Update time!

June 14, 2015 - Leave a Response

Wow, just looking back and realized that I started this blog 5 years ago and forgot about it.  Quick update, the band is still together with a few new faces since this last updated. The band now consists of Jeff and Cathy Corallo, Todd Lee, Carlos Rivera, Rocky Banovac, Steve Grothe and Charlie (CJ) Joiner. We are still performing occasionally for private functions, church festivals and whatever else comes our way. The band still fills in for other worship teams in the valley as well.  This morning Jeff and I are helping out the Prince of Peace Lutheran Church with their worship service. God is great and still in control… until next time!

3 Key Pre-Offer Home Seller Actions

March 3, 2015 - Leave a Response

I was reading an article this morning from the RealtyTimes web site and it was so well done that I thought I would share the whole article here…

3 KEY PRE-OFFER HOME SELLER ACTIONS

Written by on Monday, 02 March 2015 1:20 pm

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Sellers who wait until they’re faced with a buyer’s offer to purchase before initiating three key actions, may be forcing themselves to make too many decisions at once and too quickly.

Most of us are nervous about decision making. Many lack confidence in their ability. Yet, sellers will be faced with quickly making multiple financial, legal, and lifestyle decisions when a buyer’s offer is presented to them.

There are 3 key positive actions sellers should begin beforeoffers arrive, so that they are prepared for decision making and are less overwhelmed by the selling process:

#1. Start thinking that you’re living in the buyer’s new home.

Mentally move out. Let go of “mine.” Cut the emotional cord. Concentrate on making the property as attractive to buyers as possible and practical. If you wait to start this “cut the emotional cord to home” thinking when your real estate professional presents you with an offer, you’re doing yourself a tremendous disservice. Making confident decisions is difficult when you’re distracted by pride of ownership and personal history.

#2. Start thinking about what the buyer may ask you to do.

Anticipate buyer requests regarding financing, moving dates, and other factors that may cause inconvenience or cost to you, the seller. For instance, if you had to wait many months for closing and the money from the sale, what problems could that cause you? Conversely, consider costs attached to moving in less than a month or at least sooner than convenient. Do you understand possible costs and considerations if buyers ask you to hold a second mortgage to enable them to pay the top dollar you ask for? Ask your real estate professional to explain how seller-held mortgages work and what would have to be true for you to sell that mortgage and realize cash.

#3. Start thinking beyond list price to achieve full offer value.

The value expressed in a buyer’s offer to purchase involves 5 key elements – it’s a financial package:

  1. Purchase Price is not automatically the amount the seller receives since other factors, like unpaid property taxes, can reduce the total. It’s not the purchase price, but the net proceeds of the sale that sellers should concentrate on. Real estate professionals can calculate, or at least estimate, the seller’s net proceeds after costs related to the offer and deduction of commission.
  2. Closing Date, or the day ownership is transferred and the seller receives the money, can represent cost or value to sellers. If the seller has to make two moves or has to pay two mortgages during the transition from one home to another, costs can add up and offer value goes down.
  3. Inclusions and Exclusions represent costs and value. Appliances, light fixtures, and draperies are common seller inclusions, but the cost of replacing them in the next home reduces profit.
  4. Terms and Conditions are clauses in the offer which cover “what if” risks and the obligations of both parties. These clauses detail what the buyer asks the seller to do for the purchase price. The degree of uncertainty attached to the conditions and the buyer’s related ability to close effect the value of an offer.
  5. Intent and Sincerity are vital aspects of an offer although difficult to quantify. For the seller, offer value lies in the certainty that the buyer will close in spite of market shifts and other problems ahead.

Note: For more on how an offer can translate into value for sellers, read The Offer: There’s More to It Than Price.”

Weeks or months may pass from the time that you decide to sell and the day your real estate professional receives an offer to present to you. This key stage of selling your home is no time to discover:

  • what you didn’t understand about selling
  • what you haven’t considered thoroughly
  • which details comprise your ideal outcome.

Suggestion: To prepare for offer presentation, read the offer form standard clauses soon after listing, so that you understand what the small print commits you to do, protects you from, and leaves you vulnerable to. For instance, the seller is usually responsible for keeping the property fully insured until title changes hands. Do you understand what responsibilities you have if flooding, storm damage, or fire strikes before then? Ask your listing salesperson to show you typical offer clauses well in advance, so you have time to digest details and ask a lot of questions before you’re up against the offer deadline which may only be a few hours away.

