April & May 2015 - Phoenix Real Estate Review

To our valued clients:


I hope you enjoy this monthly newsletter. Remember whether you are buying a new or resale home it is important to have a realtor to represent your interests. If you know of anyone who is thinking about buying or selling please let me know.  You can search the MLS from my website at www.greathouseaz.com.


Do you want instant updates on the Phoenix Real Estate market? Follow me on Twitter


Do you have a rental property and need a property manager?  Please call or email Karen Van Vugt at 602-316-7028 or ftr9558@cox.net


Sincerely,

Pat Hune

Broker

greathouseaz@gmail.com

1st Southwest Realty

www.greathouseaz.com

Search the real MLS from my website!

Cell 480-703-1976

Fax 480-304-9099

Equal Housing Opportunity



Market Overview -  The real estate market seems to be celebrating the number 19.  The homes sales were up 19% in February.  As of May 2015 the housing supply was down about 19% from a year ago. Bankruptcies in the Phoenix area dropped 19% as reported in April.   For the last 19 months the real estate market has had low supply and low demand.  According to Joanne Walmsley of Sacred Scribes  "The number 19 is an endurance vibration.  It brings everything into focus, winds up old accounts and starts off anew.  People influenced by the number 19 can be completely self absorbed, are usually extroverts and are often egotistical.  They can also become dependent on others and will find that there are many obstacles in their path until they work forward, balancing their needs with the needs of others.”  I am no numerology expert or follower, just desperate for some sign of an increase in inventory.   But perhaps the prevalence of the number 19 means the real estate market will become more balanced with an increase in supply.  From the buyer and real estate professional perspective one can only hope. 


Interest Rates Creeping Up  -  The interest rates have become very very volatile in the past couple weeks. (I would say 19 days but that would be pushing it,)  Mortgage lenders are urging buyers to get under contract and lock their interest rate.  Buyers who have been sitting on the fence should make a home buying decision soon as waiting could cost them big.  As interest rates go up, payments go up and the purchase price a buyer can qualify for goes down.  Buyers may no longer qualify for the home they want.


Disturbing New Trend in Appraisals - Mortgage lenders report an increasing number of appraisals are not meeting contract. Contracts where the seller is paying the buyer’s closing costs are being appraised and then the appraiser is deducting the closing costs from the price.  Buyers who ask sellers for concessions  typically do this because the buyer does not have enough cash for both the downpayment and closing costs.  For example the list price is $175,00 and the contract price is $175,000 but the buyer has asked for 3% towards closing costs or $5,250.   The appraiser sets the value at $175,000 less $5,250 or $169,750.  Now the seller either has to reduce the price by $5,250 (most likely), the buyer needs to pay the difference (not likely unless the buyer has the extra cash available) or the buyer and seller split the difference by reducing the price by $2,625 and the buyer pays an additional $2,635 (somewhat likely if the buyer has the cash).  


Articles

1)  STAT Newsletter, PPI and Rent Check Link 

2)  Rental Market - Rents Have Increased for the Past 10 Years 

3)  Multifamily and Commercial  Real Estate Trends

4)  Multifamily Development Making Central Phoenix More Vibrant 

5)  Real Estate Briefs

     a) Gilbert Population Grows to Fourth Largest in the Valley

     b) How Much Can A Landlord Charge Tenants for Repairs?

     c) Property Insurance and Home Warranties - What Every Landlord Should know.

6)  Tales from the Real Estate Trenches 

The Check is in the Mail - Important things to know about stop payments and checks

 

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1) STAT Newsletter Link - STAT is produced monthly  by the Arizona Regional Multiple Listing Service - the database realtors use to list homes for sale and that have sold.   ARMLS® COPYRIGHT 2015


May STAT


April STAT


STAT Newsletter and Real Estate Market Highlights

Commentary by Mike Orr, WP Carey School of Business at Arizona State University


“Supply remains relatively low except at the high end of the market,” Orr says. “At the moment, we are seeing early signs that demand is likely to recover quite a bit faster than supply. It would only take a modest increase in first-time home buyer demand to overwhelm the current weak level of supply, making it tougher to find affordable homes for sale.”  Experts says supply is an issue when it comes to all types of homes, including affordably priced rentals, which Orr says are at the lowest level he has seen in 14 years. 


