Tuesday, June 17, 2014
Long awaited VIG at McCormick Ranch makes its debut on June 24th
Thursday, June 5, 2014
Down Payment Saving Tips
Every month you pay the rent, you’re probably thinking, “I wish this money was going into my future.” For a lot of would-be first-time home buyers, it’s the down payment which makes home ownership seem impossible. Climbing the “down payment mountain” isn’t impossible. Like any major challenge, it’s all a matter of breaking your big, hairy, audacious goal down into practical steps.
Here are some tips to conquer saving for a down payment:
Find out where your money goes. You can’t start saving if you don’t know where you’re spending. For a month or two, track each expenditure, no matter how small. Get an objective picture of where you’re spending the cash.
Get specific about how much you need to save. Even if you’re not 100% sure what your down payment needs to be yet, it’s good to start doing a little math to figure out how much you need to save. Pick a dollar amount and a timeline to hit that dollar amount. For example, a $25,000 down payment in two years comes to $1,041/month. Sound unrealistic? Either scale down your home desires to something smaller or scale up your timeline. If you can wait three years, that monthly savings goal drops to $694/month.
Determine the big moves you can make. If you’re in a three bedroom apartment and can stomach the idea of scaling down to a one bedroom, how much would you save in rent? What about going from two cars down to one? If you can make it work, these sacrifices will have a huge impact on your savings goals.
Setup a separate savings account. Don’t let your dream home money mingle with your regular checking or savings account. Establish a high-yield savings account with a credit union or money market account to protect and build your stash. It’s important to have a separate account with a “hands off” attitude.
Mind the risky investment schemes. Once you have a little momentum, you might be tempted to take some of that cash and invest it in order to make it grow faster. Be very prudent about this, as investing in stocks, startups, or high-yield funds can easily decimate your savings. Be conservative.
Of course, it’s important to know how much home you want to buy when you’re saving up for your down payment. I’m happy to give you an idea what homes are selling for in your area. Feel free to get in touch any time if you have questions: Becca Linnig(480) 570-8845 or bhotaz@hotmail.com
Wednesday, December 4, 2013
Monday, August 19, 2013
Preparing to campaign
I met with a branding consultant to design a 'campaign card' that I can leave with REALTORS and affiliates I meet during the campaign process. I have another incredible marketing professional, Joe Shurtz, with Sure Spark Marketing working on my new logo. The cards will take a minimum of 2 weeks to deliver and that is AFTER we decide on a design. I am so anxious to get this process started but I will just have to contain myself a little while longer.
Saturday, August 17, 2013
SAAR Board of Directors
I learned on Tuesday (after interviewing Monday) that I was selected to move forward to round 2 of running for a position on the Board of Directors for SAAR (Scottsdale Area Association of REALTORS) by the nomination committee. This is the first time SAAR has taken applicants through an interview process and eliminated potential candidates prior to the election. The catch was that I could not tell anyone until Friday which left me with my thoughts racing about how to begin campaigning. When I can.....
Tuesday, January 29, 2013
Picking the RIGHT moving company
Tuesday, January 15, 2013
The Right Home for the Right Buyer
Tuesday, January 1, 2013
New Year New You?
Monday, January 23, 2012
Tuesday, March 8, 2011
Prohibiting fees for the placement of for sale or rent signs
An owner’s right to sell real estate is a property right, and exercising that right requires marketing and signs. In the past, homeowners associations (HOAs) have tried to limit owners from marketing their property with signs on their lawn or even in their own window.
In 2007, the law governing HOAs was changed so that they may not prohibit the indoor or outdoor display of a for sale sign by a condominium unit owner or single family homeowner on their own property. In 2010 the Arizona Association of REALTORS® fought for and successfully modified statute to prevent an HOA from prohibiting or regulating temporary open house signs, a unit owner’s or owner’s agent’s for sale or lease sign and open house hours for property that is available for sale or lease.
It was recently brought to AAR's attention that some HOAs are attempting an illegal requirement that in order to use signs in certain condominium and planned communities by unscrupulously charging a fee for the use or placement of the indoor or outdoor signs. Some examples of such practice include HOAs that prohibit the use of sign installation from any other company than their “preferred vendor” which can cost upwards of $75 for the installation.
As a result of the continued efforts by HOAs to skirt current law as well as their continued creativity in finding ways to charge fees to homeowners as it pertains to for rent and sale signs, AAR has asked two Representatives to run language that would strengthen current law and penalize those associations that violate the law. HB 2609 (homeowners' associations; signs; political; leasing) sponsored by Representative Barton passed out of the House last week with a vote of 36 ayes, 21 nays and 3 no votes. The bill has been transmitted to the Senate and assigned to the Senate Government Reform Committee. The other is HB 2717 (homeowners' associations; penalties; attorney fees) sponsored by Representative Carter. This bill was amended on the House floor on last Thursday to add language pertaining to this issue.
The language in both bills would do the following:
·Prohibit an HOA from charging a fee for the use or placement of the indoor or outdoor display of for rent, sale or lease signs and sign riders, in any combination, displayed by a property owner on their property.