Discussing strategies and contingencies with your listing salesperson ahead of offer presentation will help the professional negotiate a solid high-value Agreement with the buyer. Mentally preparing yourself, and anyone else who has a say in what happens to the property, means no one will be pressured into snap decisions or miss opportunities under the tight timelines common with offers.

Real estate professionals are trained to help sellers make decisions in their own best interest by providing necessary context and details, but these professionals cannot advise sellers exactly what to do, nor make decisions for them.

To gain full benefit from the knowledge and experience of the real estate professional who lists your real estate, let them fully prepare you for offer presentations in advance. When an offer comes in (usually at a very inconvenient time), you’ll feel as confident and prepared as possible faced with this life-changing opportunity. You will understand which decisions to make and how to evaluate the full offer.

Standouts from the 2014 Home Kitchen and Bath Show

February 19, 2014 - Leave a Response

There are some great innovations and ideas that came out of this show.  Take a look through and see what the next new kitchens may look like.

Solving Solar Issues

February 19, 2014 - Leave a Response

I recently had a transaction where my clients were looking to purchase a home that had a solar lease.  Without getting into too much detail, the sellers disclosed the lease as “assumable” if the buyers could qualify.  There was also a buyout option for the seller if they chose to do so.  My clients made their offer and during the negotiations we researched the buyout option and discovered that for a fee of $25k they could buy out the 25-year lease.  As an agent we are always looking for creative ways to make transactions work.  Knowing the option, my client offered to pay for 1/2 of the buyout for the seller so that they would not have this same issue if they decide to sell in the future.  Since it was a lean on the title, the seller was happy to work out the buyout as well.  There may be some tax benefits as well (consult a CPA for advice on this matter) but it turned out to be a win/win for all involved.  My clients get the benefit of extremely low electric bills while they own the home and the seller was able to get their home sold and not have to worry about a buyer qualifying for the assumption of their lease!

For more information about solar options for your home I would recommend contacting Mike at AZ SolarCare.  If you would like his contact information drop me an email at TLee@TLeeRealty.com

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Phoenix Neighborhood Stabilization Program info

February 19, 2013 - One Response

NSP Logo 250

We had a speaker come into our office today and talk to us about the Neighborhood Stabilization Program for the city of Phoenix today.  I had heard about this program and actually put a client through a similar program a couple of years ago.  The info she shared I found very useful and thought I’d pass it along.  Basically the program is an opportunity for home buyers to receive assistance with down payment on a house (up to $15,000) as a forgivable second loan. The payback decreases by $1,000 per year and disappears after 15 years. If you sell the house before the loan goes away you simply pay back the portion that remains. It’s great opportunity for people who don’t have a lot of money to put down to get into a house. The homes are either new or “move in ready” condition and have been built/remodeled to very high standards. I will include a few links to their pages that may be helpful.

Here is the address to their home page (http://phoenix.gov/residents/stabilization/nsp/index.html).

Here is the address to their qualification page (http://phoenix.gov/residents/stabilization/nsp/eligible/index.html).  You can buy either a new home or a “move in ready” home.

Here is the address to the page where you can see a list of the “move in ready” homes that qualify for the program (http://phoenix.gov/webcms/groups/internet/@inter/@res/@stab/@nsp/documents/web_content/moveinreadyhomeinventory11-11.pdf)

If you would like to talk to me about the program or for more info, please feel free to give me a call or drop me an email at TLee@TLeeRealty.com

What’s new in 85018

February 14, 2013 - Leave a Response

The real estate community is abuzz right now… if you look around our neighborhood there are numerous projects going that had been stalled for years.  In case you are wondering, on the corner of 44th and Indian School there will be a new commercial plaza and rumor has it that there will be an In and Out Burger!  

     On the corner of 36th and Campbell there is a huge luxury condo complex in the works by the Helix Corporation.  This project had been put on hold in 2008 when the bubble burst so it’s good to see that piece finally getting finished.  

     On 32nd Street just North of Indian School there is a commercial building that had been started and stopped years ago… now they are back working on the building again.  When I get news of what will be going there I will share.  

     All in all, LOTS of activity and prices on residential real estate continues to rise with a dwindling supply.

How’s The Phoenix Home Market?

