Flagstaff Blog - Real Estate and All Things Flagstaff

These days, when it’s tougher than ever to sell a house, homeowners are turning to renting as a way out.

Renting may be a good option when you can’t sell, but not everybody is cut out to be a landlord or landlady. And while renting may seem like an easy short-term fix, it may not be a long-term solution.

Make sure you consider all the factors before deciding whether renting will solve your problems … or create more.

2 reasons homeowners rent instead of sell

Urgency is the #1 reason homeowners rent instead of sell. They have to sell, and they have to sell quickly.

Price is the #2 reason homeowners rent instead of sell. Bottom line, they’re not prepared to ‘give away their house’ at today’s depressed prices.

So they turn to a stopgap solution. In a year or two, their thinking goes, the market will recover. At that point, they further reason, they’ll be able to sell their house for more than they can today.

But will renting solve their problems? Maybe yes. And maybe no.

11 problems with renting your house

While you may have excellent reasons for renting your house, consider the following before giving up on selling your house.

Buying again – Leaving equity behind in your house may prevent you from purchasing a new house.

Property management – Managing receipts, maintenance, repairs, emergencies, and other requirements associated with renting requires time, money, and effort. You can choose to do it yourself or you can choose a property manager to do it for you.

Market recovery or market bust – It may take longer than you think for real estate prices to recover. Right now, the economy remains weak. Downward pressure on home values will continue for the foreseeable future. Who can say how much longer … or steeper … prices will sink before an eventual upswing. Once the market is on an upward trajectory, it will take years for prices to return to previous highs.

Depreciation – While the IRS allows you to take deprecation as an expense against rental income, don’t think of ‘depreciation’ as only a tax deduction good for improving cash flow. Since tenants are unlikely to treat your home as well as you would, physical depreciation is a very real aspect of turning your home over to tenants.

Capital gains tax – If you rent your house for only two years, you can still sell your house and be exempt from paying IRS taxes on up to $250,000 of capital gain (when single) or $500,000 (when married). However, the depreciation you took against rental income may have to be recaptured. Be sure to consult your tax accountant.

Re-lease or try to sell again – In this climate, you’ll find tenants quickly. Once the first year’s lease is over, you’ll have to decide whether to continue renting your house or try selling. Either way, you’ll have to invest in cleaning, painting, landscaping, replacing carpet, upgrading appliances, and making repairs before the next tenants or buyers move in.

Damaged goods – When you’re ready to sell, your house may be considered ‘damaged goods’. Homebuyers can immediately tell if a house has been lovingly cared for or simply lived in. And they will take this into consideration when making offers.

Selling with tenants in place – Let’s face it, tenants don’t care if you sell your house or not. They don’t have a stake in the outcome. They only know it disrupts their schedule. They won’t keep the house as neat and clean as you would. They won’t be as flexible to accommodate showing appointments as you would. And they may hang around the house during showings, making homebuyers uncomfortable and eager to leave. Once their lease is up, you’ll find yourself in a negative cash-flow position and may very well be forced to rent once more.

Rental merry-go-round – After renting your house for what was supposed to be no more than a year or two ... just until the market turned around ... could turn into a long-term commitment. You may get stuck on the rental merry-go-round, unable to jump off. The window between leases will leave you with only a short time to list and sell your house. Before you know it, you’ll be back on the rental merry-go-round, still waiting for the opportunity to unload a monumental burden.

Rental prices may go down – Right now rental prices are what they are, and they may be just fine for your needs. But renting your house as a short-term solution may not be a long-term solution. With so many homeowners turning to renting as an expedient to selling, tenants will have more homes to pick from. In time, instead of facing a ‘Buyer’s Market’ on the selling end, you may very well face a ‘Renter’s Market’ on the rental end. Such a circumstance would drive rents down year to year. After factoring in rising insurance rates and property taxes, you may eventually find yourself in a negative cash-flow position.

