Elizabeth Newlin – Arizona Real Estate Agent

People Who Shushed Me and My Realtor Buddies During This Class: 4
Times After I Took This Class I Woke Up In a Cold Sweat: 7
Percent of The Population Who Should Take This Class: 98

I took a continuing education class a couple of weeks ago with two of my Realtor gal pals (one of whom used to be my manager; now she’s my bossy, loud-mouthed, knows-her-stuff buddy who I always call when I don’t know what to do). We started the class of wondering why we don’t take all of our Con Ed classes together, as it would be so much more fun, and ended thinking, ‘Oh, right, that’s why,’ after almost getting kicked out twice for giggling and whispering (totally class relevant stuff, I swear!).

This class was titled, “Options For a Troubled Homeowner” and is part of a series meant to educate agents about the pretty typical homeowner we deal with right now, which is to say, the one with a financial hardship. We were hoping to pick up some tips to pass along to our short sale clients about how to safely navigate the process and come out on the other side ready to rebuild. What I actually got out of it was nightmares and cold sweats about what could happen to my own finances, the general state of the economy and the legal ramifications of all short sales to date.

Basically, the class was taught by Patrick Ritchie, who is a credit expert, genius and total nutball (and I say this with all due respect, of course. Some of my favorite people are total nutballs). I had taken a class by him several years ago at the beginning of my real estate career, and remember him being very knowledgeable and interesting, but I think the disastrous state on a national (and potentially world) level of his area of expertise has whipped him into a frenzy. He speaks with a kind of frantic hilarity about his fear of ‘hyper inflation’ which causes him to stockpile hundreds of granola bars (among other things) when they go on sale. I get the feeling that he went into the business of becoming an expert in all things credit related because he’s a bit of a control freak and the idea of not being able to control his credit (a notoriously nebulous and uncontrollable thing) scared him, so he learned as much as he could about the details and scenarios related to credit. Then, when everything went to hell a few years back, the man must have practically had a psychotic break with the stress of it all.

I didn’t walk away from the class with a really clear idea of what I learned or what the general point or structure of it was meant to be, but I did pick up some key concepts that will potentially haunt me forever. So I thought I’d share them with you so they can stalk you and turn you into a shivering, hysterical conspiracy theorist too!

1. At one point during the class, Patrick Richie’s level of fervor peaked with the declaration, “If you learn ONE THING from this class, make it this: Never KEEP money at a bank you OWE money to.” Now, when I tweeted this statement, several of my followers were like, ‘Um, DUH.’ I also, however, had several reply, ‘Why? I do…’ And I do too. I have three mortgages (rental property, HELOC on the rental property, primary residence) and a checking and savings account all with Wells Fargo. It’s convenient and the banks make it attractive with certain incentives (free bill pay, etc.) if you do.

After he said this, though, I remembered my client/friends, who, after experiencing a job layoff and extended job search period, pursued a temporary loan modification on their mortgage. They were advised by the bank to miss a payment to begin the process, but when they did this, their checking and savings account, with the same bank (a credit union, which, according to Ritchie, are the most vicious when attempting to settle a claim) were immediately frozen, scaring the living crapola out of my friends. I guess this would be Ritchie’s point. You don’t know what is going to happen, so you need to be aware of, and plan for the worst. If something happened that forced you to halt payment on your loans, you don’t want your creditors to have access to your liquid funds. Talk about making a bad situation worse. “Oh, you don’t have the money to pay your mortgage? OK, well we’ll just take all of your money then. Is that better?”

So, you know, I’m currently stuck in “Suck it up and spend an entire month (or possibly the better portion of the rest of my life) switching over my accounts, auto-paid bills, debit cards, check and probably eight other things I’m not even thinking of, to another bank that isn’t linked to my mortgages” or “Be lazy and pretend like it’s not going to be an issue and I’ll never have a reason not to pay my mortgage or anything because I totally don’t work entirely on commission and my husband isn’t in a volatile industry that’s required him to change (and be without) jobs 3 times in the last year. And it’s a hassle. And I’m lazy. Did I mention I’m lazy?” hell. Sometimes I wake up in the middle of the night and stare at the ceiling and pull my eyebrow hairs out. I’m just saying.

