to establish better credit or be prepared to provide additional documentation. Wouldn't you rather know before you find the home of your dreams whether or not you can actually buy it?!

Know what you will be required to pay at closing before you commit yourself to the loan.

Many lenders have standard processing fees that may range from $900 to many thousands of dollars for doing the loan. If you're buying a home, there is more than just your down payment to consider. There are fees and costs for things like: origination (not mandatory), discounts to the rate (not mandatory), title insurance (depending on the title company you use), mortgage insurance premiums (if putting down less than 20% of the loan), flood certification, tax service, courier, shipping, appraisals, etc. Asking for a "Good Faith Estimate" (if your loan is locked) or an estimate of fees if you are just starting the process, will tell you if this loan is really doable or not. One percent of the loan amount used to be typical, but the more the complex or risky the loan, the higher the likelihood of your fees being higher.

Know the difference between your "Interest Rate" & "APR".

Your interest rate is the amount of of interest that you will pay for your loan. Your APR or "annual percentage rate" factors all those fees I just mentioned into the life of the loan but broken down as a yearly percentage. Your interest rate may be 4%, but your APR may be 4.375% or higher. The bigger the difference between the 2 numbers, the more you're paying in fees and other costs for the loan. You can also use your APR to make "apples-to-apples" comparisons of the same loan program from different lenders, but be sure that are looking at the same loans or this won't work. I.e. don't compare a 30-year fixed conventional loan with a 15-year loan- they're just different and your comparison won't be comparable at all.

Shop your rate!

This is one of the most neglected items that borrowers fail to do when getting a home loan. While a recommendation is a heck of a thing, ignoring another really good lender whose rate is substantially lower is just a mistake. I will be the first to say that that a relationship is a great place to start, but do yourself a favor and look at how much more you will pay over the life of a loan that is a 1/4% higher.  Do be wary of the rock bottom rate out there too- it could be a teaser or be tied to all kinds of conditions that could make it a terrible option, but it's up to you to do your due diligence.

When you lock your interest rate, ask for a written confirmation that it's done.

I just had a client struggle to get her loan officer to lock her rate, only to assure her it was locked and she found out 2 days later that it really wasn't.  The end result? A higher interest rate to the tune of 1/4%. On an expensive loan, a boo boo like that could mean added cost to a monthly payment. Trust me, don't assume that everything is good- make sure it is.

Ask for regular updates in the process.

Again, "I'm on top of it" really doesn't cut it. Anyone can "yes sir" or "yes ma'am" you to death- getting it all done is a whole different story.  In my experience good lenders will update borrowers (and agents, if applicable) regularly with status updates. They may even send weekly reports with a checklist of what is done and what needs to be done. You will usually know where you are and if you don't, you can figure it out quickly.

Hope this info helps. I'm not a bank or a loan officer, but considering I veered away from a career in investment banking (I'm the daughter of a 40+yr IB veteran) I'm pretty savvy with financing. You'll have to confirm all details with your lender, but I can help you sift through the mountain of requirements and sniff out a bad deal pretty easily. If you need help, I'm a call/text or click away!

Related Info:

UP in 2017 Real Estate: Buyer Purchase Power & Mortgage Rates

9 Points Home Buyers Must Know about the New TRID Rule

Buyers: What it Really Costs to Buy a Home

I think now that elections are for the most part over (except where the last of the provisional ballots are still being counted here in Maricopa County), most folks have some expectation of what comes next.  The mortgage interest deduction is likely to stick around, unless it also gets lumped into the cost cutting still being negotiated to avoid the highly dreaded, end of year "Fiscal Cliff".  The Fed has committed to keeping the Fed Funds rate near zero and to buying mortgage-backed securities through 2014-2015, which will keep rates very low.

