Phoenix AZ | Scottsdale AZ Real Estate

Those of you who read my blog regularly know I have been calling for a ban on all short sales in Phoenix and the towns around the Valley like Scottsdale, Fountain Hills, Tempe, Peoria, Glendale, etc... .

There are a variety of reasons I am up in arms at the way short sales are handled.

Primarily, I am dismayed at the fact that many of the short sales are not in fact short sales at all. Most of these homes listed for sale as "Short sales" have not yet been approved by banks or lenders.

Thus, they are not truly available for sale at those prices. For the most part, they are arbitrary numbers picked by Realtors.

I am equally angry about the way many of the banks are handling foreclosed homes listed on the ARMLS (AZ Regional Multiple Listing Service).

For example, I am hearing story after story about lenders who are looking away from FHA financing offers, offers with Down payment assistance and even denying offers from buyers who need help with closing costs.

Now, I have just heard a short sale horror story that may just push me over the edge.

In fact, this short sale nightmare may just cause me to run for office on behalf of buyers, sellers and real estate agents to ban short sales or bank owned property listings should they (the banks) not follow the same code of better business practice that all other parties are subject.

Here's what happened:

• Mr. & Mrs. Buyer found the home they loved in Tempe, AZ.
• The property was listed at $250,000
• The Buyers offered $265,000
• Buyers asked for a seller contribution of $15,000 for closing costs & seller assisted down payment
• The net price to the seller would be $250,000; In essence, a full price offer

Did the seller accept this full price offer ??? 

The seller (bank) counter-offered that they would want an additional $1,000 more.

And the reason the foreclosed home asset manager gave was that..

"FHA financing takes an average of 10 days longer to close a loan than conventional financing. The $1,000 is to cover the extra lost interest or money paid to wait the additional 10 days";

I wanted to scream. However, my mouth just hung open in disbelief. I am sure much like yours is right now!

Bank are accessing the AZ Multiple listing service to market to Realtors. This is not a marketing tool for consumers.

Mr Bank, If you are going to ask us to show your properties to clients then please work with us in the same manner you expect us to recpricate.

We all need to reach for a higher standard and code of conduct during times of waning consumer confidence in the entire real estate, mortgage and banking industry.

A revised AAR (Arizona Association of Realtors) Short Sale Addendum went into use August 1.

The new Short Sale addendum does several important things in terms of disclosure and education for buyers, sellers and real estate agents involved with short sale transactions.

The language contained in the Short sale addendum says

• There may be disadvantages to a short sale >>> (talk to lawyer/CPA)
  
• Short sale may adversely affect the sellers FICO score
• Seller may not be relieved of debt obligation tot he lender even if short sale is approved
• Seller may have a taxable event and receive a 1099-S for the unsatisfied debt
• Seller is advised to seek legal counsel and CPA tax advice before deciding to sell short
• Buyers are informed that the seller may receive back-up offers for lender consideration
• buyers and sellers acknowledge that it make take months to for lender to approve a short sale
• All loan costs will be paid by the buyer
• Buyer waives seller warranties about the condition of the home at Close of escrow
• Close of Escrow will be 30 days after agreement of short sale

Language that must be read and initialed says "

"Seller acknowledges that that Broker is not qualified to provide financial, legal or tax advice regarding a short sale transaction. Therefore, the seller is advised to obtain professional tax advice and consult independent legal counsel immediately regarding the tax implications and advisability of entering into a short sale agreement."

Short Sales are complicated transactions.

You should work with an experienced short sale listing agent who has been successful with working with banks and asset managers.

A short sale expert can help prepare a detailed short sale approval package that would include

• personal financial information requirements
• BPO (broker price opinion)
• Comparative Market Analysis (CMA),
• work hand in hand with a savvy title company to prepare a net proceeds sheet after cost of sale,
• can inform the seller that there are other possible options prior to a short sale including, loan workout, deed in lieu of foreclosure or foreclosure
• Understand what types of offers the bank is most likely to accept

Please note, there are other options to explore first. If a short sale is your last resort, make sure you seek legal advice first.

