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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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.


Great Articles on Home Buying
June 7, 2010

Visit houselogic.com for more articles like this.

Copyright 2010 NATIONAL ASSOCIATION OF REALTORS®

Central Phoenix Townhouse back on the Market
March 25, 2010

My listing at 77 E Missouri #68 is back on the market.  We have reduced the price to $322,800 so I am expecting to get another contract on it quickly.  Check out the pictures, it’s a huge place in the heart of Phoenix!

Possible Good News for Short Sale Victims!
March 2, 2010

In today’s market more and more people are forced to short sale their homes.  I just learned from a highly renowned Real Estate Tax Attorney that there is a little known law on the books that allows for the seller of a short sale to write off their deficiency and back track it 5 years.  This means that if you qualify, you could receive a check from the IRS for overpaid back taxes… that’s right a check BACK from the IRS.  Just to give you a quick overview of what it takes to qualify, the property must have been an investment property (rental property) and the short sale had to happened before the end of 2009.  Most tax accountants will tell you that you can write off the loss over the next 20 years (standard tax law) but under this little known law, you can actually claim the loss on back taxes for the last five years.  If you paid taxes over the last five years you could collect a check from the IRS for over paying taxes NOW! If you are interested in more information about this I you can contact the office of Kingman Winslow toll-free at 866-728-4107 or you can contact Marianne Kingman by email at mkingman@kingmanwinslow.com

I also have great news for people who are candidates for short selling their primary home.  I can show you how you can write off 100% of your deficiency (difference between what is owed and selling price) so you don’t have to pay taxes on that amount either.  Someone may have told you that you don’t have to pay taxes on the deficiency anyway.  Here are the only three exceptions to getting a deficiency relieved: 1. You have not refinanced your home since the time you bought it.  2. If you did refinance the home, ALL of the proceeds (cash out) from the refinance were put back into the home in a remodel or repairs. 3. Your liabilities exceed your assets at the date of sale. In other words you have a negative net worth.  Most people do not qualify but I highly suggest you seek the counsel of someone who knows the laws inside and out.

If you are interested in more information please feel free to contact me via email at TLee@TLeeRealty.com