Chandler Real Estate
Is it Really a Bad Time to Sell?
by: Maria Hass July 2008
Most people
would probably say, "This is a horrible time to sell a home." But as a Professional
Full-Time Realtor who works constantly with buyers and sellers and watches the
market daily, I would beg to differ. The current market
offers selling opportunities as well. Let's look at the reasons why:
1.
Supply and Demand - The inventory of homes for sale in Metro Phoenix
has decreased for the eighth consecutive month since October 2007, when we
topped out at almost 58,000 homes, down to about 52,000 in June of this year.
Also, buying trends increased for the fifth consecutive month this year. This
means that the supply of homes for sale is decreasing and home sales are
increasing. The Metro Phoenix market continues to improve as sellers find less
competition when selling homes than last year.
2.
Home Appreciation - Arizona homeowners who have owned their homes for
five years or more will find themselves ahead of their investment. Arizona is
one of the leading states in home appreciation with an average of 90 percent
appreciation in value over the last five years -- about 18 percent annually
during that time.* The average real estate appreciation across the U.S. is 3 to
5 percent annually. Based on this figure, Arizona homes have appreciated 13
percent more per year than the national average.That's great news for homeowners
in Arizona -- and while sellers think that they are selling for less, they are
actually selling for more when taking a realistic look at average real estate
appreciation.
3.
Reduced Equity - Sellers who have little equity in their home or are
selling in a neighborhood dominated by foreclosures may actually find it
profitable to sell now if they want to buy a bigger home at a great price in a
desirable neighborhood. There are buying opportunities with short-sale,
bank-owned and motivated sellers who may agree to pay closing costs at prices up
to 20 percent below market value. Whatever you did not make in selling your home
you can make up with instant equity based on the value of the new home. You can
get in on a new home with little money or earn instant equity if you are careful
about what you buy and do some homework.
4.
Sell with Confidence - Homes are selling in Metro Phoenix. There are
always people looking to buy homes in the Valley. Arizona has a promising
economy and our growth makes real estate values more likely to rebound faster
here than in other states. To sell a
home in today's market, it is necessary to price your home realistically and
stage your home to make it stand out above the rest to attract the pickiest
buyers. Get the help of a professional Realtor to offer advice on what it takes
to sell a home in today's market. If you do all the right things, your home will
sell.
5. Professional Experience - My professional experience
offers encouraging news about what is really happening in today's market.
Recently, I listed a home that received an offer after only two days on the
market. Another of my listings had an offer in just two weeks. I am currently
working with buyers who have yet to find a home they like that has not had
offers from multiple bidders.
Selling or buying a home is not about the market, it
is about your plan. If you have a good plan, you'll do just
fine.
*Home appreciation may vary depending on the location of your home in
Arizona, but still exceeds the national average of real estate
appreciation.
# # #
TIPS ON HOW TO BUY A HOME
AT A GREAT PRICE IN TODAY'S MARKET
By: Maria Hass
June 2008
If you are looking to buy a home at a great
price, this is the perfect market to do so. Below are some tips that would help you
purchase a home at a bargain price and not let someone else get it.
1. Location: There are
lender-owned homes, pre-foreclosed homes or homes owned by regular sellers that
are up to 20% below market value. Unfortunately, price is not everything.
Location is just as important. Areas surrounded by foreclosed homes are likely to dip in value much faster than other homes with hardly any distressed
sale.
2 Get a pre-approved LSR: A
loan status report (LSR) is a one page document showing how much home you can
afford. An LSR is required when you make an offer to a home. It is common to see
multiple offers on homes that are priced very low a few days after it's on the
market. Depending on the seller, either the bank or the owner of the home may
take the offer of the strongest buyer and not necessarily the highest priced
offer. A strong buyer is pre-approved for the loan. By being pre-appoved, the
buyer has submitted the required documents to the lender and has met the
conditions of the lender. It is a good idea to get pre-approval by the
lender.
3. Get Real: Once you are pre-approved
and found a house at a whopping price, it is time to make your best offer. If
you are dealing with a bank as the seller, chances are they don't have the time
to go back and forth with your offer and a better and stronger offer may come in
while your offer is reviewed. If it is the house for you and you like the price,
make a decent offer and a clean offer. Once the market turns around, you will be
grateful that you did.. Otherwise, lose the house
to someone else and go stand in line for a next deal to come by.