After that contact a short sale professional so the process is smooth, timely and done correctly.

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Copyright ©  James Wexler,*Short Sale Addendum - why you need to know!*

Contact James Wexler (480) 221-8080 for all your Phoenix AZ | Scottsdale AZ Real Estate needs

Recently, the National Association of Realtors (NAR) reported, ...

A record numbers of foreclosures (up 25% year over yera) helped drive down Phoenix AZ real estate more then 30%

It does not matter if you live . Whether you are rich, poor, or live in a different Country, when people lose money they like to point fingers of blame. It is ingrained in us as Americans not to be wrong, so it must always be someone else's fault.

Today, When it comes to the housing crisis, people are losing much of their net worth; especially in Greater Phoenix and there is some blame to go around.

So who really is to blame?

• Borrowers ? greed and buying more than they could afford?
• Lenders? greed in making money with easy underwriting?
• Banks ? packaging risky loans to Wall Street?
• Wall Street - ? selling pools of risky CMO's (collateralized mortgage obligations) to investors?
• Government -? - lack of regulation ?

A fantastic multi-part history of the Housing Crisis details the Roots of the problem.

A name that is now being talked about who may be the key factor is financial uber-guru and financial world icon, and some say ‘Rock Star' is Alan Greenspan.

Alan Greenspan, Head of the Federal Reserve and maker of monetary policy introduced lax lending standards to halt the inflation of the 1990's bull (stock) market.

After he achieved this goal with great success he was challenged by the dot -com bubble bust in early 2001 and then the tragic events of 9/11. What did he do to stimulate the economy you ask??

After 9/11 he continued to ease lending guidelines (think sub-prime) and more significantly, he started lowering interest rates and lowering interest rates and lowering interest rates.

Under Greenspan the Fed cut rates from 6.5 percent in late 2000 to 1.0 percent in mid-2003.

As interest rates continued to drop and sub-prime and alternative (Alt-A) mortgages became easily available, builders built and buyers bought and investors invested.

The Housing market began to grow in 2001 and boiled until 2005 and grow into the Real estate bubble that burst at the end of July of 2005.

Look at the bright side, Alan Greenspan sees the bottom in housing next year and he cannot be so far off 2 times in a row! Can he??

It is a Buyer's Market. Period.

Most homes are sitting months on the market waiting for any offer; no less a low ball offer.

There are good reasons to make a low-ball offer.

1. That is what the buyer thinks the house is worth.
2. That is the amount the buyer is qualified for a loan.
3. May need to have that price so that the mortgage payment is equal to the rental income.
4. May want to flip the house. Buy Low Sell High.

Keep in mind, low ball offers are not likely to get accepted. You are looking for that one seller in a hundred (and they are out there) who for whatever reason , just wants out.

There are a few things you can do to get a low-ball offer to work.

• Cash Offer -cash is king to sellers who are well aware of the difficulty borrowers are facing when trying to get a loan approved.
• Unconditional offer - Do not make your offer contingent on the sale of a currently owned home.
• Quick Close of Escrow - time is money. Each day is added interest that is being paid be the owner
• Personalize the offer with a letter or introduction - sounds strange. Yet, sellers are human too. And people like to see something they love go to someone they like.
• Choose the right home to make offers (check liens) - if your low-ball offer will put the seller in a short-sale position, Don't waste your time. Move on to another house.
• Look for listed homes with remarks like Desperate seller of ‘very motivated' -you will be surprised to see how many sellers advertise their levels of desperation. - These are homes that will have the most room to negotiate.
• Waive request for Repairs; DO NOT waive inspection contingency - Make sure you keep your right to inspection. If something is unsatisfactory to you, cancel the escrow. However, you are getting a great price, do not nit-pick over minor aesthetic repairs.
• Do not request seller contributions -The seller is already reducing the price and will question your ability to close a loan if you need their help in seller concessions.
• Make lots of offers -you may be outbid or you will more likely get no resp
• Patience

Remember, there are a variety of emotions tied to home ownership. People will be insulted. Expect anger and hurt feelings.

