Monday, December 28, 2009

Improving Air Quality in Your Home

Here are 3 tips for improving air quality in your home from the Environmental Protection Agency.

1 - Source control.  Eliminate individual sources of pollution....areas that contain asbestos can be sealed off or enclosed and gas stoves can be adjusted to decrease their emissions.

2 - Improved Ventilation.  Heating and cooling systems don't usually bring fresh air into your home.
Open windows and doors, operate window or attic fans weather permitting or run a window air conditioner with the vent control open.  Pollutant-emitting activities like painting, sanding, soldering or welding should be done outside.

3 - Air Cleaners.  There are many types & sizes of air cleaners on the market from relatively inexpensive tabletop models to sophisticated whole house systems.  Some air cleaners are highly effective while others are much less so.  Air cleaners are not designed to remove gaseous pollutants.

A simple solution would be to try a house plant.  There is some evidence that household plants can help remove significant quantities of pollutants from the air in your home.  But, over watering plants can be detrimental to your home's air quality...damp soil can promote the growth of microorganisms.

Wednesday, December 16, 2009

How to Select Window Coverings

A popular TV decorating show recommends that you focus on the four main options:  blinds, shutters, shades and curtains.  During Winter months, window treatments can affect the temperature in your home.  According to the US Department of Energy, using close-fitting drapes with a cornice can reduce airflow around your windows by 25% .  Mount your shades or blinds inside the window casting and you'll be able to minimize drafts and keep the room much warmer.

Color and pattern are important when deciding what window treatment to use.  Lighter colors will make a smaller room appear larger while darker colors tend to shrink a room.  Mix it up by playing with different textured shades such as rattan or bamboo.

Shades and curtains made from lighter fabrics allow more light to filter into the room.  A heavier fabric can look more elegant which longer drapery will look more formal.  Buy an amount of fabric two to four times the width of the window to make sure you have enough for overlapping.

You can spend anywhere from $16 for a light sheer to $400 for wood shutters.

Tuesday, December 15, 2009

Gender and Home-Buying Decisions

When it comes to making home-buying decisions, men and women often have different priorities.  A National real estate company's survey finds that most women are able to select a home much more
quickly than men.  Almost 70% of women need only one visit to a new home to decide that it is right for them, compared with 62% of men.  About 1/3 of men (32%) need two or more visits.  More than half of women (55%) believe it is more important to live closer to their extended family than to their job, compared with only 37% of men.  Women are also more likely than men (65% compared with 51%) to lose interest in the home of their dreams if there are concerns about the home's security.

Saturday, December 12, 2009

Utilities - To Shut Off or Not to Shut Off

Almost every landlord has wanted to shut off a tenant's utilities for one reason or another.  Unlawfully shutting off utilities can result in severe consequences to the landlord except for a few unusual circumstances.

Normally utilities cannot be shut off and Arizona State Statute allows the tenant to sue for damages and/or terminate their rental agreement.

Here is the statute that protects the tenant:

A.R.S. 33-1374  Recovery of possession limited

A landlord may not recover or take possession of the dwelling unit by action or otherwise, including willful diminution of services to the tenant by interrupting or causing the interruption of electric, gas, water or other essential service to the tenant, except in the case of abandonment, surrender or as permitted in this Chapter.

Friday, December 11, 2009

How to Hold Proper Annual Meetings

To hold and have effective and by the book annual meetings, the HOA needs to consider the following issues:

Does your annual meeting have to be held on a certain date?

Which members are entitled to notice and/or entitled to vote?

When must notice of the annual meeting be given?

What is the quorum requirement for the annutal meeting?

Is Cumulative voting required or allowed, and if so, what does that mean?

What matters must be part of the meeting other than the elections of directors?


Must certain documents be included with the notice of the annual meeting?


Do the governing documents require the election to be held in a certain manner?


Is a nominating committee required?  If so, who appoints the members and when?


How many members need to be on the board?


What is the length of term of the board members?


Does your board have staggered terms?


If Board members have been appointed, when does their term expire?


Do board members need to be members of the association?


Do board members need to be members in good standing?


Are members of the architectural committee elected or appointed, and if elected, who elects them?

 If the association fails to follow the proper requirements for all of the above issues, a member could challenge the results of the annual meeting.  The association can change the requirements by amending the articles or bylaws.  If the association is violating any of the requirements, it should consider changed the requirements or changing the way in which it holds its annual meetings.

Monday, December 7, 2009

HOMEOWNERS CUT BACK ON REMODELING

Homeowner spending on home improvements will continue to trend downward into the first half of 2010, according to a recent Leading Indicator of Remodeling Activity report issued by Harvard
University's Joint Center for Housing Studies.

The study forecasts annual decline in remodeling activity to hover at approximately 11% for the next several quarters.  While there are some positive developments in the industry, such as low financing costs for home improvement projects and rising home sales in some markets, the study finds that the overall outlook going into 2010 remains bleak due to weak home prices and decreased cost recovery for some types of remodeling projects.

Saturday, December 5, 2009

Could you Be Prevented from Renting Your Home?

In Arizona many people buy residential property as an investment and then rent out the the home full time or at least some portion of the year.  Additionally with the current declining market and the inability to sell a home, renting it until the market improves has become increasingly popular and necessary.  But, WAIT A MINUTE....could your Homeowner's Association Covenants Conditions & Restrictions (commonly known as CC&R's) prohibit you from leasing your home??? Maybe so. CC&R's regulate the homeowner's use of their property restricting everything from the color of the home, awnings, holiday decorations, pets, outdoor basketball hoops and landscaping.