·States that an HOA or managing agent that violates specific statutes governing the use of indoor or outdoor signs by a property owner on their property forfeits and extinguishes the lien rights authorized by statue against that unit or property for a period of six consecutive months from the date of the violation.
In 2007, the law governing HOAs was changed so that they may not prohibit the indoor or outdoor display of a for sale sign by a condominium unit owner or single family homeowner on their own property. In 2010 the Arizona Association of REALTORS® fought for and successfully modified statute to prevent an HOA from prohibiting or regulating temporary open house signs, a unit owner’s or owner’s agent’s for sale or lease sign and open house hours for property that is available for sale or lease.
It was recently brought to AAR's attention that some HOAs are attempting an illegal requirement that in order to use signs in certain condominium and planned communities by unscrupulously charging a fee for the use or placement of the indoor or outdoor signs. Some examples of such practice include HOAs that prohibit the use of sign installation from any other company than their “preferred vendor” which can cost upwards of $75 for the installation.
As a result of the continued efforts by HOAs to skirt current law as well as their continued creativity in finding ways to charge fees to homeowners as it pertains to for rent and sale signs, AAR has asked two Representatives to run language that would strengthen current law and penalize those associations that violate the law. HB 2609 (homeowners' associations; signs; political; leasing) sponsored by Representative Barton passed out of the House last week with a vote of 36 ayes, 21 nays and 3 no votes. The bill has been transmitted to the Senate and assigned to the Senate Government Reform Committee. The other is HB 2717 (homeowners' associations; penalties; attorney fees) sponsored by Representative Carter. This bill was amended on the House floor on last Thursday to add language pertaining to this issue.
The language in both bills would do the following:
·Prohibit an HOA from charging a fee for the use or placement of the indoor or outdoor display of for rent, sale or lease signs and sign riders, in any combination, displayed by a property owner on their property.
·States that an HOA or managing agent that violates specific statutes governing the use of indoor or outdoor signs by a property owner on their property forfeits and extinguishes the lien rights authorized by statue against that unit or property for a period of six consecutive months from the date of the violation.
Saturday, February 19, 2011
Where to Put your Investment Dollars: Real Estate as an Investment
Investors have many choices in today’s market as to where to place their investment dollars. Many choose the stock market, in part because it is the easiest place to get started as an investor. However, those wanting to build significant wealth over the long term should consider real estate. Aside from the fact that over time, as populations tend to increase, land values should naturally increase, investing in real estate has many strategic advantages not available with other investments. Some of those strategic advantages include:
Income and Appreciation
It is very possible in today’s market to find properties that will be cash flow positive. This means that the rents collected from the tenants will more than cover the costs (expenses and financing) associated with owning the property. Few stocks in today’s market pay significant dividends, most are held for future appreciation. Those stocks or bonds that are acquired for cash flow tend not to appreciate well. With real estate, investors can have the best of both worlds: income and appreciation.
Leveraged Appreciation
The basic idea of leverage is that an investor can acquire a very high valued asset for a much lower investment amount. This works in the investors favor in an appreciating market, magnifying the returns on investment. For example, an investor may purchase a million dollar property with 30% down. If that property appreciates 10%, the return on investment is 33%. In the same example, with 10% down, the investor can achieve a 100% return on investment.
Although not impossible, it can be difficult to use leverage when investing in the stock market. Using leverage to acquire stocks is referred to as “buying on margin” and at best investors may only borrow 50% of the purchase price of the stock. Investors who choose to buy on margin are also subject to margin calls (adding more funds to the brokerage account) should the value of the stock decline significantly. The Federal Reserve Board also regulates which stocks are marginable, so options may be limited.
Tax Advantages
Although Wall Street can offer investors tax advantaged vehicles like the tax free municipal bond or the ability to buy and sell stocks through an IRA or 401K, the tax advantages Wall Street can offer pale in comparison to what is available with real estate. With real estate, there are tax advantages available while both owning and selling real estate. Let’s first discuss the advantages available during the course of real estate ownership:
Mortgage Interest Expense
The government allows all of the interest associated with the financing of the property to be written off as an expense of owning the property. For many real estate investors, especially those with interest only loans, this expense deduction can be substantial.
Depreciation
Depreciation is a method for matching the costs of acquiring property over the properties estimated economic life. The IRS now requires that most properties be depreciated using the straight-line method of depreciation (27.5 years for residential properties, 39 years for commercial properties). Depreciation will act as an intangible expense and will shelter income from taxes.
Expense Deductions
Many of the costs associated with owning and managing a real estate investment, such as management fees and insurance premiums, are deductible. One deductible expense worthy of note is the travel expense. Many real estate investors acquire real estate in places they like to (or have to) visit, and each time they travel to the property, the travel costs are a deductible expense. Not a bad deal if the property happens to be in Maui, or around the corner from a relative.
Passive Losses
Due to depreciation and expense deductions, it is possible to own a property that is producing positive cash flow, but for tax purposes showing a loss. These “passive losses” are subject to certain restrictions, but in many circumstances can be used to offset passive income from another investment.