However, it is your money and you have the right to decided what something is worth to you. And, the seller has the right to say ‘yes' (hopefully) or No.

Make sure you work with a savvy, experienced real estate agent who can assist you with finding the right homes, at the right price with the circumstances that the seller will look closely at your offers. Otherwise, you are just throwing darts blindfolded.

_______________________________________________________

Copyright ©  James Wexler *Get Your Low-Ball Offer Accepted *

Contact James Wexler (480) 221-8080 for all your Phoenix AZ | Scottsdale AZ  Real Estate needs

I have been writing short sale nightmare stories in Phoenix, Scottsdale, Peoria, Fountain Hills and Tempe for some time.

I have shared stories about banks ignore offers that request Down Payment Assistance. There are banks that will only accept cash offers.

I have spoken about lenders wanting additional monies for buyers using FHA loans. I have even spoken about sellers .

I also shared a seller nightmare with short sales who had money in a bank account frozen due to a pending short sale with that same bank.

Today, we have a new and very said story about the little buyer that could. and then couldn't.

Let's call him Mr. First Time homeowner.

Mr. First Time homeowner found a condominium in Scottsdale that he loved. He put in an offer , which got accepted. However, 6 months ago during the loan application process the bank canceled 100% majority financing. So, unfortunately, the buyer that could, could not qualify for a loan without 5% down payment.

Mr. First Time homeowners agent , being the astute agent who could think outside the box suggested a 100% lease-option program which would allow several things to happen.

1. Mr. First Time homeowner could lock in the home at today's prices.
2. If the house rose in value, (yes, believe it or not, this does happen) he was in contract at that price.
3. If house decreased in value, he could buy at the lower price.
4. He also had the ability to see if he liked the home, neighborhood, owning a condo
5. Finally, the money each month accumulated for a down payment.

Sounds great right ?? Wrong.

Here's what happened.

After 7 months of payments, Mr. First Time homeowner had enough accumulated that he again applied for a loan application.

However, as we know, the lending industry, including Fannie Mae and Freddie Mac has gone through great turmoil. Bank lending guidelines have gotten much more strict.

Now, the banks are telling Mr. First Time homeowner that he needs 20% down.

The buyer does not have that money. He cannot close the loan. Yes, he had a place to live, but now has paid money up and beyond the amount of a normal lease which for all intent and purpose has thrown out the window.

Further, he could have purchased somewhere else 7 months ago that qualified him under FHA loans and seller assisted down payments. However, his agent and the listing agent told him this would work.

This is a very sad situation for Mr. First Time homeowner.

Now, he has lost money, lost 6 months of time, and cannot buy any home as seller-assisted down payments are banned (as of October 1) and lenders are no longer taking new loan applications due to that time limitation.

I need to point out that this could have been prevented had the buyer's agent properly prepared a lease-option contract with specific contingency clauses

These are complicated transactions. There are several types of rent-to-own programs like Lease Options and Lease Purchase.

Hire a real estate attorney or experienced real estate professionals who can prepare documents, explain and protect your interests.

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© James Wexler, *Rent to Own Nightmare in Phoenix AZ*

Contact James Wexler (480) 221-8080 for all your Phoenix AZ | Scottsdale AZ Real Estate needs.

There are a record number of foreclosures throughout the country. Today, RealtyTrac reported that as 1/3 of sales may be lender owned homes.

 As a result, it is increasing difficult for sellers to get offers on homes that are priced at fair market value.

There are many things you can do to elevate your chances.

Try these 11 Tips to Sell Your Home Fast!