BTW- Purchases on conventional loans (20% down, under $417K) are hovering around 3.25%, with refi's edging closer to 3.5% is pretty remarkable, considering a year ago, the same rate was somewhere around 4-4.25%. If you haven't refinanced in the last year, it might be time to consider it again if the numbers make sense**.  For buyers this means that purchasing power is greater now, than it was a year ago, although prices have increased roughly 30% since the start of 2012 in the Phoenix Metro Area.  This will vary by city, locale & price point of the individual home.

If you are planning to buy, sell or invest in real estate, here's what you need to know now to plan accordingly for the new year.  Take some notes, ask questions and put your plan into motion, but whatever you do, don't just sit there...

The Factors:

Starting this month (December), Fannie Mae & Freddie Mac will debut higher fee structures for financing, which will take away some affordability for buyers. See more here from Inman News:  http://www.inman.com/news/2012/08/31/fannie-and-freddie-ordered-raise-fees Given the fact that rates are already low and pledged to stay low, this will have very little impact on overall buyer sentiment.

The Mortgage Debt Forgiveness Relief Act is set to expire on 12/31/12.  In Arizona, this means... pretty much nothing. AZ is an anti-deficiency (or non-recourse) states (with Alaska, California, Connecticut, Idaho, Minnesota, N. Carolina, N. Dakota, Oregon, Texas, Utah & Washington), which means that if a home is a primary residence, 1-2 units, under 2.5 AC and was acquired with purchase money (financing exclusively used for the purchase as opposed to a cash-out refi used to pay for a dream vacation), a 1st lien deficiency would be wiped out under ARS 33-729.

Already we are a "Deed of Trust" state, which means that instead of enduring a lengthy court battle to foreclose judiciously (i.e. Florida, New York, New Jersey), it only takes 91 days from notice of trustee's sale to trustee's sale date to legally foreclose.  Ultimately, all the sellers waiting with baited breath on whether their short sale will close on time have much less to worry about (UNLESS they have one or more of those pesky HELOCs or other subordinate liens on their homes- that's a whole different story).

The Senate Finance Committee has approved a bipartisan bill that would extend this act again, but has to be passed through the lame-duck session that is hung up on the Fiscal Cliff talks (see my previous blog entry about this).  While the anti-deficiency states may have little to fear, all of the other recourse states are sweating bullets because a lot of people will feel the squeeze if this law is not extended.  Status: to be continued...

Foreclosures actually spiked this year after dropping from a post bust low in 2011, even though the delinquency rate is down this year to the lowest levels since 2009.  I'm not sure completely what this means, but it is ironic that recently Fannie Mae (and to a lesser extent, Freddie Mac) are opting to counter short sale contract prices and in some cases, just refusing to complete the short sale, in favor of sending the home through foreclosure to reap a larger price on the foreclosure sale (via Homepath Loans without fear of appraisal values).

This could mean more inventory on the market in the spring at lower price points that are ripe for first time buyers and buyers coming out of the proverbial "penalty box" from previous short sales or foreclosures.  This could also lure some investors back into the market after a mass exodus from rising values and falling ROIs. That would counter the first-time buyer's ability to afford entry level homes...

Sellers are optimistically sitting on the sidelines waiting for the "right time" to list their homes after a long wait to sell.  This is the real "shadow inventory" that drives speculation from the media & everyone else.  Those would be sellers who bought in the years from 2003-2004 or at prices that were just above "the bottom" in the Phoenix Metro Area and have been putting off selling for fear of having to take a larger than desired loss to exit their home.  Many of these sellers opted in the meantime to lease out their homes or just stay put if refinancing wasn't an option due to the non-conforming loans that were not eligible for HARP or HAMP.  This leads me to the next factor...

The rental market is getting softer- particularly at higher price points. Those would be tenants who were forced out of the buying market due to a short sale, foreclosure or other hardship who now have come out of the "penalty box" after being deemed eligible again by lenders no longer desire paying premiums for homes when they can buy in many parts of town for 45% less than it costs to lease.  Case in point, I listed an executive home in N. Scottsdale for $3000/mo last December that took me 7 days to obtain a full-price offer.  That same home is on the market today for $2750/mo and after 65 days on the market, it's a vastly different story.  The "tire kickers" who call are looking for a bargain don't even want to consider coming close to asking price.  The same home gets more action for sale and enjoys bustling traffic at weekend open houses.

