Archive for March, 2009

Scammers find opportunities via stimulus package

Be alert and be aware — here is some recent information from Kiplinger on how scam artists have found ways to trick people out of their money in connection with the Obama stimulus package, including real estate foreclosure scams: CNN video

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March 31, 2009 at 12:15 pm Leave a comment

Should I Modify My Loan or Short Sale My Home?

Many people are facing a tough decision about whether to modify their loan or list their home as a short sale. To find out what is the most suitable option for you, begin by answering these questions.

* Do you want to keep the house? If you want to keep the house, loan modification is a better option for you than a short sale. If you do not want to keep the house, then short selling the house is a logical option for you.

* If you plan to keep the house, how long do you plan to stay in it and make mortgage payments? If your answer is “less than five years,” you might end up short selling the house two to three years from now because you could still be upside down on your house unless the real estate market makes a surge in appreciation.

Some homeowners are deliberately skipping payments to get quicker attention from their lender. If you are looking to modify your loan and have missed payments, hold on to the savings you’ve collected from missed payments because your lender may ask you to pay all your back payments. Loan modification does not mean that your missed payments are erased. You are merely postponing payment of your late obligations. You will have to pay them sometime during the life of the loan.

There are many loan modification outfits that are claiming a high success rate for their services. They charge a fee to start a modification of your loan. Be certain that the company you choose is legitimate and offers a guarantee on their work. You can also do the loan modification application yourself, but this is typically unsuccessful because homeowners usually do not have the knowledge or the time needed to negotiate a modification with their lender.

March 26, 2009 at 2:51 pm Leave a comment

How do you know if you qualify for a loan modification

How do you know if you qualify for a loan modification? One of the key things that your lender will be looking for is your debt-to-income (DTI) ratio. Normally, they would look for a range between 30 to 40 percent DTI. So, if your are making $6,000 a month in gross income, you should be looking at paying no more than 40 percent of your income towards house payments, which amounts to $2,400.

A DTI ratio below the minimum of 30 percent means you make enough money to afford to make your mortgage payments and a review of your expenses may be necessary. If your DTI is higher than 40 percent, that means you don’t earn enough money to sustain the life of the loan and you will be a risky borrower for the bank. Above the 40 percent DTI, you may not qualify for a loan modification.

The lender will also want to know specifics about your claimed hardship. Whether it is relocation, loss of job, reduction in pay, illness, an interest rate reset on another loan, etc., be ready to offer details.

You may directly negotiate a loan modification with your lender. In some cases, you may hire a professional lawyer or mortgage broker to negotiate on your behalf. Most of these professional services charge an up-front fee comparable to your month’s mortgage, around $1,000 to $2,000. There are legitimate loan modification outfits and there are those that are loan mod scammers. To find out about legitimate and recommended loan modification companies, visit the HUD counseling agency at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?&webListAction=search&searchstate=AZ

If you are denied a loan modification by your lender, a short sale of your home is the next-best thing to do. You need to contact a Realtor to help you in this process. I am experienced in short sales with average 74- to 90-day closing time and no up-front fees. It is best to begin a short sale process once you are just about to miss your first payment.

To get more information about the federal guidelines set by the Obama administration on loan modifications, go to http://www.financialstability.com. And for any questions you have about the local real estate market and what kinds of solutions you might be able to take advantage of, feel free to contact me anytime.

March 20, 2009 at 10:26 am Leave a comment

A Positive Turn in The Arizona Real Estate Market

CNN reported an increase in mortgage application by 11.3% ending for the week ending in March 6, 2009. The demand was sparked by very low interest rates and low home prices. Mortgage applications included refinance and purchases.
MLS reported an increase in home sales of existing homes in Arizona from 4,726 in January, 2009 to 5,457 in February, 2009. Pending sales which is indicative of future sales increased sharply to 7,975 ending March 1, 2009. The inventory of homes for sale dropped below the 50,000 mark for the first time in many months.
If this trend continues, we should see a decrease in supply of homes and an increase in demand which will lead to a healthy real estate market.

These are all good news for the real estate market and the economy as a whole.