Mortgage rates – Mortgage rates are the lowest they’ve been in recent history. But they can’t stay low forever. When the economy recovers, the Federal Reserve will start raising key interest rates. Mortgage rates will climb in lockstep, making homeownership more expensive. To make up for higher monthly costs, buyers will bargain that much harder, forcing prices down once again.

Moving out and moving on

If you have a pressing need to move out and move on, and don't want to be weighed down with renting your house, there is a way to sell quickly and still get full market value for your house.

By applying methodical price cuts, you seek out the optimal ‘sweet spot’ where buyers will be forced to make an offer. By finding the correct price, you cannot undercut the market value of your house. Best of all, you can accomplish your goal in 2 months or less.

******

JUDY CHAPMAN |What can I do for you?

Residential Sales ∙ Short Sales ∙ Residential Rentals

Evanston | Wilmette | Kenilworth | Winnetka | Glencoe | Highland Park | Lake Forest
Glenview | Golf | Northbrook | Northfield | Deerfield | Skokie | Morton Grove
Also Arlington Heights | Prospect Heights | Wheeling | Mt Prospect

Koenig & Strey | 1925 Cherry Lane | Northbrook, IL 60062

Judy@JudyChapman.net | Office: 847.749.3811

   

© 2007-2011 www.activerain.com/blogs/NorthShoreChicago by Judy Chapman. ALL RIGHTS RESERVED. Portions of this content may be used with attribution. The information contained in this blog is the author’s own opinion and does not reflect the opinions of Koenig & Strey Real Living.

 

CNNMoney.com has featured and article showing that Million Dollar Homes across the country are selling at massive discounts.

Several examples are given highlighting the deep discounts made to sell these luxury homes:

Palm Springs, California - A remodeled 5-Bed 5-Bath Mediterranean is being marketed at a 28% compared to prices seen a few years ago;

Las Vegas, Nevada - A repossessed 5-Bed home has been marked down a whopping 64% from it's previous Selling Price;

Scottsadale, Arizona - A 4400 sq ft Tuscan home has been marked down by 31%;

Norwalk, Connecticut - A custom-built 400- sq ft Colonial-style home has been reduced by 39%.

While these prices are unfavorable to Sellers, this environment must surely represent a unique buying opportunity for Buyers.

I certainly acknowledge that no-one can tell when the market will eventually improve (and I'm not convinced we've even seen the bottom as yet), I believe that Buyers that are interested in owning their home for the medium to longer term should take advantage of these great buying opportunities.

Up until today I'd never heard of Joel Burns.

But I received an email from a fellow ActiveRainer who wanted to share this YouTube clip with me and I'm so appreciative that she did. Councilman Joel Burns of Forth Worth delivered the most eloquent, sincere and compassionate speech that touched my heart and actually made me cry ..... not for me or how I feel, because I'm fine, I'm happy, settled and content.

Instead I cried for the desperate children who are being bullied and harassed, for those victims who can't see beyond the pain that's being inflicted on them.

I urge everyone who sees this viceo this to spread the word. Make others aware of this cruel and vicious "epidemic" that's destroying innocent young lives.

(Click on the link below to watch Joel Burn's speech)

Oh I get it you don't believe me so get it appraised!

It should not be a big surprise that there are still home sellers who have not caught up with the market.

If you are a listing agent you might be asked why is my property not getting shown, or how come the price reduction didn't work?

The truth is, the market has shifted and is nothing like we were accustomed to just a few years ago.  I really feel for home owners who need to sell, especially those who bought at the height of the market and now find themselves carrying a mortgage that is larger than what the home is worth.

With that being said, both sellers and agents have to pay attention to the trends in the existing market.  So, here are a few situations to ponder.

•  What if as a seller you just agreed to a price change but you still don't have any showings?

 The market is liquid and it is not uncommon for your competitors to make even bigger cuts which would immediately put you at a disadvantage.  This could mean you might have to cut even further.

•    But my house is assessed at $380,000 why am I getting offers only in the $200,000's?

