Flagstaff Blog - Real Estate and All Things Flagstaff

Should I consider renting out my house until the market improves?

Fri, 16 Oct 2009 20:57:42 -0500

This post from Payson provides food for thought for Flagstaff homeowners who are thinking of renting their homes. It's doable... just be prepared.

Via Prest Realty, Sales and Rentals in Payson, AZ:

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?

Stimulus Money To Purchase Primary Residence. 22% Second Mortgage. Zero Interest Rate. Call Your REALTOR! (1 of 3)

Sat, 25 Jul 2009 20:27:45 -0500

Great info on this program. I've heard about it from Flagstaff lenders, but this really EXPLAINS it. If you plan to be a long-term homeowner in Flagstaff, I can't think of anything better.

Via Mike Jones (SUNSTREET MORTGAGE, LLC):

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

Get foreclosures out of circulation and off the market.

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

Straight Talk on Tuesday Morning

Wed, 22 Jul 2009 21:50:35 -0500

Linda's comments about the New London County, Connecticut market apply equally to Flagstaff, AZ

Via Linda Davis (RE/MAX Realty Group):

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.

Are You Working With An Agent? ... A Perspective.

Thu, 16 Jul 2009 09:44:28 -0500

I always ask this when meeting a prospective buyer for the first time. Get many different reactions. Ideally, it leads to a conversation, if not a relationship and a sale.

Via Jim Valentine (RE/MAX Realty Affiliates):

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.

2009 HomeBuyers Tax Credit - "More" Common Questions & Answers

Wed, 15 Jul 2009 20:47:07 -0500

Have had several buyers this year taking advantage of the tax credit -- here are the details. Thanks Gabrielle Rhind, for laying out the details again!

Via Gabrielle (Kamahele) Rhind (Tierra Antigua Realty, Tucson AZ Real Estate Agent):

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.

Inquiring Minds Want to Know "How Much Did the Sellers Pay?"

Wed, 08 Jul 2009 22:33:16 -0500

Interesting post about negotiating for buyers and the comments from agents around the country are also interesting.

Via Brian Block -- Northern Virginia & D.C. Real Estate (RE/MAX Allegiance):

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.

Dear Home Seller: So, you are offended?

Tue, 23 Jun 2009 22:54:09 -0500

My advice to a seller who receives a low-ball offer is always: Don't be offended. this Buyer thought enough of your property to make an offer. The others who have seen it (or passed it by) did not.

Via Jennifer Fivelsdal, Fishkill NY (Keller Williams Realty Team - Real Estate Agent):

In some of my previous market reports I gave tips to sellers as to how to gain a competitive edge in this challenging market; one of the tips was: Do not take offense if a buyer makes a low-ball offer.

The present real estate market in the Dutchess County area is what is called a buyer's market. Properties are on the market longer, the inventory is large and there are fewer buyers.

You can imagine how surprised I was when one of my buyers placed an offer and the seller was so offended that the consideration of a counter offer was out of the question. This offer was by no means out of the realm of the type of offers I have been seeing this year, and with good negotiation a meeting of the minds would have been possible.

In this particular incident it was especially surprising because this property was in the price range that would have required a jumbo loan, a category in which there are even fewer buyers, but my buyer was paying cash.

I make a point to tell my sellers that a buyer will probably make a low offer but don't get offended by this, instead view it as the beginning point of a negotiation process instead of the end.

So what should a seller do next when facing this situation?

Review the offer with your agent

Take a look at the most recent sale of similar properties

Make a counter offer.

Your counter offer will give the potential buyer a clear indication as to whether you are willing to budge on the price. or not. At this stage your counter offer might be accepted or you might have to do this back and forth a few times. The key is this, don't get offended and you might find that you can arrive at an agreement.

In the case I mentioned above, because of high inventory and cash in hand the buyer moved on to another property, and did not see any reason to waste time on a seller who took offense to an offer.

Foreclosures hit 1,000,000 so far this year, loan mods wane

Sun, 14 Jun 2009 14:13:52 -0500

Thanks, Patrick, for pointing out this article and pushing me to write my "out-on-a limb" speculation about what's happening with Flagtaff foreclosures:

What's Happening With Foreclosures in Flagstaff?

Via Patrick Schutte, Prescott Arizona REO Specialist (RE/MAX Mountain Properties):

Several newspapers thought that a decline in May foreclosures from April's record high was good news, but a decline off a record is not necessarily healthy. Here's an article from the WSJ that I thought was a little more appropriate.

Here's a bleak milestone: there's been more the 1 million foreclosures filed in the U.S. so far this year, according to a count by the Center for Responsible Lending.

Not all of those foreclosures will result in evictions, but the statistic offers a sobering illustration of the magnitude of the problems that still face the housing market.

