Elizabeth Newlin – Arizona Real Estate Agent

Miles Driven: 90
Houses Viewed: 7
Paintings by Artists that Rhyme with Lisa Bonet I Was So Close to I Could Have Licked If I Really Wanted To: 1

I’ve been out with a set of clients who I’ve been working with for more than a year for the last few days. They own a 12,000 square foot log cabin in Wyoming that sits on 950 acres and are looking to relocate out to the Phoenix area.

Beyond the fact that their life is different and interesting enough for me to be constantly trying wrap my brain around their 950 acres (I’m always asking them questions like, ‘So, where is your mailbox?’ [Answer: 5 miles down the road] and ‘Can’t you just subdivide the land a whole bunch and sell it to developers?’ [Answer: not so much… that would require roads and utility access and sewers and zoning changes, etc.] and the Wyoming weather (‘It snows 7 to 8 MONTHS out of the year??? Wait, so like how many sweaters do you actually have?’) they are kind of just a fun couple. He has a mocking and sarcastic tone that is reminiscent of my own family (we don’t really trust ‘nice’ people. Making fun is a more genuine way to show affection as far as we’re concerned, and if any of us actually ever say anything kind to one another, well then you KNOW we really mean it and it’s probably causing us pain to do so.). She is sweet and demure until she’s occasionally vulgar in a hilarious manner. They’re down-to-earth rich folk and I feel confident that if they read this they’ll take this description as the compliment I mean it.

We have been looking in the roughly $1 to $2 million range in primarily Scottsdale and Fountain Hills, and let me tell you, we’ve scoured the price range. We’ve gotten to the point where I feel pretty confident I can tell the possibilities from the dogs without taking my clients through. We’ve worked out a system where they comb through the listings online and identify the ones that might work and I preview the houses and take a quick video of layout so that we can narrow the list further.

They came into town for the first time in several months this week. We’ve been planning for this for about 6 weeks; previewing and searching and creating a list of viable options. We narrowed the field down to 15 candidates which we have been viewing in person the last few days.

I have to say, if I could easily specialize in the luxury home buying process, I would. You know, unlike any other Realtor in the Phoenix metro area. They would all hate it, I’m sure. But whatever, I’ve got a taste of the good stuff, and I’m loving it. It’s fun to get to know your client’s wants and desires as well as your own. It’s lovely to enjoy stunning views and pick apart gourmet kitchens (“I don’t know… it doesn’t have a pot filler, my clients are really looking for a kitchen with a double ovens, a subzero, two dishwashers AND a pot filler. I don’t know if this is going to fly.”). It’s fabulous to tour winding streets up the sides of mountains and hear from listing agents about the wildlife seen (javalina, coyotes, mountain lions, tarantulas and the occasional giant hairy desert scorpion).

The problem is it’s a market hard to cultivate. Buyers in the upper price ranges are few and far between to begin with (whereas the majority of buyers will purchase in the $100K to $200K at least once in their lives) and they tend to put down roots. People who spend $1.5 million aren’t looking to move again in three years generally speaking. Also, many of the people buying in the Phoenix metro area in that price range are coming in from out of state. They are second home buyers from chilly states, or corporate drones relocated in. How do you market to a crowd that geographically diverse? It’s a lucky break to get a buyer in that price range.

Today we visited a house in Fountain Hills in one of the most exclusive communities in the city, Shadow Canyon. The house is listed for about $1.7 million and sits up on one of the highest points in Fountain Hills. It has the kind of view from every single one of the windows in the house that ruins you on every view you’ll ever see again. I spent most of the 45 minutes we were in the home transfixed in front of the closest window; practically hypnotized by the sprawling mountains, desert landscape, Four Peaks and the famous ‘fountain’ of Fountain Hills dancing before me.

The house, according to the listing agent, is owned by a 90 year old couple as a vacation home. They are selling to move into an assisted living facility. They own an island somewhere and insane amounts of art. In fact, we were told we wouldn’t be able to see the house without the listing agent present because of the crazy amounts of valuable property to be potentially stolen.

At one point, I was waiting in the hallway for my client (she takes extensive notes of all of the properties we see) and I glanced over at the painting I was standing next to only to see the unforgettable (yes, I’m a bit of an art geek; Jason and I took art history together in college and loved it) signature of Claude Monet on a waterlily-ish type oil painting. I got a little bit fan-girl for a minute and went running in to the other room to find the listing agent.