 Just a few years ago it was not uncommon to see a house assessed at $200,000 selling for $400,000 and this made home sellers happy.  That was a market called a Seller's Market, in other words more buyers and fewer properties.  The well known rule of supply and demand dictates that a higher demand with a limited supply will result in higher prices.  Today the scenario is so different.  Very high inventory and few buyers makes this a Buyer's Market.  In this case buyers want to spend less and get much more for their money.

•  How come my neighbor's house sold for so much more than I am being offered although my home is larger?

 Mr. Seller take a close look at the neighbor's property.  Did you notice the nicely landscaped yard?  And do you remember the large renovation project they did a year ago? Well, curb appeal and the condition of the home does matter.  Do you remember the checklist of the things you were told you would need to do if you wanted to get more for your home?  How much of that list has been completed?

•  Please don't tell me what potential buyers have to say about my home.   Despite what they have to say, I know my home is lovely and worth every dollar I am asking.

 If potential buyers are saying similar things and making similar offers this is an indication that this is what the market will bear.  Sorry, you really don't get to make this decision, buyers do.

So, you have the feedback, the offers, the comparative market analysis and you still disagree.  Yes I get it you don't believe me.    May I make one final suggestion?  Get it appraised.

 The appraisal will show you what your home is truly worth in this market, and what a bank will finance.  The question is:  Do you really want to sell your home or are you waiting for the market to come back? Keep in mind that it may be a long wait.

 

      

Jennifer Fivelsdal - JFIVE HOMES REALTY LLC - 845-758-6842- jennifer@jfivehomes.com 

www.jfivehomes.com  or www.midhudsonhomevalue.com

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 Copyright © by Jennifer Fivelsdal, all rights reserved-Oh I get it you don't believe me so get it appraised!

               

By Todd Clark (Broker/Sales Coach) 503-524-9494

This morning I read a report that the President says the problem with the housing industry is short sales and he wants to fix it. I thought GREAT, ABOUT TIME! But then I read the article and quickly I realized that our President has no clue about what is going on with the housing industry. As with most politicians he thinks if we throw money at a problem, he thinks it will go away.

You see, the President says the problem with short sales is that the sellers don’t want to move out and that he is willing to offer $1500 to home owners to move out, so they can have money to move. WHAT? Since when do we have a problem with sellers not wanting to move out? Does he not realize what a short sale is? A short sale is where a seller puts his home on the market because he knows he is in trouble and wants to move. Now, I think this is going to be a huge chance for fraud!

You see, the real problem with short sales is the banks are taking so long to respond that the home ends up going in to foreclosure and that is when the sellers are refusing to move out. They tried to do a loan modification, they tried the short sale… the banks are the problem, not the sellers.

I think we are going to see a lot of sellers take advantage of your $1500 program and actually create the problem of sellers not moving out until they get their $1500 a real thing. Mr. President, if you want to fix the problem, make it so the banks have to respond to short sale offers submitted to them within 30 days of being submitted. (The reason I say 30 days, is so that gives them time to do a BPO or an appraisal) If they don’t respond within the 30 days, they have to give a $500 a day credit to the home owner that will go toward back payments and principle.

I promise, if you do this, as soon as the banks realize that they are getting people out of default with their delays, the short sale problem will go away.

 

Todd Clark - Broker / Sales Coach
All Brokers Real Estate
Phone: (503)524-9494
Fax: (503)622-8739

Beaverton Oregon Homes for Sale, Beaverton OR homes for sale, homes for sale in zip code, 97006, 97007, 97008, 97005, 97223, 97224, 97124, 97123, Beaverton Oregon Realtor, Beaverton OR Realtor, Beaverton Oregon MLS Search, Beaverton OR MLS Search, 1st time home buying expert, short sale expert, avoiding foreclosure in beaverton, helping families home, LivingBeaverton, Townhomes for sale, home for sale, house for sale, Merlo Station, Hart Neighborhood, Greenway Neighorborhood, Sexton Mountain Neighborhood, Aloha Neighborhood, Lexington Neighborhood, Cooper Mountain neighborhood, Sorrento neighborhood, Murrayhill Neighborhood. Beaverton Oregon Real Estate, Beaverton OR real estate, Todd Clark, (503)524-9494, WWW.LivingBeaverton.com, www.IFoundYourNewHome.com, www.SavingyouFromForeclosure.com