Finding a home at a great price, may offer
challenges.. Consult a trusted and knowledgeable
Realtor in your area. He or she can simplify the process for you and manage your
expectations.
Foreclosure frenzy! Is it worth it?
By:Maria Hass
May 2008
Like any other human being looking for a
bargain, I was curious for myself and for my clients to find out what a
foreclosure real estate auction is all about. So, I recently decided to attend
one of Arizona's largest foreclosure auctions of lender-owned homes.
The auction attracted a standing-room-only crowd
in a huge ballroom at a prestigious hotel - about 1,000 frenzied people
attended, most of them unfamiliar with the auction process and not represented
by a professional Realtor. Still, all were thinking they could get a great
bargain.
To bid, the buyer was required to present a
cashier's check of $5,000 up-front. A five percent premium of the bid price is
paid by the buyer and added to the final bid price. And the successful bidder is
required to pay 5 percent deposit to move the sale forward.
Lots of people are hooked on this marketing
technique. People were bidding properties up based on historic high values that
are outdated based on today's market. And their adrenaline surges as they
attempt to win what they think is the best deal in town.
But can buying at a foreclosure auction really
net you the "Deal of the Century"? Let's compare the differences between this
auction and a traditional real estate sale.
Lender-owned Foreclosure
Auction
1. Buyer pays 5 percent premium to buy a
house.
2. Buyer is required to present $5,000 cashier's
check to bid and purchase.
3. Buyer is required to pay 5 percent down
payment on a successful bid.
4. Seller sets a reserve price on every
property. So, Seller will sell the home for the price they want and is under no
obligation to sell below the reserve price.
5. Most Buyers' interests are not represented or
protected by a licensed Realtor.
6. Opportunities to view properties limited to
two or three weekends.
7. Buyer selects from a limited inventory of
roughly 400 homes.
8. Due diligence and all forms of inspections to
be done prior to bidding.
9. Recent comparable sales prices are not
available.
10. A majority of the homes for sale need work
and are not turn-key ready. Most failed to sell via the Multiple Listing Service
(MLS) because they were competing with homes that are better-priced and in
better condition.Seller does not pay any of the buyer's closing
costs.
11. Seller does not pay any of the buyer's closing
costs.
12. A successful bidder signs a 21-page lender designed
Purchase agreement that is pro-Seller.
13. All homes are sold AS-IS; Seller will not make any
repairs.
14. Buying a home is based on a quick decision at a
pressure-packed event, not a careful process.
Traditional Real Estate
Sale
1. Buyer pays NO premium to buy a house.
2. Buyer is not required to show any money to make an offer. However, Buyer should
be pre-qualified by a lender.
3. Buyer may qualify for 100-percent financing with no money down. Typical earnest
money for a conventional loan is one percent of the purchase price.
4. Seller may not always set a firm price on the home.
5. Buyer
negotiates down on the price instead of up.
6. Most buyers receive professional guidance from a licensed Realtor who protects
their interests.
7.
Daily access available to view properties of interest.. Buyer selects from roughly 56,000 homes in the
Phoenix-area market.
8.
Buyer is given a 10-day inspection period after an accepted contract with an
option to withdraw.
9.
Recent comparable sales are available 24/7.
10. Homes for sale vary in condition, price and financing
situation.
11. Seller may pay for Buyer's closing costs.
12. Buyer signs a 14-page Arizona Association of Realtors
(AAR) purchase agreement designed to protect both the Buyer and
Seller.
13. Seller can agree to make repairs requested by buyer
at seller's cost.
14. Buying a home is a careful process not an
event.
In my
opinion, after finding out what the homes sold for and factoring in all the
added costs (Buyer's premium, closing costs, repair costs), a majority of the
homes in the auction sold for a fair price - but not at the bargain prices many
would think. The Auction requirements seemed pro-Seller to me and only get more
stringent as the process continues.
In summary,
a traditional real estate transaction with representation by a professional
Realtor offers the buyer protection, professional guidance and savings that a
foreclosure auction may not.
