Flagstaff Blog - Real Estate and All Things Flagstaff: July 2009

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

 

Tough love with a bite of reality for Sellers in New London County serious about getting their home sold

Since I've been in the real estate business for over 32 years, I usually have a story for any given situation. One of the stories I tell most often, is the one about the sellers who turned down a $228,000 offer the first week their home was on the market because they were getting lots of showings and thought it was too early to accept $7000 less than asking price. Nine months later they sold the house for $189,000.  I admit I stifled an "I told you so".

When you list your home, the very best opportunity of selling it comes in the first 21 days. As soon as your home hits the market, buyers looking in your location and price range will be calling their agent to schedule a showing. In the age where listings show up on the internet just hours after the ink on the listing agreement is dry, buyers are watching hourly for new listings to hit the market. If your home is priced right, you should get an initial flurry of showings. If it doesn't sell in the first 21 days then it might take awhile. The average "Days on Market" statistic in Eastern Connecticut is about 90 days but that's because some houses sell within 21 days and others take 5 or 6 months.

Once the first 21 days are past, only buyers new to the market will look at your home. Bernice Ross in a recent article in Inman News refers to the first 30 days as a "honeymoon period". Although I think that period is shorter than 30 days, I do agree with Bernice when she says "If you don't sell during the honeymoon period, there's a high probability that your property will be on the market for an extended period of time. You can generate additional interest with a price reduction, but it never creates the attention you receive when you first list the property."

So what's my point?  On the first day of the listing period your home should be priced right and in show condition. Testing the market with a higher price for a few weeks or showing the house when it isn't quite ready is a huge mistake. By the time you reduce the price, it's too late; the honeymoon is over.

And one more thing, "Your first offer is often your best offer" so don't blow it.

Straight Talk on Tuesday Morning is an ongoing series for sellers in New London County who are willing to listen, roll up their sleeves, and do what they need to do to get their home sold. If your aren't serious about selling your home, then move along. There is nothing to see here.

Linda Davis has been selling real estate in Ledyard CT for 32 years. You'll find Linda's profile on her Online Business Card.

Agents usually ask right up front when they encounter a prospective buyer, "Are you working with an agent?"  Amazingly, "working with an agent" means different things to different people.  Not all agents see it alike, and certainly Buyers don't always understand what is being asked.  It seems simple enough yet the interpretation varies according to your filters.

 A Buyer may have been shown 50 homes by an agent and yet they'll respond "no" when asked.  An agent may have talked to a Buyer one time on the phone, given the price and acquired the Buyer's name, and yet they will perceive that they are "working with" that Buyer.  How does this happen? 

 The Buyer doesn't always understand that the agent is asking the question to make sure that he isn't creating a conflict with another agent that may have considerable time invested in the Buyer.  The questioning agent wants to make sure he isn't wasting his time by working with someone else's customer which only leads to hard feelings all the way around - agents and customers.  The agent also doesn't want to spend time with someone that is dancing with several agents and choosing none. 

 Buyer's often don't understand that we work on commission - we get paid when they get what they want and all of the pieces to the puzzle are correctly assembled to facilitate the close of escrow.  It is up to the agent to explain the nature of our business to them so they will remain faithful to an agent they have confidence in and are comfortable with. 

 Some agents think that because they've shown property to someone they are working with them.  The Buyer, however, may not have been pleased with the agent's performance.  Pushing too hard, showing only their office listings, not hearing what they really wanted, an off color joke, etc. - all reasons for a Buyer to not want to continue "working" with that agent.  It is their right and often warranted. 

 Buyers can stray if they have not had the proper orientation to the practices of the real estate industry.  Tell them how it's going to work.  If they see a sign, any sign including a FSBO, "call me, I can help.  I'll get the information for you.  I will be there every step of the way, from finding the right property to negotiating, contracting, inspecting, reviewing the title and related deed restriction documentation, loan approval, repairs, etc., etc., etc.  In other words - I offer the services of a professional agent and I know and understand your wants, needs, and I care.  I will be there for you and your family.  Together we'll do good work and we'll get you what you want!" 

 This isn't a script, rather an idea.  I don't say it that way it's written above, but I get the ideas in during our initial meeting so they are confident in me and expect to work with me.  We both win.  I expect to work with them, but I don't take it for granted - I earn the honor.