But Tom Davis, vice president at Pioneer Title Agency, says in some areas, pending listings are up as much as 33 percent and this appears to be the trend throughout the Valley. Davis is quick to add that we are still in somewhat of a sellers’ market, with only about a six week inventory of homes on the MLS.

“The biggest overall trend we see in residential real estate is the market trending upward from relief to optimism,” said one real estate broker. “We are continuing to see an uptick in the market across the board. Housing prices are on the rise and so is the rental market.  We are seeing very early signs of multiple offers, which could possibly be an indication of the return of a seller’s market.”  


The market for existing housing in Greater Phoenix is also improving. Active listings continue to decline (26,810 in April vs. 27,553 in March). Resales continue to grow (8,373 vs. 7,887). And prices are increasing ($202,000 in April vs. $200,000 in March and $190,000 a year ago).


Elliott Pollack and Company reported the "Greater Phoenix housing affordability improved slightly in the first quarter of 2015 as 70.2% of new and existing homes sold were affordable to families earning the local median income. This compares to 68.3% a year ago.”  According to the Homebuilders Association of Central Arizona (Greater Phoenix), single family building permits in April were up to 1,505. That’s up 40.7% from last April’s 1,070. Year-to-date, single family permits in Greater Phoenix are up 22.3%. This is a clear indication that the new housing market in Great Phoenix is finally gaining traction. Hopefully, this will continue and help increase the supply of available homes.


Single Family Homes...sales increased year over year in three sectors:

  • Normal re-sales (up 25%)
  • New homes (up 12%)
  • Third party purchases at trustee sale (up 13%)

Single family home sales decreased year over year across the remaining sectors:

  • Investor flips (down 20%)
  • Short sales and pre-foreclosures (down 16%)
  • Bank owned homes (down 12%)
  • GSE (Fannie Mae, Freddie Mac, etc.) owned homes
  • (down 58%)
  • HUD sales (down 19%)

The change in total dollars spent on homes was even more favorable than the change in the unit count.

  • Total dollars spent on single family homes rose by 20% above March 2014.
  • Total dollars spent on townhouses & condos rose by 31% above March 2014.

The median sales price was up 5.9% from $204,900 to $217,000

In the single family market we see that average price per sq. ft. went up 2.2%, which is more than the three individual categories. Overall pricing for single family homes has been very stable over the last year, but is starting to move upwards again.


New Home Sales

Newly built single family homes saw 910 closings in March, a 32% improvement over February and 12% higher than March 2014. The total dollar value of single family new homes closed in March was up 15% from $285 million in 2014 to $328 million in 2015.  The average sq. ft. of a new single family home in January was 2,640 while the average sq. ft. of a non-distressed re-sale was 2,018. The fact that the average new home was 31% larger than the typical resale confirms the extent to which homebuilders have abandoned the entry-level market in favor of the move-up market. It also shows us why the median sales price of new homes is so much higher than for re-sales, even though the price per square foot is very similar.  The market share for new single family homes was 11%, down from 12% in March 2014.  Average price per square foot gained 2.2% from $129.31 to $132.15


Demand

Total single family, townhouse & condo sales were 17% higher than March 2014, with a 16% rise in single family homes while townhouse & condo sales were up 27%. Townhomes and condos gained market share from 14.3% to 15.5% compared with March 2014. Homes priced over $500,000 is no longer out-performing with a slight decline in dollar market share from 27% to 25% since last year. Homes under $200,000 also lost market share from 25% to 23%. The big increase came for the mid range between $200,000 and $500,000 where market share rose from 48% to 52%.  We saw growth in normal transactions (21%) and new home sales (12%) at the expense of distressed transactions (down 18%).


Supply

The number of active single family listings without an existing contract was 16,644 for the Greater Phoenix area as of April 1. This is down 6.1% since March 1. The inventory of single family homes under $150,000 stands at 34 days, down from 61 days a year ago.  Overall we have seen 3% fewer new listings created in 2015 than at the same stage in 2014. Supply remains on a declining trend after accounting for seasonality. We saw growth in normal transactions (21%) and new home sales (12%) at the expense of distressed transactions (down 18%).


Outlook

Demand increased during March, especially for the mid range between $200,000 and $500,000, where 28% more money was spent on both single-family homes and townhouse/condos compared to a year earlier.  It is now very likely that the second quarter of 2015 will see a much stronger housing market than the second quarter of 2014. Many observers seem to believe interest rates must rise at some point. We believe such an increase will most likely be balanced by more favorable underwriting policies leading to wider availability of loans even if they are a little more expensive. We therefore do not expect a rise in interest rates to deflate the market. Instead we believe we will start to see a small swing back towards home ownership and away from renting.