There are also specific tax breaks available when selling real estate. The tax breaks available depend on the type of real estate sold. If a primary residence is sold, Section 121 of the Internal Revenue Code allows the seller to avoid paying capital gains taxes. If an investment property is sold, Section 1031 of the Internal Revenue Code allows the seller to defer the payment of capital gains taxes. Both sections of the tax code merit further discussion:
Section 121
Upon the sale of a primary residence a taxpayer can avoid paying capital gains taxes on the first $250K of gain if single, or the first $500K of gain if married. The seller(s) must have owned and lived in the home as their primary residence for two out of the past five years.
Section 1031
Upon the sale of an investment property a taxpayer can defer the payment of capital gains taxes. In order for the entire tax liability to be deferred, the taxpayer will need to reinvest all of the sale proceeds and purchase a property of equal or greater value. The new property must be acquired within 180 days.
Many investors can use both Section 121 and Section 1031 together for maximum tax advantage. An example would be an investor who conducts a 1031 Exchange into a rental home. After establishing the property as a rental for two years, the investor moves into the property. Once the property is established as a primary residence, taxes can be avoided on the sale via Section 121.
Obviously investors have many choices available to them on Wall Street. With a little education however, many investors might find that investing in Main Street, or Elm Street, might be a better long term decision.
Income and Appreciation
It is very possible in today’s market to find properties that will be cash flow positive. This means that the rents collected from the tenants will more than cover the costs (expenses and financing) associated with owning the property. Few stocks in today’s market pay significant dividends, most are held for future appreciation. Those stocks or bonds that are acquired for cash flow tend not to appreciate well. With real estate, investors can have the best of both worlds: income and appreciation.
Leveraged Appreciation
The basic idea of leverage is that an investor can acquire a very high valued asset for a much lower investment amount. This works in the investors favor in an appreciating market, magnifying the returns on investment. For example, an investor may purchase a million dollar property with 30% down. If that property appreciates 10%, the return on investment is 33%. In the same example, with 10% down, the investor can achieve a 100% return on investment.
Although not impossible, it can be difficult to use leverage when investing in the stock market. Using leverage to acquire stocks is referred to as “buying on margin” and at best investors may only borrow 50% of the purchase price of the stock. Investors who choose to buy on margin are also subject to margin calls (adding more funds to the brokerage account) should the value of the stock decline significantly. The Federal Reserve Board also regulates which stocks are marginable, so options may be limited.
Tax Advantages
Although Wall Street can offer investors tax advantaged vehicles like the tax free municipal bond or the ability to buy and sell stocks through an IRA or 401K, the tax advantages Wall Street can offer pale in comparison to what is available with real estate. With real estate, there are tax advantages available while both owning and selling real estate. Let’s first discuss the advantages available during the course of real estate ownership:
Mortgage Interest Expense
The government allows all of the interest associated with the financing of the property to be written off as an expense of owning the property. For many real estate investors, especially those with interest only loans, this expense deduction can be substantial.
Depreciation
Depreciation is a method for matching the costs of acquiring property over the properties estimated economic life. The IRS now requires that most properties be depreciated using the straight-line method of depreciation (27.5 years for residential properties, 39 years for commercial properties). Depreciation will act as an intangible expense and will shelter income from taxes.
Expense Deductions
Many of the costs associated with owning and managing a real estate investment, such as management fees and insurance premiums, are deductible. One deductible expense worthy of note is the travel expense. Many real estate investors acquire real estate in places they like to (or have to) visit, and each time they travel to the property, the travel costs are a deductible expense. Not a bad deal if the property happens to be in Maui, or around the corner from a relative.
Passive Losses
Due to depreciation and expense deductions, it is possible to own a property that is producing positive cash flow, but for tax purposes showing a loss. These “passive losses” are subject to certain restrictions, but in many circumstances can be used to offset passive income from another investment.
There are also specific tax breaks available when selling real estate. The tax breaks available depend on the type of real estate sold. If a primary residence is sold, Section 121 of the Internal Revenue Code allows the seller to avoid paying capital gains taxes. If an investment property is sold, Section 1031 of the Internal Revenue Code allows the seller to defer the payment of capital gains taxes. Both sections of the tax code merit further discussion:
Section 121
Upon the sale of a primary residence a taxpayer can avoid paying capital gains taxes on the first $250K of gain if single, or the first $500K of gain if married. The seller(s) must have owned and lived in the home as their primary residence for two out of the past five years.
Section 1031
Upon the sale of an investment property a taxpayer can defer the payment of capital gains taxes. In order for the entire tax liability to be deferred, the taxpayer will need to reinvest all of the sale proceeds and purchase a property of equal or greater value. The new property must be acquired within 180 days.
Many investors can use both Section 121 and Section 1031 together for maximum tax advantage. An example would be an investor who conducts a 1031 Exchange into a rental home. After establishing the property as a rental for two years, the investor moves into the property. Once the property is established as a primary residence, taxes can be avoided on the sale via Section 121.
Obviously investors have many choices available to them on Wall Street. With a little education however, many investors might find that investing in Main Street, or Elm Street, might be a better long term decision.
