Do this first before you Buy a Home

You found your dream home and are ready to make an offer.  Do these four investigative measures before you sign on the dotted line.

1.  Talk to would-be neighbors.  Ask how they like the area, how are the schools or if there are any problem activity nearby.


2.  Check your commute.  Drive from your possible new home to work during rush hour to see how long it will really take.  If you use the bus, then take the daily bus you would use to commute.


3.  Check crime data and sex offender databases.  For crime statistics go to faxnet1.org or search the internet for your local crime statistics link.  For sex offenders go to azsexoffender.org or search the internet for your local sex offender database line.


 4.  Read up.  Investigate the location of nearby dairy farms, jails or proposed freeway developments or alignments.  Call local Planning and Zoning for additional proposed developments.

5.  Make multiple offers on multiple properties.  You can make sellers compete for your business.  Just make sure the Realtor provides the correct verbiage so that you don't end up buying several properties. This won't always work but in the current Seller's market it's worth a shot.





Linda Shank is a local real estate broker in the Southeast Phoenix Valley.  She can be reached on her website www.ISellAZSunshine.com or on this blog.   

What you Should Know about FHA loans

Loans can be underwritten by an approved lender which includes most of the major banks in the country.  FHA has the some high loan limits as Freddie Mac and Fannie Mae (which have been extended to the end of 2010).  You can buy a home with a 3.5 percent down payment as compared to at least 10 percent down for a Freddie Mac or Fannie Mae home.  You can get your loan scored for approval through a variety of underwriting engines including Fannie Mae's Desktop Underwriter and Freddie Mac's Loan Prospector.



 Linda Shank is a Real Estate broker in the Phoenix Southeast Valley Gold Canyon area.  She can be contacted at www.ISellAZsunshine.com

WHAT IS A SELLER'S MARKET?

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

*Lower Inventory of homes for sale

*Lower or reasonable interest rates

*Strong local economy

*High population influx into an area

*Increasing home prices

*Diverse area economic base

*Increasing area employment base

Some of the reasons that can additionally contribute to when a Seller should consider putting their home up for sale are the following:

1.  Weather is generally better in the higher selling months because it is easier for potential buyers to be out looking for homes and moving. Conversely it is better to list your home during the winter months if you are in a sunny Winter Resort home area.

2.  Families prefer to move when the children are out of school.

3.  More homes sell between the months of May through September than are sold the other seven months of the year.

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

Designing Your Home Office

First step is to draw the line between work and play with the computer.  A dedicated business-only computer will help you keep your office a business atmosphere only.  You might also have professionals install additional electrical, phone or cable outlets to accommodate your various office equipment.

Next divide your new office into three sections:  the work center, the reference center and the supply center.  The work center includes your desk, computer and things that you use on a regular basis.  The reference center includes dictionaries, books, binders, etc.  Consider placing  a small filing cabinet or installing shelves behind your desk for easy access.  Lastly, the supply center of your workspace holds all your office supplies.  Consider using shoe boxes for holding note cards and other small items and/or jars for keeping pens and pencils to save money on storage solutions.

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.

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.

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.

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.

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.

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.

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.

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 

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.



 

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.

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/

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.

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. 

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.