1. One Chance to make a First Impression - keep lawn trimmed, landscaping neat, driveway empty, welcome mat and sharp front door - remember buyers are visualizing coming home.
2. Repairs / Pre-inspection - minor flaws not only detract from a homes value, they lead buyers to wonder what else is wrong that they cannot see
3. Stage your home for a quick sale - staging works. Statistics show that sellers get better price offers in a much more quick time frame
4. Bedroom and Baths help sell homes - remove excess furniture, make beds, clean bathrooms, add scented flowers or candles
5. Let there be light - open shades, draperies and turn on lights - dark rooms are depressing , light is cheerful
6. Music to my ears - light music sets a mood, make sure it is not loud, turn off televisions
7. Too many cooks in the kitchen - let the buyer walk and talk freely, they did not come to the house to talk to you or your agent
8. Silence is Golden - buyers are here to see the home, if there is something to point out, do it while at the front door, and let them talk.
9. Forget Animal Rights - pets should be out of the way, and out of the house, people love their own animals. not yours in what may be their new home
10. Agent should show your home and hold open houses . Not you! - sellers love their house because it is their home. However, buyers are need to be able to talk freely, ask questions and raise concerns that they may not feel comfortable doing in your presence.
11. Price Right, Price right , Price Right - all of the above do not matter if you don't PRICE YOUR HOME RIGHT, this is the # 1 rule, secret and is 90% (or more) of your chance for success. The other 10% you ask?? Price your home right!!
    

Despite what the newspapers say, homes are selling. However, competition and inventory on the market are at all-time highs.

You have to give yourself the best chances to

1. get your house seen
2. get them through the front door
3. get them to see your house as their home

If you follow these 11 Tips to sell your home fast, the above 3 rules will follow.

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One of the most popular type of financing used here in Greater Phoenix, Glendale, Peoria, even Scottsdale is FHA financing.

FHA financing here in the valley has really picked up steam as of late with the rush to take advantage of Seller-Assisted down payments or charitable down payment assistance programs like Ameridream, Nehemiah and Grant America (GAP).

The Down payment assistance programs have been banned by the recently passed Homeowner Rescue Act and

Down Payment Assistance will no longer be funded as of October 1st, 2008.

In fact, you should note that banks will no longer be accepting loan applications at the end of this month, August; Some bigger banks are no longer accepting them period.

One of the challenges facing approval of an FHA loan and use of Down payment assistance is that the community must be FHA eligible.

What does FHA eligible mean???

First, let me give you a story.

• Agent took buyers to see a home which they loved
• The listing agent confirmed that the community was FHA eligible
• Buyers made an offer which was Accepted.
• During underwriting the bank tell buyer that community is Not FHA eligible.
• Buyer cannot obtain FHA financing
• Client is now 2 weeks into loan process
• down payment assistance deadline is coming up quickly.
• Must find replacement home by end of August or not get FHA loan
• Maybe not buy a home at all if cannot get FHA loan and Down Payment Assistance

What does FHA eligible mean???

There are several guidelines that must be met to be an FHA approved community.

However, the primary one to look for is that more than 50% of the homes sold in the community must be owner occupied.

In most parts of the country this is not something to even consider. However, in most of the towns around Phoenix this is can be a difficult hurdle to overcome.

Especially, in the Condo conversion market where the community was 100% rental and was converted to Condo sales. Often times the developer did not sell 50% to owner occupants. Thus, there is a a much greater proportion of rentals than homeowners.

In new home sales and new build subdivisions a similar challenge arises. Although, Builders have all lots and homes available for purchase. In many cases 50% have not been sold when lot sales begin in the first many months.

I encourage you to ask your real estate agent do the research for you.

Do not assume because the community has been around a long time that it is more than 50% sold to owner occupants.

Most residents and even many sales agents who work in these communities do not know.

If you are going to use an FHA loan, find out first; Before earnest monies are non-refundable and eligibility for loan approval is denied.