March 15, 2009 at 9:09 am 2 comments

BUYER’S MARKET TURNED SELLER’S MARKET

Phoenix, Arizona, is one of the cities being hammered by declining home values. There are many foreclosed homes being offered at amazingly low prices — some are even priced below building cost.

But once you get serious about making an offer on any of these homes, you’ll find that getting the home you’d like is harder than you thought. Why is this so?

Banks and Realtors listing REOs have gotten smarter. They finally figured out what it takes for buyers to write an offer — they are pricing homes 35 to 40 percent below market value to generate bidding wars.

By doing this, they are ending up getting close to the actual price they want for the home, stirring up initial interest among buyers because they originally listed the price below market value.

On top of this, banks and their designated Realtors are giving competing bids two or more chances to increase their bids. It does get frustrating when you are the buyer’s Realtor to know that you made it through the first round of bidding but do not successfully get the home on the third and final round.

One of my clients recently made an offer on a nice lender-owned home in Chandler. The market value of the home is around $170,000. The home was listed at $124,900. Ours was one of eight offers on the home. The lender countered the multiple offers with highest and best. On this second round of bids, the offers were, of course, higher still.

Three days after the highest and best offers were submitted, the Realtor for the lender informed us that the seller (bank) would continue to negotiate with three other offers that were higher than ours. So, one of these three buyers will likely have to up their offer again to get the home. By the time the buyer wins the home, the price is no longer a deal. It’s an emotional roller coaster for an average deal.

Everybody is bidding on the same house that is move-in ready and priced ridiculously low. If buyers continue to go this route, this outcome will be repeated over and over again. It seems that these sellers (the banks) are taking control of the market.

So, how do you get a home you like at a price you can afford in this market? Look high and bid low. There are many nice homes priced realistically, that have motivated sellers with no offers on their homes. Chances are you will be the only offer. You can then negotiate down on your offer which is good for you as the buyer.

With the help of a qualified Realtor, look where other buyers are not looking. There are gems in this lesser-known territory waiting for you to discover.

March 12, 2009 at 9:42 pm Leave a comment

Home Buyer’s Seminar A Success

First-time homebuyers packed the room to take advantage of the current low prices and low interest rates got all of their questions answered at the homebuyer’s seminar hosted by Realty Executives Realtor Maria Hass on Saturday, March 7, in Chandler.

Among the topics discussed were first-time home buyers’ incentives; the different loan options available; credit; mortgage rates; specifics of the home buying process; tips on short sale and foreclosure properties, and more. Glen Barnett of Platinum Mortgage answered mortgage questions and Maria provided insights on the current real estate market in Arizona.

The event was intended to educate future homebuyers on making better decisions when making what will be the biggest investment of their lives. The next home buyer’s seminar is scheduled in June. Contact Maria Hass at (480) 650-00075 for more details.

March 10, 2009 at 9:32 am Leave a comment

City of Chandler Favors Builder over Fulton Ranch Residents

A story published in the March 4 edition of the Chandler Republic reported that Chandler’s City Council unanimously approved Fulton Homes’ request to build less-expensive homes in South Chandler’s tony community of Fulton Ranch.

The decision to allow Fulton Homes to build cheaper homes is meant to save the already struggling home builder from abandoning the posh development and see it through to completion, which will benefit the city with more development fees and property taxes.

The City Council also agreed to allow the builder to reduce the separation between two-story homes to 15 feet from 20 feet. Fulton Homes will be allowed to build smaller-sized homes than originally planned — from 2,320 square feet to 1,973 square feet. New homes will be priced starting at $350,000.

Many residents were angry at Fulton Homes’ request because they feel Fulton will devalue their million-dollar homes by building cheaper houses in the same subdivision. Residents were victorious in temporarily stopping the builder from selling cheaper homes when the City Council postponed its decision at a meeting last month.

I had a feeling that the residents of Fulton Ranch would be denied in their bid to block Fulton Homes’ request. The builder has no control over the real estate market. By selling cheaper homes, they are saving the current homeowners from an unfinished development that would sap their homes’ values even further. I have nothing against people who have million-dollar homes except that sometimes it seems they tend to overreact when it comes to money. Nothing is potentially lost until you SELL! If you are not thinking of selling your home NOW, then don’t worry about home values NOW

March 5, 2009 at 11:00 am Leave a comment

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