©2010 Todd Clark - Mr. President, stop throwing money at the housing industry, that isn’t the problem

"People can be exposed to toxins in tobacco smoke in a way that's never been recognized before."  

That quote by Lara Gundel, indoor environment specialist and staff scientist at the Lawrence Berkeley National Laboratory may change the level of disclosure required when agents list an existing home for sale.

If the findings of the study (click the LBNL link to see the article) are confirmed, homebuyers like me are going to want to know whether the previous occupants of a home were smokers.

Services commonly in use today can minimize or mask the odor of stale smoke left in a home by years of tobacco smoke residue, but it has yet to be determined if the risk uncovered by this study will remain.  (Click the link for the entire article.)

"We know that these residual levels of nicotine may build up over time after several smoking cycles, and we know that through the process of aging, thirdhand smoke can become more toxic over time," according to co-author Hugo Destaillats.

It's just one more thing to think about.

 ___________________ 

I'm Mike in Tucson, your preferred Tucson Mortgage Lender.

NMLS #223495

SUNSTREET MORTGAGE llc ~ Mortgage Bankers, Not Brokers!
Offices in Scottsdale, Tucson, and Nogales, AZ, and Albuquerque, NM.

Call me on my Blackberry  (520) 349-9090

photo courtesy Microsoft Office 2007 clipart

What distinguishes a full time agent from a part time agent?  There are agents who work solely in the real estate business and do not have another job.  Does that make them full time agents?  Does anyone in the real estate business work less than a 40 hour week?  I've heard agents who admit they work in this field just because there is flexibility of hours spent working.  I'm not sure if I understand exactly what that means!!!  I've been doing this job for 31 years, and I'm still waiting for my hours to become more flexible!! 

I actually feel offended when real estate agents request to join an office on a part time basis.  I would never hire an agent who does not want to commit to a full force effort.  There are agents who only have this one job and describe themselves as full time, but they are not industrious.  The ideal full time agent is one who is positive, dynamic and energetic with an eagerness to earn and learn.  That's my definition.  Wake me if I'm dreaming!!!

                

             

                

               "The #1 Team in Franklin's #1 Office"

            

             www.barbaratodaro.com

                  

Watching the massive snow storm in the Northeast and news clips of people stranded in cars or having to abandon their cars, got me thinking about car readiness for the winter season.

The realty is, the winter season can be rather harsh, so preparation is needed to avoid some problems that will come up.

Here are several maintenance and emergency preparedness tips to consider for your car:

• Has your car been tuned up recently? How old is your battery? Remember the winter weather takes a toll on your car.
• Are your wipers in excellent condition? Trust me, I know how important that wipers are;  They certainly got me through many rainy and icy winter days on the road.
• How about your tires? For the winter you might want to get new ones and make sure they are kept correctly inflated.  This is key in the winter - you face all kinds of weather conditions and not having good tires could cost you your life.
• Have you checked out your spare recently? Make sure this is in good condition because you never know when you will need it.  While you are doing that make sure your jack is in the car.
• How about your heating system? This had better be working well.
• Always maintain a full tank of gas, you just never know what may happen.

Now that you have checked the maintenance of the car, there are also other essential items you should have on hand in case of an emergency.