2. Ritchie managed to end the class on an even more depressing note by discussing a friend of his who committed suicide the day before last Christmas because he was in a financial black hole. He went on to mention his sister, who, even though he is one of the most knowledgeable credit experts around, has creditors stalking her through him and has for years and finally, a friend who was declaring bankruptcy now, even though he’d been telling him for 4 years it was the right thing to do. Yes, each of these things is icky and awkward and not at all where we want to see ourselves, but here’s what I gleaned from all of this (and what I think Ritchie’s ultimate point was): everyone, in some capacity, is currently dealing with, or will in the near future come into contact with financial hardship. It isn’t the end all, be all. It doesn’t help to bury your head in the sand or be devastated by the embarrassment and stigma of it all. It’s a temporary situation and you can’t let it run your life or ruin your happiness. You have to be aware of your rights and options and make the best choice you can moving forward. It is what it is. Don’t be a dummy and kill yourself over it.

So I’m totally going to stop pulling my eyebrow hairs out, I swear. Pretty soon.

Clients I’ve Attempted to Force To Be More Analytical: 5
Clients I’ve Successfully Rehabilitated of Their Emotionality: 0
Dents I’ve Put In My Wall With My Own Forehead: 12

In my opinion (did anyone see The Good Wife this week? ‘IN MY OPINION!’), all buyers are one of two things: Analytical or Emotional. They either need data, charts and numbers that unarguably prove a house is perfect for them or they need an emotional connection with the property that lets them know this is the house.

I kind of think it’s like what they say about being gay, though; it’s a spectrum thing. There’s the uber-analytical side of the spectrum (where the engineers and attorneys always fall) and the extreme-emotional buyer (this is where the ladies with crystals and cats who visit their ’spiritual advisers’ would sit). Most people would fall somewhere in between, but generally to one side or the other of dead center.

A buyer I signed a contract with last night is definitely on the more analytical side. For her, the house was right because she could see proof that she was getting the best price anyone has gotten on that model, she had read the HOA bylaws and knew that if she could rent it out (even though she’s not planning on that), had researched the school districts (even though she doesn’t have kids right now) and had driven by the house at night to see if the street light in back was bright enough to be annoying. All of her research came back with positive results, so she knew that it was The House.

I had another buyer a couple of years back who had really general criteria for the house she wanted (bigger than the apartment they were in, with a yard, Ahwatukee, Tempe or Chandler) and when we started looking at houses, I quickly realized she was at the very other end of the spectrum. We would step into a house and she would take a quick peek in and step out and say, ‘No, that’s not the one. Didn’t feel right.’ When I pressed her for specifics about wasn’t right about the house (it’s difficult to retool an MLS search based on Chakrahs) she stuck with the reasoning that ’something just wasn’t right’. Was it the lower ceilings? Well, yes, she said, she likes higher ceilings, but if it was the right house and had lower ceilings, that would be OK. Her husband just shrugged and when she turned around rolled his eyes. I never did find them a house. They ended up moving back East instead. So I will forever wonder what was ‘right’ for her (I did, however, learn during one of our many trips out, that you can make a print of a placenta right after a baby is born with the blood from the placenta that looks like a tree and frame it and put it in your house. Her husband did much eye rolling and pantomimed vomiting during this story also. I liked him.).

I tend to be of the more analytical variety. This is likely because the analysis of properties is the only thing i can control. I can refine searches, assemble data, find supporting graphs, pull comps. I cannot, however, feel for my clients. With 40,000ish properties on the market in Metro-Phoenix, emotional buyers tend to make me feel like I can’t control anything. They also stress me out (in a completely irrational manner on my part) that they are making the wrong choice because it’s based heavily on emotion. I’m kind of like Spock; emotion feels ‘illogical’ to me.

