Archive for June, 2009

Lender Rules!

It is hard to understand why the industry that put all of us in this bad state of recession is getting the most money from people they victimized. The lending industry, despite the bad mistakes they’ve committed in the past, was awarded billions of government dollars to recover. I wonder what would have happened if they were left to reorganize on their own. That would teach a careless child a lesson, wouldn’t it?

But no, instead we are spoiling the lenders with bailouts. Lenders are controlling the housing market by holding off on selling imminent foreclosures to the public. Interest rates have risen, slowing down mortgage applications. Close of escrow is delayed more often than not, even to the best of buyers, because lenders are backlogged. Despite the increase in sales by numerous banks and lending institutions, the rewards to the average Joe are slow in coming. Pending foreclosures are still high and distressed homeowners are not getting answers.

Big banks tend to act like sharks, only doing what is best for them, not for you. I’m not sure if there are any banks out there other than credit unions who really listen to their customers right now. “The lender rules. It’s their way or the highway!”

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June 26, 2009 at 10:43 am Leave a comment

Tips on Moving from a Foreclosure to a Rental

The rental market in greater Phoenix is fast becoming a refuge for homeowners whose houses were recently foreclosed on or sold on a short sale.

The most common question asked by displaced homeowners is, “Will I be able to rent a home if I have bad credit from a foreclosure or short sale?” The answer is “maybe,” depending on the location, landlord’s flexibility, the amount of your down payment, your income and your rental history or credit history.

1. Location – Areas that have a high foreclosure rate usually tend to be more accommodating to homeowners who have bad credit due to a foreclosure or short sale. Examples are: Phoenix, Laveen, Maricopa, Queen Creek, El Mirage, Mesa and Surprise.

2. Landlord’s Flexibility – Some landlords have stricter guidelines than others regarding what they would consider a good renter. Some ban smokers or pets, while others don’t mind.

3. Down Payment – If you are considering renting a home due to an imminent short sale or foreclosure, it is a good idea to build your reserves for a large down payment. It is possible that the landlord or property management company will ask for six months’ rent in advance to manage the risk that you may default on your monthly rent.

4. Income –
You should be prepared to prove that your income is sufficient to pay the rent.

5. Rental History and Credit History
– Many times the property management company will need more information to explain why your credit rating is low and will want to verify whether you are a good renter and person. This can be done by calling your previous landlord, talking to references and verifying any eviction or judgment liens against you.

The key to recovering from a short sale or foreclosure of your home is planning and preparation. If you need more information or are considering a short sale of your home, feel free to contact me or another qualified Realtor for help.

June 21, 2009 at 2:43 pm Leave a comment

REAL-LIFE ADVICE ABOUT RENT-TO-OWN PROPERTIES

I recently came across a renter who was looking for a “rent-to-own” property. The renter wanted a home with specific features, including at least four bedrooms and three baths in within a specific two- to three-square-mile area.

My initial reaction was, “you’re not going to find anything.” Not only is it rare to find a seller that would allow a “rent to own” arrangement, it makes it even harder to find one within a small area and boasting four bedrooms and three baths. Especially because most homes with four bedrooms have two-and-a-half baths, not three. My gut feeling was confirmed when I found zero listings on the MLS using the specifications the renter wanted.

In most cases, a seller would consider a “rent-to-own” arrangement only if the house is hard to sell — either because it backs up to or fronts a busy street, needs major repair, has a dysfunctional layout, etc. And renters are interested in a rent-to-own to allow them time to improve their credit.

In a rent-to-own situation, the seller agrees to rent the house to the renter, who will have the option to purchase the house at the end of the option period, which is anywhere from one to three years. The renter pays an option premium (which in most cases, is not refundable) to secure the right to the option. The price of the house is determined today and the purchase is exercised a few years afterwards. Many times, a rent-to-own agreement does NOT successfully result in a sale to the renter. The renter and seller’s situations can change during the waiting period and they can decide to cancel the contract.

The lessons learned here are:
1. Don’t be choosy when you are looking for a rent-to-own home.
2. The rent-to-own agreement is complicated and has a high failure rate.
3. Be prepared to get legal council if you choose to go this route prior to signing any contracts.

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June 12, 2009 at 9:12 pm Leave a comment

Business Week Provides Faulty National Scope on What’s Really a Local Story

The title of an article in the June 15th edition of Business Week, “Foreclosure Goes Upscale,” is typical of tactics used by many forms of media – it catches attention because it takes a negative spin on what is not necessarily a negative subject.

The article itself cites research conducted by the National Association of Realtors (NAR) reporting “there are enough $750,000-plus homes on the market (nationwide) to cover more than 40 months’ worth of demand at the current rate of sales.” The article further states, “That’s four times the rate of oversupply in the housing market as a whole.”

I find this statistic highly deceiving. The figure is totally the opposite of the current market in Metro Phoenix, where a majority of the cities have below the normal 4.5-month supply of homes. In Arizona, houses under the $250,000 price range are selling like hot cakes and multiple bids are common. We just entered a “sellers market” due to a surge on demand and low inventory.

To find an accurate measurement of the performance of the housing market, a report should look at statistics specific to a city or state, not the entire nation. Otherwise, the report is inaccurate to the point of being useless. The housing market in New York is not the same as it is in California, or in Arizona. And to provide one statistic that covers all 50 states demonstrates reckless disregard for the truth.

The lesson learned in this report and many past and future careless media reports is for the reader or viewer to remember NOT to believe everything that is reported. Reporters’ sources may NOT always be the best sources for accurate reporting on a given subject, including the real estate market.

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June 9, 2009 at 6:53 pm Leave a comment

FREE Homebuyers’ Seminar and Credit Survival Training

People considering a home purchase in the current market can learn tips on how to improve their credit, save money by using government grants and incentives and understand their financing options during a free 90-minute seminar hosted by local Realtor Maria Hass, Finance Consultant Eric Macy and Credit Repair Consultant Malinda Gustafson of DHI Mortgage at 6:30 p.m.. on Tuesday, June 16, 2009, in Chandler.

The seminar will address the following questions:

* How can you improve your credit at NO COST prior to purchasing a home?
* How can you save money using a government grant and incentives for down payment?
* What financing options do home buyers have available?
* Where do you find the best deal in buying a home – foreclosure, auction or short sale?

Other questions will be answered during a Q&A session.

The free seminar will be held at Realty Executives’ Chandler office at 920 W. Chandler Blvd. Ste. 1 (NE corner of Chandler Boulevard and Alma School). Attendees must register no later than Saturday, June 13, to reserve a seat by calling Chandler Realtor Maria Hass of Realty Executives at 480-650-0075 or via email at MariaHass@RealtyExecutives.com.

June 6, 2009 at 1:49 pm Leave a comment