• Make sure to have food and water. I had many hour and a half trips turned into four to five hour trips due to accidents and roads in poor condition due to snow.
• A Warm Blanket, just in case you break down or if you are stuck in a traffic jam and you make the decision to turn the car off.
• Jumper cables or portable battery charger
• A flashlight
• First Aid Kit
• Well charged cell phone and charger
• Several ice scrapers.
• Sand or Kitty litter
• De-icer for your locks
• Boots and socks
• Change of clothes in case you have to check into the nearest motel

By having these items on had if you are caught in a storm or stuck behind an accident you will have what is necessary in the car to make you more comfortable or even help someone else out who failed to prepare.

Jennifer Fivelsdal- Associate Broker- Keller Williams Realty Team - 845-758-6842- jennifer@jfivehomes.com  and www.jfivehomes.com  

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             SEARCH FOR A HOME IN THE MID HUDSON VALLEY

This is my update to this article I posted originally about a year and a half ago. The sales market has not improved, in Payson.

In today's real estate market many Owners are finding that they either can't sell, or might have to sell at a very deep discount to find a buyer. Many are, therefore, turning to renting as a possible alternative to a bargain basement sale. (I'm talking here about non-occupied properties. We have many in our area- either they are 2nd homes, investment property that isn't selling, or the Owners have HAD to move for some reason).
These are some of the issues we raise with Owners who come to discuss it with us:

-Can I AFFORD to rent my house for enough time for the market to recover?
    -At least in our area (Payson, AZ) we don't see the market turning around for some time
    -Possible rent may OR MAY NOT be enough to cover your mortgage payment- rents are coming down somewhat, and there is more competition than ever, especially higher end
    -a reputable Property Management company is not going to give any refundable security deposit 
from the Tenant to you, so don't count on that money. It will probably go into the company's trust 
account until the Tenant moves out.
    -Do your homework and find out how long it takes comparable properties to rent, and for how much $.
    -Can you make the payment if the house doesn't rent for a few months, or if the Tenant leaves and  the property takes awhile to re-rent? This is a BIGGIE. You just can't count on the property renting immediately.
    -Can you make any necessary repairs to make the place safe for renters?
    -Can you do any fix-ups needed to make it "rentable"?
    -Can you do necessary maintenance while the property is rented? What if the water heater goes out? The furnace or AC? What if there is a plumbing or roof leak? Can you repair/replace necessary items? Cosmetic items don't have to be done, but a Landlord must provide the basics.
 
-How "rentable" is my house?
    -How much competition is there in your area for quailified Tenants? (Believe me, NO Tenant at all is much better than the unqualified kind)
    -How easy it it to rent properties in my neighborhood? Ask a good Property Manager. (In Payson, that means us).
    -Is the rent amount I want/need reasonable? Again- ask a professional.
    -Am I willing to allow pets? (people LOVE their pets, no pets makes a place less rentable)
    -If you want to leave your house on the sales market Tenants will NOT want to rent it. You
will probably have to give them lower rent or other concessions to get it rented. And the Tenant 
CAN and may "blow the sale" with any prospective Buyer. Better to take it OFF the sales market.
   
-How ready am I to give my house up to Tenants?
    -How emotionally attached are you? I guarantee you will have at least normal wear and tear.
    -That "accent" wall you love may make the house harder to rent. We don't want you to leave your treasured drapes (OR the furniture you just don't want anymore)
    -Are you willing to allow children? Fair Housing violations are VERY expensive.
    -Once the property is leased you CANNOT come on the property except with proper notice.
    -You MUST comply with any and all national, state, and local laws regarding rentals.
  
This is not intended to be a comprehensive list of things to consider. It is intended to get you thinking. A good (read "experienced") Property Management Company can give you information particular to your area. If you decide to rent out your house we STRONGLY recommend letting a professional handle it. Mistakes (letting in a Tenant who can't pay, tears up the house, makes a meth lab, fills it with illegals, etc.) can be very expensive.
Renting CAN be a viable option- don't let this scare you off. Just be aware of the possibilities and
TALK TO A PROFESSIONAL!

In the Payson, AZ area, call Prest Realty. We are the rental experts for Payson. Visit our web site for more information.

AR people- what would you add?

