Archive for the ‘Finance’ Category

Phoenix Neighborhood Stabilization Program info
February 19, 2013

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

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The Future of Short Sales in Phoenix
November 15, 2011

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

NAR Reports Rise in Home Sales
February 20, 2011

 

Existing-home sales exceeded analysts’ expectations by increasing by 12.3 percent in December. Homes sales are returning to their highest level since last May.

 

The National Association of Realtors (NAR) reported seasonally adjusted sales rose to an annualized rate of 5.28 million last month from 4.7 million for November. Analysts had predicted a rate of approximately 4.9 million units.

 

NAR Chief Economist Lawrence Yun said, “December was a good finish to 2010, when sales fluctuate more than normal. The pattern over the past six months is clearly showing a recovery. The December pace is near the volume we’re expecting for 2011, so the market is getting much closer to an adequate, sustainable level. The recovery will likely continue as job growth gains momentum and rising rents encourage more renters into ownership while exceptional affordability conditions remain.”

 

NAR said the median existing-home price in December was $168,000, down 1 percent from a year earlier, which was attributed to the number of distressed properties sold during the month. The level of distressed-home sales last month rose to 36 percent of the existing-home market, up from 33 percent in November and 32 percent last year.

 

Regarding distressed-home sales, Yun said, “The modest rise in distressed sales, which typically are discounted 10 to 15 percent relative to traditional homes, dampened the median price in December, but the flat price trend continues,”

 

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said buyers are responding to very good affordability conditions despite tight mortgage credit. “Historically low mortgage interest rates, stable home prices, and pent-up demand are drawing home buyers into the market,” Phipps said. “Recent home buyers have been successful with very low default rates, given the outstanding performance for loans originated in 2009 and 2010.”

6 Common Home Buyer Mistakes to Avoid
November 12, 2010

You’ve determined that you’re ready to buy a home. You’ve saved enough for a down payment, you’ve been searching for properties, and you’re ready to make your dream a reality. Buying a home is an exciting process; however, if you’re not careful, it can turn into a nightmare. Here are 6 common home buyer mistakes to avoid. 

1. Not Budgeting Properly

It’s easy to overestimate what you can afford. Although owning a home may be a better investment than renting, it’s not necessarily going to be cheaper. Take a good look at your income and expenses for a few months before determining what you can comfortably afford. Make a budget sheet using Microsoft Excel or any other budgeting software. List all your income as well as every single expense, including food, gifts, and even haircuts. Keep in mind any emergency expenses as well.

When budgeting, don’t forget about hidden costs including closing costs, homeowner’s insurance, property taxes, HOA fees, and décor and furniture to fill your new home.

2. Neglecting your Credit Report Prior to Getting Approved

Your credit score can be either helpful or detrimental to your loan process. Getting a full credit report from all three credit reporting agencies – ExperianEquifax, and TransUnion – before applying for your home loan will not only let you know how credit-worthy you are, it can lead you to possible reporting errors. One study found that as many as 25 percent of credit reports have damaging errors.

3. Not Getting Pre-approved for a Home Loan before Searching

Most sellers prefer bids from prospective buyers who are already pre-approved for a home loan. Being pre-qualified and pre-approved are different. Pre-qualification is usually the unofficial process of informing a lender of your credit status, income, and debt. The lender can usually give you a ballpark figure of what type of loan they may offer. Pre-qualification is based on your word alone and doesn’t hold much weight with sellers.

Pre-approval is the verification of the information you provided to the lender. This process will give you a better idea of how much the bank will loan you. Getting pre-approved can get you a step ahead other potential bidders that have no pre-approval.

4. Skipping the Home Inspection

You love that old fixer-upper, but skipping the home inspection can cost you as much in repairs as the cost of the home itself. The home inspection should include the overall foundation and structural features of the house, the roof, walls, plumbing, the presence of mold, pest infestations, heating, air conditioning, appliances, and the electrical system. Also, ensure that your inspector is certified with the American Society of Home Inspectors.

5. Picking the wrong neighborhood

You’ve found a home you love, but do you know what happens in the neighborhood after dark? Do you know the crime rate? What is the traffic like during rush hour? How is the school district?

Knock on your potential neighbors’ doors, and don’t be afraid to ask questions. Call the school principal, or talk to parents who are waiting to pick up their kids after school. Read the local newspaper to learn more about the community. There are many real estate blogs and community websites on the internet so before buying the home, check out the neighborhood.

6. Using a Bad Real Estate Agent or No Agent

You want a real estate agent who understands your needs and limitations and will work for you and look out for your interests. Get references from friends, family, co-workers, and neighbors. Consider interviewing a few different agents to find out about their activity and experience in your area.

It’s definitely possible to buy a home without the help of a professional real estate agent, but realtors have access to all the homes on the market through the multiple listing service (MLS). Unless you are in the real estate business yourself, you’ll likely not have any access to the MLS in your area. Real estate agents spend their time sifting through listings, making appointments to show homes, meeting with inspectors, and helping you create a comparative market analysis to determine proper pricing.

The real estate agent you choose could be the greatest asset or biggest obstacle to finding your dream home.