2)  Rental Market - Rents Have Increased for the Past 10 Years 

Debra Hill-Fox, Arizona School of Real Estate and Business, March 2013


The home rental arena has seen a consistent increase in rental rates for the past several years. Average rental prices and vacancy rates have become the hot topics as industry reports continue to point out that renting is the popular housing choice in Phoenix metro, especially for the millennials. It has become normal to see apartment communities popping up all over the Valley. Rental rates have been steadily increasing from an average of $750 in 4th quarter 2012 to an average of $808 in 4th quarter 2014. Rent for many folks in the metro Phoenix area has gone up about 15% over the past twelve months. A market study recently performed revealed most renters are paying $50 to $75 more than they were a year ago. That may not sound like a big increase, but it's enough to make some renters start considering home ownership. Rent is upwards of $1,000 a month, just for a two-bedroom, two-bath apartment, And you'll pay $1,400 or $1,500 for a three-bedroom, single family home in most areas, although there's more affordability on the outskirts of Phoenix.  However, in 2015 we’ve seen rental rates remain fairly steady from the 2014 increases as the homeownership market is coming back.  Below are some average Phoenix metro statistics related to rentals:


Asking Rent

Highest Rent: South Scottsdale:

 $1,126 ($981 in 4th quarter 2013)


Lowest Rent: West Central Phoenix:

$559 ($583 in 4th quarter 2013)


The end of 2014 was the 10th consecutive quarter of year over year asking rent increases with 27 out of 30 submarkets having higher asking rents than they did in 4th quarter 2013. In fact, the last quarter of 2014 recorded the highest ever average rents in Phoenix metro.  At the same time, 2015 eviction filings have declined and complaints for fair housing have risen, which suggests a slowing trend in future rent growth.


Vacancies

Highest Vacancy: South Scottsdale:

17.5% (11.8% in 4th quarter 2013)


Lowest Vacancy: NW/SW County:

2.7% (8.1% in 4th quarter 2013)


Concession Ratio

Highest Concession Ratio:

West Central Phoenix – 89% (72% in 4th quarter 2013)


Lowest Concession Ratio:

NW/SW County 0.0% (33% in 4th quarter 2013)


New Construction 

The year 2014 generated 24 projects comprising of 5,658 units added to the market. In 4th quarter 2014 there were 34 projects comprising of 8,298 units scheduled or under construction in 2015. The rental market in Phoenix metro will continue to remain strong throughout this year. It will be interesting to see how steady rental rates and the growth of homeownership will impact the real estate market overall.


Rent Check - Rent Check is an ARMLS's  publication tracking single family home rentals.  Click on the link for the statistics.

Rent Stats


3) Multifamily and Commercial  Real Estate Trends


Current Phoenix market trends data indicates a decrease of +3.8% in the median asking price per unit for Multifamily properties compared to the prior 3 months, with an increase of +15.5% compared to last year's prices. County-wide, asking prices for Multifamily properties are 3.7% higher at $56,403 per unit compared to the current median price of $55,138 per unit for Multifamily properties in Phoenix, AZ.


Loopnet Commercial Trends


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4)  Multifamily Development Making Central Phoenix More Vibrant

Philip Haldiman, Dealmaker, May 2015


All large cities evolve over the course of time, but central Phoenix could look and feel substantially different in the coming years.  Infill development within the central corridor is in full swing, particularly multi-family, which experts say will lead to a more diverse and vibrant urban core.


From 2012 to 2014, the U.S. Census Bureau recorded 16,773 multi-family permits in Maricopa County, with about 46 percent of those in Phoenix, many in the central basin. Tempe and Scottsdale followed, with about 19 percent.  Phoenix Planning and Development Director Alan Stephenson told Dealmaker the last two to three years has seen substantial development and an influx of new residents to the central part of the city.  Stephenson said projects by Alliance Residential Company, Lennar Homes and Habitat Metro plan to bring nearly 1,000 units to central Phoenix, with more projects set for later this year.


Four multi-family projects have broken ground or are slated for the 16th Street corridor.  The growth of multi-family and higher density in central Phoenix will result in many commercial uses reflecting the city’s specific neighborhoods, Stephenson said.  “It will lead to more cultural attractions whether they be art studios, coffee shops, restaurants or bars,” he said. ”We’ll end up having enough people to support more than one type of activity throughout our neighborhoods.”


