Archive for the ‘Helpful Tips’ Category

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

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Fire Happens: Protect Your Investment
February 26, 2011

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.

 

Home Security Options
February 4, 2011

 

There are many effective security options that protect your family and home and give you peace of mind. From inexpensive Do-It-Yourself methods to pricier security systems with monitoring centers, here are a few different home security products and methods to consider.

 

  • Installed Security Alarm Systems with Monitoring Services

These systems are the most expensive, typically costing $25 – $50 per month. You pay for the installation and the equipment as well, which is generally in addition to your monthly fee. Many of the companies that provide these systems also require you to sign a contract, which can keep you committed from 3-5 years. Although, you may be able to find companies who will negotiate month-to-month options.

 

In the event that you need assistance, you have direct access to help once the alarm is activated. Maintenance of such systems should be minimal, and most of these systems are accompanied by a warranty.

 

If you enter into a contract for a security alarm system, it can be difficult to get out of without paying a large fee. Also, unintentionally activating these alarms can cause problems if you aren’t home to turn them off, resulting in annoyed neighbors and a possible visit from your local police department.

 

  • DIY Security Alarm Systems

 

Much less expensive than the monitoring systems are basic sensor alarm systems. You can usually install these alarm systems yourself with the ability to connect the system to your phone lines to dial preselected numbers if the home’s security is breached. Many of these systems allow for a number of points of contacts at various doors and windows around the home. These security systems typically have alarms and flashing lights to alert anyone nearby of a potential problem.

 

Since these systems don’t have monitoring services, they rely on those in the home or around the home to contact the police as well as the reliability of the dialer to dial preselected emergency contacts. Many of these systems have warranties, and you typically don’t sign any contracts.

 

  • Surveillance Cameras

 

The cost for a full video surveillance system for many homeowners can be pricey, but if it’s something you’d like to consider, it should be used as a backup device to a basic home security alarm or installed system. Cameras can only deter someone from breaking in. Also, many people who have security cameras around their home neglect to actually monitor and record the activity around the home. There have been many reported thefts from homes with surveillance systems that were never resolved due to the fact that the homeowners could never refer to any footage because the cameras weren’t recording. So, if you choose to install surveillance cameras, make sure you use them properly.

 

  • Man’s Best Friend

Although you wouldn’t get a dog for the sole purpose of protecting your home, Fido can be a great alarm system when anything or anyone suspicious may be threatening your home.

 

  • Simply Advertising an Alarm

it’s not a necessarily an effective or reliable source of protection in the event of an actual burglary, but sometimes simply placing an alarm system advertisement outside can be enough of a deterrent to keep anyone away who may consider breaking into your home.

 

  • Reliable Locks on all Windows and Doors

 

Use sturdy, dependable deadbolt locks on all your doors. Keep windows locked when they’re not in use. Block your sliding doors or windows from being opened from the outside by measuring the window track when the window is open, and purchasing a piece of wood that will fit in the slot yet is sturdy enough not to break with force.

 

When leaving your home or going to bed, always ensure that your doors and windows are securely locked. Keep your home well lit, especially from the outside. Also, let your neighbors know if you are going out of town so you have someone aware of any suspicious activity happening around your home while you’re gone.

 

Saving on Your Heating Bill this Winter
January 14, 2011

 

The weather is starting to cool down and Jack Frost has already made an appearance in many areas of the country. Before you boil over from receiving a huge heating bill, read these tips and tricks to help save on your heating costs this winter.

  • Lower your thermostat. Set it between 68 to 70 degrees when you’re home. Lower the temperature at night. If you’ll be out of the house for longer than 4 hours, lower the temperature to 62 degrees. Remind everyone to put on a sweater, warm pajamas, and wear slippers or socks. Add an extra blanket or quilt to your beds.
  • Buy a programmable thermostat. A smart thermostat can be set to change the temperature for you and will only set you back about $75-$150.
  • Clean or replace your furnace filters regularly. Inspect them monthly – especially during the colder months.
  • Set your hot water tank to 120 degrees or lower.
  • Use lower temperatures when washing laundry. Use a cold rinse whenever possible. Empty the lint trap before every dryer cycle. Consider line-drying clothes instead of using the dryer.
  • Open curtains and blinds on sunny winter days to help warm your home, but make sure to close them at night to help keep heat in.
  • Quick showers use a lot less hot water than long baths.
  • Limit use of a gas fireplace.
  • Use bathroom and kitchen fans sparingly. In just one hour, a hard-working bathroom or kitchen fan can expel a houseful of warm air, according to the Department of Energy. Turn them off as soon as they’ve done their job.
  • Restrict warm air from unused areas. Close vents and doors to unused rooms.
  • Winterize your windows. If you can’t afford storm windows, put plastic film on windows where a clear view isn’t crucial, which will curb drafts. About $6 of plastic film covers three windows.