Six Signs you're Ready To Buy
by Michelle Dawson
April 2008
Figuring out whether you're ready to buy a house, whether
you're a renter or are aiming to move up or size down can be a daunting
task. But there are signs that will indicate
whether you're ready to take the buying plunge.
So are you ready to make the move?. You might be if you....
-
Are familiar with the market. If you've been paying attention to how much houses
are listed for in the neighborhoods you're eyeing and have a realistic view of
how much a house will cost you, you're in good shape.. But if your'e dreaming about that big corner house
with no clue about it's asking price, you may want to spend some more time
becoming familiar with the market and how much houses are going
for.
-
Have the money for a down payment and closing
costs The down payment is a percentage of the value of the
property.. Freddie Mac says the percentage will
be determined by the type of mortgage you select.. Down payments usually range from 3 to 20 percent of
the property value.. Also, you may be required to
have Private Mortgage Insurance (PMI or MI) if your down payment is less than
20%.. Closing costs include points, taxes, title
insurance, financing costs and items that must be prepaid or escrowed and other
settlement costs.. Generally, buyers will receive
an estimate of these costs from your lender after you apply for a
mortgage.
-
Know how much you can afford Freddie Mac says
that as a general guide, your monthly mortgage payment should be less than or
equal to a percentage of your income,. usually
about quarter of your gross monthly income..
Also, your income, debt and credit history go into determining how much you can
borrow.. As a general rule, your debt-credit card
bills, car loans, housing expenses, alimony and child support should not be
more than about 30 to 40 % of your gross income.
-
Know what additional expenses will come with owning
a home. This includes homeowners
insurance, utility bills, maintenance costs, roofing, plumbing, heating and
cooling.
-
Have your credit in good shape and make sure your
credit report is accurate Potential lenders will view your credit
history -- how much debt you've accrued, how many accounts you have open,
whether your payments are made on time etc. to determine whether they'll give
you loan.You should get a report from each of
the three credit reporting companies:. Equifax,
Experian, and Trans Union.
Once you have this in place, the next steps is to hire a real
estate professional and getting pre-approved for a loan. This way you will know if you are approved and how
much you can spend on a house.. It also puts you
in a stronger position once you make an offer on a house.
Is Buying a short-sale property right for me?
By: Maria Hass
March 2008
"Short sales" and "foreclosures" are words
synonymous with real estate nowadays. Below are answers to frequently-asked
questions about short sales and foreclosure to help you find out if a short sale
is right for you when considering a home purchase.
1.
What is a short sale?
A home
labeled as a "short sale" indicates the current homeowners owe more on their
mortgage than what the home is worth. The difference between the two is called a
"short." The short is a debt forgiven by the bank in a successful short
sale.
2.
When does a short sale occur?
A short sale
can be initiated by the homeowner anytime he or she foresees a hardship in
paying the mortgage. This may occur prior to or during missed payments.
After
three months of missed payments, the lender sends a notice of trustee sale to
the homeowner detailing the date his/her property will be sold in a public
auction. If the property does not sell in the auction, the lender takes back the
property. At this point the home is called "REO" -- Real Estate Owned or
bank-owned property.
3.
Where can you find the best foreclosure deals?
There are
three ways you can purchase a property in foreclosure. First is the
pre-foreclosure or short sale. Second is a government-held public auction and
third is the REO stage.
Depending on
your expertise and your goals, any phase can offer a rewarding deal for
you.
In a short
sale, the buyer negotiates with the seller and the bank, although all
negotiations are lender-approved. Short sale homes typically need some work and
may sometimes appear neglected. Responses to offers may take a few days to up to
three months, depending on bank policies and previous paperwork done on the
property. A short sale may be for you if you have time to wait on the response
and the money to make any repairs.
A public
auction might be for you, if you are confident in how the bidding process works.
However, you may have to bid on a property "blindly," because many homes in a
government auction are not available for showing unless they are marketed
publicly prior to the bidding.
Finally, REO
properties can be marketed, among other ways, via a private auction or through
the MLS. The bank or listing agent typically may have cleaned and retouched the
home to make it look appealing.
There are
many REOs that are being sold for 10- to 20-percent below comparable homes.