Some worry that the sheer volume of foreclosures could swamp the government's efforts to help underwater borrowers refinance and to modify loans of distressed homeowners. Three weeks ago, Treasury department officials estimated that more than 55,000 homeowners had been helped so far by the Obama administration's loan modification plans, including some 15,000 borrowers who were in trial modifications with Chase Home Mortgage, and 3,000 who were in a trial with Wells Fargo.

The CRL, a nonprofit research and lobbying group that favors aggressive policies to help troubled homeowners, estimates that there are 6,500 new foreclosures filed every day. The center estimates that there will be 2.4 million foreclosure starts in 2009, based off of figures from the Mortgage Bankers Association that are adjusted to reflect the entire mortgage market.

The CRL supports the Obama administration's efforts to set standards for banks to modify loans, where the government will match in part the costs to the servicer to lower mortgage payments to 31% of a borrower's income. The CRL warns that "loan modifications are not likely to succeed with superficial fixes that fail to lower a homeowner's monthly payment."

See the original post By Nick Timiraos, Associated Press

With an estimated 2.4 million foreclosure starting this year and a paltry 55,000 loan mods, the REO business should continue to grow in all areas including Prescott, Prescott Valley, Chino Valley, and Dewey-Humboldt.

Recollections of the Meaning of Memorial Day from Flagstaff AZ

Mon, 28 May 2007 14:23:49 -0500

Recollections of the Meaning of Memorial Day from Flagstaff AZ

When I was young, Memorial Day was quite different. This was after the days when everyone walked 10 miles to school no matter what the weather, but we were still in the era of black and white TV where the test pattern came on after the 10 o'clock news. Though I now live in Flagstaff, Arizona, my recollections are from Iowa, where I grew up. Somehow, I think the way things were observed in Iowa were not much different from in Flagstaff in the 1950s.

One way in which Memorial Day was different is that every adult called it Decoration Day. Another difference is that it was not always on Monday as part of a three day weekend. It was on May 30, no matter what day of the week that happened to be. (The change to the last Monday in May happened in 1969.) May 30 came at a convenient time of year to take a day off in Iowa since the crops were in (meaning corn and soybeans were planted) and it was usually before the first round of hay-baling (farmers tried to get three in each summer/fall in order to keep the cattle in hay during the winter).

So, everyone dressed up as though it were Sunday and got in the car and visited cemeteries. Sometimes, someone would go out to a nearby cemetery the Sunday before the actual holiday so the graves would be decorated before anyone arrived on Memorial Day - there was often a little competition about the most elaborate decoration.

In our family, Decoration Day had little to do with military honors. It was a day to remember the grandparents and others who had died by decorating their graves. By the time we finished the circuit of graveyards (first picking up an aunt and uncle or two to ride along), we may have put over 200 miles on the car at an average of 40 miles per hour on the narrow two-lane roads. We started early and got home long after dark.

Along the way, we looked forward to each cemetery to come because it meant getting out of the hot (no auto air-conditioning then!) car to run around under the shade of the big old trees surrounding the graves. We also learned a lot about our families. All the grandfathers had come directly from Germany to Iowa to claim and farm new land, and to avoid the Kaiser's military draft. One of them had been born in New York harbor and was thus a U.S. citizen though no one else in his family was. The origin of the grandmothers was a bit less clear, but at least one of them was German since that's the language she spoke at home. There were also a few of their children buried nearby - still born babies and victims of life on the plains without the miracle of antibiotics. That sort of thing was much more common in the late 19^th and early 20^th Centuries, and the evidence and history lesson was evident on the ground around us on those Memorial Days.

I was off to college by the time Congress changed Memorial Day to just one of those Uniform Holidays conveniently always located on a Monday to make a nice three-day weekend. Somehow, I think we've lost something important to gain these mini-vacations.

Ann Heitland, Flagstaff AZ Real Estate

Like this post? Subscribe to the feed for future posts:

April home sales numbers in Phoenix bode well for Prescott area sellers

Sun, 17 May 2009 00:57:15 -0500

And for Flagstaff area sellers too! Especially with this heat!

Via Patrick Schutte, Prescott Arizona REO Specialist (RE/MAX Mountain Properties):

The Wall Street Journal said that ZipRealty reported this week healthy year over year sales increases and signs that prices were leveling off for the Phoenix metro area.

ZipRealty reported that Phoenix led the nation in the change in the number of homes listed for sale at the end of April compared with a month earlier with a drop of almost 15%.

"Banks have sped up the process for getting foreclosed homes on the market, and continue to lower prices to sell them," said Leslie Tyler, vice president and chief home hunter for ZipRealty. "The drop in days on market versus last year highlights that distressed properties in these hard hit markets are starting to move, which is a hopeful sign." "In markets where prices have fallen the most, such as many California cities, Phoenix and Las Vegas, we continue to see strong buyer interest," said Tyler. "The market is being driven right now by first time buyers and investors because of the affordability in these areas."

