Monday, November 30, 2020

 


I stopped by Green Things when walking along the Rillito with my hiking buddies today. The poinsettias were stunning.

Wednesday, November 18, 2020

The New Mexico Purchase Agreement


I now have a license to sell real estate in New Mexico. Some of the procedures in the Land of Enchantment were surprising to me. 

In Arizona, the purchase price of a property is public record. You may not be able to find out who owns a property if the deed is recorded in the name of a trust or LLC, but you can look up the sale price history. This seems important, so real estate professionals and the public know whether a seller has priced his house appropriately, based on recent sales of nearby houses. 

In New Mexico, sale price information is not available to the public. That's one of the reasons I want to get a real estate license. I want to buy a house in Silver City, and I want access to the sale data, which is available to real estate professionals. 

Typically property taxes go up, not down. In Arizona, the tax can go down if an owner-occupant buys a house that was owned by an investor, who pays higher property tax. The tax paid on a registered historic property will be lower than the taxes on a similar, nearby property that does not have historic designation. Governments can pass bonds that are funded by property tax, which will cause the tax to increase. When houses in a particular part of town sell for high prices, the property taxes on all houses in the area will increase. Whatever the taxes are when we buy a house, we can be pretty sure they will be different the following year. 

In New Mexico, prior to accepting a purchase contract, the listing agent or seller is required to give house buyer an estimate of what their new property tax will be, based on a non-binding calculation done by the county assessor.  

Another thing that surprised me is the paragraph in the Purchase Agreement that states, "Buyer warrants that prior to entering into the Agreement, he has thoroughly investigated the neighborhood and the areas surrounding the property, to include, but not be limited to investigation of the following: the existence of register sex offender or other person convicted of crime that may reside in the area; and the presence of any structures located businesses operating or activities conducted in the area that, in the Buyer's opinion, affects the value and/or desirability of the property. By entering into the Agreement, Buyer represents he is satisfied with the neighborhood and surrounding areas."

How and why the buyer can be expected to investigate all these issues before making an offer is something I'll need to learn as I practice real estate in New Mexico.

In Arizona, the homeowner association has 10 days to provide the buyer with the homeowner resale disclosure. The disclosure has important information that may cause the buyer to decide the homeowner's association is not right for them. Maybe there are restrictions on pets, or vehicles in the driveway, or home businesses. Maybe the HOA is in a lawsuit, or is financially unstable. Maybe the property is subject to an assessment that the seller didn't mention. The property may be in violation of HOA regulations due to disrepair, an unapproved porch addition or paint color. If the disclosure has information that is unacceptable to the buyer, in Arizona, the buyer has five days to cancel the contract and get his earnest money back.

In New Mexico, the HOA has until seven days before closing to deliver the HOA disclosure to the buyer. Then the buyer has seven days to approve the HOA disclosure or cancel the purchase contract. So yes, a sale can fall apart on the day it is supposed to close. 


Monday, October 26, 2020

Dia de los Muertos, or Day of the Dead, is my favorite holiday. In 2015, I had the privilege of experiencing this quintessential Mexican holiday in Patzcuaro, Michoacan. It was beautiful, spiritual and very moving. 
Tucson's All Souls Procession had to be cancelled like everything else this year, so we went to the Tucson Botanical Gardens to see the eight-foot tall catrinas. We wore calavera pandemic masks. 

Wednesday, October 21, 2020

Earnest Money Deposits in New Mexico


I am working on getting licensed to sell real estate in New Mexico, and I have learned some surprising things about how houses are sold in the Land of Enchantment. 

In the Grand Canyon State, if the Arizona Association of Realtors Purchase Agreement is used, when a buyer's offer is accepted on a property, the buyer deposits refundable earnest money, usually 1% of the sale price, with an escrow company. The Arizona buyer has several opportunities to cancel their purchase contract and get their earnest money deposit returned. 

1) The buyer has an inspection period, typically 10 days, and if they "reasonably disapprove" of anything about the property after doing the inspection period, they can cancel the purchase contract and get their earnest money refunded. 

2) If the seller won't make the repairs the buyer requests, the buyer can cancel the contract within five days of receiving the seller's response to the buyer's request for repairs.

3) If the buyer doesn't approve of information in the title report or the homeowner association disclosure, the buyer can cancel the contract within five days of the receipt of the unacceptable information. 

4) If the property doesn't appraise for the contract price, and the seller won't reduce the sale price to the appraised price, the buyer can cancel the contract. If the buyer is getting a mortgage, his lender won't let him pay more than the appraised price, and the buyer has no choice but to cancel the contract if the seller won't reduce the price. 

5) If the buyer notifies the seller no fewer than three days before close of escrow that they are unable to get a mortgage on the terms specified in the purchase contract, the buyer can cancel the contract. 

In all these cases, the buyer notifies the escrow company and the seller that they are cancelling the purchase contract, and if the notice to the escrow company is given within the time frames specified in the contract, the escrow company refunds the buyer's earnest money. The seller has no say in the matter, which is as it should be, because he agreed to all these cancellation contingencies when he accepted the offer. 

