Phoenix AZ | Scottsdale AZ Real Estate

I have recently written several articles about my support for the Housing Rescue and Financial Bailout Package that is now weeks into effect.

I believe it is an important piece of Legislation that does 2 important key things to add support to the ailing housing and credit markets.

It creates badly need liquidity in the credit .

Opposition was strong in many camps arguing to block grants on the grounds that "the principal beneficiaries of this type of plan would be private lenders - who are now the owners of the vacant or foreclosed properties - instead of struggling homeowners who are working hard to stay in their homes."; Fear of the public mentioning the dreaded "bailout" is not something Republicans ever mention or want to hear.

I argued that this is not a Democratic issue or a Republican issue. This is an American issue. I believe that we could face a prolonged recession and economic crisis.

A scenario that that the Government needs to act quickly to avert.

Even Republican nominated Treasury Secretary, Henry Paulson said about the theory of such a quick and strong move by the Federal Government is , "(the bill is) of a magnitude more important to turning the corner on the housing correction and supporting our markets and our economy".

Even more resounding statement came from Rep. John A. Boehner, R-Ohio, the minority leader who voted against the Bill, and "It's a bill that I cannot support.

However, It's a bill that the market clearly needs .."

However, I received a variety of criticism and backlash which as you know, I always welcome and encourage.

The main and understandable point of contention is what the ultimate cost to the good paying US Taxpayer.

Other detractors commented that the cost to the Treasury, and the American taxpayer, could reach a Trillion dollars .

The House of Representatives' Republican whip Roy Blunt objected to what he said would be "a 700-billion-dollar bailout of mortgage lenders, allowing them to offload their worst loans onto the Federal Housing Administration. " and stated unequivocally that he "believe rewarding, encouraging and reinforcing risky investments should not be the role of the government - and certainly shouldn't be financed by taxpayers," Blunt said.

There is little doubt that this legislation will be costly to taxpayers.

I agree it is not our responsibility to bailout business and consumers at every turn and for every decision that turns out unexpectedly.

However, I still believe this is more than a financial issue that could spiral to a National Crisis if the government fails to act. And I do believe the Government has some role in protecting our national interests personally and financially.

Events have transpired and conspired in an unprecedented way that no one could have imagined to cause a financial calamity. An economic disaster. A Financial ‘Perfect Storm".

The government must act.

However, the question is fair, "At What Cost??"

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

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Believe it or not , home buyers purchase real estate on-line. 

In Phoenix, Scottsdale, Peoria, Glendale and other popular retirement towns this is a growing practice as these are popular vacation home and retirement cities.

Many of these buyers are relocating to the Metro Phoenix area and want to purchase before they move.

The advantage to buying a home on-line is usually cost savings. Although, many buyers simply see a home they love and make purchase offers, so not to miss out.

In many cases, buying homes site unseen; except for the photos and virtual tour of the house beautifully staged by the listing broker.

Some companies, including the widely respected, RedFin have made this a profitable business model. Although, they do offer personal service, and very good personal service, the majority of the home buying (and selling) process is done on-line.

60 Minutes 's Lesley Stahl produced a story about Buying and Selling Real Estate on-line .

My brother's wife's family relocated from New Jersey to Fountain Hills, AZ finding and buying their home on-line. They are very pleased. (although, I did have the opportunity to preview and negotiate the Fountain Hills home on their behalf).

Generally, I recommend you consult a real estate agent as there are many aspects to home buying more than price; especially the contract terms and conditions.

However, if you are going to buy your next home on-line make sure you follow these tips.

1. extended Close of escrow so that you have plenty of time to get the best available finance. You can always close early.
2. Financing details must be in the contract so that if you do not get satisfactory finance you can cancel per finance contingency without breach -Terms of finance would include who pays for pay for loan costs (and appraisal)
3. Choice of Escrow company. In Phoenix, the seller pays for Title Insurance and will often demand use of Title and escrow company of their choice. However, all items are negotiable and I prefer my buyers to have control of escrow to best protect earnest monies
4. Inspection Period time frames including response times. Contingencies regarding this period are crucial.Inclusion of any other reports the buyer may need to determine the suitability of this particular property
5. Buyer (and seller ) cancellation contingencies to allow for offer contract cancellation. Make sure you know these time frames and have them spelled out clearly.
6. Cure Period Notices. In Arizona, virtually everything is ‘curable' with a 3-day cure period. Arizona ‘Cure periods' can be changed and negotiated to reduced. Make sure you know what these cure periods time-frames.

There is plenty more to understand and negotiate when buying real estate on-line.

Be careful, there is more than earnest money at stake. Buyers and sellers can and do sue for breach of contract.

Make sure you know how to read and prepare offers for real estate that protect your best interest. Often, these -on-line contracts are prepared for and designed to protect those who write them; Themselves!