Tuesday, September 14, 2010
The Six Worst Items To Appear On Your Credit Report
It’s easy to make mistakes or experience hardship when it comes to paying your bills. Some mistakes are so detrimental; want to avoid them at all cost. Since future creditors and lenders use your credit report to make decisions about you, it’s important to understand how each of these impact your credit file.
1. Charge-offs
Missing your payments for 6 months or more could cause your creditors to deem your account as uncollectible. When this happens, the creditors write that debt off as a loss against their income taxes. Charged-off accounts are allowed to be reported on your credit report for seven years. Just because a debt is charged off (or written off) does not mean the debt is forgiven. The money is still owed. The creditor will usually sell or assign the debt to a collection agency or a lawyer to effect collection.
Some companies continue to charge interest, but most don’t. If they do decide to keep charging interest, they have to continue to report it as income. Most companies would rather just write it off and be done with it.
Having charge offs on your credit report usually results in the consumer being denied credit by other lenders. Even worse, it can also affect the interest rate that other lenders charge on current debts even if those lenders were not impacted by the charge off themselves.
If you find yourself late on your payments, you should always try to contact the lender and let them know you are having problems meeting your financial obligations. Ignoring the situation and letting it get to charge off status always makes it worse. You can usually avoid your account being charged off by at least letting them know you intend to pay and by at least making small payments as often as you can.
It’s much easier to get a paid charge off removed from your credit report than it is an unpaid charge off. When you dispute the charge off with the credit bureaus, they have 30 days to verify the account with the creditor. If the account is paid, many times the creditor will just ignore the verification request. They really only report charge off so that they can damage your credit hoping that it will turn make you want to pay them off.
2. Collections
Not only will creditors charge-off your account after a period of non-payment, they may also hire a third-party debt collector to attempt to collect payment from you. Your credit report may or may not be updated to reflect a collection status. Sometimes the debt collector places an entry on your credit report or the original creditor places a note on your report indicating the account is in collection status.
3. Bankruptcy
Filing bankruptcy allows you to legally remove liability for some or all of your debts, depending on the type of bankruptcy you file. Your credit report will reflect each of the accounts you included in your bankruptcy. Even though the bankruptcy information can legally remain on your credit report for seven to 10 years, you can begin rebuilding your credit soon after your debts have been discharged.
4. Foreclosure
If you default on your mortgage loan, your lender will repossess your home and auction it off to recover the amount of the mortgage. This process is known as foreclosure. When your home is foreclosed it can severely damage your credit, limiting your ability to obtain new credit in the future. A foreclosure can remain on your credit report for seven years.
5. Tax liens
When you don’t pay property taxes on your home or another piece of property, the government can seize the property and auction it off for the unpaid taxes. Even if your home is foreclosed because of a tax lien, you are still responsible for the mortgage loan. Non-payment of the mortgage will also hurt your credit. Unpaid tax liens can remain on your credit report for 15 years, while paid tax liens remain for 10 years.
6. Lawsuits or judgments
Some creditors may take you to court and sue you for a debt, if other collections fail. If the lawsuit is accurate and a judgment is entered against you, it can remain on your credit report for 7 years from the date of filing, even after you satisfy the judgment.
1. Charge-offs
Missing your payments for 6 months or more could cause your creditors to deem your account as uncollectible. When this happens, the creditors write that debt off as a loss against their income taxes. Charged-off accounts are allowed to be reported on your credit report for seven years. Just because a debt is charged off (or written off) does not mean the debt is forgiven. The money is still owed. The creditor will usually sell or assign the debt to a collection agency or a lawyer to effect collection.
Some companies continue to charge interest, but most don’t. If they do decide to keep charging interest, they have to continue to report it as income. Most companies would rather just write it off and be done with it.
Having charge offs on your credit report usually results in the consumer being denied credit by other lenders. Even worse, it can also affect the interest rate that other lenders charge on current debts even if those lenders were not impacted by the charge off themselves.
If you find yourself late on your payments, you should always try to contact the lender and let them know you are having problems meeting your financial obligations. Ignoring the situation and letting it get to charge off status always makes it worse. You can usually avoid your account being charged off by at least letting them know you intend to pay and by at least making small payments as often as you can.
It’s much easier to get a paid charge off removed from your credit report than it is an unpaid charge off. When you dispute the charge off with the credit bureaus, they have 30 days to verify the account with the creditor. If the account is paid, many times the creditor will just ignore the verification request. They really only report charge off so that they can damage your credit hoping that it will turn make you want to pay them off.
2. Collections
Not only will creditors charge-off your account after a period of non-payment, they may also hire a third-party debt collector to attempt to collect payment from you. Your credit report may or may not be updated to reflect a collection status. Sometimes the debt collector places an entry on your credit report or the original creditor places a note on your report indicating the account is in collection status.
3. Bankruptcy
Filing bankruptcy allows you to legally remove liability for some or all of your debts, depending on the type of bankruptcy you file. Your credit report will reflect each of the accounts you included in your bankruptcy. Even though the bankruptcy information can legally remain on your credit report for seven to 10 years, you can begin rebuilding your credit soon after your debts have been discharged.
