Phoenix AZ | Scottsdale AZ Real Estate

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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I often get asked by homeowners who are having difficulty selling their home, can they buy another home prior to a successful sale.

The common trend recently has been to rent your existing home and purchase a new home using the rental income from you existing home to offset a portion or all of the mortgage payment.

If you have been waiting to buy a home while your home is in escrow pending a sale or you have been considering renting your home until the market improves, please be aware of these important Fannie Mae lending guideline changes.

FANNIE MAE 's NEW LENDING GUIDELINE, Effective AUG. 1, (except for a few exceptions)...

If you are converting your current home to a 2nd home, vacation home, or investment property...

"THE BORROWER IS GOING TO HAVE TO QUALIFY FOR BOTH PAYMENTS."

Fannie Mae will still permit up to 75% of rental income to offset your mortgage payment, IF, there is 30% equity (appraisal required) in the home.

There are other guidelines that must be met to qualify for a mortgage per your specific situation. However, ...

I need to point out that I am not a mortgage professional.

The information I am sharing is coming directly from Fannie Mae.

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Copyright © James Wexler, *Important - New Fannie Mae Lending Guideline*

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

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Sub-prime lending and easy credit are widely considered the primary factors that caused the expansion of the housing bubble and the expansion of housing prices that led to the ultimate implosion of the real estate economy. However,

....what are the reasons that caused the mortgage crisis?

and the collapse of Bear Stearns, IndyMac, Fannie Mae and Freddie Mac and a free-fall in housing prices in greater Phoenix and in virtually every part of the country.

Who really is to blame?

• Borrowers - The vast majority of borrowers where honest in their loan applications. These are the neighbors that are hardest hit as unqualified buyers walk away from next-door homes as prices fall and interest rates adjust higher. Though, remember, Buyer Beware! We are quick to recall that old adage until it happens to us. However, buyers must take some responsibility before they are quick to point blame.

• Lenders - different than mortgage banks. Most lenders originate loans to consumers with the plan of immediately selling this loan to another institution. Greed by lenders to get paid a commission led to "liar loans' and a wide disregard of borrowers ability to pay for the mortgage.

• Banks - Lack of over sight by management, low underwriting standards and poor explanation of borrower risks are key factors to the sub-prime meltdown as banks quickly packaged loans and sell them to Wall Street investment banks and Hedge Funds for high rates of return.

• Wall Street -Investment banks pooled these CMO 's (collateralized mortgage obligations) and sold to their investors with high rates of returns. However, the ability to use leverage allowed banks to buy more than they could afford. When it was time to pay investors the value of these funds was virtually gone.

• Government- In a odd twist of fate, the government is taking little criticism or pointed fingers of blame. However, we are a Country built on borrowing; not Savings. The vast majority (some say more than 80%) of our gross domestic product (GDP) is from consumer spending. This has been great for economic expansion. However, lack of now planned oversight of allowing too many to buy what they cannot afford in order to support growth, may have come too little too late.

We all have our opinions of who is to blame.

Unfortunately, there is no one answer. No easy answer. No easy solution.

As the President pointed out, "it took us some time to get into this and will likely us some time to get out"; .... not comforting news, but likely the truth!

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Copyright © James Wexler *Housing Crisis - Who's to Blame ?*

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

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As a Real Estate Broker here in Scottsdale and the towns around Phoenix, I am asked by many sellers whether or not they should upgrade their homes in order to help them sell more quickly.

Now, I know there are differing opinions on the subject.

A well respected Associated Press author, J.W. Elphinstone wrote recently that more people are upgrading their properties in the interest of enjoyment while they are waiting for their home to sell. He also makes the claim that "an in-ground pool increases the selling price of a home by almost 8%."

In contrast, a Wall Street Journal Reporter, M.P. McQueen suggested , "If you're putting your home on the market anytime soon, you may want to rethink those plans to bump out the kitchen or add an extra bath."

My humble opinion, if you are planning on selling, Do Not Upgrade your home . Period.

Even during the housing boom, projects would rarely recoup as much as 90 cents on the dollar according to M.P. McQueen. Today, it is even less.

