(Video Transcript:)

This is Jim Sexton with some ground breaking news for the Phoenix real estate market. How about John Hall & Associates merging with Realty ONE Group. (What did he say?) That’s right! John Hall & Associates will become Realty ONE Group.

Who’s Realty ONE Group?

Here’s a company that started six years ago in Nevada. In three short years they went to number one in the marketplace for number of agents as well as number of transactions. They came to Arizona in 2007 and have grown from zero to over 700 agents and have four offices. Last fall they opened in California and have four offices including a fifth this month. They’ve reached 2,500 agents in that short period of time. They are ranked 13th nationally for number of transactions. This is a company that’s going places.

Why are we doing this?

For the past couple of years I’ve been searching for what John Hall needs in order to compete for agents in the marketplace. Here’s what I’ve figured. I need better technology. I need better systems. I need more modern offices and more modern conference rooms so agents can bring buyers and sellers in can sit them down and show them contracts, make presentations, and show them properties. These needs are met with the acquisition by Realty ONE Group. Additionally Realty ONE Group has an intranet system in which agents are able to sign on to have access to their forms, access to their transactions, calendar of events, etc.

So here we are with the announcement via video first, but we’re having meetings on Tuesday and Wednesday August 9th and 10th in which we’re going to have complete packages and complete information of all the incentives, all the reasons, all the questions that you might have about Realty ONE Group.

Additionally the founder of Realty ONE Group as well as his support staff will be here to help answer questions and start to get you set up. The reason we’re starting on Wednesday is because it takes time to order business cards, order signs, and answer all your questions. We’re having all this take place and switching licenses and switching listings towards the end of the month; the last week in August.

Who’s coming over?

The core John Hall & Associates support personal are all included; Marge, Toni, Phil, Bill, Diane and support staff from all the offices are included in this transition process and we’re here to help you and we’re here to answer your questions.
Agents that are doing property management need to get additional information that we’ve put in a separate video on the intranet. Check that out because your conversion path is slightly different than non-property managers.

Let’s review:

Wednesday August 10th, come to your office and pick up your conversion packet that will answer your questions. You’ll receive an email this week with dates and times of meetings at various offices in which you’ll be able to meet the founder of the company as well as managing brokers of their various offices. I’ll be there, I’ll be answering your questions, obviously I hope to see you there and have a chance to interact and let you know why I think this is an excellent idea and excellent opportunity for both of us.

This is Jim Sexton, soon to be with Realty ONE Group, inviting you to Wednesday August 10th meeting. Thank you very much for watching.

Meeting Schedule

Tuesday 8/9 – 9am – Arrowhead – Jim and Phil
Tuesday 8/9 – 8:30am – PV – Marge

Wednesday 8/10 – 9:00am – PV – Jim and ROG Leadership
Wednesday 8/10 – 11:30am – Scottsdale – Jim and ROG Leadership
Wednesday 8/10 – 2:00pm – Tempe – Jim and ROG Leadership
Wednesday 8/10 – 4:30pm – PV – Jim and ROG Leadership

*Realty ONE Group conversion packets will be available on Wednesday 8/10 at each branch office.

July has 8,377 closed transactions as of 8/1/2011. Of those 3,597 (43%) are Bank Owned and 1,991 (24%) are Short Sales. The percentage of distressed sales continues in the 2 out of 3 range.

July 2011 had the 4 highest number of homes sold compared to the last 11 years. It’s an above average or above normal number. However 7/11 was down 21% from June in a month to month comparison; but 7/11 was up 18% from 7/10 in a year over year comparison. Note: ARMLS is currently over-reporting 6/11 total closings @ 11,125. My search today for 6/11 closings found 10,582, which is the number I used for this report.

Our inventory remains low with 20,217 in active status. We could add the ~7,600 properties in AWC status (6,900 – 91% of these are short sales), but I like to compare to previous reports of actives less the properties with contracts on them. So we now have a 2.4 month supply of active inventory, but only because there were ‘only’ 8,377 closings instead of +10,000. A balanced market has 4-6 months inventory, so we’re still in a seller’s market with lots of multiple offer situations.

Bank owned properties have a 1 month supply with approx 3,600 active and 3,600 closed in July. HUD owned homes have a 2 week supply with 289 active and 554 closed.

Short sales come in with 3,900 active, 6,900 AWC, 3,900 pending, and 1,991 (24%) closed.

Prices in July had little newsworthy developments as they continued to bump along the bottom. The median price was down slightly in July (110k), but has basically been unchanged since 12/10. Both the average price ($155k) and the price per square foot (~$80) are at or below their previous low figures from 2/11.