During the recent housing boom builders included restrictions prohibiting homeowner's from renting their properties to limit the number of rental units in a community.  These builders/developers and their lenders believed that the number of rentals in a community affected the value of the property because of crime that often occurs in rental property.  Now many Homeowner's Associations are seeking to amend their CC&R's to include a restriction preventing rentals. While these associations might find this to be a difficult process as there have been no case law that addresses this issue...but you never know what can happen. 



The law in Arizona clearly states that if you choose to live in a HOA (Homeowner's Association) that has CC&R's you have a binding contract with the HOA and are accepting the restrictions associated with your property.  There is a contingency in the Arizona Associations of Realtor's resale purchase contract that allows the Buyer a period of time to review, accept or reject the CC&R's after their offer has been accepted.  ALWAYS carefully review the CCR's (provided by the Title company) to determine whether or not you must occupy the home and not rent it out.  REMEMBER CC&R's can be amended.  A HOA that doesn't have a rental restriction today may have it arise as an issue at a later date.


Linda Shank is a Broker/Owner & Certified Residential Specialist in the Southeast Phoenix Valley who has been selling real estate since 1978.  She is experiencing her third down market cycle.

Sunday, November 22, 2009

Unforeseen Tax Issues Triggered by Foreclosures & Short Sales

 SURPRISE! SURPRISE! SURPRISE!  Individual homeowner's facing foreclosure, short sale or a Deed in Lieu of Foreclosure would be wise to check with their income tax professional to determine what income tax impact they might face down the road.  There are two tax situations (which can get quite involved...Principal residence? Business or Investment Property?, Recourse or Nonrecourse debt?) to review when looking at giving back a property to cancel or release debt.  


(1)  Recognition of gain or loss on the transaction


(2)  Recognition of cancellation of debt income (COD)



Only your tax professional can really determine how this affects you personally so spend a few dollars up front to determine your course of action.  It's like adding insult to injury...first you
lose your home and then you get zapped with an unexpected tax bill.


 Linda Shank is a Broker/Owner & Certified Residential Specialist in the Southeast Phoenix Valley who has been selling real estate since 1978.  She is experiencing her third down market cycle.

Saturday, November 21, 2009

Buy a Fixer Upper with A FHA 203K Loan

The FHA 203K loan is a little known tool that many real estate and loan professionals have been using for many, many years.  A FHA 203K is very similar to the traditional FHA 203B loan...the only real difference is that with the FHA203K the home buyer is adding money upfront to their loan amount to finance any repair/improvement costs.  The traditional FHA203B loan requires that certain repairs to be done before the loan is made and the FHA203K loan allows the home buyer to purchase their fixer-upper and complete the repairs/improvements after the transaction closes. The other traditional FHA qualifications...appraisal guidelines, seasoning rules...still apply.  However, with the FHA203K loan the home buyer can fix up his/her home and not have to worry about the additional out-of-pocket expenses for the repairs/improvements.  A Fantastic Way to buy a Fixer-Upper!  Contact me on my blog site if you would like more info or check with your lender as there are two types of FHA203K loan programs.

Friday, November 20, 2009

BEING SUED BY YOUR LENDER

Some Arizona homeowners who have walked away from their homes have found themselves as defendants in lawsuits filed by one of their lenders.  These unfortunate borrowers wonder how that could have happened since Arizona has Anti-Deficiency StatutesSuch lawsuits revolve around a type of loan called an 80/20 loan where one or two different lenders would lend the borrower an 80% first loan which would be secured by the residence.  The remaining 20% of purchase price was also financed & secured by the home in a second lien position.  The lenders that made these type of loans to borrowers were basically financing 100% of the purchase price of the home.  

When real estate values declined, homeowners stopped making loan payments and began walking away from their homes.  As one would expect, without payment, the holders of the first mortgage foreclosed on the homes.  Holders of the second loans were left with none or a small fraction of their 20% loan being repaid due to the declining value.  These lenders began filling lawsuits against the borrowers for the full amount of the second loanSURPRISE! SURPRISE!

While these homeowners should otherwise be protected from the deficiency lawsuits, their 20% second loans may not be the type that fit within the "Arizona Anti-Deficiency" laws...such as home equity loans that are made for some other purpose than to purchase a home.  Seeking legal advice to determine whether or not the lender has a valid claim against the borrower/homeowner is a MUST as many lenders are unaware of Arizona's "Anti-Deficiency" statutes.

Tuesday, November 10, 2009

WHY DO LENDERS CHARGE POINTS?

Whenever governmental regulation, state usury laws and/or competitive practices prohibit the lender from charging a rate of interest which would make the real estate loan competitive with other fields of investments, the lender must seek some other method of increasing the yield for their investors.  By charging "points" (a percentage of the loan amount being borrowed), the lender can bring the real estate loan up to those other investments.

Are Points Called by Different Names?  Yes.   Commitment Fee, Discount Fee, Warehousing Fee, Funding Fee

Do the Number of Points Charged Fluctuate?  Yes.  If rates on mortgage loans are lower than other investments (such as stocks, bonds, etc.) then funds will be drawn away from mortgage market.  Also when there is heavy demand upon the money market because of business needs, military requirements or other government borrowing, the result is that money for home mortgages becomes scarce and more expensive.  When this occurs, more "points" (a percentage of the amount being borrowed) can be charged.  Points balance the market.  Points are not set by government regulation but by each lender individually.

FOR MORE INFORMATION CONTACT ME AT MY I Sell AZ Sunshine website.

Thursday, November 5, 2009

What Does the Title Company Do?