4. Foreclosure
If you default on your mortgage loan, your lender will repossess your home and auction it off to recover the amount of the mortgage. This process is known as foreclosure. When your home is foreclosed it can severely damage your credit, limiting your ability to obtain new credit in the future. A foreclosure can remain on your credit report for seven years.
5. Tax liens
When you don’t pay property taxes on your home or another piece of property, the government can seize the property and auction it off for the unpaid taxes. Even if your home is foreclosed because of a tax lien, you are still responsible for the mortgage loan. Non-payment of the mortgage will also hurt your credit. Unpaid tax liens can remain on your credit report for 15 years, while paid tax liens remain for 10 years.
6. Lawsuits or judgments
Some creditors may take you to court and sue you for a debt, if other collections fail. If the lawsuit is accurate and a judgment is entered against you, it can remain on your credit report for 7 years from the date of filing, even after you satisfy the judgment.
Thursday, August 5, 2010
FHA's Implementation of Premium Changes
FHA has informed the lending industry of their intent to make changes to the Mortgage Insurance Premiums charged to borrowers when using FHA financing. Note, the effective date for the changes to the upfront and annual premiums will be September 7, 2010.
Please see attached letter from Commissioner Stevens regarding his intention to decrease the UFMIP from 2.25% to 1.0% and increase the monthly Mortgage Insurance from 0.55% to between .80%-.90% annually.
The net-affect to a borrower who is requesting maximum financing from FHA is an increase in their monthly payment of approximately $22 per $100,000 borrowed at today’s interest rates.
Please see attached letter from Commissioner Stevens regarding his intention to decrease the UFMIP from 2.25% to 1.0% and increase the monthly Mortgage Insurance from 0.55% to between .80%-.90% annually.
The net-affect to a borrower who is requesting maximum financing from FHA is an increase in their monthly payment of approximately $22 per $100,000 borrowed at today’s interest rates.
Wednesday, July 28, 2010
Six New Arizona Real Estate Laws Take Effect
NEWS RELEASE Contact: July 27, 2010 Ron LaMee (602) 248-7787
PHOENIX – The Arizona Association of REALTORS® said six new state laws that take effect Thursday will resolve issues often faced by both homeowners and the real estate community. One new law will have an impact on the placement of “for sale” signs at properties covered by homeowner and condo associations. The associations will no longer be allowed to ban temporary open house signs, except in common areas. Another new law requires swimming pools and spas to be included in the list of items checked during a home inspection.
The Arizona Association of REALTORS® supported these changes during the recent legislative session. “We listened to our members about the problems they were facing in representing buyers and sellers in real estate transactions,” said Tom Farley, CEO of the Arizona Association of REALTORS®. “We are pleased lawmakers listened to us to resolve issues hurting both homeowners and REALTORS. These new laws will make a big difference for everyone involved.”
Here is a summary of the six bills that take effect July 29: HB2345: HOA; Condos; For Sale Signs – Homeowner and condo associations are prohibited from banning the display of temporary open house signs, except in common areas. The associations also are prohibited from regulating a property owner’s “for sale” sign that conforms
to the industry standards and are owned or used by the seller or the seller’s agent, nor can they require a particular sign. Further, they may not regulate open house hours except for restricting the hours to after 8 a.m. or before 6 p.m. Nor can they prohibit display of “for lease” signs unless the association does not allow leasing of units.
HB2371: Home Inspections – Swimming pools and spas are included in the list of items that a certified home inspector is to examine during a home inspection.
HB2450: Water and Wastewater Fees and Charges – Prohibits a municipality from refusing service or requiring payment for unpaid water and wastewater services from anyone other than the person contracted with the municipality.
HB2766: Tenant Notice; Foreclosures – If the landlord of a residential property of not more than four connected units that is under foreclosure leases a unit, the landlord must provide each tenant with written notice of possible foreclosure. The form of the notice is prescribed and includes, if known, the date, time and place of the foreclosure sale. If a landlord fails to comply with the notice requirement, the tenant may deliver a notice of breach of agreement and recover damages and obtain injunctive relief.
HB2768: Real Property Transfer Fee Covenants – Prohibits private transfer fees paid to developers or third-party companies on the sale of real property. This legislation targets a specific and new type of transfer fee, not those paid by homeowner associations. Government- imposed transfer fees are already prohibited by the 2008 constitutional amendment drafted by AAR and passed by the voters.
SB1219: Real Estate Licensee - Conforms the time a real estate license is valid to the time period for completing education requirements (two years). The law allows a licensee to cancel his/her license, defines business broker, and requires a valid fingerprint clearance card before applying for a license.
### The Arizona Association of REALTORS is the largest professional trade association in the state. The association is comprised of individuals involved in the real estate industry, allied industries and firms. The association’s nearly 45,000 members represent more than half of the real estate licenses in Arizona. For more information about the Arizona Association of REALTORS, including home buying and selling points, visitwww.aaronline. com
PHOENIX – The Arizona Association of REALTORS® said six new state laws that take effect Thursday will resolve issues often faced by both homeowners and the real estate community. One new law will have an impact on the placement of “for sale” signs at properties covered by homeowner and condo associations. The associations will no longer be allowed to ban temporary open house signs, except in common areas. Another new law requires swimming pools and spas to be included in the list of items checked during a home inspection.