“That’s not a REAL Monet in the entry way, is it?” I asked, willing my voice not to crack with excitement.

“Well… um, yes. That’s why I have to be here with you,” she replied.

Wow. Sometimes I really love my job.

Realtors discuss commission amongst each other constantly. Usually the numbers, assertions and claims are vague and inflated, but that doesn’t stop us from talking about it. Bizarrely enough, however, commission is a taboo subject between agents and the rest of the world. In fact, lots of buyers have no idea how or what their agent is going to be paid.

I have a dear friend who bought her first house before I was a Realtor and she used another friend of ours as her purchasing agent. When we were discussing real estate years later I discovered that she was carrying a load of guilt about how this friend had helped her and she hadn’t paid her anything. When I explained that the seller traditionally pays the commissions to sell the property, she was so relieved that her agent had been compensated for her time. She’s a sweet-hearted person to think that a real estate agent, of all people, would help anyone out of merely the goodness of her heart (ba-dum-dum, ssss!).

It goes the other way, too. Sellers, especially, do the math on what they think we walk away with and decide that it is just way too much. Sometimes I just want to sit down with them and break it out to the hourly rate; but I don’t.

So I’m going to tell you a story about one of my most recent closings and the commission breakdown. There are probably lots of Realtors who are going to disagree with the fact that I’m posting this story, but the point of my blog is to give you a look into the wild world of a real estate agent, ups and downs, pros and cons (and by that, of course I mean: professionals and convicts). There’s a ton of confusion on the part of the general public about what agents are paid, and I’d like to clear a bit of it up.

Right now our market is flush with short sales. They’re a little bit like dog poo in the park around the corner from my house, and my clients are like my two year old. When we’re out together, he’ll go running off to play in a bit of longer grass and come back with a handful of doo thinking he’s brought me a treasure. I don’t want to break his heart and tell him what he’s actually got in his hand, but at the same time, I don’t want it to make him sick. It’s often a lose/lose situation. Occasionally, though, we come across a short sale property that really is just too good to pass up, so my clients and I take a deep breath and dive in to a stinky situation.

All listings on the MLS (multiple listing system) have a section that tells the buyer’s agent how much commission is being offered to the agent who bring a buyer into the property. The listing agent generally negotiates a commission with the seller and then offers part of that commission to the buyer’s agent. We are a free trade business, so the commission to sell the property can be anything. It can be a fixed dollar amount or a percentage of the sale, but whatever it is, the listing agent is required to pay the buyer’s agent at the successful close of escrow.

Now a short sale is a slightly different story because the owner of the house is underneath the loan, and therefore, it is assumed that he won’t have cash to pay for closing costs and commissions, so the commission will be paid by the bank who is servicing the loan. However, the bank will not negotiate anything about the deal or the house without an offer on the table. So most of the time, the listing agent has to list the property and offer a commission to the buyer’s agent without knowing what commission the bank is going to be willing to pay.

Because a listing agent is held to what he advertises on the MLS, if an agent offered X to a buyer’s agent on the MLS and then asked the bank to pay 2X, but the bank only agreed to pay 1.6X, then the listing agent only received 0.6X, which seemed a bit unfair to most of the listing agents working short sales. So lots of agents started employing the technique of offering 0.8X to the buyer’s agent on the MLS, but still asking 2X in commission for the bank, so that when, inevitably, the bank was only willing to pay 1.6X, everything still worked out pretty evenly for everyone.

Most buyer’s agents have also been listing agents at one time or another, so when we all started seeing commissions at maybe a little bit less than we’d seen before, we understood this was part of the market, part of the game, and we didn’t want the listing agents to have to end up taking the short end of the stick, so we went with it.

Here’s where things get a little ugly. On the last short sale I closed, I was offered that 0.8X I’ve come to expect with short sales in the MLS, but when I received the settlement statement at just before close of escrow to go over to ensure that my client was paying what we had agreed to, I discovered that the bank was actually paying 2X in commission, but I was still receiving my 0.8X. So the listing agent was making 1.2X.

Now the listing agent is under no legal or ethical obligation to pay me an equal half of the commission the seller is paying. The only obligation the listing agent has is to pay what is advertised in the MLS. That’s was a bit of a knife in the back, though. Up to that point the agent had come across as sweet and easy to work with. I’ve never been in the position, as the listing agent, where the bank has agreed to pay more than I’ve expected them to in commission, but I know agents who’ve had it happen to them. One of my close friends actually, has had it happen to her twice, and I know for a fact, that she called up the buyer’s agent and offered to split the overage with them (which they joyfully accepted).

