Archive for November, 2008

Federal Housing Aid – What does it mean for potential home buyers and sellers?

As part of the Federal housing aid package approved in July, nine cities across Metro Phoenix are devising a plan on how to use the federal aid money to resurrect the housing market and stimulate the economy. Among the cities awarded with federal aid are Mesa, Avondale, Phoenix, Tolleson, Chandler, Surprise and Glendale. In addition, Tucson and fellow Pima County communities Queen Creek and the City of Maricopa are also included. The cities have until Monday, December 1, to submit the plan.

One of the ways being considered to spend the federal money is to help low income buyers purchase and rehabilitate foreclosed homes. Also, municipalities can buy homes in partnership with non-profit agencies, fix them and then sell them. They can also demolish blighted properties and redevelop the lots. Some of the money can be diverted towards foreclosure counseling to help distressed homeowners work out a loan modification with their lenders.

What do these plans mean to potential home buyers?

If the plans are executed effectively, we could see the beginning of stabilization of home values and nicer-looking neighborhoods. Municipalities could buy foreclosed homes, fix them and sell them for a profit. Unlike lender-owned properties, the municipalities do not have to sell these homes now. They can hold them and sell at a time that they feel is right. I don’t think we will see drastic price reductions as we do with bank-owned homes. Instead, homes will be priced well around the recent comparable listings.

What does this mean for sellers?

If home prices stabilize, the public will have a better perception of the real estate market. Buying and selling will increase. Many homes that were rented out will be for sale. The inventory will increase and hopefully, with the help of home buyers’ loan incentives, the sales of homes will also increase.

At the same time that these plans are under way, an aggressive move to keep distressed homeowners in their homes should take priority in order to contain the number of new foreclosures. Foreclosed homes continue to drive our area’s home values down. The banks don’t care about home values, all they care about is selling these homes, which they see only as liabilities on their balance sheets.

For a recent <em>Arizona Republic
article on this subject, go to:
http://www.azcentral.com/12news/news/articles/2008/11/27/20081127housing-bailout1127-CP.html

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November 28, 2008 at 9:43 am Leave a comment

Home Buyer Deals and Incentives

Today’s real estate market offers many incentives for home buyers. These incentives are aimed at stimulating the housing market by increasing home sales. Let’s take a moment to find out what the details are.

1. HUD Homes – A buyer can purchase a government-acquired home, called Housing and Urban Development (HUD) homes, with only $100 down payment on an FHA loan. HUD will pay upto 3 % of the buyers closing cost and give $1,000 bonus on a full price offer. The new guideline hopes to contain the increasing foreclosure of HUD homes for sale. HUD will pay up to $5,500 in repair costs. A pre-inspection and appraisal has been done by HUD prior to selling these homes. An inspection report on each HUD home is available online. This provides home buyers with valuable information on the condition of the property they are interested in bidding on. Only HUD-licensed real estate brokers can participate in purchasing HUD homes. Realty Executives is a licensed HUD broker. To find out which brokers participate in the HUD program, visit http://www.mcbreo.com.

2. First-Time Home Buyers – A tax credit of $7,500 will be given to first-time home buyers purchasing an owner-occupied home from April 9, 2008 to July 1, 2009. This credit is payable for 15 years at $500 annually and may be paid from the proceeds of the sale of the home. If the home sells at a loss, the $7,500 repayment is waived. First-time home buyers may barrow the $7,500 from a family member to close the home and pay it back during the tax season. This incentive is available to U.S. citizens filing annual income tax returns with a modified adjusted gross income of less than $75,000 for single filer and $150,000 for joint filer.

3. Six months with no interest payments – If a seller is willing to pay 6 percent of the purchase price towards closing costs and pre-paid taxes, insurance and HOA fees (if applicable), part of this money can be used towards payment of the mortgage interest for six months. This will reduce your first six months of monthly mortgage payments by roughly $600 on a home that is purchased at $140,000 – even more for a higher-priced home. This allows the home buyer to ease into the home mortgage structure.