Here's what the title company does in a nutshell:


*Opens the escrow and assigns a Escrow number.
*Requests a Title Commitment to determine the status of title to the property.
*Comply with the lender's requirements as specified on its instructions to escrow.
*Receive and handle purchase funds from the buyer.
*Prepare or secure the deed and documents related to the escrow.
*Prorate taxes, interest, insurance and rents.
*Secure releases of all contingencies or other conditions stated on the escrow.
*Record the Deed and any other documents.
*Request the title insurance policy.
*Close the escrow per the instructions supplied by the seller, buyer and lender if any.
*Disburse funds as authorized by the instructions including charges for title insurance, recording fees, loan 
  payoffs and real estate commissions.
*Prepare final statements for all parties involved that account for the disposition of all funds held   the escrow account.

NEED MORE INFO CONTACT ME on my I Sell AZ Sunshine website.

Wednesday, November 4, 2009

WHAT HAPPENS TO EARNEST MONEY?

A earnest money deposit is made to show the seller you are serious about buying their home.  The Realtor will inform you of the amount that is usually given in your area.  The seller doesn't actually receive the earnest money.  A third neutral party like the Title Company holds the amount in a special trust or escrow account until the sale is closed or the contract is canceled.


If you go through with the sale, the money is usually applied to your down payment or other closing costs depending on what is agreed to in the contract.  If you fail to buy the home, the seller has the right to keep the earnest money.  However, you can get your money back until the point at which you are notified that the seller has accepted your offer.  And if the seller fails to fulfill their obligations, the money is yours.  Other contractual contingencies can also come into play so ALWAYS have your Realtor explain the contract and it's contingencies to you thoroughly prior to signing.

FOR MORE INFO CONTACT ME AT MY I Sell AZ Sunshine website.

Tuesday, November 3, 2009

WHAT IS A BUYER'S MARKET?

Almost everyone has heard the term"Buyer's Market" and wondered what that meant.  This term means what it says...it's a good time to buy.  Here are a few factors that helps to make it that way:


*High Inventory of homes for sale
*Lower interest rates
*Unstable or weak economy (no kidding)
*Less population influx into the areas
*Lower home prices (ya think?)
*Narrow area economic base
*Decreasing area employment base


Some of the factors which help to predicate a Buyers' Market include:  Weather, special interest areas by specific groups of people like retirees, expanding employment, spiritual affiliations, special recreation availability, artistic activities or just a heightened interest in the area.


One important statistic that buyers need to know is that nationwide more homes are sold between May and September than are sold in the other seven months of the year.

NEED MORE INFO CONTACT ME AT MY I Sell AZ Sunshine website.

Friday, October 30, 2009

What Type of Home Do You Want?

Maybe you know what you want....3 bedrooms 3 baths 3 Car garage in an Active Adult Community with mountain views.  If so, then your Realtor can immediately begin to look for only that type of home.  Otherwise, if you don't know what you want but "you'll know it when you see it" you need to take a moment and make a list of "needs" and "wants".


Consider what specific features you are looking for like the distance to work, school and overall location.  Consider what you want the exterior to look like and what you would like for the interior.  Decide on a type of home and don't overlook the systems such as security, heating, electrical and energy saving options.  As for the extras, consider whether you want a pool, den, clubhouse amenities, office or spa.  It will help you define what you really have to have and really want to have in a house and neighborhood. 


This will help a Realtor considerably when searching for the right home to show you.  When you look at homes, be sure to bring your list with you & pick up brochures at each home so you'll remember which home offered what.  I also name each house with a memorable nickname which helps you to recall the home (golf home or pet house or pool home) as well especially after you've looked at 5 or 6 homes in one day.


NEED MORE INFO CONTACT ME at my I Sell AZ Sunshine website.

Tuesday, October 27, 2009

WHAT TITLE INSURANCE PROTECTS AGAINST

The matter of title insurance arises in every real estate transaction.  For the Seller, the title policy covers the insured for their loss up to the amount of the policy.  It assures owners that they are acquiring marketable title and is designed to eliminate risk or loss caused by defects in title for the past.


For the Buyer and/or Lender, title insurance is issued to guarantee to the insured party or parties "Free and Clear" title to the property being insured, from the beginning of time until the date and time the buyer acquires title to the property.  In the case of a lender's policy until the date and time the lender's loan document is recorded against the property.


"Free and Clear" is defined as there being no loans, liens, encumbrances, back taxes, easements or covenants, conditions or restrictions against the property that were not disclosed on Schedule B of the commitment for title insurance issued by the the insuring company.


Here's a few things Title Insurance protects against:
*False Impersonation of the True owner of the property
*Forged deeds, releases or wills
*Undisclosed or missing heirs
*Mistakes in recording legal documents
*Deeds by persons of unsound mind
*Deeds by minors
*Deeds by persons supposedly single but actually married
*Fraud
*Liens for unpaid inheritance, income of gift taxes

FOR MORE INFO CONTACT ME AT MY I Sell AZ Sunshine website.

WINTER VISITOR---TO BUY OR RENT A HOME??

Arizona vacation rentals have some of the most sought out space, especially for those who are getting away during the frigid northern winters.  Wintering way away from home by purchasing a home or your own vacation rental has its advantages but so does renting prior to taking the leap to buy.

If you are renting, you do not have to worry about any upkeep or maintenance of the rental home as there is always someone to call for that job. For instance with vacation rentals in the Gold Canyon, Mesa, Queen Creek, Sun Lakes or Scottsdale areas, most are going to have pools and spas for your use which don't require any maintenance by you the tenant.  All you have to provide is the money to pay for your rental.

On a positive note, you may still be motivated to buy after you spend some time doing your homework. Never overlook the fact that you can both buy and rent your own vacation home in one of the most popular vacation markets to date as well as have a second-home tax write-off.  Furthermore, since this is a second home, you can opt to migrate and head North for the summer. Any qualms about purchasing can be overcome by testing the waters first and spending time in an Arizona vacation rental to make up your mind. Give it a month and talk to local homeowners about their experiences and the local housing climate.  Since it is a buyer's market the housing sector will get it shot in the arm in due time.  AND, while you are visiting sunny Arizona be sure to apply SPF 32 sunscreen liberally and enjoy yourself.