State Demographer Jim Chang told Dealmaker these areas stand to see an influx in thousands of people leading to some dynamic changes, with a good chance of growth in businesses.  Traffic will increase, but the central corridor stands to be livelier with activities, Chang said.  “When people move in they are definitely going to need services,” Chang said. “Establishments will see more customers, and if existing establishments are not enough, more businesses will come in.”


Additionally, Dan Klocke, vice president of development for Downtown Phoenix Partnership, told Dealmaker the multi-family activity will draw Millennials, who are still not quite ready to buy, but interested in urban living.  “I think all these new apartments will attract a lot of young people,” Klocke said. “This becomes really attractive for newer companies interested in that demographic for their workforce.”


Mixed-use projects with commercial at the ground level and multi-family above has become a common choice for developers. Stephenson said more projects like these are coming online, and will lead to a more walkable city, also an attractive quality to Millennials.  People want to live, work and play in one place, he said.  “People are interested in a city with an active street scape, with shaded walkways, where you can walk, where you can hop on a bike or the light rail and not have to drive as historically you used to,” Stephenson said. “That trend is continuing and will lead to more people downtown.”


Colliers International reported the greater Phoenix multi-family vacancy rate continued to improve in the first quarter of 2015 to 5.7 percent, after ending 2014 at a 17-year low.  Mike Huckins, vice president of public affairs for the Greater Phoenix Chamber of Commerce, told Dealmaker the deluge of infill activity has been a self-fulfilling prophesy that came out of the light rail.  “The light rail helped create the environment for the businesses along the central corridor and with that brings the need for housing,” Huckins said.


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5) Real Estate Briefs


a) Gilbert Population Grows to Fourth Largest in the Valley

Parker Leavitt, The Republic, May 2015


One year after passing Scottsdale to become the community with the fifth-largest population in the Valley, fast-growing Gilbert has taken another victim, this time overtaking Glendale for the No. 4 spot, according to new U.S. Census Bureau estimates.


Gilbert added nearly 9,000 residents between July 2013 and July 2014 to become the 86th most-populous community in the U.S., also leap-frogging Reno; Garland, Texas; and Winston-Salem, N.C., while climbing from No. 92 the year before.  The town's growth rate of 3.8 percent was good enough for 23rd in the nation, bringing its total population to an estimated 239,277.  According to Movoto the reason is the family-friendly atmosphere of Gilbert, which boasts a median household income of more than $80,000, and the town's up-and-coming downtown area, which is home to a number of cool new restaurants and shops.  “Downtown has so many choices of eateries, shops, a farmers market, with a family atmosphere that cannot be found in any other Phoenix suburb,” said a local real estate agent  in Movoto's blog post about the ranking.


Mesa, which remains by far the largest city in the East Valley, added about 6,300 residents for a population of 464,704. Mesa retained its spot as the nation's 38th most populous city, one spot ahead of Atlanta.


After Gilbert, Tempe was the fastest-growing East Valley city according to the new Census figures, released May 21. Likely drawing on an influx of higher-density, multifamily housing, the landlocked city added nearly 4,000 residents, or 2.3 percent, to bring its population to nearly 172,816.


Scottsdale grew by 1.8 percent but didn't move in the rankings as the 95th most-populous in the U.S., one spot ahead of Baton Rouge, La.


Chandler's 3,900 new residents gave it a 1.6 percent population boost as the city passed St. Petersburg, Fla., for No. 78 nationally for total population.


Phoenix remains the sixth largest city in the U.S. behind Philadelphia after adding nearly 25,000 residents between 2013 and 2014, according to the Census Bureau.


Despite falling behind Gilbert in population among Arizona cities, Glendale is tops in the West Valley with 237,517 residents, followed by Peoria (166,934), Surprise (126,275) and Avondale (79,646).


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b)  How Much Can A Landlord Charge Tenants for Repairs?

Various sources, May 2015


Every time a tenant moves out of a rental property repairs are needed.  Often the owner believes the tenant should leave the property as rent ready as when they moved in.  Any experienced rental property owner or property manager knows this is not a reasonable expectation.  But how much can a tenant be charged?  What is considered normal wear and tear?  