In New Mexico, if the buyer wants to cancel the contract because of one of the conditions above, which are all allowed in the New Mexico Purchase Agreement, the buyer still needs to get the seller's permission to cancel the contract. If the seller won't sign the cancellation agreement, the escrow company has to hold the earnest money until the buyer and seller work things out. The seller can put the house back on the market and accept a purchase contract from another buyer while holding on to the first buyer's earnest money. The second buyer has to use a different escrow company, one that's not holding the earnest money. Whether the seller has to disclose to buyer #2 that the seller is in a dispute over earnest money with buyer #1 is another question I couldn't get answered in my class. 

The escrow company sometimes bears the cost of the earnest money battle. If the buyer and seller can't agree on who is entitled to the earnest money, eventually the escrow company needs to get the earnest money off their books, and they will release the funds to the state's unclaimed funds account. Everyone loses. 

Rather than just authorizing the escrow company to release earnest money in accordance with the Purchase Agreement that the seller signed, the New Mexico Real Estate Commission invented the Time Off Market (TOM) Fee. This is a small, $50 to $350 non-refundable deposit paid directly to the seller by the buyer when the buyer's offer is accepted. The seller keeps the TOM fee regardless of whether the buyer buys the house or cancels the contract. 

The buyer and seller can negotiate when or if earnest money will be deposited. They might wait until the inspection, financing, title and homeowner contingencies have been met. But a Silver City broker I talked to said earnest money is usually only $500 to $1,000, which doesn't seem to me like enough money to justify a legal dispute. 



Thursday, August 6, 2020

The Jewel Box

Stunningly beautiful. Rarely will you find such attention to detail as the owner has put into this little jewel box of a home. 

Living room ceiling was opened to create a cathedral effect. Kitchen wall was widened to living room. Saltillo-look porcelain tile throughout. Custom-made cabinets in kitchen and bath. Concrete counter tops, new stainless appliances and a gorgeous wall of green tile in the completely redesigned cook's heaven. 

New French doors, plank ceiling, laundry cabinet with new stacking washer and dryer in the dining room. 

Hall has raised ceiling, restored built-in cabinet and new sky light. Walk-in closets in both bedrooms. 


Enormous yard with mature mesquite is enclosed by attractive rusted corrugated fence and block wall. Gas pak/AC new in 2020. Evaporative cooler new in 2018. Two bedrooms, one bath, 971 square feet. The floor plan is here.

We put this house on the market on a Thursday and allowed agents to schedule showings at 30 minute intervals on Saturday. We received three offers at or above the list price. We accepted an offer for $15,000 above the list price. We found that this method maximized the market exposure for the house and motivated the buyers to make aggressive offers. We minimized the number of people in the house at any one time, which in important when selling a house in the time of coronavirus. This was also convenient for the seller, who only had to leave the house for one three-hour period during the compressed showing schedule. 

Sold for $235,000 on September 4, 2020. 

Thursday, July 30, 2020

Eden Roc Rocks!

Extremely rare first floor Central Tucson condo with private yard and GARAGE! Vintage masonry Mid-Century Modern design by Swaim and Cook Architects. 

Lush Mediterranean landscaping. Just one block from Reid Park Community Center and Randolph Golf Course. Tucked away in one of the best locations in Eden Roc Gardens, adjacent to the common area and away from the hustle and bustle. 


Listen to the birds and the tranquil burbling of the tiki fountain under the orange tree on your secluded patio. Spacious rooms with natural light. Check out the floor plan here.


Lots of storage. Almost everything in the condo can be conveyed by separate bill of sale. Has been a great turn-key vacation home. 


Rolling shutters keep it secure while you're away. $5,000 special assessment has been paid. This is the home you've been seeking at a bargain price. Sold September 11, 2020 for $150,000. 

Monday, June 29, 2020

2718 N Warren Avenue


This adorable apartment is hidden away from the street in the middle of a four-plex. High beamed ceilings. Ceiling fans. Lots of sun light and quiet. Oak cabinets in the kitchen.

Two bed rooms, one bath. The floor plan is here.

At 600 square feet, it's itty bitty, but still, my tenants happily stay for years.
Very pretty and clean.
Each of the four apartments here has its own washer and dryer in its own laundry shed. Off street parking is available for two cars per apartment.
New in 2019: Central air conditioning and gas heat; refrigerator and gas stove; ceramic tile through out; bath vanity, medicine cabinet, storage cabinet and low-flow toilet.  
A mile and a half north of the U of A near the Mountain Avenue bike path. A few blocks from Albertson's, Raging Sage, Beyond Bread, Opa!, Lovin' Spoonful, Yoshimatsu, Blue Willow, The Folk Shop and lots of other cool stuff on Tucson's real main street, Campbell Avenue.

Rent is $820 per month, but if you pay before the first of the month, you can pay $810. Deposit is $920. I pay for water, trash and recycling. You pay for gas and electric.

No smoking, no pets. Tenant must be self supporting. Good credit and landlord references a must! Listing agent is owner and property manager. Equal opportunity housing.

This property is leased through June 30, 2021.