Most recently (a version of this has happened before, you’d think I’d learn, you’d also be wrong), I had a buyer who I was showing house after house after house and who wasn’t making a decision based on anything I could quantify. We talked about features of the houses until we were blue in the face and found properties I thought were perfect and it seemed she did, too, but when when it came down to it she wasn’t ready to pull the trigger because it wasn’t right. I decided to take things into my own hands and create an informational spread sheet for her. I thought if we could fill in all of the info about the houses and grade certain criteria (for example: The community for house #1 gets a B) as we went then I could make everything come clear for her. The data would show that she really liked a house the best and then we could make an offer! I was utterly convinced this would solve all of our house finding problems and really excited to go on our next house hunting trip and try it out.

She’s a nice girl, so she went along with my spread sheet and diligently filled in data, but I could tell by house #4 that it didn’t really matter to her. I was consulting the chart and gauging how good the houses were by the data, but for her, it was a general happy feeling of all of the things she liked in a house coming together. She didn’t need a chart for that, she could just tell.

And that’s when I realized I have to relinquish control. It’s not my job to tell my clients which house is perfect for them. It’s not even my job to agree with them. It’s my job to make the houses available and then to help them obtain the one they eventually pick. That’s all I can do (all the while banging my head against a wall as we go).

Houses Shown: 8
Pretty Fabulous Deals Found: 3
Motor Vehicles That Weren’t Mine I Was Allowed to Operate: 1 (SCORE!)

I took a buyer out last Saturday in the North Scottsdale/Desert Ridge area. My client has been renting in the McDowell Mountain Ranch area (or ‘The MMR’ if you’re a cool kid and hang out there a lot) and she would really prefer to buy in that area. Unfortunately, she also really likes new builds. She told me a few weeks back that if she could just build new in The MMR, that would be PERFECT! I told her they should probably just bulldoze off the top of the McDowells, and put a community up there, don’t you think? It probably wouldn’t hack off the environmentalists or anything. The HOA, though, you don’t want to get in trouble with them. They get cranky if you paint the house the wrong shade of Desert Sand; they probably would write a REALLY mean letter if you removed the scenic mountain views. We can’t have that. Thus the quandry: Resale and probably needing work in The MMR, or New and Fabulous but at Desert Ridge.

We did, however, find several decent candidates in both categories, and we reaffirmed my understanding that well-priced houses in all price ranges are going fast. For example:

1. This cutie on Rockingham:

Is a new build by Del Webb (a division of Pulte) at Fireside at Desert Ridge. We orginally saw it back in December when it fell out of escrow with the buyer who had been building it. The original buyer had ordered a bunch of fancy upgrades like hammered plank hardwood floors, plantation shutters and travertine everywhere (there wasn’t carpet anywhere in the house). When we saw it they wanted $475,000 for it. It came on to the MLS last week at $434,990. By the time we got out to see it it had been snatched up. They do, however, still have several nicely upgraded specs at really fabulous prices (AND, apparently if you’re really nice and look totally trustworthy they might even let you drive the golf cart to go see the specs! Completely worth the trip just for that).

2. This MMR single-level on Caribbean:

Is not super upgraded (laminate counters, older appliances, needs paint) but pretty move-in ready and exceedingly well-priced at $330,000 (I’m not even going to tell you what another client of mine paid for exactly the same model 2 years ago). It had been on the market 8 days when we saw it and the Realtor Remarks on the listing said to hold all offers until Monday because the seller was out of town. Monday I checked in to see if we could see it one more time and they had 3 offers and a bidding war going.