The details are below.  This is the first program I've seen that really, really helps do two things:

1. Get foreclosures out of circulation and off the market.
2. Stimulate buyers to buy now.

HUD's Neighborhood Stabilization Program provides for 22% of the purchase price to be subsidized with a ZERO interest second loan.  The best part?  That 22% can be forgiven over a period of time.  (Details below.)

Grant money has been allocated for every state in the Union.  What does that mean to REALTORS and homebuyers?

What program can give you 22% of the purchase price, and what's the catch?

In Arizona, the grant program is called YOUR WAY HOME AZ.   Your Way Home AZ will provide second loans to eligible purchasers for up to 22% of the purchase price of the property.  Second loans will have a term of from five to fifteen years, depending on the amount of assistance, and will be forgiven at the end of the term if all program requirements have been met, and the borrower continues to live in the house.

 

NOTE:  AZ program is funded through HUD's Neighborhood Stabilization Program.  Every state has a similar grant program. 

Click this link to check out your state:  HUD_NPS1

 

PROGRAM OVERVIEW

BORROWER REQUIREMENTS

• The property you purchase must be your primary residence.
• You must use a lender from the ADOH participating lender list.  (That would include Mike in Tucson at Sunstreet Mortgage, LLC) 
• You must have maximum Debt to Income ratios of 31/43.  No exceptions.
• You must have two months' reserves PITI (mortgage payment--Principle, Interest, Taxes, Insurance)
• You must be AUS (Automated Underwriting) "Approve / Eligible."  That means pre-approved, with fully documentable application.
• You must attend and complete an eight-hour Homebuyer Education class provided by an ADOH approved non-profit counseling agency (list provided by lender once you begin the process)

DOWNPAYMENT REQUIREMENTS

• 3% downpayment required, of which 1% must come from the borrower's own funds, sourced and seasoned.  (That means we have to document where it came from, and how long you have had the money.)  2% can come from any other approved source.
• Standard lending practices apply.  (Credit, income, documentation, etc.)

INCOME LIMITATIONS

Eligible purchasers must have household gross incomes not greater than 120% of the median household income for the county in which the home is being purchased.  The table below will help you determine if your household qualifies to buy a foreclosed home under the program.  (Talk with your lender before concluding that you don't qualify, as some types of income do not have to be included.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ELIGIBLE PROPERTIES

• Foreclosed properties only.  Tax or mortgage foreclosure process must be complete.
• Vacant properties only.  Federal guidelines do not allow occupants to be displaced.  The property must be vacant at the time of listing.
  
• 1-unit single family homes, condos and townhomes are eligible.
• Homes must meet minimum property standards.

HOME PURCHASE PRICE LIMITS

The maximum purchase price varies by county, minus 1% for program-required discount.

 

 

 

 

 

 

 

 

 

ADOH 2nd LOAN TERMS

• 22% of purchase price
• All loans are forgivable after a period of time, based on the amount of the loan
  • 5 years for assistance of $15,000 or less
  • 10 years for assistance of $15,001 to $40,000
  • 15 years for assistance of more than $40,000
• All loans are zero percent interest with no monthly payment
• The loan is forgiven at the completion of the term (called an "affordability period")

How can you get started, now that you've decided you would like to buy a foreclosed home as your primary residence?

Check out your eligibility on YourWayHomeAZ.com.

Call me to get prequalified for a 75% first mortgage, and Arizona Department Of Housing's "Your Way Home AZ" forgivable second mortgage.

PLEASE NOTE:  Once escrow is opened, the loan MUST CLOSE within 45 days. 

Notify your favorite REALTOR that you're jumping in with both feet, but don't go home shopping until you've been approved and entered into the system, and you're signed up for the required counseling.  This is important!

Tomorrow, I'll blog about the step-by-step process in Part 2!

 ___________________

I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.

SUNSTREET MORTGAGE
Call me if I can help you or someone you know with a purchase or refi mortgage;
(520) 349-9090