NEED MORE INFO CONTACT ME AT MY I Sell AZ Sunshine website.

Monday, October 26, 2009

Bankruptcy Won't Necessarily Save Your Commerical Property

A Chapter 11 bankruptcy may buy some time for commercial property owners facing a loan foreclosure, but it may not be the best option for those who are hoping to hang on to their property.

Why not? Chapter 11 was designed to help businesses continue to operate but not necessarily to protect the interests of the borrower.  A bankruptcy affords little protection for a property held as a single asset in a special purpose entity.  Also, continual attorney and advisory fees during a bankruptcy can impose an additional financial burden that may outweigh any benefit from the reorganization plan.

Best option is try to do all that you can to arrive at a workout option with your lender. Remember that there needs to be some justifiable reasons for the lender to consider giving concessions.

Try working with the lender in second place to reach an agreement with the first lien holder.  This strategy is very useful when the property's value has fallen below the amount of the first lien and a workout provides a better option for the secondary lender to be repaid.

Most lenders don't want to foreclose. A workout that lets owners and lenders ride out the downturn is often the best option for all parties.

NEED MORE INFO CONTACT ME AT MY I Sell AZ Sunshine website.

Friday, October 23, 2009

TRICK OR TREAT! MSN EMAIL BEEN HACKED LATELY? READ THIS!!!

TRICK OR TREAT!!!Am using My Computer Works to help with any computer issues and they spent 70 minutes on my computer yesterday trying to remove all the email addresses that hacker put in when they sabotaged my account over Labor Day.  Turns out I had to call MSN support and have them go in and remove the addresses because they were on their Server and not actually in my address book where I could remove them.  I suggest checking your computer to see if yours has the same crap in it.  It's not supposed to be a danger but I don't like a bunch of weird email addresses that I can't take out...always afraid of some implanted virus that could explode at anytime....muy paranoid am I.  The scary thing about this is that when I am in MSN these addresses don't show up as they are not in my actual address book.  But, if I go out on 
Internet Explorer or Foxfire Mozilla, go into www.msn.com and go to send a new message they are in the online address book.  By typing the letter "a" into the "TO:" and then scrolling down all the a's I accidentally found all the hacker's addresses they used when they sent out their emails asking for money.  I went to the b's and did the same thing finding more.  I went down the whole alphabet and they stopped adding the emails when they got to K.  Anyway after talking to two MSN Tech Support people at midnight (had to insist on a supervisor...the first person didn't listen and kept giving me a canned pitch) I finally sent all the email addresses to butterflyhelp@hotmail.com(the guy's English was so terrible I had to ask him several times what he was saying...erggggggg. Try having a English as a second language person say Butterfly!!

MSN EMAIL BEEN COMPROMISED? TRICK OR TREAT! BETTER CHECK THIS OUT!!!!

TRICK OR TREAT!!!Am using My Computer Works to help with any computer issues and they spent 70 minutes on my computer yesterday trying to remove all the email addresses that hacker put in when they sabotaged my account over Labor Day.  Turns out I had to call MSN support and have them go in and remove the addresses because they were on their Server and not actually in my address book where I could remove them.  I suggest checking your computer to see if yours has the same crap in it.  It's not supposed to be a danger but I don't like a bunch of weird email addresses that I can't take out...always afraid of some implanted virus that could explode at anytime....muy paranoid am I.  The scary thing about this is that when I am in MSN these addresses don't show up as they are not in my actual address book.  But, if I go out on 
Internet Explorer or Foxfire Mozilla, go into www.msn.com and go to send a new message they are in the online address book.  By typing the letter "a" into the "TO:" and then scrolling down all the a's I accidentally found all the hacker's addresses they used when they sent out their emails asking for money.  I went to the b's and did the same thing finding more.  I went down the whole alphabet and they stopped adding the emails when they got to K.  Anyway after talking to two MSN Tech Support people at midnight (had to insist on a supervisor...the first person didn't listen and kept giving me a canned pitch) I finally sent all the email addresses to butterflyhelp@hotmail.com(the guy's English was so terrible I had to ask him several times what he was saying...erggggggg. Try having a English as a second language person say Butterfly!!

Wednesday, October 21, 2009

"I'VE FOUND A BARGAIN!" OR HAVE YOU???

It's try that affordability is at record levels today but many buyers need help putting price into perspective.

Buyers, especially first time buyers, think they can get a really really nice home for $60,000 but the average home in the Queen Creek, Arizona area (where there is an abundance of bank owned homes for sale) is running around $105,000. The closer you get to the center of the Phoenix valley then the average sales price is $150,000.  Buyers perceive that there are really great deals which is true.  But a lot of homes are stripped of all of their fixtures.  While a home maybe listed for $75,000, buyers are going to need $20,000 to $30,000 in cash to replace the plumbing and restore the kitchen and bathrooms.  The prudent buyer will look at some of the really low-priced homes first and decide if they want to do all that work.  Know what your costs will be up front by making a list of all needed repairs before making an offer....no Surprises!!!  You might even decide to spend a little more and not have to do the home repairs.

FLIP THIS HOUSE? MAYBE NOT?

FNMA, FHMLC, and the banks such as Wells, Chase, etc. continue to warn lenders to apply extra scrutiny on transactions where the seller has owned the home less than 90 days.  It is possible that they may soon adopt a 90 day rule similar to FHA's rules, but in the mean time, Bell Mortgage in Phoenix Arizona is continuing to process these transactions on a case by case basis.  They still have two investors who will accept these loans, and there are currently two mortgage insurance companies who will insure them up to 90% LTV, provided the borrowers have strong files with solid home appraisals.
 