3. The last fabulous deal we saw wasn’t right at all for my buyer because the yard is 90% pool and it has some traffic noise issues (backs to 105th and MMR Road) and needs paint, carpet, appliances and nicer counters, but priced at $307,900 for more than 1900 square feet, 3 bedrooms plus an office and with a pool in McDowell Mountain Ranch, I think it was the best of the bunch, investment-wise:

Yes, it would need some money into it to get going, but in these times of recession, I can see this as an excellent rental property. It’s still showing as ‘Active’ in the MLS, but I would be surprised if it doesn’t have any offers on it currently.

Clearly deals AND buyers are still out there, so if you see something you like, jump on it!

Average Lot Size of a New Build in Metro Phoenix: 5000 Square Feet
Lot Size of This Cutie House on Kiva: 7187 Square Feet
Miles This House Sits Outside of the Tempe Boarder: 2.5
Approximate Dollars Per Square Foot Cheaper It Is Because of This 2.5 Miles: 29

I have a great new listing off of Baseline and Country Club. Check it:

It’s your basic older starter home in a central location. I have to warn you that it is a short sale. I know, I know, it’s a touch ironic (or is it just unfortunate?) that I’ve been extolling the woes of short sales this week only to list one like 3.5 minutes later. That’s right, have a good chuckle.

So no, it’s not going to be as easy to purchase as a normal sale, or probably even as smooth-sailing as a foreclosure, but I can promise you that I’ve actually closed a few short sales before AND that I’m going to make well sure my clients and their attorney are happy with the approval letter before we let the buyer know it is time to have the house inspected and appraised.

This house has been moderately remodeled. It has a new in 2007 kitchen with a stone back-splash and stainless steel appliances. It has a nice big laundry room with a counter and cabinet and a huge walk-in pantry. It has 4 decent sized bedrooms and a nice big backyard.

Yes, the house is in Mesa. You’d be surprised how many clients I have worked with who just don’t like the idea of Mesa. Mesa doesn’t have the hip reputation of Tempe or Scottsdale and it’s not generally thought to be as new and upcoming family destination like Chandler and Gilbert. It’s kind of the red-headed stepchild of the East Valley. I, however, am a born and raised Mesonite (yep, just totally made that word up) and I understand the true, unappreciated, undervalued fabulousness that is Mesa.

I grew up just along the inside of Mesa border where it sits against Tempe and Chandler. I had all the benefits of a central lifestyle, without the higher taxes and price tag of either. No really, check it out:

The circles are Tempe’s average monthly price per square foot and the triangles are Mesa’s. Look at how much crazy-pants lower Mesa it! Gotta love that!

So in these dollar-conscious recessional times of ours, how can you not love the value that Mesa-almost-practically-Tempe gets you? That’s all I’m saying! Come check out my new listing. Now. Cause I said so.

Special Certifications I Hold:

CSE (Certified Sparkle Examiner)
ELC (Expert-Level Cartwheeler)
MIATM (Master In All Things Mothering)

That’s right, my full title is: Elizabeth Newlin, REALTOR, CSE, ELC, MIATM. It’s kind of long, though, so you can just call me Certified Expert Master. That’s the important part.

To be a real estate agent in Arizona, I had to take 90 hours of education and pass both a school and state test. This got me my license, but little knowledge about how to actually successfully navigate the world of real estate. I walked away from the Scottsdale School of Real Estate about a grand poorer with an official-looking paper with a pretty seal and without a clue about how to actually find a house on the Multiple Listing System or even how to open a lockbox if I did find a house to show. Sure, I knew the definition of the word ‘easement’ and how to calculate tax prorations (which is actually title’s job, not mine), but no idea whatsoever how to write a contract and protect my client.

I have to take 24 hours of continuing education classes every two years to keep my license, and I’ve found these classes to be roughly as useful. Yes, I glean knowledge of a new legal issue every now and then, but by and large, my understanding and expertise in the business of real estate has come from actually working the job and collaborating with my peers. The real estate market is a constantly evolving animal. What is important to know today is obsolete tomorrow. This makes it tough to develop useful curriculum to teach on a large scale. I’ve found it’s much more useful to keep my eyes open and my ear to the ground.