September 19, 2012 - Leave a Response

Home prices are definitely on the rise and inventory is very low. This is causing bidding wars again in many neighborhoods. The reasons behind the rebound in our market are varied but a lot of it is centered around the value of investment property to rental pricing and demand. The laws of supply and demand are definitely in play and with the increasing prices more people are getting “right side up” on their mortgages again. As displayed in the graphs below you can see what the market trends are.

Phoenix average property price
Phoenix Homes For Sale
Phoenix – number of properties
Phoenix Homes For Sale

Questions or comments are certainly welcome. I can be reached at tlee@tleerealty.com

The Future of Short Sales in Phoenix

November 15, 2011 - Leave a Response

In these tough economic times we have seen lots of good people who are struggling to make their payments and keep their homes.  Recently I attended a seminar that talked about the future of short sales in the Arizona market.  It was headed by a panel that included executives from Wells Fargo, Bank of America, Chase and some other well-known people from the financial industry.  The long and the short of it is that short sales are not going away anytime soon.  One of the panel members made the comment that he sees the numbers rising not decreasing in the near future.  We were assured that while there is noshadow inventory” in the Phoenix future, there will be lots of short sales that will continue to affect the market locally.  Another panel member reminded us that a short sale transaction is a settlement of debt, not a relief of debt.  Basically he was saying that lenders are not in the habit or will they be in the habit of approving a short sale if the sellers do not have a true hardship causing them to no longer be able to afford the house.  “Strategic default” was brought up and the bank execs all agreed flat-out, do not submit them because they will not be approved. If you are not familiar with the term strategic default it means that the seller wants to sell because they no longer want to pay on a home that is worth substantially less than what they owe.  This is not what the short sale was intended for and banks made it clear they do not and will not work with these home owners.  One other point that was brought up was that the IRS has recently hired 20,000 new agents and they are going to be primarily be investigating mortgage fraud and the strategic default process.

As for real estate agents, we were encouraged to hear that the banks have stream-lined their short sale process and in many cases are even able to aid the seller in getting out of the home and relocating into a new home but offering a little $$$.  The HAFA and HAMP programs are there and can be a great help for those who qualify.  There are some great articles out there that explain the options to home owners that are in trouble.  One website I highly endorse is shortsalehelp.org  I urge all home owners and agents who work with short sales to educate yourself on the process and keep up to date.  The short sale market is changing rapidly and by the time you read this I am sure that some of the rules have changed.

As with any legal and financial dealings I highly recommend that you not only speak to a reputable real estate attorney but also talk to a CPA that you trust to find out what your financial implications may be.   While we are in an anti-deficiency state here in AZ, you still may have financial implications.  Real estate agents are great to help you market and sell your home but we are not legal or financial experts and should not be relied upon for that purpose.

Below are some links to lending institution web sites that may be helpful if you have a loan with one of them and are looking for answers:

Bank of America

Wells Fargo

Chase

Who are Fannie Mae and Freddie Mac and What do They Have to Do with My Mortgage?

June 1, 2011 - Leave a Response

Bankers, real estate sales associates and even journalists use the terms “Fannie Mae” and “Freddie Mac” like the names of old friends — veterans in the mortgage game. We’ve all heard the term and feel like we should remember good old Fannie pinching our cheeks at a family reunion while Freddie flipped the burgers. Don’t be embarrassed if you don’t remember them or even know who they are. Don’t fret if you don’t even know what they are. You’re in good company.

At our company we have challenged ourselves to help educate our clients and potential clients by educating ourselves. Consider this a little brush up on loan lingo that will wipe away that ever so dim question mark that pops up in your mind when these terms are mentioned. Feel free to contact us today and we’ll be glad to answer all of your questions about mortgage-related issues — or at least we’ll find someone else who can!

Fannie Mae does not Wear a Straw Hat or Crochet Placemats

Fannie Mae is a friendly name for the Federal National Mortgage Association (FNMA). I know, that doesn’t help much, but it’s a start. Fannie Mae is actually a stockholder-owned corporation. Congress chartered the organization in 1968 as a government-sponsored enterprise. The association was actually founded in 1938 during the Great Depression.

The mission of the association is to “provide liquidity and stability to the U.S. housing and mortgage markets,” according to Fannie Mae’s website at http://www.fanniemae.com.

Fannie Mae works in the secondary mortgage market. It doesn’t make loans directly to buyers, but rather works with primary lenders like mortgage bankers, brokers, and others to make sure they have the funds available to give borrowers affordable rates. Mortgage investments are funded through debt securities in the U.S. domestic market and in international capital markets.