I urge you to contact a real estate agent to help you.

There are many experts on Active Rain who have commented below with their email and phone number attached.

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Copyright ©  James Wexler, *Be Careful when Buying Real Estate On-line*

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

Yesterday, I wrote a blog titled Will the housing rescue Bill work ?

Today, I woke up to the front page of an associate press story giving me (indirectly) their opinion where they discuss the Uses for $700 billion bailout money ever shifting

• First, the $700 billion rescue for the economy was about buying devalued mortgage assets to unclog frozen credit markets.
• Then it was about using $250 billion of it to buy stakes in banks.

The idea is simple. To offer banks cheap (Free) money so that banks would use the money to start making loans again.

But reports surfaced that bankers might instead use the money to

• buy other banks,
• pay dividends,
• give employees a raise
• executives a bonus,
• or just sit on it.

Just sit on it ????

Sen. Charles Schumer, D-N.Y  whose constituents include Wall Street bankers, said he also fears that they might stuff the money "under the proverbial mattress" rather than make loans.

There is no language in the legislation that mandates that these banks lend any of the money that they are getting from the (Taxpayers) government.

It appears that it makes more sense to them to buy other banks for pennies on the dollar or just sit on it instead of lending it to distressed consumers.

Treasury Secretary Henry Paulson said the "The driver is to have our healthy banks be well-capitalized so that they can play the role they need to play for our country right now."

 However, it does not appear now, after the money has started flowing,  that the banks are going to take their new found wealth to lend to consumers.

AS Chris Dodd said,  "The key to our nation's economic recovery is the recovery of the housing market," Dodd said. "And the key to recovery of the housing market is reducing foreclosures."

If consumers cannot refinance, modify loans or buy homes, we will not see price stabilization or a reduction in foreclosures.

I urge you to email your Congressman and tell them that the language of this bill needs to be amended to make sure banks can use that money to lend or not at all.

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Copyright © James Wexler, *Will the Housing Rescue Bill and Bank Bailout work ? *

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

The question on everyone's mind nationally is "will the plan outlined in the Rescue legislation work" to help the struggling economy and support the ailing real estate market?

I believe that there is no silver bullet that will be a complete quick fix.

However, there is precedent and reason to be optimistic.

New York Times writer, Amy Schoenfeld discussed the role of American Debt and the American Burden that has come since the first consumer loans took form in the 1920's.

Ms. Schoenfeld, walks us through a previous time in history where ....

for the first time, starting in the 1920's banks offered 3-year to 5-year mortgages with lump sum (balloon loans) payments at the end of the loan.

Does this at all sound like short term ARM‘s (Adjustable rate mortgages) of the last 10 years?

Americans then, like Americans now,  took on debt during the Great Depression and many leaders called on debt as a key to recovery.

Does this sound like the lowering of interest rates rapidly starting in 2001 after 9/11 to add consumer confidence to a shaken economy?

However, refinancing of theses loans was nearly impossible as home prices dropped.

Does this sound similar to the inability of today's homeowners to re-finance into better loans to ride out the housing downturn?

According to one estimate nearly half of urban mortgages are delinquent in 1934.

Today, we have as many as 3 million Americans who may face foreclosure by several estimates.

The government acted quickly to make long-term loans the industry standard and provided for the refinancing of one million delinquent loans and offered insurance on loans.

Does this sound eerily similar to the Housing Rescue Act that the Senate just passed ?

Next, right after WWII, Americans buy homes with government insured mortgages.

Will the outcome of the Housing Rescue Act of 2008 be the same renewed consumer confidence and economic recovery that we saw in the 1940's? 

In 1951, 53% of homeowners have no mortgage debt.

This outcome may be a bit far reaching as  we are a now a Country and economy built on debt. (According to the New York Times,  Americans carry $2.56 Trillion in consumer debt, up 22 percent since 2000.)

However, the historical parallels are compelling and are difficult to ignore.

We may not reach the levels of 1951. However, if the Housing Rescue bill works we are well on the way of putting words like ‘recession' in our rear-view mirror and are heading towards a recovery.

History tells us we have reason to be optimistic; dare I say ‘confident'?

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Copyright © James Wexler, *Will the Housing Rescue Bill and Bank Bailout work ? *

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

Phoenix area home builders are struggling to sell homes. There has been a 56% drop in New home sales from June 2007 to June 2008 according to R.L. Brown's housing report on the Phoenix area real estate market.

The days of waiting in line to pay a premium for a home from a Phoenix new home builder are a fleeting memory.

Today, large builders like Toll Brothers, Pulte, KB Homes, Hovnanian, and most smaller local builders like Camelot Homes are offering truly great products at unbelievable prices.