 Remember, nobody owns a Buyer.  If you want to keep your Buyer be sure to care about them and focus on their wants and needs.  They will respond accordingly.

COMMON QUESTIONS AND ANSWERS TO THE 2009 First Time Home Buyer Tax Credit

Once I have closed on my home and how do I file for the tax credit?  Pick up tax form 5405 at your local CPA/Tax Preparer office or go online at www.irs.gov.  You will need your date of closing and new address along with your other tax information.  Once the form is completed, it can be filed with the IRS.

Do I really get $8,000 back from the IRS? Yes, it is an actual $8,000.

If I am already getting a tax refund back, do I get the $8,000 in addition to this? Yes, the tax credit is in addition to your normal refund.

If I have not paid $8,000 in taxes can I still get the tax credit? Yes, you are still entitled to the full tax credit.

Can I file for my tax credit before I close on my home so I can use the money for my down payment? No. 

Are mobile homes eligible for the Home buyers Tax Credit? Yes. The guidelines state that the following types of properties are eligible:  Houseboat, house trailer, cooperative apartment, condominium, or other type of residence.  It has to be the one you occupy most of the time.  No second home or vacation properties allowed. 

Can I still file in 2008 for my tax credit and get my money this year? Yes, you can file the 5405 anytime up until December 1, 2009 and still get the money this tax year.  If you have extended your taxes for 2008 and you have closed on your home you can just attached the 5405 form to the rest of your tax return. 

Do both spouses have to be first time home buyers to receive the credit? Yes.  However, if they are married filing separate they will split the return on the credit.

Can the tax credit be split amount those who are buying the home if they are not married? Yes, they can split it.

How much does it cost to file the amended return?  It depends.   You need to check with the person who filed your tax return for you.

If I have any other questions or would like more information on the tax credit where can I get it? You can go online to IRS.gov and search for form 5405.  There it will tell you more information about the credit.

Source:  American Home Mortgage, Tucson email newsletter, 7/2009.

Gabrielle (Kamahele) Rhind - 2009. If you want to reprint parts of this - just email me for my permission rhindohana@msn.com. Buying or selling Tucson Arizona Real Estate? Click info@gabriellerhind.com and let me know how I can help you! Or visit www.BuyMyTucsonHome.com. 

If you'd like more info about  Mt. Lemmon homes, Tucson bank owned homes, Tucson lease option to purchase homes, Tucson rental homes, buying or seling your Tucson home or the Tucson real estate market or real estate news, email or call me at (520) 245.0242.

It's a matter of public record. 

Once a house is sold, that purchase price is recorded in the land records of the city or county where it was sold.  The whole world can see what Sally and Tom paid for their new house.  When it comes time for them to sell, many potential buyers will be asking this question:

HOW MUCH DID THE SELLERS PAY?

9 times out of 10, buyers I work with ask this question.  Whether the sellers have lived in the house for 3 months or 32 years, buyers want to know.  As the tagline for a popular supermarket tabloid used to say, "Inquiring Minds Want to Know."

While this amount can sometimes give an indication of the position of the seller, more often than not it does not make much difference at all.  Sometimes the public record will show that a seller paid a very low price for a home compared to its value today.  However, it may not display the fact that the seller has refinanced a couple of times and now owes more than they'll be able to net from a sale.  Other times, it may appear that a seller would need a short sale because the value is so far below the previous purchase price.  This may not be the case if the sellers used a large down payment to purchase the property.

The key thing to remember is that the today's value has almost nothing to do with what a seller originally paid for their home. 

The market value of a home is the estimate of the most probable price that an item will bring in cash in an open and competitive market assuming reasonably informed buyers & seller, unrelated buyers & sellers, and property exposed to the market for a resonable amount of time.  That's the textbook definition.

While one can ask what the sellers paid, the reality is that the price the new buyers will pay is determined by the market and the sales that have occurred most recently.  It may be interesting to know what the sellers paid and speculate until the cows come home about their motivations to sell, that number has very little bearing on today's market value.

The only question buyers should ask themselves is instead:

HOW MUCH AM I WILLING TO PAY FOR THIS HOME?

Your experienced REALTOR can help you with making an informed decision.