Here are some areas of concern:
 
1)  The seller must have clear title to the property when they sign the purchase contract.  All liens must be paid off.  Short sale middlemen do not have clear title. 
 
2)  The title company must supply the lender with a 24 month chain of title.  We may need to obtain copies of the Trustee Deed in order to determine who is actually on title.
 
3)  Multiple ownership changes in a short period of time (other than between financial institutions and their agents) can be a cause of concern.
 
4)  Large changes in value with little or no improvement to the property may trigger additional scrutiny of the loan file.
 
5)  Sales that are not arms length (sale to a relative) may cause the transaction to be denied.
 
Courtesy of Jay Starks, Bell Mortgage, Phoenix, Arizona

Tuesday, October 13, 2009

AZ HOME BUYER -REO's MAKING AN OFFER PART 5

Making an Offer
Have your agent contact the the listing agent and ask the following before submitting a purchase offer:
  • Are there any inspection reports?
  • Has the bank agreed to make any repairs?  Will they offer a seller's concession for the buyer's loan costs?
  • Is there a special "as is" form?
  • How long does it take the bank to accept an offer? Are there any other offers?  If so, how many?
Offers are usually FAXED or emailed to the Bank's agent.  There is no formal presentation.  Keep in mind---nothing happens evenings and weekends (banks are closed).  It's a good idea to expect a response time of 4-5  business days to your offer. Since there is no face-to-face presentation to the bank you should provide the listing agent with a Loan Status Report (LSR) plus proof of funds. Make your offer straight forward and easy to accept.
Remember that REO's are selling very close to full list price and often thousands over the asking price---depending on the location of the property and multiple bidders.  REO's are not always the deals presented on late night television.

Monday, October 12, 2009

AZ BUYER -- "AS IS" REO PROPERTY CONDITION PART IV

Property Condition
Banks always want to sell a property in "AS IS" condition. Most will provide a pest inspection but not unless you include it in your offer and insist upon it. They will allow you to all the inspections you want (at your expense) but generally do not agree to do any repairs unless required by the buyer's lender.
Your offer should include an inspection contingency period that allows you to terminate the sale if the inspections reveal unforeseen damages that the bank will not correct.
Even though you've agreed to “AS IS" always give the bank another chance to make repairs or give you a credit after you’ve completed your inspections.  Occasionally banks will re-negotiate to save the transaction instead of putting the property back on the market---just don’t count on it.
Most banks will not provide financing on their REOs but they may give a seller concession for the buyer's loan costs.  Many banks will also include a One-Year Home Warranty on the property but you have to ask for it in your purchase offer.

Friday, October 9, 2009

AZ BUYER--HOW BANKS SELL REO'S PART III

How Banks Sell REO's
Each bank/lender works a little differently but they all want to get the best price possible and have no interest in giving away the property. If the bank is very large they will have an entire department set up to manage their REO inventory.  After you make an offer to purchase, banks usually present a "counter-offer" and/or ask for your "highest & best" offer especially when there are several bidders on a property.   The Bank's counter may be at a higher price than you expect (especially the first week a REO is listed for sale) but they have to demonstrate to investors, shareholders and auditors that they attempted to get the highest price possible. You should plan to counter the counter-offer but when multiple offers exist you may not get the opportunity to make an additional counter offer.
Additionally, your offer will have to be reviewed and approved by several individuals and/or mortgage insurance companies.  Although an offer is accepted the bank may insert verbiage like “contingent upon corporate approval within 5 days" plus include there own "AS IS" addendum.

Thursday, October 8, 2009

AZ Buyer---Bank Owns the Real Estate...Now What? Part II

REO Properties For Sale
The Bank now owns the property and the real estate loan no longer exists. The Bank will handle the eviction (if necessary) and may do some repairs. They will also negotiate with the IRS for removal of any tax liens which can take up to 6 months to achieve. If you buy a REO property, you will receive a Special Warranty Deed, Title insurance and the opportunity to inspect the property.
A bank owned property might not be a great bargain. Do your homework before making an offer. Compare the price that you will pay (if successful) to other home sales in the surrounding neighborhood.  Repair costs including time to complete them should also be considered plus factor in potential unknown issues. Avoid becoming involved in a ‘bidding war’ and paying over market value---very common in today's fast moving market.

Wednesday, October 7, 2009

What is a Foreclosure & REO (Real Estate Owned)? Part 1

A Foreclosure sale begins with a minimum bid that includes the loan balance, all accrued interest plus legal fees and any costs associated with the foreclosure process. In order to bid at a foreclosure auction, you must have a $10,000 cashier's check in your hand and the full amount of your bid is due within 24 hours after the sale has ended. As the successful bidder, you obtain the property in "as is" condition and that can include a tenant still occupying the property.  Recent legislation can prevent you from having the tenant removed and you may have to honor their lease with the previous owner so do your homework on this one before bidding.
In today's real estate arena the amount owed to the bank is almost always more than the value of the home resulting in very few successful foreclosure auction sales. Hence, the property "reverts" back to the bank and becomes an "REO" or "real estate owned" property. 

Monday, October 5, 2009

NEW Community-Owned or Privately Maintained Streets FNMA Requirements

In our ever-tightening environment appraisers are doing their research more carefully and lenders are finding that many streets thought to be publicly maintained are actually private roads.  This triggers an underwriting requirement to provide the recorded road maintenance agreement---which often does not exist.