If you're looking for homes sub-$1500, it's still very tight, particularly for single-family homes in good school districts or near major commerce areas. Also, as AZ & Phoenix/Scottsdale become magnets for out-of-towners relocating for jobs or other reasons, inexpensive housing is getting snapped up with lots of competition vying for these homes.

The media- as crazy as it sounds, people pay more attention to the details when they are blasted on the morning/midday/evening news, online, in their newspapers, etc.  The fact is that things started picking up long before this past spring.  Inventory levels started to drop roughly in mid-2011, however the media didn't pick up onto it until it became glaringly obvious.  Interestingly enough, many people go to sources that are so outdated that by the time the data gets out they aren't that accurate anymore.

Take for example the Case-Schiller Index. Many people aren't aware of the fact that 1) these are national statistics when, in real estate, the local market is what really matters to any seller or buyer; 2) the data lags by 3-months (or more)... today is 12/4/12. The most recent Case-Schiller report actually refers to data from as recent at Q2- we're well into the last 3rd of... Q4- that's about 5 months behind. In five months time in Phoenix/Scottsdale, interest rates have dropped a half point, demand spiked, peaked and fell back, inventory increased, dropped substantially and increased again, etc.

It's not just Case-Schiller either. Typically when a reporter goes out to cover a story, he or she has to do their research, talk to a few experts and publish the work, but that may not happen immediately. Frequently in articles I come across, the data referenced lags by at least a few months and that alone can erode the validity of the facts.  They may be true, but if they aren't timely the info is almost irrelevant.  Your best source for data is local info, preferably tied to the multiple listing service (ARMLS), in our area and is watched monthly, if not weekly because trends can change on a dime.  So, as you gather your information, be sure to check the dates- like a gallon of milk, there is an expiration on this data- after which time it's stale and just no good to anyone.

The Bottom Line:

Prepare now, whether you're a buyer or seller. If you're selling, think about what you can do to make your home stand out from the crowd (also see my video 8 Tips to Get Your Home Sold Now).  Though competition will still exist from other would-be sellers, if the demand is there, think about whether you want to endure months of showings and keeping your home pristine during that time, or whether you want one good offer at the start of the listing.

Believe me, after seeing some of the listings in ARMLS, setting a listing up for success is an art and amateurs need not attempt the work of a professional.  Work with a seasoned list agent to identify a sound marketing strategy for what you can do to yield the highest return on your home- and it's not necessarily how much money you spend- just trust me!

If you're a buyer, talk to a loan officer immediately. Not knowing how much home you can qualify for or not having the proper documentation or down payment ready can be the difference between that dream home on the cul-de-sac in Carefree and a dump in some other part of town.  If you're pining over perfection in Paradise Valley, chances are a lot of other buyers will be too.  Then, get in your car, get on your computer, talk to people and do your homework. Remember, your Realtor is your best source for info, but without having all the details about your personal life- your plans to get married, have a baby, relocate in the next 3 years, etc, it's hard to advise you on all points of your purchase if you have only part of the puzzle.

Again, even choosing the right loan officer can be critical. If your loan officer can't get you the loan he or she promises, it could mean that you will lose out on a home that you really want and potentially put some of your own money at risk. Be very careful and ask for referrals if need be. I have a list of lenders who I trust (who I know can deliver what they promise) and would be happy to share their contact info with you.

Regardless of who you are, choosing the right professional for the job is key- I've successfully represented sellers and buyers alike through over 150 transactions since 2005 and can work with you to create a customized approach to reach your goals. Remember, I'm only a phone call away.

Happy Holidays!

**Ask me if you need help figuring out how to make sense of "the numbers".