As I look back at July’s performance, I remember when July/August used to have a ‘close before school starts’ flurry of activity. But with only 1 of 3 sales normal (non-distressed), and 73% of all closings vacant, the back to school rush might apply more to rentals than sales in this market.

That’s how I see it on August 1, 2011. Try to stay cool this month.

Jim Sexton
John Hall & Associates Inc.

Here’s an excerpt from the ADRE bulletin earlier this week.

Here’s what the FTC had to say.

So what do these announcements mean to the agents negotiating short sales in Arizona? My initial take is no more disclosure forms or announcements on web sites or other forms of advertising. For John Hall agents that means all forms 1, 2, 3a and 3b are no longer required. 1 is the advertising form for ads and web sites. 2, 3a and 3b were for short sale listing transactions. Again the MARS forms are no longer required at John Hall & Associates. Removing the ban on advanced fees might be a little trickier. Is it regulated by state statute or by the FTC? That’s why I think we will hear something from ADRE in the near future.

ADRE did clarify their interpretation on 2 agents from the same company working a short sale and teams having multiple agents including a specific short sale bank negotiator and whether they need a loan originator license or not. It’s contained in the 4th and 5th questions in the article. We’ll be talking about these changes at the office meetings coming up, so check us out on Tuesday in Scottsdale and 7/26 in the PV office.

Stay informed and practice real estate the right way.

Warning: Placement of Feathers in Cap Ahead

Annually the Phoenix Business Journal publishes their Book of Lists. This is where they rank local businesses based on various criteria depending on the industry. Real estate happens to be a popular industry in our neck of the woods, therefore it receives several lists based on different segments; residential brokerage, commercial brokerages, residential real estate agents, commercial real estate agents, etc. Here are three definite noteworthy items…

John Hall & Associates Ranks 5th

Based on 2010 local residential sales volume, we came in fifth on the Residential Real Estate Broker’s list!  Woot! kind of an interesting note, we were fifth last year and fifth 10 years ago.

Russell Shaw Ranks 10th

Based on total dollar volume closed in 2010, Russell Shaw came in tenth on the Residential Real Estate Agents list.

Evan Carr Ranks 15th

Again, based on the total dollar volume closed in 2010, Evan Carr came in fifteenth on the Residential Real Estate Agents list.

Congrats to all the REALTORS® that ranked and especially those JHA family members.  Always cool to get recognized for your hard work!

Once again building the Phoenix real estate market report first thing on the first of the month produced some surprising results. The number of closings looks too high, especially the number and percentage of short sale closings. Even though I think these numbers will change, I’ll report them as I see them on 7/1/11.

June 2011 had 10,509 closed transactions; highest number of home sales from any June. In fact, it happens to be the highest number of home sales from any single month ever, previous high 10,250. The Arizona Regional MLS (ARMLS) has reported +10,000 sales only 3 other times: 6/04, 6/05, and 8/05. This is the first time over 10,000 in almost 6 years.

Phoenix Market Trends

Looking at recent Phoenix market trends, June 2011 sales volume increased 7% over May 2011 and by 13% over June 2010.

Fortunately in early July, we have good news on the price front as well. Both the average and median home sales price increased month over month 2% and 3% respectively – $161,000 and $111,000.

Since we have 6 months in the books, I looked at the year to date comparisons 2011 vs. 2010 and 2011 vs. all-time. Remember 2010’s number of transactions were approximately 92,000 which ranked fourth highest home sales all time. Greater Phoenix’s highest year with 104,700 came in 2005. Well, 2011 is off to a very strong start with 53,501 closings YTD. That’s 11% higher than 2010′s numbers and 1% off of the record setting 2005.

Previously the buyer and seller had to acknowledge and agree to things like;

• it’s an arm’s length transaction,
• there are no agreements that haven’t been disclosed,
• misrepresentation may subject the parties to civil and/or criminal liability,
• there is no appraisal fraud, flipping or straw buying.

Now the real estate agents and escrow agents are also ‘acknowledging and agreeing’ to these conditions. In addition, there is a new paragraph that creates huge liability issues for the parties that sign this addendum;

13. Each signatory agrees to indemnify the Servicer and Freddie Mac for any and all loss resulting from any negligent or intentional misrepresentation made in the affidavit including, but not limited to, repayment of the amount of the reduced payoff of the Mortgage.