If the property is not situated on a publicly dedicated and maintained street, then it must be situated on a street that is community owned and maintained or privately owned and maintained. There must be adequate vehicular access and there must be an adequate and legally enforceable agreement for vehicular access and maintenance.  
 
Community-Owned or Privately Maintained Streets
If the property is located on a community-owned or privately-owned and maintained street, an adequate, legally enforceable agreement or covenant for maintenance of the street is required. The agreement or covenant should include the following provisions and be recorded in the land records of the appropriate jurisdiction:

responsibility for payment of repairs, including each party’s representative share,


default remedies in the event a party to the agreement or covenant fails to comply with his or her obligations, and


The effective term of the agreement or covenant, which in most cases should be perpetual and binding on any future owners.  
 
Note: If the property is located within a state that has statutory provisions that define the responsibilities of property owners for the maintenance and repair of a private street, no separate agreement or covenant is required.
If the property is not located in a state that imposes statutory requirements for maintenance, and either there is no agreement or covenant for maintenance of the street, or an agreement or covenant exists but does not meet the requirements listed above, the lender must indemnify Fannie Mae for any losses or expenses it may incur due to the physical condition of the street or in order to establish and/or retain access thereto.

HOUSING AFFORDABILITY CONTINUES TO CLIMB

Price declines and low interest rates continue to motivate buyers to enter the most affordable housing market in 28 years.  But, at the same time, only 1 in 10 of today's homeowners say they have delayed selling due to those same market conditions.  In the past year, the National Association of Realtor's Housing Affordability Index has increased 29% overall and 19% for first-time home buyers---the highest levels during the Index's 28 year history.

The survey also found that most Americans aren't aware of how affordable homes are becoming in today's fast-changing housing market.  More than 3/4's of consumers think a median-income family can afford less than half of the homes for sale in their area.  In reality, however, a family earning a median income of $53,182 can afford to buy nearly 75% of the current homes for sale.  For 14.6 percent of first-time home buyers, the government's $8,000 tax credit provides the impetus to shop for a home this year.

Courtesy of Sherri Buttler, Sun American Mortgage Company   sherri.buttler@SunAmerican.com 

Friday, October 2, 2009

HIDDEN HAZARDS IN YOUR HOME

The Most Painful Burn is the One you Could Have Prevented! 


Among the hidden hazards in your home, there are two especially harmful to children:  flammable liquids like gasoline and paint thinner.  The other is ordinary household tap water that's too hot for a child's skin.  Protecting your loved ones from flammable liquids and extremely hot water should come down to common sense.  However, with so many accidents, injuries and deaths every year it's easy to see that common sense is sometimes overlooked. 

As parents & grandparents, we become preoccupied or distracted in going about our daily lives and that's where the problems lie.  All it takes is a split second to change the course of your life and/or the life of a much-loved child.


Gasoline is a Motor fuel - that is the only thing gasoline is for.  It is not a solvent, not a cleaning fluid and should never be used that way.   Dangerous flammable vapors are released in your home or garage every time there is a spill or when the gasoline or other flammable liquid is not properly sealed in its storage container.  Silent, invisible vapors can travel; and, if these vapors reach a source of ignition, like a faulty electric outlet, the spark from a running motor or the pilot light of home appliance (hot water heater is a biggie), the vapors can ignite....and blow you clean out of the house.

Are These Products Around Your Home?  
GASOLINE, propane, kerosene, lighting liquids, cleaning liquids, oil-based paints, fertilizers, mineral spirits, nail polish remover, furniture polish, floor polish, disinfectants, pesticides, weed killers, turpentine, hair spray, adhesives and/or glues.



 

Wednesday, September 30, 2009

DON'T BUY ON THE REBOUND

It happens to thousands of homeowners each year.  They find their dream home but are outbid by another buyer.  Out of frustration they buy the next house they see.  BAD IDEA!!! 

Sure, it's disappointing to lose the "perfect" house.  But rushing to find a replacement can bring an even greater regret.  The fact is that most home buyers face some kind of a setback during their home search...albeit it pricing or financing or timing.  The key is to approach each step in the home buying process as part of a valuable learning experience.  

Finally, buying a home is not the ultimate goal.  Buying the right home is the goal.  Compromising with an inadequate choice is a sure path to Buyer's remorse.  I found out a long time ago that there will be another house coming on the market soon very often better than the first one you thought was the "perfect" house.


 Courtesy of Sherri Buttler, Sun American Morgage Company  sherri.buttler@SunAmerican.com  

       






   

MORTGAGE IS DENIED? HERE'S WHAT TO DO

Talk about raining on your parade!  You find your home, make an offer & then learn that your loan application as been turned down.  What to do now?

You may be able to turn a "NO" into a "YES" by taking the right steps:

Low appraisal-Try negotiating with the Seller or consider making a larger down payment should you have the money.

Not enough up front Cash-Lender determines that you don't have enough money to cover the downpayment + closing costs.  Ask the Seller to assume some of the closing costs or consider a non-repayable gift of funds from a relative.  Your lender will instruct you how to document this gift.

Insufficient Income-Due to governments "Making Homes Affordable" program, lenders are using a 31/38 rule when calculating allowable loan limits. Monthly PITI (principal, interest, taxes & insurance) should not be more than 31% of your gross monthly income. Your total debt (car loans, credit cards etc.) plus the PITI should not exceed 38% of your gross monthly income.  If your credit record is good & you've been carrying an equivalent housing payment, try to convince the lender to ease this guideline. If you or your spouse are expecting a salary increase, tell the lender who can then verify the forthcoming income increase.