4. 100% Financing, No money down – This USDA program may sound to good to be true and may elicit a negative response. After all, many borrowers that used this loan term found themselves in default. This loan program is not for everyone. It is suitable for people that meet income restrictions and will live in the property. The home should be located in assigned areas like Maricopa, Queen Creek, Anthem, Surprise and others. This program is ideal for people who have good income but don’t have the money for a down payment. The mortgage payment will be higher than if there is a huge down payment but it could get you into a home without out-of-pocket expense.

5. 203K Streamline – This loan allows a home buyer to finance the repair costs on a home that is not move-in ready. If you are buying a bank-owned property that is priced low but is in need of repair, this is an option that would come handy.

6. Other loan programs – Below are other available loan programs in today’s market.

· 1% Down FHA with grant money
· 2% Down Conventional loan
· 3% Down FHA

For more information about any of these buyer incentives, contact me at 480-650-0075 so I can connect you to the right lender. Every lender offers different loan products and some may be more familiar with one product over the other. It is important to get connected with the right lender suitable for your specific needs.

November 27, 2008 at 2:43 pm Leave a comment

Holiday Relief from Fannie Mae and Freddie Mac for Distressed Homeowners

The Washington Post Friday reported a relief plan to halt foreclosure proceedings on Fannie Mae and Freddie Mac homes from November 26, 2008, until January 9, 2009.

This is all well and good — it at least makes it look like the two largest wholesale mortgage backed giants, recently taken over by government, care about the customers they didn’t care about in the past.

Hopefully, the foreclosure freeze will allow Freddie and Fannie to structure a simple, quick and easy loan modification program to qualifying homeowners. The more homeowners we keep in their homes, the sooner foreclosures will be contained. The positive results on the economy would be many: Housing values will stabilize; homeowners will have more money to spend; businesses will grow; employment will increase; and people will feel good about the housing market and start selling and investing in homes again.

For The Washington Post article, please see below:

Fannie, Freddie Halt Foreclosures for Holidays
By Zachary A. Goldfarb
Washington Post Staff Writer
Friday, November 21, 2008; Page D01

Fannie Mae and Freddie Mac announced yesterday that they are temporarily suspending foreclosures and evictions during the holiday season in an effort to keep people from losing their homes.

The companies said they are taking the step so they can include more people in a newly announced program to change the terms of troubled mortgages to make them more affordable.

The mortgage finance giants, seized by the government in early September, have been under pressure by lawmakers and housing advocates to take bolder steps to fight foreclosures. As the owners or backers of trillions of dollars of mortgages, the companies have an unrivaled ability to shape the home loan market and help people with distressed mortgages.

Last week, the companies said they would enact a program to restructure mortgages for borrowers who are falling behind in their payments. That effort would seek to help homeowners who haven’t paid their loans for three months but whose homes had not been foreclosed upon yet. In a foreclosure, Fannie Mae or Freddie Mac seizes control of a home and, usually, tries to sell it.

The foreclosure freeze announced yesterday will extend the mortgage modification program to those who have been declared in default and are at immediate risk of being forced from their homes. The companies said as many as 16,000 borrowers could benefit.

Foreclosures and evictions will be stopped from Nov. 26 to Jan. 9.

“With this suspension, seriously delinquent borrowers may have an opportunity to avoid foreclosure and work out terms to stay in their homes,” said Federal Housing Finance Agency director James B. Lockhart III, the regulator in charge of Fannie Mae and Freddie Mac.

Under the mortgage modifications program unveiled last week, Fannie and Freddie will seek to modify loan terms to ensure borrowers aren’t paying more than 38 percent of their monthly pretax salary on their mortgage. The companies will do this by extending the total term of loans to up to 40 years, reducing the interest rate, and, in some cases, delaying payment on part of the loan.

The program will begin Dec. 15. Attorneys working for Fannie Mae and Freddie Mac will contact borrowers facing foreclosure.

“Until the streamlined modification program is fully implemented, we felt it was in the best interest of both borrowers and Fannie Mae to take this extra step to ensure that homeowners with the desire and ability to prevent a foreclosure have an opportunity to stay in their homes,” Fannie Mae chief executive Herbert M. Allison said in a statement.