There are many things you can do (that are not major upgrades) to help prepare you home to sell that are quick, easy and cost-effective such as Cleaning, landscaping, new light fixtures, staging and a pre-inspection.

Curb appeal may be the most important and least expensive improvement bang for your buck.

In most cases, in today's Phoenix area real estate market,...

if you are planning on selling soon, Remodeling is a waste of money. 

You will rarely get dollar for dollar return. And the money spent, cash in bank is better safe in your bank should you need it to ride out a lengthy time on market.

A home improvement loan is expensive and you do not need the extra montly payment while waiting.

If there is an upside to a down market, it is cheaper prices. Buyer's are looking for bargains, even steals;

There are simply, too many short-sales, lender owned properties (REO) and desperate sellers who you cannot compete with by adding on more value to a  home.

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Copyright © 2008 By James Wexler, All Rights Reserved. *Planning on selling? Don't Upgrade your home!*

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

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earlier this year, while it was still in business, Wachovia Bank announced that they, (Wachovia) is exiting the General Bank wholesale mortgage origination channel.

This was a shocking follow up from the announcement from Bank America closing its wholesale division of lending through mortgage brokers.

Look no further than www.ML-Implode.com; Here you can watch the wreckage in the mortgage lending business tallied for the world to see.

Industry guru, Rob Blake wrote asked ... are Mortgage Brokers are an endangered species?

He pointed out that If you listen to Mortgage (broker) Industry insiders you will hear whispers that the 'all-powerful' "banking lobby will finally get the Government to legislate mortgage brokers out of existence."

In his very well written article, he outlines the history of the banking industry's "pursuit of the killing off their competition, many believe the banks decided upon a "scorched earth" plan to rid themselves of retail mortgage competition once and for all. The Plan was one they pulled from the S&L play book a decade earlier".

Blake argues that if the Banks "Give the mortgage brokers just enough rope to hang themselves just like the Savings and Loans did!"

Before, you write this banter off as conspiracy theory hogwash, listen to what has happened and the now dreaded word of the year for 2007. Sub-Prime :

Sub-prime loans, Alt-A loans, option-arm 's , etc.. where originated through private banks; specifically depositor banks to start. (many other private and smaller institutions entered the frenzy to make a quick buck from borrowers who mostly could not afford the loans. Although this is another topic for another day.)

Borrowers did not need to go to their local banks to get a loan. They could get these sub-prime loans through mortgage brokers who could virtually originate a loan to anyone who could sign their name.

Borrowers wanted to buy, they wanted these aggressive loans and the bank underwriters approved the loans. Hey, give the customer what they want, right? and, ultimately the deposit banks where approving these loans.

So, in the vast majority of cases, it's not the honest mortgage broker's fault. It's the banks who approved the risky loans. Right?.. Wrong!

You know who is now getting too much of the blame.  -- The mortgage broker.

Currently, their is a vast inspection and audit of the entire industry. Primary focus are new and strict lending guidelines and practices aimed primarily at the mortgage broker.

In fact, not only are the banks not being blamed. They are getting bailed out by the Government.

Think Bear Stearns. Think Fannie Mae. Think Freddie Mac. So on, and so forth , and so on.....

Wow, a deposit bank, JP Morgan/Chase was able to sweep in and buy Bear Stearns . Not only at pennies on the dollar, but with guarantees and assurances and actual insurance from the Federal government. Not bad for Chase Bank, right?

The current and pending Federal Legislation (pushed by the banking lobby) that requires heavy regulation and oversight of mortgage brokers. Mortgage brokers will continue to have less and less product availability. Comparatively to banks, they have unfavorable pricing of rates.

It is not unforeseeable that these factors may ultimately put mortgage brokers out of business!.

Ask yourself, ....why would you go anywhere else but a big bank?

"when the dust settles a few years from now, every one will go to a bank to get a mortgage because that is all that is left.

Often, where there is smoke, there is fire.

I hope he is wrong. However, I am concerned he may be right

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Copyright © James Wexler *Will mortgage brokers become extinct?*

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