Unsatisfactory credit (FICO) score--Lenders are looking for defaults, bankruptcies as well as late or missed monthly payments.  The lender needs to know the full picture if these issues are due to an illness, job layoff, marital problems or other short-term situations.  If you've regained financial stability for at least a year, the lender may reconsider.  If you have an up-and-down credit history, the only solution is to reestablish prompt payment practices.  There are also a few good lenders that will assist you in "cleaning up" your credit report and therefore increasing your FICO score.  Please contact me and I can refer you to these lenders which do not charge for this service...they just want to handle your loan when it comes time to buy.

Tuesday, September 22, 2009

FIRST TIME HOMEBUYER CREDIT ENDS DECEMBER 1, 2009

To qualify for this credit, the closing date for the home must take place after December 31, 2008 and before December 1, 2009.  If a taxpayer is building a home they must occupy the home between those dates.  The credit amoung is the lesser of 10% of the purchase price of the home or $8000.  The home must be occupied by the taxpayer for 36 months.  In addition, the taxpayer must not have owned a home in the United States for three years prior to taking the credit.  Selling or converting a home to rental property before the 36-month perior may subject the taxpayer to repayment of the credit.  The credit is not available for vacation homes or rental property.  In addition, this credit also has a phase-out range based on income.  You can find details on the IRS website  http://www.irs.gov/

Monday, September 21, 2009

HOME INSPECTIONS ARE A MUST! DEMAND ONE!

As a buyer you have the right to know what you are buying...especially in today's foreclosure market where homes are being purchased in AS IS condition with no guarantees or warranties.  A professional home inspection is something you MUST do regardless whether or not it is a new or pre-owned home.  This inspection is an opportunity to have an expert look closely at the home you are considering purchasing.  It is best to have all the inspectors findings in a written report and not rely on an oral opinion as they are easily misinterpreted.

Make sure your inspector is Stated licensed and a member of ASHI (American Society of Home Inspection).  Accompany the inspector to the inspection if possible and ask questions.  If you can't be present ask a family member or close friend to represent you.

Most real estate contracts provide for an inspection to be done within a certain time period.  This inspection clause is considered a contingency to your purchasing the home.  If you don't approve the inspection, you don't have to buy.  Many times the seller will make the necessary repairs found in the Inspection
Report but sometimes they won't (as in FHA and Bank Owned Foreclosures).  If you do not approve the inspection report and wish to cancel the contract, ALWAYS put your cancellation in writing within the time period specified in the purchase contract.

Friday, September 18, 2009

TO TWITTER OR NOT TO TWITTER....THAT IS THE QUESTION

If you don't know what it means to "Twitter" you may be behind the times.  Social media tools like "twitter" are as popular and user friendly as yesterday's PDA's.  Other social media trends include Google Reader, Twitter , Activerain and Facebook which are the new wave in connecting with others.  These new avenues seem to bring networking circles closer together and allow more frequent communication. While we may not know whether these new methods of mass media are a blessing or a curse, it is probably a good idea to at least get familiar with them.  If you don't, you may just be missing the boat that's leaving port.

Facebook seems to be used in more of a business or professional setting.  It provides pictures of people and periodic updates as to what these people are doing.  Twitter requires communications to be in bytes of approximately 140 characters or less. Ironically one of the most valuable aspects of Twitter is developing the skill of communicating a mouth full in a few choice words.

One of the best things about these new methods of communications is that by and large they are free.  As postage becomes more expensive and takes more time, it makes sense to use the Internet as a creative chatter box.

Thursday, September 17, 2009

TIPS FOR FORTHCOMING 2010 CENSUS - PROCEED WITH CAUTION

There will be a mass mailing of US Census forms to fill out in 2010.  Be CAUTIOUS of what information you give to any Census worker---NO Social Security Number, NO Banking Information or addresses of rentals. (tax returns reflect that information.) and NO SALARY INFO.  With the U.S. Census process beginning, the Better Business Bureau (BBB) advises people to be cooperative, but prudent, so not to become a victim of fraud or identity theft.


The first phase of the 2010 U.S. Census is under way as workers have begun verifying the addresses of households across the country.  Eventually more than 140,000 Census workers will count every person in the US and will gather information about every person living at each address, including name, age, gender, race and other relevant data.


The big question is - How do you tell the difference between a U.S. Census worker and a con artist?  The BBB offers the following advice:  If a U.S. Census worker knocks on your door, they will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentiality notice. Ask to see their identification and their badge before answering their questions. And NEVER invite anyone you don't know into your home.


Currently, Census workers are only knocking on doors to verify address information. Do not give your Social Security number, credit card or banking information to anyone, even if they claim they need it for the
U.S. Census. While the Census Bureau might ask for basic financial information, such as a salary range, it will not ask for Social Security, bank account, or credit card numbers nor will employee solicit donations.




Finally, Census workers may contact you by telephone, mail, or in person at home. However, they will NOT contact you by Email, so be on the lookout for Email scams impersonating the Census. Never click on a link or open any attachments in an Email that are supposedly from the U.S. Census Bureau.


FOR MORE INFORMATION OR ADVICE VISIT http://www.bbb.org/

Wednesday, September 16, 2009

REAL ESTATE MOVES-TOP MOST FORGOTTEN ITEMS

When you are running around on moving day, here are some items to remember:

A. Copies of family medical records, vet records and prescriptions to transfer to a destination pharmacy.  Also your child's permanent school record and shot records.

B. Anything that you have placed in a hidden spot....like jewelery, wills or other valuables.

C. Check with the dry cleaners to make sure you haven't forgotten to pick up your favorite piece of clothing.

D. Keep your new address handy....you may be so stressed that you can actually forget it.

E.  Leave out cleaning supplies for a final cleaning.  Many of these items mover's won't transport anyway.

F.  Don't pack your garage door openers and appliance instruction manuals.  Put them in the cabinet over the stove with a sign for the movers "Don't Pack" on the doors. Spare house keys, mailbox keys and pool keys should be placed there too.