Freddie Mac chief executive David M. Moffett said his company is on track to help three out of five troubled borrowers with Freddie Mac-owned loans avoid foreclosure. “Today’s announcement builds on this momentum and provides a new measure of certainty to many of these families during the holidays,” he said in a statement.

The foreclosure freeze will apply to single-family homes that continue to be occupied. Freddie Mac’s program also applies to buildings with two to four apartments.

Fannie and Freddie have launched other programs as well. A Fannie Mae program requires employees to take a second look at delinquent loans to ensure the borrower has been contacted and other options have been considered. Freddie Mac gives authority to mortgage lenders to renegotiate loans and offers them financial incentives to do so.

“We must and will do more,” Allison said.

November 23, 2008 at 1:29 pm Leave a comment

NAR Proposes Four-Point Plan to Revive the Housing Market

The National Association on Realtors (NAR) has proposed four key points to be included in any future stimulus package to help stabilize the housing market and, in turn, improve the economy.

The four-points put forth in NAR’s Housing Stimulus Plan are:

1. Make the $7,500 first-time home buyer tax credit available to all buyers and eliminate repayment requirements. The credit’s limited availability and repayment requirements severely minimize the credit’s use and effectiveness.

2. Make the 2008 FHA, Fannie Mae and Freddie Mac loan limits permanent. New rules for 2009 will reduce them. Now is not the time to limit mortgage affordability.

3. Get the Treasury relief program back on track and target more funds for mortgage relief. Create a federal mortgage interest buy-down program to make below-market rates available and stabilize home prices.

4. Permanently bar banks from engaging in real estate brokerage and management. The banks have proven they have enough to do to simply manage the loan process. Banks should not manage home sales and purchases.

I truly appreciate the efforts of NAR to create this Housing Stimulus Plan proposal. It is important to know what NAR views as essential steps toward improving the housing market and the economy.

Most of the points suggested in the plan are mortgage-related, benefiting the home buyer. In many ways reducing the interest rate, providing a $7,500 tax credit without repayment, and increasing the loan limits would stimulate more buying and eventually help balance the demand for homes with the supply of homes.

On the flip side, we have to slow down the supply of homes by keeping distressed home owners in their homes. This can be achieved if lenders work out affordable loan terms with home owners that are on the brink of foreclosure. What would it take for lenders to do this? A law obligating current lenders to agree on loan modifications to qualifying applicants is a start. But first, lenders should cut down on the maze they are putting their customers into. There should be an easier and faster way for lenders to make adjustments for borrowers who are showing signs of distress.

November 17, 2008 at 4:41 pm Leave a comment

How Accurate is Zillow.com?

By now most people have heard of Zillow.com – a website where home buyers or home sellers can go to find out the worth of a property. But is it really accurate? My answer is a resounding NO! In fact, there is usually a huge difference between the home value calculated on Zillow.com versus the true market value of the home.

Why is Zillow.com not accurate?

1. Zillow.com determines a home’s value based on tax records, which are hardly accurate nor updated. I tried experimenting on my old home to see what the site has to say. Zillow.com estimated my home at $223,000. I was able to sell it for $250,000. Zillow’s estimate showed that my home was only a three-bedroom without a pool when in reality it was a three-bedroom plus a den with a Pebble-tec pool and built-in barbecue. Home buyers visiting my home without the help of a Realtor would argue that the home is only worth what Zillow says it is. Well, in the real estate industry, Realtors don’t give Zillow’s estimates any respect.

2. Zillow.com provides a comparative market analysis of your home based on what sold in the last year. Real estate agents typically pull up homes that sold within the last three months because the market is constantly changing. We also look at what is pending and active to get an idea of what the future sales look like. Zillow does not do that.