 

Natural Disaster Preparation: Will You Be Ready?
November 16, 2010

Throughout history, natural disasters have wreaked havoc on families, homes, communities, and even entire nations. According to the Federal Emergency Management Agency (FEMA), every state in the country has been hit by flooding, fires, or destructive high winds. There are also 41 states that have a significant earthquake hazard.

Advanced planning and preparation can be the key to a quick response and a quick, safe recovery if you happen to face a natural disaster.

First Aid Supplies

In the case of a natural disaster, or any home emergency, it is important to have basic emergency and first aid supplies readily available, and every family member should know where these supplies are located and how to use them. These supplies should include:

  • Prescription and other OTC medications such as aspirin, ibuprofen, acetaminophen, anti-diarrhea medication, anti-nausea medication, cold medicine, throat lozenges, etc.
  • Flashlight with extra batteries
  • First aid instruction book
  • Blankets and sheets
  • Antibiotic ointment
  • Sterile gauze pads
  • Assorted bandages
  • Small, sharp scissors
  • Instant ice pack
  • Adhesive tape
  • Absorbent cotton balls
  • Antibacterial soap
  • Water purification tablets
  • Small bottle of bleach
  • Multipurpose knife/tool
  • Large and small plastic bags

These items should be stored in a durable, waterproof container. Update items annually as some, such as medications, may expire.

Develop a Family Emergency Plan

Your family members should all be prepared to respond to a natural disaster. Take time to discuss and practice for emergency situations. Teach responsible family members how to turn off the water, gas, and electricity. Make sure your children know how to safely exit your home. Designate a gathering place near your home as well as another meeting place in the occasion that you are separated.

Knowledge of first aid procedures can be invaluable. The Red Cross chapter in your community can assist you in finding a helpful class for your family. FEMA also has some material to assist children in learning more about disaster preparedness.

Preparing your Home

  • Consult your local building authority for the base flood elevation in your area, and determine whether your home is in a Special Flood Hazard Area.
  • Secure large appliances, such as your refrigerator and water heater, with flexible cable, braided wire, or metal strapping to keep them from falling over.
  • Every home should have an ABC-rated fire extinguisher.
  • Anchor propane tanks and gas cylinders.
  • Make sure your house number is visible from the street in case emergency personnel need to find your home. Some cities offer a program to paint your house number on the curb for a small fee. The best place for your house number is near the front door or slightly above eye level and lit by a light.
  • Permanent shutters are the best protection for high winds. A lower-cost approach is to put up plywood panels.
  • Roofs can be the first to go in severe storms. Simple metal straps can keep roof rafters tied to the top wall of the house and prevent uplift during high winds.
  • Foundation bolts cost around $2 each and can save thousands of dollars worth of damage if high winds, floods, or earthquakes try to force a house off its foundation.
  • Keep important records, such as mortgage papers, medical records, insurance policies, birth certificates, marriage licenses, wills, stock and bond certificates, tax records, an inventory of your assets and personal items, and other vital documents in one central location where they can easily be transported if you must leave the area quickly. Keep all papers in a water- and fire-proof container.
  • Check your homeowner’s insurance coverage. Floods are not covered by homeowner’s insurance policies. However, flood insurance is available through the government-backed National Flood Insurance Program.
  • Make food storage a priority. Have at least a five-day supply of food and water for each family member on hand. Store water in sealed, unbreakable containers, and replace it as necessary. Food should be non-perishable goods such as canned or sealed-package items.

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.