There are a bunch of classes a Realtor can take that will earn them a ‘designation’, which is basically a certificate and an acronym after their name. GRI (Graduate Realtor Institute), ABR (Accredited Buyer’s Representative) and GREEN (the NAR official, “I’m a giant hippie long-haired tree hugging Realtor” designation) are just a few offered. The designations come down to varying amounts of hours of classes and fees. GRI is a pretty hefty commitment of classes, while GREEN is like a 3 hour class.

A newish designation that has become very popular lately is CDPE, or Certified Distressed Property Expert. This set of classes is supposed to teach a Realtor how to deal with short sales and foreclosures.

I’ve closed my fair share of short sales (as listing agent and buyer’s agent) and foreclosures and I tend to be wary of agents with a laundry list of acronyms after their names (in real estate, those who ‘talk big’ are usually over compensating for a lack of action, if you know what I mean) so I haven’t actually taken the class, but I have it on good authority that it’s a two day event costing anywhere from $400 to $1000.

I recently had a buyer I’ve been working with for quite awhile walk into an open house. She informed the agent who was holding the house open that she was already working with an agent, but that she’d like to see the house. This was acceptable to the agent, so they got a tour, and a basic rundown of the situation of the house from the agent. They called me later to write an offer on the property (which was a short sale) and told me all about how this was going to be a fast short sale because the agent is an expert in short sales and she says it will be smooth.

When I contacted the agent to work out the details of the offer, I was also immediately informed that she was a CDPE and that this would all go smoothly. She also asked me for a laundry list of things to get the offer submitted, including my client’s full earnest money to be deposited with title immediately (this is practically unheard of in a short sale, because the transaction is so up in the air until approval from the lender is received, earnest is almost always deposited after approval is obtained). As we continued to discuss things and I pried further, it quickly came out that this was the very first short sale she had EVER been a part of. She was an ‘expert’ with no experience whatsoever. The CDPE class had told her to have earnest money deposited immediately AND to have the buyer start inspections and appraisal as soon as possible as well, which is in direct contradiction with the Short Sale Addendum of the Arizona Approved Contract and utterly ludicrous (as you would know if you read my last post).

Here’s the sucky thing about all of this: Yes, I pretty much want to create a class and call it the “Designations Are As Important In RE As A Coach Purse To My 18 Year Old Cat” and label it the DAAIIREAACPTMEYOC designation in protest of all of this, BUT, I am quite aware that real estate is about 75% perception. A client to believe you know what you’re talking about is almost as important as actually knowing what you’re talking about. So I have a class on the schedule for March 12. It’s not an actual designation, and I’ve been warned by people who’ve taken it that I won’t learn a single thing, but then apparently if I’m ever sued over a short sale issue I can say, “What? I took a class! I’m totally an expert!”

Houses Shown: A Number Higher Than My 5 Year Old Can Count (And he can ramble into the hundreds. Just ask him sometime if you need a nap.)

Girl Scout Cookies I Consumed While Stress-Eating During All of This: 5*

For a long time in 2008 and the beginning of 2009 I did everything I could to warn my clients about getting involved in short sales. I had a brochure on the evils of short sales, I had a prepared speech, I even had a waiver I made them sign if they really wanted to get involved in one (That said: “I, Dumbass, Non-listening-to-my-Realtor’s-perfectly-sound-advice Client, will hold harmless and totally not sue my Real Estate agent, or her brokerage for any drama, horror, or even paper cuts I get from dealing with this whole short sale debacle, because PUH-LEASE, she tried everything she could think of to talk me out of this and I am just a ridiculous, stubborn buyer who doesn’t know what’s good for me. I promise to only think sweet and nice thoughts about how much I love my Realtor, even when I’m pouring all of my time, money, hopes and dreams down a black hole labeled ‘Short Sale’. Because it’s not her fault. At all.” It’s possible I paraphrased that.)