Unfortunately, Fannie Mae — sweet as she is — ran into some trouble as a private shareholder-owned company. On Sept. 6, 2008, Federal Housing Finance Agency Director James Lockhart put his agency in charge of overseeing the private company. Fannie Mae was bailed out of a major economic crisis with up to $100 billion in capital from the U.S. Department of the Treasury to ensure the housing and mortgage markets stayed liquid. Basically this means the federal government took legal control of the private company in exchange for financial assistance. This was considered a broad and sweeping government intervention in a private industry unlike any seen in decades in America.

Fannie Mae works in three separate businesses:

Single family housing
Housing and Community Development
Capital Markets

These entities “work together to provide services, products, and solutions to lender partners and a broad range of housing partners,” according to http://www.fanniemae.com.

Freddie Mac is Not Your Favorite Uncle

Freddie Mac has certainly helped the mortgage industry, but rather than a friendly old man playing checkers in the park, Freddie Mac is known by a much more distinguished name in the US Government: Federal Home Loan Mortgage Corporation.

Freddie Mac, like Fannie Mae, is a private government sponsored enterprise. It was created in 1970 to help grow the mortgage secondary market. Freddie Mac buys mortgages on the secondary market, pools them together and sells them. They are sold as mortgage-backed securities on what we know as the open market.

This is a good plan because it increases the amount of money out there for mortgages. Like Fannie Mae, Lockhart locked up conservatorship of Freddie Mac in September 2008 to prevent further collapse of a mortgage market in crisis.

Where does Freddie Mac’s money come from? The enterprise charges guarantee fees on loans that it purchases and puts into mortgage-backed security bonds. Freddie Mac assumes the risk on these mortgages and lenders are happy to let Freddie Mac have it and the fees. Freddy Mac guarantees a lender will get back principal and interest on such loans whether or not the borrower actually pays.

As of 2008, Fannie Mae and Freddie Mac owned or guaranteed about $12 trillion of the country’s mortgage market.

Fire Happens: Protect Your Investment

February 26, 2011 - Leave a Response

It seems the world is on fire.

Many states including California and Utah are ablaze with life-threatening, home-threatening flames. It’s a common scenario for the season. Unless, those fires are hitting close to your home.

Protecting a home from the perils of fire is a very hot topic today.

The first three recommendations I would like to make are these:

  • 1. Get insurance
  • 2. Get insurance
  • 3. Get insurance

On the morning news I watched a man interviewed by probing reporters as he stood in the midst of his once beautiful 20-acre paradise. His charred home was a pile of rubble and the trees surrounding him grim silhouettes still smoldering in the grey morning chill. He didn’t have any homeowner’s insurance. He was mad. He was very, very angry that the fire had been allowed to consume his home. “They told me that it would never happen. It happened,” he said shaking his head. He appeared to be in a mild state of shock.

Sometimes despite best efforts by safety experts, fires get out of control.

Homeowner’s insurance will protect you and your lifetime investment in the unlikely event of a fire. Check your policy for fire coverage. Make sure your personal belongings are included in the policy. Purchase “replacement value” insurance to assure your insurance company will pay to replace your home (and not just pay what is owed on it).

You might never cash in on the cost of homeowner’s insurance premiums. Consider including the premiums in your entertainment budget because knowing you have insurance will help you relax more and more often than any vacation ever will!

Do Your Part to Protect Your Home from Fire

It is important to consider fire safety at every stage of buying or building a home. When choosing a building lot, be completely aware of the surroundings. Wooded lots are lovely, but they do pose an increased risk of fire due to the fuel that surrounds them. Look for other safety considerations and make a plan for how you will physically protect your home and property.

When building a home, take into consideration the many fire-retardant materials available on the building market today. Build fire safety into your plans with plenty of accessible exits, and recommended windows to allow easy escape. Contact your local fire station for other recommendations specific to your area.

In an existing home, double-check smoke detectors and change the batteries regularly. Create a family escape plan. Avoid heavy build up of newspapers and trash in and around the home. Never store flammable liquids near the home. Make a sweep through your garage at least once a week to check for potentially dangerous chemicals.

Keep trees, shrubs and other vegetation surrounding your home trimmed. Yard debris should be removed as soon as possible including dry leaves and pine needles.

There are many, many ways to protect your home from a potentially devastating fire. Fires throughout the nation are great reminders to consider fire safety and review the precautions you have taken to protect yourself.

Fire happens. Don’t let it happen to you.