Banks are not in the business of selling homes. The sooner they get the homes
off their books, the less costs they incur. For this reason, banks may be open
to negotiate on price. REO homes are sold as-is, without repairs and without any
disclosure of the condition of the property. When buying a home in foreclosure,
the standing policy is BUYER BEWARE!
4. Are all short sales
successful?
No. The lender may decline a request for a short sale by
the homeowner for several reasons, including:
- The lender determines that the homeowner is not facing a true
hardship and can continue making mortgage payments; or
- The lender believes it will profit more if the home is sold as
an REO than as a short sale.
- A common issue among Realtors listing a short sale is trying to hold on to the buyer who made an offer. Because of the length of time it takes for a response from lenders, it is
common for buyers to walk away from an offer to
look for another home.
5. Where do I find out about
short sales or foreclosure homes in my neighborhood?
Realtors
have access to a list of short sales and REOs marketed via MLS. You may also look online for websites such as
Realtytrac.com to get a list.. This website
offers a free trial but charges a monthly fee to continue using it. You may also visit your county office to see a list
of foreclosures in the area you are interested in,. or visit infoclosure.com to subscribe to an. up-to-date list of foreclosures. This website also
offers free courses on short sales, auction process and foreclosures.
If you are
thinking of taking advantage of the buying opportunities in the current market,
try seeking the expertise and experience of a trusted and knowledgeable Realtor.
He or she will simplify the process for you and direct you to the best deals in
the areas you are considering.
Putting the Media's Negative Real Estate News in
Perspective
By: Maria Hass
February 2008
I know you're reading so many negative stories about the
housing market. But don't let it overshadow your enthusiasm of realizing your
ultimate goal of home ownership.
1. Real estate is a long-term investment.. The boom created a misconception that real estate is
a high yield, short-term investment. It's not. It is a long-term investment with
the benefits of home ownership and equity building.
2. There's no such thing as a
bad
market. Regardless of where we are in the cycle, there are
always plenty of people ready to buy and sell. Today's market is not "bad," it
is an opportunity for smart investors to snatch up deals. Some areas hold their
values better than others. Talk to your trusted Realtor to find out which areas
are desirable areas to get the best deal. 3. Today's market offers the best of both
worlds. Not only are the interest rates
incredibly low, buyers can purchase the deal of the century given the many
choices of homes offered by motivated sellers.
4. The economic indicators remain good. Phoenix
is the second fastest-growing metropolitan area in the nation. Unemployment
remains low, and interest rates are at a historic low. As a whole, Arizona has a
strong and promising future.
5. Bad news should be put in. .
perspective. Every foreclosure
is a tragedy. But when newspapers talk about foreclosure spikes, they ought to
provide context. The problem lies among sub-prime loans that account for less
than 10 percent of homeowners.
6. The current
real estate market offers opportunities for smart investors not speculators. It is the time to ask
yourself: Are you an investor or a speculator? An investor buys a property at a
discounted price with long-term plans of holding it. A speculator foregoes his
buying decision to wait for something that is not guaranteed. The investor, who
has a plan, comes out ahead.
7. Home Sales vs. Home Values are not the same.
The media reported recently that home sales nationwide plummeted to 26 percent
-- the worst in many years. What the media failed to report is that home values
declined only about 3 percent in some areas like Chandler, Tempe &Scottsdale
in 2007. As an investor, appreciation of your investment is what counts. Home
sales don't mean anything unless you are selling your home. You haven't loss any
money yet unless you sell.
If you plan to hold your investment for at least three years and
have enough money in reserve for a down payment and closing costs, this is a
great time to buy. Arizona real estate is on sale.. . Opportunities like
this don't come every year! Buy when no one is buying. When people start feeling
good about the market, you know you have missed the boat.
Quotes of
the month:
"There
comes a time when one must take a position that is neither safe, nor popular,
but he must take it because his conscience tells him it is
right."
Martin Luther King
"He that
is overcautious will accomplish little."
Freidrich Won Shiller
"Nothing
comes down forever."
Wayne Kandas, Financial
Radio Show Adviser
"If 10 percent decline worries you, you should not be
investing."
Rey Lucia, Financial Talk Show Host
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