About mid-2009, however, short sales began to become so prevalent they were literally half the pool of available houses. It was almost impossible to avoid them and still have reasonable houses to look at in many price ranges. Also, the banks started to get a clue, hire more personnel to deal with the short sale situations and move the process forward a bit more quickly. I began to see and experience short sales that were actually successful, if not relatively pain-free. We all started to get the hang of things a bit more and the industry made strides in systematizing and automating the process.

So I shorted up my ‘SHORT SALES WILL MAKE YOU DIE’ speech, stopped telling some of the worst stories I heard and showed more short sales (and not even under duress anymore!). I developed a false sense of security about short sales.

Let tell you, this little security blanket was abruptly ripped from my snuggled down and napping body last week, on the scheduled day of close of escrow for my buyer because the Idiot (and when I say ‘idiot’ I mean ‘Alleged Idiot’) Seller of the house at the last minute decided (as recommended by his alleged imbecile of a lawyer) it might not be in his best interest to sign to sell.

Basically, here’s what went down (broken down into Seven Steps of Misery):

1. My client saw the house in late October and loved it. We wrote a contract that was accepted in first position by the seller. He signed to accept that contract pending approval with acceptable terms by the lien holder (the bank who loaned him the money to buy the house).

2. The listing agent’s ’short sale team’ let me know just after Christmas that the bank and the seller were close to coming to agreement on the terms of the short sale. She said they were going back and forth, but that it was a productive negotiation and wouldn’t affect our contract.

3. On January 28, 2010 I got an email from the short sale team letting us know that we had an official approval and that we should pull the trigger on inspections and appraisals. This email constitutes a ‘Notice of Agreement’. At this point, the sale morphs into a traditional sale. We have approval by all parties; we move forward.

4. My buyer had an inspection done to the tune of $275, a termite inspection at $55 and an appraisal at $450. Minor things were found, but value on the appraisal came back good and my buyer was comfortable going through with the purchase.

5. The loan was completed and the paperwork was sent to the title company on Thursday, February 18. The buyer went in to sign her portion early on the 19th and the goal was to fund and record by Tuesday the 23rd. She even brought a cashier’s check in for her down payment (more than $5,000).

6. Tuesday morning I was informed, for the first time, by the title company that the seller had not returned the signed paperwork. I called the listing agent (this time I bypassed the ‘team’ and called the man himself). He told me that his client had a lawyer advising him the wording of the approval letter from the bank would leave him open to being sued at some time in the future for the deficiency of the loan. The listing agent told me he was 90% sure he could get his client to sign, and that he would call to let me know by 11am.

7. By Thursday, when we still weren’t hearing anything definitive or positive back from the listing agent or seller, we put in for a cancellation and refund of deposited funds due to non-performance by the seller. My client received her earnest money and the money she’d brought to title for her down payment back. She did not, however, get any kind of reimbursement for the $780 she spent on inspections and appraisal (which is, in some ways, the least of her investment into all of this. We spent an hour on Saturday before the supposed Close of Escrow matching paint chips to various walls in the house, for heaven’s sake).

My client plans to pursue damages from the seller in mediation and arbitration. The seller had a chance to negotiate his issues with the lender, and he said he was finished. We were told all parties were in agreement. I’m not an attorney, but I believe she has a strong case. Let me tell you, though, she will never be a winner in all of this, even if she is awarded damages. To begin with, getting money from a seller already in default on his mortgage seems a bit like trying to squeeze blood from a stone. If it’s not there, how can you get it? And secondly, vindication in court won’t get her a place to live. She had put notice on her apartment and found out yesterday they have rented it out to someone else. She has to be out by April 12. We’re doing our best, but I don’t feel particularly confident that we will find her an acceptable house that can close by then in the next week.

So for now, I’m wary of the shark infested waters of the short sale, and believe you, me, this is a story I will be telling to all of my clients who want to look at short sales in the future.

*Units of measurement are in boxes.