3. Zillow.com does not have specific search criteria. The website does not take into consideration the condition of the home, any upgrades to the home, the number of levels of the home (single-level, two-story, with or without a basement), the direct and indirect competition of the property for sale and any additions to the home. Zillow does not distinguish whether the home that sold backs out to a main street or to a lake. This property description alone can add $20,000 more value to a home on a lake and a lot less to a home that backs to a busy street. It does not know if the home that sold has an extremely big lot or extremely small lot. Again, this can add a greater value to a home with a huge lot. Zillow does not identify whether a home that just closed is bank-owned or a regular sale. The type of sale matters to real estate agents because distressed sales normally sell for a lot less than regular sales. So, your four-bedroom home will be compared to all the four-bedroom homes close by, regardless of valuable property features, condition, upgrades, etc.

4. Zillow’s estimate is computer-generated. There is no human intervention to identify the changing market conditions. It does not have the eye to see the condition and competition of the home for sale. Zillow.com is one big misleading home search website. It is a quick and easy way to find a home’s value, but is far from being 100 percent accurate. If you are serious about finding the value of a home, take time to call a trusted and knowledgeable real estate agent. Realtors have the tools and expertise at their disposal to find out what your home’s value really is. If you need help with determining the value of your home, feel free to contact me for assistance.

November 10, 2008 at 10:36 am 2 comments

What’s the Difference Between Living in Chandler versus Gilbert?

I recently came across an interesting blog post, in which a woman who is relocating from New York to Arizona wanted to know the difference between living in Gilbert and Chandler. Her inquiry prompted me to find a fuller answer to her question. I decided to go and ask some local residents what they thought. I would like to thank the generous people who contributed their opinions and time. Your thoughts and insight will help future home buyers looking to buy in these areas. I’ve also added my “two cents” to complete the picture.

“I lived in Mesa and Gilbert and currently reside in Tempe. After 15 years in Arizona, I’ve seen the growth in the Valley of the Sun. I think the difference between Chandler and Gilbert is Chandler is closer to Phoenix, and there are more major business corporations. Chandler’s population is more diverse. Gilbert, on the other hand, is newer and with more choices for a safe community. Gilbert is more like a bedroom community for those working in Phoenix or Chandler.”

— Willi of Tempe

“Chandler is a city, whereas Gilbert is a town. There are three hospitals in Gilbert versus one in Chandler. Many commercial and industrial corporations are located in Chandler than Gilbert. The Chandler-Gilbert Community College is located in Chandler.”

Kathleen of Gilbert

“Chandler and Gilbert are similar communities. The style of homes and pricing are comparable. The real estate market in these areas move together as opposed to Queen Creek or Maricopa City.
Chandler has a stronger and balanced economic base. There are major industrial and commercial businesses in Chandler such as Intel Corp. and Motorola. The City of Chandler is developing Downtown Chandler and the Chandler Air Park to provide better quality of life and quality jobs for the City. On the other hand, Gilbert is newer and have nice communities throughout while Chandler has nicer homes in the South and not as well-kept homes in North Chandler.”

Bob of Chandler

“Chandler has more corporate businesses around. My daughter goes to Gilbert’s Neeley Traditional Elementary School and I find it to be a very good school. There are lots of parks in Gilbert.”

— Yi Bin of Gilbert

From my perspective as a Realtor, both the Chandler and Gilbert areas are comparable in home values and are holding their property values stronger than the Northwest or Southwest areas of Maricopa County. Foreclosed homes are not as prominent in Chandler and Gilbert, therefore home values here are not in a steep decline. Most home buyers who are thinking of Chandler as their next home also look at Gilbert or vice-versa because of the comparable quality of life and affordability.

Chandler is closer to Phoenix and minutes from Tempe. Both are close to amenities and offer excellent school systems. NorthWest Chandler boast Kyrene School District which has gained a reputation for effective teaching methods and consistent high school rankings. Chandler residents voted last week to continue the override for the budget of the Chandler school district which confirms the residents’ support for education. Community service and quality of life are well provided to residents of different age groups. Gilbert has one active adult community at Trilogy in Power Ranch, built by reknowned master plan designer Del Webb. Chandler has three active adult communities: Sun Lakes, Sunbird and Springfield Solera. All offer golf privileges, club houses, health and recreation facilities. All three active-adult communities are located in the quiet and low-crime area of South Chandler.