In this case, I contacted the listing agent and pointed out the unequal split (just in case she didn’t realize it) and asked if she was willing to split it with me. She was not. She cited expenses (she had apparently hired a professional negotiator to handle the short sale, had trashed out the house and had had it rekeyed) and apologized. I let it drop because legally, there’s nothing I can do, but I can’t say I was mollified by her excuses. We all have expenses. I spend tons of time driving clients around and spend money on gas (at a time, gas that cost in excess of $4/gallon). It’s ridiculous to nickel and dime the process with the other agent. Who spent more time, energy, money, etc? It’s going to be a close call, regardless.

But like I said, she’s under no obligation, and them’s the breaks. You can bet, however, that I’ve learned my lesson on this one. On future short sales I will have a conversation with the listing agent at the time when we are writing the offer about where she stands on the ‘splitting the overage’ issue. At least at that point I’ll know where we stand, and sometimes agents are a little bit more willing to split the difference at the beginning of a transaction when they haven’t counted all of their pennies just yet.

Miles Driven (Saturday and Sunday): 275
Price Range Viewed: $85,000-$1,699,000
Hours Spent in the Car: 12
Mammalian Bodily Fluids I Came Too Close For Comfort To: 2 (At Least)

I’m still immersed in a buyer crunch; showing property at all free moments. This weekend I went from Maricopa, to South Gilbert and Chandler, to North Scottsdale and finally Cave Creek (or as I fondly refer to it, South Flagstaff).

Saturday, my client and I started out in a house in Maricopa with a great layout we’d even seen before. It was a 3000+ square foot foreclosure property. Usually, with foreclosures the bank will, at the very least, send a crew in to toss all of the trash in the house, and sometimes will clean and paint the property. Not so much with this house. This house was pretty clear of debris, but it had a nice little crime scene on the floor of the kitchen:

Yes, that appears to be blood. It was splashed up on the wall in the kitchen also. We CSI-fans refer to that as ‘blood splatter’. My client actually said to me, “Do you think someone was killed here?” Nice.

The other winning house of the weekend was a cute little number over in Gilbert. We’d already tried to view this one twice, but it had tenants in the house who weren’t willing to let us in to see it unless they were there. The agent eventually had the tenants evicted and today was the first time we were actually able to get inside to view. I’m not sure I would say it was worth the wait.

I’ve never encountered such an intense odor when walking into a house before. I’ve been in lots of stinky houses, and even houses my client wanted to leave immediately because of the stench, but with this house, it was like a cat was actively peeing into my nostrils (and let me tell you, I’m not a wuss about this smell. We have three cats and occasionally they get annoyed with us and pee in the house.):

We had to cover our mouths and noses when walking through the house. I started taking pictures immediately and when I encountered quizzical looks from my client and her mother and explained, ‘for my blog,’ my client said, “It’s too bad you don’t have ‘smell-o-vision’ on your blog”. True.

But the house was worth the full trip through. Bizarrely enough, the cat pee throughout the house was not the worst feature. No, the house sits on one of those Gilbert fissures you hear about that created a crack in the foundation significant enough to cause this:

Um… wow. So, my client’s not making an offer, if you can believe that. And the crime scene house is staying on the market too.

Miles Driven: 44
Pop Tarts Eaten: 2
Egregious Instances of Mold: 5
Dead Body-shaped Objects Shoved Under a Sheet That Freaked Us Out: 1

I’m currently in pre-holiday, end of year push to buy and sell mode, so I’m out showing houses fairly non-stop. This morning, I was in South Scottsdale checking out a few houses with a young couple who have a brand new baby. We decided to head out early to get a couple of houses in before they had to be at work.

We met at the first house on Earll Drive at 8AM. The house is in an older, but geographically desirable neighborhood off of Hayden and Thomas. From the outside it was cute brick ranch with a carport that needed a bit of work. On the inside, it was the most horrifying case of mold and neglect I’ve ever seen (and this is really saying something). When I opened the door and took a step inside, I was slapped with a wave of mildew. It smelled a little bit like cardboard boxes left out in the rain and then stuck in the corner of someone’s garage (or, you know, Oregon). It was carpeted with that stuff my mother always calls ‘dead rabbit carpet’. I Googled it and it’s apparently called Sculptured Nylon (by the way, DON’T Google dead rabbit carpet. The results are disturbing, to say the least). Picture this, but 40 years old, brown and heavily stained:

The ceiling in this house was covered in popcorn texture, but it appeared to be of the DIY version, and we could tell this by three reasons:
1. It was a thicker popcorn, with heavier kernels, so to speak, than I’ve ever seen
2. In the middle of the family room there was an ornate cross on the ceiling UNDER the popcorn texture.[Dear Earll House, a 1982 Jesus Freak interior designer would like his esthetic back. Love you, Bye.]
3. In several places, large sections of the popcorn was hanging down in a big sheet, or completely missing.