However, the competition for fewer and fewer buyers is so fierce that Builder incentives are ever increasing and are tempting many Arizona home buyers.

Builder Incentives include everything from cars, pools, plasma TV's, vacations, upgraded interior fixtures like granite and stainless steel appliances, Green cost saving efforts like solar paneling and financial incentives like no money out of pocket closing costs.

Shea Homes offered BMW convertibles. Many builders offer free pools which can cost as much as a BMW or Lexus

Let me suggest that you look for these Builder incentives when you make offers and negotiate the purchase of a home from a builder.

• Inventory 'spec' s (Completed homes, ) are opportunities as these completed homes sit, accruing interest or tying up cash,  in builder inventory. The lower pricing on many of these are incentives alone.
• Closing Costs and (some HOA fees)  paid through use of Builder's preferred lender - maximums are controlled by RESPA (not the builder)
• Upgrades at reduced cost on appliances, flooring, counters and cabinets, even pools and patios from Standard features
• Lot Premium Reductions  - get a premium lot for less
• Many builders are offering bonus to Realtors.  Many Realtors will split this commission with the buyer as additional cost savings to the client.

Contact a real estate agent who specializes in new home builders and communities. New Home specialists can help you negotiate price and incentives.

Bottom Line, It is a buyer's market. 

More and more it is ‘Ask and you shall receive.'

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Copyright ©  James Wexler,  *Take Advantage of Builders (Incentives) *

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

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In many area of the country and in parts of Arizona water damage from floods are a serious issue. 

In fact, flooding is the leading natural disaster in the U.S., reports the Federal Emergency Management Administration. Flood losses averaged $2.4 billion a year the past decade.

However, in Maricopa County which includes the dry towns of Paradise Valley, Scottsdale, Fountain Hills, Peoria, Tempe and Phoenix, why do lenders ask,

" Are you  insured against floods ??

Further, if you are in a designated flood zone lenders mandate you have flood insurance.  Yes, mandated flood insurance here in the Valley of the Sun.

It is important for you to know that homeowners insurance does protect you from natural disasters  including wind, fire and lightning.

However, standard homeowners insurance does not protect you from floods.

If you want to buy flood insurance, it must be obtained through the National Flood Insurance Program administered by FEMA.

Without specific ‘Flood' insurance, you are responsible for all costs related to flood disaster including cleanup and the contents of the home.  Most importantly...

 you cannot secure a Government loan to rebuild if you are not covered.

A year ago, the Insurance information Institute reported that 35% of all Americans mistakenly believed their homeowners' insurance policies cover repairs or replacement from flood.

Make sure you know if you are in a area designated a flood zone. A title and escrow company can tell you with a quick preliminary title search.

In greater Phoenix, the Flood Control District of Maricopa County oversees the development and implementation of comprehensive flood hazard control measures in Maricopa County.

Be advised that even if you are in low to moderate flood risk or are just outside a flood zone area it may be worth spending a few dollars to protect your home and family.

Now, I have never heard of a flooding natural disaster in the Phoenix Valley.

However, during monsoon season waters do run off rapidly;  and if you have been victim of water damage you know ...

it takes only a little water to cause significant damage to your home and belongings

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Copyright © James Wexler, *Flood Insurance required in the Phoenix Desert *

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

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As real estate prices continue to slide in greater Phoenix and the surrounding towns including Scottsdale, Fountain Hills, Peoria, Tempe, there has been a flurry of activity of an again emerging class of buyers, First-Time home buyers.

Prices have fallen back into affordability levels. Interest rates are still historically very low. And with Federal legislation allowing incentives and exceptions in Fannie Mae and Freddie Mac financing,

...these buyers are who had been for many years, priced out of entry level housing are now the lone winner of they housing crisis sweepstakes.

However, if you are in the market to buy a home using FHA financing, keep an eye out for  danger signs of your personal finances before you buy as financing and purchasing home using FHA loans is now more than ever credit score driven.

• Know your FICO score and what it means
• Review your credit report with a lender sooner than later
• Report mistakes or outdated information
• pay down debt
• do not make an large purchases
• Dont' fall for credit repair scams
• Pay your bills on-time

these may be signs that your finances are in trouble.  If you find yourself ,

• maxing out credit cards
• paying late on debt
• borrowing on cards to pay other cards
• tapping into home equity to pay other debt
• receiving notices that credit lines are being reduced
• HELOC or credit card rates are  being increased

If this might be the case, I encourage you to address the situation sooner than later. And,...

...definitely do not add more debt and leverage and

don't purchase a home before your financial foundation is firmly on the ground.

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©  James Wexler, *Danger Signs that your Finances are in Trouble! *

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

Welcome to my first installment of my regular segment called ...