The Arizona Association of REALTORS® supported these changes during the recent legislative session. “We listened to our members about the problems they were facing in representing buyers and sellers in real estate transactions,” said Tom Farley, CEO of the Arizona Association of REALTORS®. “We are pleased lawmakers listened to us to resolve issues hurting both homeowners and REALTORS. These new laws will make a big difference for everyone involved.”
Here is a summary of the six bills that take effect July 29: HB2345: HOA; Condos; For Sale Signs – Homeowner and condo associations are prohibited from banning the display of temporary open house signs, except in common areas. The associations also are prohibited from regulating a property owner’s “for sale” sign that conforms
to the industry standards and are owned or used by the seller or the seller’s agent, nor can they require a particular sign. Further, they may not regulate open house hours except for restricting the hours to after 8 a.m. or before 6 p.m. Nor can they prohibit display of “for lease” signs unless the association does not allow leasing of units.
HB2371: Home Inspections – Swimming pools and spas are included in the list of items that a certified home inspector is to examine during a home inspection.
HB2450: Water and Wastewater Fees and Charges – Prohibits a municipality from refusing service or requiring payment for unpaid water and wastewater services from anyone other than the person contracted with the municipality.
HB2766: Tenant Notice; Foreclosures – If the landlord of a residential property of not more than four connected units that is under foreclosure leases a unit, the landlord must provide each tenant with written notice of possible foreclosure. The form of the notice is prescribed and includes, if known, the date, time and place of the foreclosure sale. If a landlord fails to comply with the notice requirement, the tenant may deliver a notice of breach of agreement and recover damages and obtain injunctive relief.
HB2768: Real Property Transfer Fee Covenants – Prohibits private transfer fees paid to developers or third-party companies on the sale of real property. This legislation targets a specific and new type of transfer fee, not those paid by homeowner associations. Government- imposed transfer fees are already prohibited by the 2008 constitutional amendment drafted by AAR and passed by the voters.
SB1219: Real Estate Licensee - Conforms the time a real estate license is valid to the time period for completing education requirements (two years). The law allows a licensee to cancel his/her license, defines business broker, and requires a valid fingerprint clearance card before applying for a license.
### The Arizona Association of REALTORS is the largest professional trade association in the state. The association is comprised of individuals involved in the real estate industry, allied industries and firms. The association’s nearly 45,000 members represent more than half of the real estate licenses in Arizona. For more information about the Arizona Association of REALTORS, including home buying and selling points, visitwww.aaronline. com
Thursday, June 24, 2010
One more reason short sale makes sense instead of foreclosure
Fannie Mae Revises Foreclosure Guidelines
On April 14, 2010, Fannie Mae made changes to the timeframes required after a “PRE-Foreclosure Event” before someone could obtain new Fannie Mae financing. They have stated that since there are a variety of foreclosure alternatives available to borrowers who are having difficulty making their mortgage payments that the changes would highlight the importance of borrowers working with their servicers to avoid foreclosure. As a follow-up to that Announcement, yesterday Fannie Mae modified the waiting period that must elapse before a borrower is eligible for a new mortgage loan after a “foreclosure.” The combination of the waiting period policies for foreclosures and preforeclosure events continue to favor borrowers who work with their servicers to avoid foreclosure by allowing these borrowers to be eligible for a future Fannie Mae loan in a shorter period of time.
Under the new guidance, unless the foreclosure was the result of documented extenuating circumstances*, which only requires a three-year waiting period (with additional requirements of minimum of 10% down, primary residence purchase or rate/term refinance for all occupancy types), ALL borrowers will now be required to meet a seven-year waiting period after a prior foreclosure to be eligible for a new mortgage loan eligible for sale to Fannie Mae.
* Fannie Mae Definition of Extenuation Circumstances: These are nonrecurring events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations. If a borrower claims that derogatory information is the result of extenuating circumstances, the lender must substantiate the borrower’s claim. Examples of documentation that can be used to support extenuating circumstances include documents that confirm the event (such as a copy of a divorce decree, medical reports or bills, notice of job layoff, job severance papers, etc.) and documents that illustrate factors that contributed to the borrower’s inability to resolve the problems that resulted from the event (such as a copy of insurance papers or claim settlements, property listing agreements, lease agreements, tax returns (covering the periods prior to, during, and after a loss of employment), etc.). The lender must obtain a letter from the borrower explaining the relevance of the documentation. The letter must support the claims of extenuating circumstances, confirm the nature of the event that led to the bankruptcy or foreclosure-related action, and illustrate the borrower had no reasonable options other than to default on their financial obligations.