Per the attorney firm of Williams, Zinman & Parham PC tenants generally cannot be charged for items more than 5 years old as they are considered fully depreciated.  Tenants can only be charged a pro-rated amount for items damaged.  Tenants cannot be charged for pre-existing damages.  The tenant cannot be charged for work that has not or will not be done. 


So the question is how does a landlord prove the tenant did damage above normal wear and tear?  How are pre-existing damages documented?  Some things are a matter of opinion while others can be clearly documented.  Here are some examples:


1) Flooring - Flooring, especially carpet, is typically the item that gets the most wear.  Most landlords know carpet will typically have to be replaced every time a tenant moves. If the carpet is new when the tenant moves in and  has to be replaced when the tenant moves out a year later the tenant can be charged for the cost of the replacement less 6% for depreciation.  But the owner would have to prove the carpet was new.  If the replacement cost is $1000 the tenant could be charged $940.  If the carpet was 12 years old when the tenant moved in and has to be replaced when the tenant moved out the tenant could not be charged for the cost of replacing the carpet.   Installation of more durable floor coverings like porcelain tile or vinyl are recommended as it will save the owner money in the long run.  


2) Paint - Paint is typically scuffed up by tenants.  Unless there are holes in the drywall and a majority of paint damage would be considered normal wear and tear. 


3) Appliances - Appliances typically last more than 5 years but are still considered fully depreciated.  A stove was 12 years old when the tenant moved in and was still functional when the tenant moved out. But it was dirty and had some discoloration and chips.  The landlord cannot charge the tenant 100% of the replacement cost as the stove was too old.  They could deduct for additional cleaning from the security deposit.


4) Slow Drains and Leaks - If there is a leak under the sink or slow drains this is the responsibility of the landlord not the tenant as this is a maintenance item.  The only exception is if the tenant caused the drain to be stopped up or flushed something down the drain that caused the clog. 


Documentation - The best way is to have a written record and photographs to support the condition both when the tenant moves in and out.  However the landlord and property manager have to be careful because the tenant can start asking for things to be fixed or changed costing the owner money.  In addition pictures do not always show all the damages as some things do not show up in photographs.


How to collect for damages - The only way to collect for damages is to take the tenant to court with iron clad evidence. This includes - receipts showing the original purchase of an item, receipt for replacement of an item, copy of the lease, documentation of the condition before and after the tenant occupied the property, photos before and after.  Even if an owner is lucky enough to get a judgment it is unlikely the tenant will ever pay a dime.  The only recourse Landlords have is to turn the judgment over to a collection agency which typically keeps 50% of any money recovered.  In addition Landlords need to be careful as tenants may come back and do a lot more damage if they are unhappy about getting a judgment.  Owners need to weigh the cost of attorney fees and possible retribution by the tenant versus the cost of repairs.  


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c) Property Insurance and Home Warranties - What Every Landlord Should know.

Various sources, May 2015


Property Insurance - Some landlords donknow if they have the right home owner’s insurance coverage for rentals.  Some of the common mistakes are 1) Deductibles that are too high, 2) No coverage if the property is vacant, 3) Mold coverage, or 4) Coverage for lost rent if the property is damaged due to flood, fire or other catastrophes.  The owners should cal their insurance company to add the coverages listed above and have no more than a $500 deductible.  It may cost a little more but in the long run it will be worth it.


Home Warranties - Most property managers encourage their owners to get a home warranty.  But all home warranties are not created equal.  Here is some customer feedback:


2-10 Home Buyers Warranty -   This company is very difficult to work with.  It is hard to pay the service fee if the owner is not there in person to meet the technician as they won’t take credit cards. The contractors are not good.  Typically there are multiple trips and the problem is still not solved.


Choice Home Warranty - To quote on owner “They are absolutely the worst home warranty company out there.  I had an 8 year old air conditioner that needed to be replaced.  They said since is was not 18 years old or older they would not replace!”  This company does a great job of marketing as their website is often in first place if you Google home warranty.  They are cheap but the old adage you get what you pay for was never more true than with this company.


Fidelity -  Contractors they use tend to be good.  If there are issues with a contractor they seem to be fairly agreeable to the owner using a different contractor as long as Fidelity gives their permission first. 


First American - Mixed reviews on the contractors they use.  The contractors are supposed to contact the home owner but this does not happen with most of them.  If a service call is placed the owner should call the contractor to set a time.  Sometimes the contractors do not not call or show up. First American is not very willing to assign a different contractor.