G. Don't forget your pets.  Make arrangements for their transport....just don't leave them with the house....like so many people are doing these days.

H.  Open a destination bank account about a month before your move so that you will have immediate access to your funds and local bank checks.  This also gives the Title company an account for the transfer of closing funds from the sale of your home.

I.  Collect all the spare keys (from neighbors or other outside hiding places) and leave them in a predetermined spot for the new owners.

Tuesday, September 15, 2009

WHAT IS A HOMEOWNER'S ASSOCIATION (HOA) ASSESSMENT LIEN?

Once a homeowner becomes delinquent on their monthly fees (assessments), the HOA attaches an assessment lien to the homeowner's property for the benefit of the HOA.  This assessment lien allows the HOA to sell the homeowner's property to repay delinquent fees owed to the HOA.  Arizona law defines that an HOA assessment lien may only be imposed for past due assessments, late fees, collection fees and attorney's fees relating to the past due HOA assessments. An assessment lien foreclosure lawsuit can only be filed if the homeowner is delinquent by at least $1,200 in overdue assessments or it is a least one year past due.   If the HOA begins its foreclosure lawsuit too soon, the lawsuit can be dismissed.

An HOA assessment lien also operates as a cloud on the title which prohibits the seller from selling or refinancing the property until the HOA assessment lien is paid off.    Most assessment liens are automatically extinguished if collection proceedings are not brought within 3 years.  Furthermore, once a property is foreclosed upon, the HOA assessment is extinguished and the HOA essentially loses whatever monies they are owed. 

Monday, September 14, 2009

DON'T MAKE MAJOR CREDIT PURCHASES DURING LOAN QUALIFICATION

Home buyers---don't go on a spending spree using credit if you are qualifying to purchase a home. Your loan pre-approval is subject to a final evaluation of your credit report just a fewdays prior to closing. Every $100 you pay per month on a credit payment could cost you about $10,000 in home eligibility ie. $300 car payment could mean that you qualify for $30,000 less in a mortgage. Even if you have sizable savings, don't make any large purchases until after closing. The last thing you want to happen is to have your loan declined and lose your new home.

SHORT SALES DEFINED & WHAT INFO TO PROVIDE LENDER & REALTOR

Here's my definition in a nutshell: A short sale is nothing more than negotiating with loan holders a payoff for less than what they are owed. Otherwise, a sale of debt generally on a piece of real estate, short of the full amount owed. It does not extinguish the remaining balance unless this is clearly settled in the acceptance of the offer. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing since there are legal and other carrying costs that are associated with a foreclosure. This occurs on a daily basis since many homes have loans that are considerably higher than the current value of the home. If you would like my Homeowner's Short Sale 16-Step Instructions emailed to you please contact me through this blog site.

ARIZONA HOME OWNERS, SENIOR CITIZENS & INVESTORS BE CAREFUL!!! PHONY FORECLOSURE SCHEMES ARE RAPIDLY GROWING!!!

Panicky Arizona home owners who have fallen behind in their mortgage payments and are on the verge of foreclosure are vulnerable to phony " real estate mortgage rescue" or "home foreclosure prevention" schemes. Do not turn to these companies with the hope of preventing the loss of your home without doing your homework first. Call the Arizona Better Business Bureau plus asking for local references. These schemers want to take your home, steal any equity you have built up and may focus on unsuspecting Senior citizens.One common foreclosure prevention scheme has the "rescue company" lending a homeowner money @ high interest rates to make back-payments to their mortgage lender. The homeowner must agree to make monthly payments to the "rescue company" that includes the original mortgage payment plus a payment on the new loan. The "rescue company" also requires the homeowner to sign a deed tranferring the property to the "rescue company". The homeowner ends up renting the home that they formely owned. If the homeowner fails to make the "rent" payments on time, the "rescue company" evicts the former owner. You have lost all your rights and equity in what was once your home.

ARIZONA HOME BUYER'S PROPERTY INFORMATION WEBSITES

Bank-owned and foreclosure homes are currently being sold "AS IS" without the homebuyer receiving any kind of Seller's Disclosure regarding the history of the property ie. repairs, room additions, criminal issues, environmental sites or any other disclosure that may affect the buyer's decision to purchase. A real estate agent can provide you with websites containing this vital information; however, if you are purchasing property without an agent, here are some websites that you may want to peruse.
County Assessors/Tax Records Maricopa County www.maricopa.gov/assessor or http://treasurer.maricopa.gov/parcels Other Counties www.az.gov/webpage/portal
Termites & Other Wood Destroying Pests www.sb.state.az.us/TermiteInsp.php orhttp://www.sb.state.az.us/
Lead-Based Paint Disclosures www.epa.gov/lead/
Roof Information http://www.azroofing.org/
Septic/Other On-Site Water Treatmentwww.azdeq.gov/environ/water/permits/onsitenot.html
Swimming Pools http://azdhs.gov/phs/oeh/pool_rules.htm
Mold www.cdc.gov/mold/default.htm
Deaths/Felonies on the Property www.azleg.state.az.us/ars/32/02156.htm
Superfund Sites www.adeq.state.az.us/environ/waste/sps/phx.html
Sex Offenders https://az.gov/webapp/offender/main.do
Crime Statistics http://www.faxnet1.org/
Schools http://www.ade.state.az.us/
Soil Problems http://www.az.nrcs.usda.gov/ (Search shrink/swell)

Finally, be sure to talk to the surrounding neighbors and drive around the neighborhood.For additional Maricopa & Pinal county real estate homebuyer related websites contact me through my blogsite.