ZipRealty Change in Inventory March 2009 to April 2009

See WSJ article with additional graphs and more detail

The number of homes listed for sale in many U.S. cities continued to decline in April in what some analysts see as a sign that the market may be nearing a bottom. Other analysts are looking at a new round of foreclosures to hit the market soon and are cautious to say we are at the bottom. I'm personally on the cautious side and expect prices to struggle in some local markets and rise in others depending on the number of foreclosures hitting the market. Prescott should see bottom fairly quickly, while I expect some areas of Prescott Valley and Chino Valley that have high percentages of foreclosures will continue to see price pressure.

Get The Wall Street Journal for 75% off!

Bond Auction Disappoints; Long Bonds Tank. (What It Means for REALTORS & Buyers)

Sat, 09 May 2009 00:08:21 -0500

Here's an important alert for would-be buyers!

Via Mike Jones (Tucson Mortgage Company, LLC):

The bond market anticipates future inflation, and demand today for longer term bonds (10 - 30 year) was much less than anticipated.

The result? Interest rates, after falling to historic lows this past three weeks, are headed back up.

If you're a REALTOR, light a fire under your buyers.

If you're a buyer, it's time to jump in.

The only thing that I can see pushing bond yields back up (and interest rates down) would be the government stepping in and purchasing bonds.

Don't count on it.

_____________________________

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

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

photo courtesy Spaceball on Flickr

3-2-1- LIFTOFF! Prevent Failure to Launch: Help Your Kid Buy A House This Year

Tue, 28 Apr 2009 23:24:48 -0500

Parents: don't let your daughter or son miss the opportunity of that first time home buyer $8000 tax credit. This post dispels all those excuses.

Via Janet Guilbault California Mortgage Banker/Broker:

It wasn't THAT long ago that we Baby Boomers worried a lot about our kids.

You know, those irrepressible Generation Y kids who were on the Internet at age 4 and who grew up clicking (my son says I grew up turning dials and that is why his generation is superior different).

Sitting on our own fat bubble- enhanced, low taxed properties, we watched prices spiral out of control here in the San Francisco Bay Area. We believed our children would either:

Never be able to afford a house

Move away forever

Move back in with us (eek!)

But post meltdown, all of that has changed. And in the wake of economic disaster lies a once in a lifetime opportunity to get junior into his very own house or condo.

This is the year to help your kid become a first time buyer. You snooze, you lose.

No, I cannot promise son will become a handyman or daughter will turn into Martha Stewart. But I can promise you that everyone in the family will look back someday (sooner than you think) and thank their lucky stars you took advantage of a 24 karat golden real estate opportunity to give your child financial stability.

Why this year? Here are 3 reasons that point directly to the stars being lined up perfectly:

Cheap properties (prices being driven down by foreclosures)

Low fixed rates on old fashioned 30 year mortgages

FHA financing finally has limits high enough to buy in California

As if that isn't ENOUGH, here is your amazing limited time BONUS OFFER: First Time Homebuyer Tax Credit of $8000 is good through the end of the year.

The strategy:

GIFT your child the down minimum payment (3.5% of selling price)

ASK the seller to pay the closing costs in your offer, so your kid needs NO cash at all

SNAG a cheap property in the best location your kid can afford

Be prepared for this:

MULTIPLE OFFERS on lender foreclosed properties for sale

SELLERS insisting on an approval with a LENDER (not just a letter from the mortgage person)

A LONGER time line than you are expecting

10 things not to worry about:

Rates will go lower. FHA loans have the ability to be easily re-written if rates drop (streamline refinance)

Real estate will be cheaper. So what? Think long term.

Your kid isn't "ready". Most first time buyers do not have the perspective to understand the benefit of the tax credit, or the silver lining of economic downturns. Come to think of it, you probably weren't "ready" when he was born.

Going on the loan with your kid. If your kid has no job now, or just can't afford to buy, you can co-sign.

Finding the "perfect" house/condo. It is a starter house, for crying out loud. Do not expect lender foreclosures to be pretty

FHA closing costs are "too high". Yep, FHA will have slightly higher closing costs than conventional. Seller may not pay closing costs. You can gift your kid closing costs, too.

What if my kid loses his job? "What if's" are the biggest reason for missed opportunities!

The real estate market is just too confusing! That is why you should find a great real estate agent

Getting a loan is a big hassle! Get preapproved first with a great mortgage person

Where will I get the cash to help my kid? How about an equity line or retirement account? Maybe Grandma has the money?

Get your kid set and maybe you could move in with him someday. (double eek!)

Maybe not.

Written by Janet Guilbault, Mortgage Banker/Broker Based Out of the San Francisco Bay Area

Top 10 Reasons Why You Should Get Pre-Approved Before You Look For Your Las Vegas Area Home!