In the kitchen, the popcorn ceiling wasn’t popcorned, at least, but it was black with mold and water damage. Directly off the kitchen was the master bath (which is, in itself, interesting bathroom placement that we have encountered several times in this particular Scottsdale neighborhood), minus about 30 percent of its necessary drywall. It clearly should have been minus about 30 percent more drywall to actually take care of the mold problem housed within its walls. At this point my clients were done and we bailed. It was not a successful house visit, let me tell you.

House number two of the day was cute and in decent shape. It was sorely in need of a remodel, but not a health hazard, and therefore, somewhat unremarkable for the day.

House number three, however, was a doozy. To begin with, it was occupied. The listing said that I should contact the tenant to show. I called the guy and left a message, but hadn’t heard back, so general protocol in a case like this is to attempt to show, but make sure to ring the bell and knock loudly before entering, so you don’t catch anyone doing nude yoga or sacrificing a goat or anything really weird.

The lockbox was on the front door, so I knocked loudly and opened the door while shouting, ‘HELLOOOO!’ like someone’s crazy Aunt Nancy showing up uninvited. We didn’t get a response, but there was music playing in one of the other rooms. This automatically gave the house a slightly creepy vibe. We kept thinking there was really someone there and that he would pop out at any moment.

The living room was fairly bare of furniture, except for a small end table with a black and white framed photo of Jesus (like maybe he followed us from the first house?) and a china hutch with a few knick knacks. We took a few steps into the house and the female half of my client-couple gasped loudly, clutched at her chest and practically shrieked, “This house is freaking me out! I don’t understand; why is there a photo of Jesus and then dentist’s tools?”

It turned out she wasn’t wearing her glasses and couldn’t see super well. The ‘dentist’s tools’ were really a chrome bar set, but by then, she was completely shaken. The converted carport with the giant glass cage housing a snake didn’t really help. The master bath (also with a door right off the kitchen) had a huge crack in the shower floor which had been allowing water to seep through the wall into the kitchen and deteriorating the drywall. She was the first one through the bathroom into the master bedroom, and at that point, she was almost hysterical, and backed right out of the room and declared that she wanted to leave.

When I walked into the master bedroom, I understood why she wanted to go. In the far corner of the room, there was an object on the floor under a pile of sheets and blanket that was distinctly human shaped. It was the right height for a man, with even a sort of bend up where the knee would be and looped down over the ‘feet’ at the bottom. I really wanted to tap it with a toe, just to make sure, but I’m sadly, not that brave. We hightailed it out of there. As we were locking up, the wife said to the husband, “That was the scariest house I’ve ever been in!” To which he replied, “Really? What about the first one we saw today?” And she said, “I forgot about that one!!”

Miles Driven: 122
Houses Shown: 9
Doors-to-Nowhere From Which (Presumably) Previous Owners Flung Themselves to the Hard Ground Below Only to Haunt the Property for the Rest of Eternity Viewed: 1

I showed a bucket of houses today. One of the properties was a house my client emailed over a couple of hours before we were going to meet to see another house, so I didn’t have the opportunity to print out the MLS plano. I just pulled it up on my blackberry and met him over there.

It was not the usual house I show, to say the least:

And then there’s the fact that I get a little chicken occasionally. Sometimes I’m stupidly brave. I often show houses to men I’ve never met before and regularly invite strangers into open houses when I’m alone. But when I step into a vacant house with an odd vibe alone, I start to get a bit skittish. I’m a touch paranoid about squatters (and, you know, monsters and ghosts, but that’s a given):

I’m going for the world record in number of times I can say ’super weird’ and/or ’super creepy’ in a video here:

Once I get that scary, creeped out feeling, it sticks with me. After wandering in this house alone for about 10 minutes, I walked out to my car and accidently hit the panic button, causing the GOV to freakout and honk and flash lights, and me to scream bloody murder like a little girl. I’m so professional, I know, you’re jealous.