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Copyright © 2008 By James Wexler , *Buyer Beware!- Make sure AZ Community is FHA eligible *

Contact James Wexler (480) 221-8080 for all your Phoenix AZ | Scottsdale AZ Real Estate needs

The Title and Escrow process is somewhat of a mystery to consumers and most agents in Arizona.

Chicago Title has streamlined this process by automating a documents check list that is emailed to the representing listing broker and selling broker and copying the buyer and sellers.

Here's how it works:

Email generated when Escrow is opened with a Status of

Order Opened

Review Real Estate Contract Purchase Agreement

• Title Commitment Ordered
• Commercial Critical Dates Letter Sent
• Schedule B's Received
• Amended Commitment Received
• Process IBA Instructions
• Order Payoff (1st loan)
• Order Payoff (2nd position Loan
• Order Hazard Insurance
• Order Survey
• Order Tax/HOA Info
• Order Home Warranty
• Order Special Districts
• Power of Attorney Received (if applicable)
• Due Diligence Period Completed
• Inspection Period Completed
• Additional Deposits Received
• Earnest Money Deposit Becomes Non-Refundable
• Corp/LLC/Trust Docs Received
• Commission Agreement Received Listing Agent
• Survey Received
• Tenant Approval Received
• Environmental Approval Received
• 1031 Exchange Dos Received
• Loan Docs received
• Estimated HUD/ Settlement Statement to agents
• Closing Protection Letter Sent
• Signing Scheduled with Buyer
• Signing Scheduled with Seller
• Loan Docs Returned to Lender
• Closing Funds Received from Buyer
• Closing Funds Received from Seller
• Closing Funds received from Lender
• Confirmation of Recording
• Notify Parties of Recording
• Final HUD / Settlement Statement
• Closing Packages Distributed to Parties to the transaction
• Escrow Closed

Also, attached to email that are sent automated upon any change in status are:

• Pending Loan Details/Loan Contact/Phone Number
• Mortgage Broker / Contact information
• Title Officer / Phone number / Fax number
• Listing and Selling Agent Information / Phone number / Fax / Email address

This Summary for the Property in escrow will most surely help expedite the escrow process and keep all parties to the transaction aware of any potential issues so that they can be address and resolved as quickly as possible.

_______________________________________________________

Copyright ©  James Wexler, *The New Title and Escrow Process by Chicago Title*

Contact James Wexler (480) 221-8080 for all your Phoenix AZ| Scottsdale AZ Real Estate needs

Today's Phoenix and Scottsdale area new home buyers Stand Some GOOD NEWS for real estate!!!offer more reasons to buy direct from a New home builder than ever before.

A wide variety of communities, location, location, location, modern floor plans, an practically unlimited choices of features, colors, fixtures and finishing's, lot selection, modern safety and energy efficient standards, and invaluable Builder warranty offering an extended commitment to reliability, unique value opportunities and generally better profit in long-term appreciation,

it is difficult to look past a new home for your American Dream.  

Consider these 5 Important Reasons to buy a home from a new home builder in Arizona

1) Value - In today's market, almost everything is negotiable. Many home builders, if you negotiate well, will often help contribute down payment and almost always money towards closing costs; thus saving you what can amount to a lot of money out of pocket. Further, they are more willing to negotiate pricing, as they have more flexibility in pricing than the resale home seller. Finally, happy community residents and satisfied customers are the best source of new sales for the builder who has many homes available in that neighborhood.

2) Modern Architecture - Build the Home that's Right for you: Today's New Home Builder, offers an array of modern floor plans that are sure to feel custom to each buyer, these plans are including large kitchens with huge family great room, more bathrooms, with steam showers, and jetted tubs, walk-in closets, his and her sinks, Guest Entrance/Casitas, pools, spas, putting greens, fireplaces, home offices, built-in plasma TVs & wonderful use of windows for natural lighting and often spectacular views

3) Choices - The dizzying amount of choices include and are no way limited to...exterior paint, stonework, windows, interior Paint colors, faux and textured, carpets, stone, floors or wood, variety of wood cabinets, stainless steel appliances, with larger capacity refrigerators, double ovens and 6 burner gas range, granite counters, tiled bathrooms, light fixtures, landscaping choices and solar heated pools, to name only a few of the countless choices making the process not only fun, but personal.