Sat, 18 Apr 2009 10:30:44 -0500

These are also the top ten reasons to meet with a lender before you go house-hunting in Flagstaff.

Thanks Renee!

Via Renee Burrows - Las Vegas NV. ASK ABOUT -1st Time Buyer Down Payment Assistance! (Nevada Realty Solutions - Realtor - Estate - Probate - REO):

10 - You don't want the big let down if you can't get approved after you got your heart set on purchasing a property

9 - If there are errors on your credit report you will have time to get it fixed

8 - You will save energy, time and money

7 - Your odds of working with a great Realtor are better (many Realtors don't even show without a Pre-Approval!)

6 - You will be looking at homes in the right price range

5 - You will have a good understanding of current market rates and a monthly payment when your lender gives you a GFE (good faith estimate)

4 - You will know how much money you need to come up with for a down payment

3 - You will know where your comfort zone is and feel confident when you submit your offer

2 - Many REO (bank owned, foreclosure) sellers will not even accept an offer without a pre-approval letter (most the time from a direct lender)

1 - The Seller will look at your offer to see that it is strong so odds of approval are higher

Underwriting guidelines have changed majorly over the last two years. Many cannot qualify. Lots can qualify and they don't even realize it. It never hurts to see if you can qualify for a home.

Condos have become pretty much unfinanceable due to recent underwriting guideline changes. Underwriters are not only looking at litigation but they are looking at investor concentration in the subdivision and HOA defaults within the subdivision after they order something called a "condo certification." A condo certification is basically a questionnaire so the lender can balance risk.

If you are a lender in the Las Vegas area and have successfully closed more than 5 VERIFIABLE transactions since March 1, 2009, near conforming rates and closing fees: feel free to call or email me for an interview!

April 14th: Look For Lower Rates Today

Wed, 15 Apr 2009 00:05:59 -0500

Interest rates move in the opposite direction of the bond-market. Thus, following the bond market usually tells you where interest rates are going. Here's a post on today's market from my blogging-buddy, Mike, in Tucson.

Via Mike Jones (Tucson Mortgage Company, LLC):

US retail sales fell 1.1% in March. They were expected to rise. The stock market is down, and the 10 year bond yield is falling. Other factors affecting today's bond market rally:

Sabre rattling: North Korea pulled out of the nuclear talks.

Profits eroding: Producer prices were down in March by 1.2%.

If you're closing on a loan in the next 30 days, my recommendation is to lock.

___________________________________________________________

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

Think of me as your Tucson mortgage expert.

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

Save Money in Style - A Clean, Economical Heating Option

Sat, 11 Apr 2009 14:48:29 -0500

This is a eco-friendl, clever product that I had not heard of. With individual home wind turbines and solar panels, electric heat becomes something to consider.

Via Elizabeth Bolton - Cambridge MA Real Estate Agent (Coldwell Banker Cambridge, Massachusetts):

As real estate agents we're in the enviable position of getting a first hand look at all sorts of nifty things in people's homes - from the newest in kitchen design, to a special floor tile, to a dramatic light fixture. All sorts of things - you never know what unusual or intriguing item will catch your eye.

On our weekly tour of new listings I came across something I had never seen before. It was a flat panel painted to match the wall on which it was attached. As I studied it I realized it was a electric heating unit and I had never seen one like it. A little investigation online when I got back to the office and I discovered the Econo-Heat Wall Panel Heater.

I've long been a fan of electric heat. It has a reputation of being expensive and people in New England tend to look askance at electric heat. I think it's underrated though and can be much more economical than people think. Electric heat is also the cleanest form of home heating - no fumes, no danger of explosion (several gas explosions have destroyed houses in Massachusetts recently), and no danger of ground contamination from oil. It's the ideal heating choice for the growing numbers of people with chemical sensitivities. Since electric heat can be controlled room by room - you have as many zones as you have heating elements - costs can be managed more effectively than with other types of heat.

So I was predisposed to think well of Econo-Heat. After reading about it I'm quite excited. Manufactured in South Africa, the Econo-Heat wall panel:

Is remarkably economical. The company suggests that the cost to run it is equivalent to the cost of using four incandescent light bulbs and estimates that the cost in the United States is approximately three cents per hour.

Is a cement fiber board panel. It is unobtrusive with a slim, stylish design

Can be painted. In fact, it can even become a decorative piece with screen painted designs available

Will not burn skin on contact (see the site for details about temperature, safety etc.)

Has no moving parts to break or burn out

Takes less than ten minutes to install

This is a great heating option to introduce to your clients or to consider for your own home. Perhaps that three-season room could be used in the winter. Or you could add a panel to that unheated bedroom (I've got four of those in my old house!). Maybe you want to try a panel in your home office and leave the thermostat low in the rest of the house. I'm looking forward to spring and summer but I see an Econo-Heat panel in my future!