Old Republic - This company does ok for multifamily but their contractors do not want to work on weekends.  If a tenant’s air conditioner stops working on Friday afternoon the contractor won’t show up until Monday.  This is unacceptable and a violation of the Landlord Tenant act. So the owner has to put the tenants up in a hotel until the problem is resolved.  In general the contractors do not deal well with emergency situations.  Old Republic isnot recommended for single family homes.


OneGuard - They are pretty good for single family homes but cannot seem to figure out multi family.  Sometimes there is not a lot of sympathy when the A/C is out and it is 110 degrees.  One tenant ended up staying with friends for the week it took to repair the A/C.  Because she had a dog because most hotels do not allow pets.  They would not reimburse her for lodging since she did not go to a hotel. 


The Warranty Group - Very bad reviews from home owners.  The coverage for multifamily is cheap at $1100 versus 1700 from other warranty plans.  But they do not want to cover anything.  



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6)  Tales from the Real Estate Trenches -  The Check is in the Mail

Important things to know about stop payments and checks

Pat Hune, Broker at 1st Southwest Realty, Karen Van Vugt, Property Manager at 1st Southwest Realty 


Stop Payments - We have all had it happen when receiving or sending a payment by check through the mail.  The check is not received or gets lost.  The issuer goes to the bank and requests that the bank stop payment on the check. (Note - it is very important you know the check number.  Make sure to either write down the number or better yet - make a copy of the check.)  A replacement check is sent.  So what happens a few months later when the original check is found and deposited?  Will the bank cash the check even though a stop payment has been issued?  The answer is yes.  Stop payments are only good for six months.  If the check is presented to the bank after six months the bank may honor it.  The only way to prevent this from happening is to print “void if not cashed within xxx days of the above date” on your checks. (The length of time is typically 90 to180 days.)  Though this is typically found on business checks it can also be written on your personal checks.


Stale Date - But wait you say! If the check is many months old doesn’t it have a “stale date”?  Unfortunately there is no law or hard-and-fast rule that banks must adhere to regarding stale-dated checks. According to the Federal Deposit Insurance Corp., if a check is presented for deposit more than six months after the date on the check, it is reasonable for the bank to assume that the check may be uncollectible — and therefore the financial institution can refuse to deposit or cash the check.  But the banks don’t have to do this. The other issue is checks are being electronically deposited through cell phones (see below) or through ATMs.  There are no human tellers to review the checks and kick them back because they were issued incorrectly, are too old or for other issues.  I had a business check cashed that was nearly a year old after the recipient said they never received the check.   I reissued the check but did not put a stop payment on the original check.  Silly me I thought the bank would refuse to accept it due to the old date.  Luckily I was able to get the recipient to refund the duplicate payment though it took about a month and several phone calls.


Cashier’s Checks - Since cashiers checks have already been paid for in cash, they do not have an expiration date.  But let’s say you wrote out a cashier’s check and dropped it into the mail.  Then you discovered the check amount was incorrect.  What can you do?  The answer is not much.  Cashier's Checks under $500 cannot be revoked for at least 30 days. Checks over $500 can be revoked but it is a painful process requiring you to get surety bond and other paperwork. The easiest course of action is to get the recipient to return the check so you can take it back to the bank, have it voided and then issue a new cashier’s check.  Several years ago one of my clients sent a cashier’s check to the title company along with some paperwork.  The check was not stapled or attached so the paperwork was removed and the check thrown out with the envelope.  It was a huge risk to the client but the the bank reissued the cashier’s check.  The bank warned the buyer if the check was found it could be cashed.  Luckily the check was buried somewhere in a landfill never to be seen again.


Depositing Checks Using a Phone App - Ahh the wonders of technology. Some banks allow iPhone users (and other smartphones, including Android phones) to deposit checks simply by taking a picture of the check. Select banks and credit unions offer the ability to use your phone’s camera and a secure application to save their customers a trip to the branch. Of course the bank will say "be sure not to deposit the check another time and you should write "ELECTRONICALLY PRESENTED" on the check to avoid legal problems if you accidentally deposit it again".  But ultimately the same check can be deposited over and over again.   If the check gets deposited multiple times the person who issued the check will  have to spend the time and aggravation to get it straightened out.  The banks are not taking any responsibility, There is really nothing you can do to prevent someone from depositing the check electronically multiple times.  Hopefully the banks will implement some type of way to stop this.