4) Spec Builds in Inventory - Discount price - no discount in product or value. If you can be a little more flexible in all of your specific desires. Many New Home Builders have some home in current Inventory. Either Buyers could not qualify or the Builder built as "Specs" , homes available for purchase immediately. These homes are often built 70-100% to completion; thus offering a few less choices. However, what you lack in choices, is often well made up for in pricing as these builders need to sell them more quickly as they are costly to keep each month.

5) Long-Term Appreciation - Think New Car Smell!Lets face it, who doesn't like New vs. Used is as American as apple pie. Think, new car smell. And when it comes to resale, one of the first items looked at when comparing location, size and pricing, is Age of home and modern fixtures and finishings. If you compare equal homes, with equal amenities, the new home is more marketable, more sell-able and often demands more money.

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Copyright © James Wexler, *Why Buy a Home Direct from a Phoenix AZ New Home Builder in Today's real estate Market*

Contact James Wexler (480) 221-8080 for all your Phoenix AZ | Scottsdale Real Estate needs.

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• Exit Poll for Phoenix AZ real estate owners
• Buy a New Home in Phoenix cheaper than Builder Cost
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New Home Construction in the rapidly developed communities around Phoenix, such as Glendale, Peoria and Desert Ridge Marketplace in North Phoenix as slowed considerably as a result of little interest in new home construction.

Buyers are buying spec homes in builder inventory as they are priced at steep discount as new home builders are trying to dump inventory to reduce overhead of unoccupied homes.

However, there is a type of new construction home that is selling ...        

Green Homes that are built with an effort to make them as eco-friendly as possible.

Dave Macklin reported that 9 out of 10 Realtors said home buyers are looking for energy efficient features in homes for reducing their carbon footprint and cost savings.

Interestingly, Mr. Macklin cited a a survey of 250 home builders reported that buyers are willing to pay more for green-built homes.

Mindy Allen mentioned that Green Home building is on the rise in New England.

Pam Dent in Charlottesville mentioned the many features of Green home building.

And the eco-friendly movement to build Green Homes is not limited to the United States.

According to Andrew Perkins, British Columbia, Canada is proposing legislation that will require buildings to be carbon neutral as early as 2016 - and every new building to have no carbon footprint by 2020

What makes a home eco-friendly and "Green" ?

• Environmental friendly homes incorporate many of the following:
• Built from existing homes to conserve materials
• New homes with recycled woods and recycled construction waste
• Non-toxic materials like paints and finishes
• Energy star HVAC systems
• Window, screen and awnings to produce shading
• Dual Glaze e-efficient windows
• Development in urban cores to save gas of residents

Shea Homes offers a green Certified home in their Shea Homes Trilogy series at Trilogy at Vistancia in Peoria, AZ orEncanterra at Trilogy Country Club in Queen Creek, AZ.

If you buy certain Shea Homes far from a urban center you will receive a Hybrid Car.

• Solar Power
• LED lights
• Better ventilation
• Soy and wool-based insulation and flooring
• Dual Flush Toilets
• Programmable Thermostats
• Wood from sustainable forests

U.S. Green Building Council certifies home LEED (Leadership in Energy and Environment Design Gold Certification )

Make sure you look for the LEED Gold Certification if you are buying a new construction home.

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Copyright ©  James Wexler, All Rights Reserved. *What is ‘Green' Home Construction? *

Contact James Wexler (480) 221-8080 for all your Phoenix AZ| Scottsdale AZ Real Estate needs

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