On April 14, 2010, Fannie Mae made changes to the timeframes required after a “PRE-Foreclosure Event” before someone could obtain new Fannie Mae financing. They have stated that since there are a variety of foreclosure alternatives available to borrowers who are having difficulty making their mortgage payments that the changes would highlight the importance of borrowers working with their servicers to avoid foreclosure. As a follow-up to that Announcement, yesterday Fannie Mae modified the waiting period that must elapse before a borrower is eligible for a new mortgage loan after a “foreclosure.” The combination of the waiting period policies for foreclosures and preforeclosure events continue to favor borrowers who work with their servicers to avoid foreclosure by allowing these borrowers to be eligible for a future Fannie Mae loan in a shorter period of time.
Under the new guidance, unless the foreclosure was the result of documented extenuating circumstances*, which only requires a three-year waiting period (with additional requirements of minimum of 10% down, primary residence purchase or rate/term refinance for all occupancy types), ALL borrowers will now be required to meet a seven-year waiting period after a prior foreclosure to be eligible for a new mortgage loan eligible for sale to Fannie Mae.
* Fannie Mae Definition of Extenuation Circumstances: These are nonrecurring events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations. If a borrower claims that derogatory information is the result of extenuating circumstances, the lender must substantiate the borrower’s claim. Examples of documentation that can be used to support extenuating circumstances include documents that confirm the event (such as a copy of a divorce decree, medical reports or bills, notice of job layoff, job severance papers, etc.) and documents that illustrate factors that contributed to the borrower’s inability to resolve the problems that resulted from the event (such as a copy of insurance papers or claim settlements, property listing agreements, lease agreements, tax returns (covering the periods prior to, during, and after a loss of employment), etc.). The lender must obtain a letter from the borrower explaining the relevance of the documentation. The letter must support the claims of extenuating circumstances, confirm the nature of the event that led to the bankruptcy or foreclosure-related action, and illustrate the borrower had no reasonable options other than to default on their financial obligations.
Tuesday, June 15, 2010
Heads-up! Buyer credit changes could sabotage your closing.
Financing Alert: Fannie Mae Loan Quality Initiative
June 1, 2010 marked the beginning of Fannie Mae's "Loan Quality Initiative." If you're not familiar with the initiative, now would be a good time to become familiar with it. Why? Well, one of the provisions in the initiative is "credit re-verification" on the day of funding. If your borrower's credit changes more than 2%, it's back to underwriting for approval! You need to know how to help buyers protect their financing by making smart moves between first and second verification. There are several other important considerations to the initiative as well.
The following articles will help you wrap your head around Fannie Mae's LQI:
Fannie Mae's loan quality initiative: another potential snag with financing
http://bit.ly/cX5Y6P
(BostonGlobe.com)
Borrowers: Beware the Second Credit Report
http://bit.ly/c9hCI6
(SmartMoney.com)
Fannie Mae "Loan Quality Initiative" begins June 1, 2010. How will this affect home buyers?
http://bit.ly/9cevT7
(Amy Jones, RE/MAX Excalibur, Arizona)
For the fine print, don't miss Fannie Mae's page dedicated to the initiative:
https://www.efanniemae.com/sf/lqi/index.jsp
June 1, 2010 marked the beginning of Fannie Mae's "Loan Quality Initiative." If you're not familiar with the initiative, now would be a good time to become familiar with it. Why? Well, one of the provisions in the initiative is "credit re-verification" on the day of funding. If your borrower's credit changes more than 2%, it's back to underwriting for approval! You need to know how to help buyers protect their financing by making smart moves between first and second verification. There are several other important considerations to the initiative as well.
The following articles will help you wrap your head around Fannie Mae's LQI:
Fannie Mae's loan quality initiative: another potential snag with financing
http://bit.ly/cX5Y6P
(BostonGlobe.com)
Borrowers: Beware the Second Credit Report
http://bit.ly/c9hCI6
(SmartMoney.com)
Fannie Mae "Loan Quality Initiative" begins June 1, 2010. How will this affect home buyers?
http://bit.ly/9cevT7
(Amy Jones, RE/MAX Excalibur, Arizona)
For the fine print, don't miss Fannie Mae's page dedicated to the initiative:
https://www.efanniemae.com/sf/lqi/index.jsp
Monday, May 31, 2010
Should you convert your home to rental property?
Suppose you move to another house, but have difficulty selling your previous home. If it looks like it may take a while to sell that house, does it make financial sense to rent it? In addition to the economics of the situation, there are several tax factors you should consider first.
When you rent your home, you must report the rental income on your tax return. However, you can deduct the expenses of the home from that income, including utilities, operating expenses, repairs and maintenance, and depreciation. You can fully offset the income with these expenses. Due to the passive activity loss rules, however, losses can only be used to offset other passive income, with any excess losses carried forward to future years. That said, a favorable exception allows an individual with an adjusted gross income (AGI) of $100,000 or less to deduct up to $25,000 of passive losses against other income, as long as they are actively involved in the property's management. This deduction phases out with AGI between $100,000 and $150,000.
Pay attention to how long you rent your home, especially if you expect a profit from the sale. In general, you don't have to pay income taxes on up to $250,000 of gain if you are single or $500,000 of gain if you are married filing jointly. However, to qualify for the exemption, you must use the home as your principal residence in at least two of the five years preceding the sale. Even if you qualify for the exemption, the exclusion of the gain does not apply to the extent of any depreciation allowable with respect to the rental or business use of the home for periods after May 6, 1997. A maximum tax rate of 25 percent applies to the gain attributable to depreciation deductions.