The town of Gilbert landed in the list of the nation’s top 10 fastest growing cities/towns from the period of 2000 to 2007. Meanwhile, since 2005, Chandler has been voted three times as among the top 100 places to live for younger people.

The Tumbleweed Recreation Center, located at 745 Germann Rd., provides fitness and recreation to Chandler families and friends. The Freestone Recreation Center located at 1141 E. Guadalupe Rd. is a family-friendly multipurpose facility offering fitness classes, rock climbing, child care and more for the town of Gilbert. Chandler boasts five outstanding and inexpensive water park facilities while Gilbert recently added two swimming facilities to total five aquatic centers offering swimming and diving lessons.

The rental tax in both Gilbert and Chandler is 1.5% of the monthly rent. As of Nov. 5, 2008, Chandler has 399 homes for rent while Gilbert has 333 rental homes available. The rental market in Chandler and Gilbert has been pretty steady, averaging 45 days to rent. There are 1,978 homes for sale and 874 sold in the last 30 days in Chandler, while Gilbert has 2,103 homes for sale, 990 sold in the last 30 days.

Both areas offer private neighborhood lakes. Ocotillo Lakes in South Chandler and Val Vista Lakes and El Dorado Lakes in Gilbert are popular communities for many home buyers. Chandler recently opened at Veterans Oasis Park at the corner of Val Vista and Chandler Heights. The lake is open for public fishing. The city has stocked the lake with 500 catfish and will stock it with trout this month. Phoenix, AZ, is the golf capital of America. So, you’ll find golf courses everywhere in Metro Phoenix, including both Gilbert and Chandler. The Chandler Fashion Mall is an indoor shopping mall located west of Chandler Blvd and Price Rd. while Gilbert opened in 2007 the San Tan Village Outdoor Regional Mall on Williams Field Rd and Loop 202. Ice skating is available at the Polar Ice Skating Arena located at 7225 W Harrison St in Chandler and Gilbert on Knox and Greenfield Rd.

In summary, what difference Chandler has from Gilbert is Chandler’s proximity to Phoenix and Tempe. It has a stronger economic base attributed to major businesses in the area and it’s vision to develop Downtown Chandler, the Chandler Air Park and bring transportation into South Chandler. Gilbert on the other hand maintains a friendly suburban feel with nice communities. And continues to bring quality jobs for its residents. Both areas offer great quality of life at an affordable price.

If you are looking to purchase or rent a home in Chandler and Gilbert or have any questions. You know where to find me. Click on the links below to view the Chandler and Gilbert websites.

http://www.ci.gilbert.az.us
http://www.chandleraz.gov

November 7, 2008 at 1:18 pm 11 comments

Great News for Our Economy

I’ve said it before and I’m saying it again: The housing market is the fuel that will drive our economy forward.

The sooner we decrease the number of foreclosures in the Valley of the Sun, the sooner home values will stabilize. People will develop a better perception of the housing market and start buying and selling homes again. To make this come to fruition, lenders need to seriously look at modifying loans of distressed home owners to a monthly mortgage that is affordable to them. By doing so, homeowners will have money left to spend and consumer spending will increase. As a result, businesses will increase their revenue, expand their services and hire more workers.

There was a welcome surprise in Saturday’s Arizona Republic — what I had hoped for is coming together. The article reported that Bank of America is halting 2,000 foreclosures in the Valley by initiating a loan modification plan for borrowers. Rick Simon, spokesman for Bank of America, said they will contact homeowners once their home-retention program is ready by early December. About 13,000 borrowers will benefit from the loan modification program, according to the Arizona Attorney General’s Office.

Bank of America hopes that other lenders will pick up on this effort. But for now, this is great news for the housing market and the economy as a whole.

Click on the link below to view The Arizona Republic article:
http://www.azcentral.com/news/articles/2008/11/01/20081101foreclosures1101.html

November 2, 2008 at 9:25 pm Leave a comment

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