SHORT SALE - Horror Stories

I recently wrote an article: Ban All Short Sales , in which I suggested we start a petition to Ban Short-Sales !

or , at least get the NAR and the MLS to not allow listing short-sales until their is a bank approval.

Since then I have heard many accounts by real estate buyers, sellers and agents here in Phoenix and Scottsdale when dealing with non-approved Short Sales.

I want to begin sharing these SHORT SALE - Horror Stories with you.

Last week, after sifting through the listings of "short sales", we found a

• 'short sale' home that was actually approved by the lender.
• My client loved the home listed at $250K.
• The client is using an FHA loan with 3% down-payment.
• The buyer offered $260K.
• The offer was not accepted.
• The bank accepted a lesser price offer.
• The listing agent told me the bank is simply not accepting FHA buyers with only the minimum 3% down as the loan denial percentage is more than 40%.

I have been involved with numerous REO transactions.

However, this is the first I have heard of banks taking lesser offers if a buyer has small down payments.

I wanted to share this short sale nightmare and continue to take names for my petition to ban short sales.

Please share your stories if you have any similar experiences; good or bad.

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Copyright © 2008 By James Wexler, All Rights Reserved. *SHORT SALE - Horror Story of the week*

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

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In the midst of the mortgage crisis, rising interest rates and tighter lending and the disappearance of 100% financing, the last lending option has been taken away for credit worthy borrowers who lack the money for a down-payment

Down-payment assistance programs like

• Ameridream,
• Nehemiah 
• Grant America Program

have offered Phoenix area home buyers....an opportunity to obtain mortgage loans with the help of non-profit organizations and charity assistance groups that contribute the down-payment for buyers to obtain FHA loans.

However,

Federal Regulators believed that these lending practices and programs is actually a contribution or kick-back from the seller. Here's why.

The buyer is including an extra amount (usually 3%-5%) in the price of the loan which is insured by FHA which insures all loans involving down-payment assistance. The money then is a credit funneled from the seller to the non-profit organization to the buyer as a down-payment.

This practice, which has been described as a ‘loophole' in FHA guidelines that allows down -payments from charities has been banned.

Now that sub-prime loans require much higher down-payments, this has become a very popular strategy to get risky loans approved with little money down that are still insured by FHA. Thus, Wall Street buyers of loans can more comfortably buy the debt as any default would be insured by the FHA.

The housing-reform bill eliminatd this practice.

What do you think??  should this be reversed ??

Would Down Payment Assistance Programs Help or Hurt the Credit Markets?

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

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The Federal Regulators, including the Treasury Department have swooped in to offer unprecedented guarantees to mortgage lenders Fannie Mae and Freddie Mac to stave off possible financial collapse of the United States banking system.

I applauded and had previously argued that the FED should move quickly to prevent a failure of Fannie Mae and Freddie Mac.

Russ Wiles of the AZ Republic wrote an excellent leading opinion that the boom in housing was led by greed shared by lenders, buyers and Wall Street mortgage investors; "Unqualified buyers reaching for unaffordable homes and Wall Streets investment (mortgage) banks willingness to offer almost anyone who had a heartbeat a sub-prime loan."

And yes, maybe during this time the regulators did not pay too much attention to these unique practices.

Now, Americans are pointing fingers in every direction looking for blame; Including the Governments role, or lack thereof.

This look to the government to help every aspect of our lives when things are bad (think oil) is not generally what most Americans want; The majority of voting Americans think the Government should mind their own business and not ‘regulate' every aspect of our lives.

I believe this is a unique crisis. The lending and Banking industry , especially Fannie Mae and Freddie Mac are simply too important to consumer confidence and the Real Estate economy to fail.

I also have supported variations of Congressional legislation such as the Homeowner Rescue act that would aid struggling homeowners and keep many from foreclosure.

However, after I wrote this article, I received a lot of backlash and criticism. Let me share with you a consensus of the (sharply) pointed comments.

Most opinions pointed out that the secret victim of all this fallout is the good paying, strong credited neighbor .... who put down large cash payments when they bought.

These home buyers cannot walk away. They are stuck with mortgages that cannot be adjusted per proposed legislation. Now anchored in homes with a drastic drop in value in large part due to foreclosures of those who cannot afford or never could truly afford to pay.

Further, Housing legislation needs to be funded somehow, somewhere; either a cut in other important social programs or on-time Tax payers.

I am not one to waiver on my beliefs. Governments should not intervene; Unless it is absolutely necessary.

However, it is worth considering the opinion of one Mesa, Arizona home owner ,

 "let market forces work this out. This rescue plan rewards those who do not deserve to be rewarded!"

I encourage your thoughts and ideas in this open forum.

Who knows maybe your Congressman is listening?

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Copyright © James Wexler, *Government Mortgage Bailout Hurts Financially Responsible*

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

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