“Negligent or intentional misrepresentations made in the affidavit”…. What does that mean? Or better yet, who has seen these affidavits? Earlier in the addendum it states that “‘the Servicer and the Investor are relying on statements made in the affidavits as consideration for the reduction of the payoff amount.” These statements are made by the seller, but who has seen these affidavits? Has the buyer, buyer’s agent or escrow closing agent been given a copy of the statements and the documentation to verify that the seller’s statements are true? Probably not. So how can they “indemnify the Servicer and Freddie Mac for any and all loss” based on a seller’s statement that they haven’t seen or have no knowledge of?

Oops – I probably should have started with…

I’m not an attorney. I do not play an attorney on TV. This is not legal advice. My broker advice is to advise your clients to get legal advice concerning this document.

My advice to John Hall agents being asked to sign this form as a buyer’s agent is to “Just Say No!” Don’t be surprised if you find more and more title companies declining to sign also.

Last week during an awards breakfast for the Scottsdale Area Association of REALTORS®, Kevin Duff was awarded with REALTOR® Emeritus status.

Kevin has been working out of the John Hall & Associates Scottsdale office since 1984 and he’s been licensed in Arizona since 1971. Nice going Kevin, well deserved my friend!

REALTOR® Emeritus Status:

Any person who has held membership in the National Association as a REALTOR®, REALTOR-ASSOCIATE®, or a combination of both, for a cumulative period of 40 years in one or more Associations of REALTORS® is eligible for REALTOR® Emeritus status.

Fannie Mae has recently announced a special incentive effective with offers submitted on or after June 14th.

Terms and Conditions:

• Buyers and/or selling agents (the agent representing the buyer) must request the incentive upon submission of initial offer.
• Initial offer must be submitted on or after June 14, 2011 and close by October 31, 2011. Initial offers made prior to June 14 are not eligible for the June 14 – October 31 incentive.
• Sale must close on or before October 31, 2011. No exceptions will be made to this deadline. (Note: Initial offers submitted after September 15, 2011 may not close by the incentive deadline of October 31, 2011.)
• Buyers must be purchasing a HomePath property to use as their primary residence to receive closing cost assistance. Second homes and investment properties are excluded from the incentive.
• Sales closed via the retail channel are eligible, including those utilizing public funds. Pool and auction sales are ineligible.
• Buyers must sign the Owner Occupant Certification Rider to the Real Estate Purchase Addendum.
• Buyers with total closing costs under 3.5% are not eligible to receive the difference as a credit.
• Properties where Fannie Mae acquired the property in connection with financing under a reverse mortgage are not eligible. Ask the listing agent for details.
• Buyers should consult their lenders for guidance on financing. Lenders and mortgage products may impose their own limitations on the use of the 3.5% incentive. For example, the lender may consider the incentive a Seller Contribution and limit the amount to 3.0%. In those instances, the remaining 0.5% will no longer be available to the buyer.
• Fannie Mae reserves the right to remove any property from promotion or end the promotion at any time. Any dispute over the payment of the incentive shall be resolved by Fannie Mae in its sole discretion.

Note that this incentive will be identified on the purchase contract, and must close by October 31, 2011 to receive the incentive from Fannie Mae.

Tour Improvements

Ever since the Eilers started organizing the home tours they have been making helpful improvements. The tours now have a set time frame. The bus leaves at 9am and returns by noon. They also replaced the standard school-like bus with a limo bus. The limo bus has seating designed similar to a stretched limo; REALTORS® face each other rather than everyone facing forward. This turned out to be a great catalyst for conversations and networking. I also like that a week before the tour they announce the area of focus; last month – McCormick Ranch and Pinnacle Reserve, this month – luxury homes in Scottsdale/Paradise Valley. Stay tuned for July’s area…

Looking to network with other dynamic REALTORS®? Join the next tour on July 13th!

Have a listing you’d like to add to the tour? Contact the Eilers Team through the Paradise Valley office or drop them an email (eilersoffice at gmail). Next month’s tour date is Wednesday July 13th. Hopefully you can attend!

View pictures from this year’s tours…

Just when you thought the only way to read the Arizona REALTOR® magazine was in a digital format, AAR brings back a printed version… with a twist.

In a cost cutting/going green strategy last year (or was it the year before?) the Arizona Association of REALTORS® stopped printing their monthly magazine/newsletter to the dismay of many members. It has been argued that readership has dropped causing less-knowledgeable REALTORS® on the street. Luckily for us AAR cares.

Now four times a year you can receive a printed version of the Arizona REALTOR® Quarterly in your physical mailbox. AAR is aggregating the best articles and legal hotline questions from their monthly publications. All you have to do is subscribe at http://aaronline.com/azq. There is a cost = $28/yr.

So what do you think? Are you going to sign-up?