If you sell the home at a loss, you can only deduct the loss if you prove the home was permanently converted to income-producing property. Your basis for calculating the loss is the lesser of your cost basis or the property's fair market value when it was converted to rental property. For instance, if you bought a home for $250,000, converted it to rental property when it was worth $225,000, claimed $10,000 of depreciation deduction, and sold it for $200,000, your loss would be $15,000 -- not $50,000.
Contact your CPA for details on how this will impact you.
When you rent your home, you must report the rental income on your tax return. However, you can deduct the expenses of the home from that income, including utilities, operating expenses, repairs and maintenance, and depreciation. You can fully offset the income with these expenses. Due to the passive activity loss rules, however, losses can only be used to offset other passive income, with any excess losses carried forward to future years. That said, a favorable exception allows an individual with an adjusted gross income (AGI) of $100,000 or less to deduct up to $25,000 of passive losses against other income, as long as they are actively involved in the property's management. This deduction phases out with AGI between $100,000 and $150,000.
Pay attention to how long you rent your home, especially if you expect a profit from the sale. In general, you don't have to pay income taxes on up to $250,000 of gain if you are single or $500,000 of gain if you are married filing jointly. However, to qualify for the exemption, you must use the home as your principal residence in at least two of the five years preceding the sale. Even if you qualify for the exemption, the exclusion of the gain does not apply to the extent of any depreciation allowable with respect to the rental or business use of the home for periods after May 6, 1997. A maximum tax rate of 25 percent applies to the gain attributable to depreciation deductions.
If you sell the home at a loss, you can only deduct the loss if you prove the home was permanently converted to income-producing property. Your basis for calculating the loss is the lesser of your cost basis or the property's fair market value when it was converted to rental property. For instance, if you bought a home for $250,000, converted it to rental property when it was worth $225,000, claimed $10,000 of depreciation deduction, and sold it for $200,000, your loss would be $15,000 -- not $50,000.
Contact your CPA for details on how this will impact you.
Wednesday, May 26, 2010
FHA 90 day flip rule
Question: My FHA buyer's close of escrow is delayed because the lender is asking for the home inspection and information on the seller's LLC. Why?
Answer: We will assume the contract was executed within the 90 days of the seller acquiring the property. In February of this year, The Waiver of Requirements of 24 CFR 203.37 amended the FHA 90 day flipping rule, or flopping as it is now called by some underwriters. To keep things spicy, it was not amended in a mandated FHA mortgagee letter. Therefore some of the lenders are not as excited about originating financing within the 90 days. Keep in mind this is brand spanking new, and the banks that embraced it early on, are getting their hands slapped from HUD. In April, second appraisals were rare. But today, more often than not, it will be required. If the sales price is 20 percent or more over the seller's acquisition cost, the lender is required to get a property inspection. The thought process behind this guideline is that the home was purchased at a deep discount, therefore the seller should spend some bucks to gussie it up. And it better be darn next to perfect. The lender may require any and all repairs, including minor cosmetic items to be completed before close of escrow, even if your buyer could care less, and the appraisal did not mention anything about a stove and tip-over protection. A second appraisal is typical to cover the Bank's "you know what" to validate the purchase price. The second part of question can make you cross-eyed. FHA is scrutinizing the "Identity of Interest," between the buyer, seller and other parties participating in the sales transaction. And we aren't talking about being personally related. One bank informed us that if the property is owned by an investor, an LLC, and the selling real estate brokerage is an LLC, and if there is any ownership between the two, then FHA will not do the loan until after the 90 days is up. So, just to be clear, it is not okay during the first 90 days but the 91st day it becomes acceptable. This is one bank's interpretation of the ruling. Regardless, documentation on the LLC will be required. HUD is closely analyzing the purchases of these flopped properties. Be prepared for additional documentation and second appraisals. FYI: If your seller purchased the property under his name, then transferred it to an LLC at a later time, the date of the deed transfer, not the purchase, could start the clock for the 90 day flipping/flopping guidelines.
Answer: We will assume the contract was executed within the 90 days of the seller acquiring the property. In February of this year, The Waiver of Requirements of 24 CFR 203.37 amended the FHA 90 day flipping rule, or flopping as it is now called by some underwriters. To keep things spicy, it was not amended in a mandated FHA mortgagee letter. Therefore some of the lenders are not as excited about originating financing within the 90 days. Keep in mind this is brand spanking new, and the banks that embraced it early on, are getting their hands slapped from HUD. In April, second appraisals were rare. But today, more often than not, it will be required. If the sales price is 20 percent or more over the seller's acquisition cost, the lender is required to get a property inspection. The thought process behind this guideline is that the home was purchased at a deep discount, therefore the seller should spend some bucks to gussie it up. And it better be darn next to perfect. The lender may require any and all repairs, including minor cosmetic items to be completed before close of escrow, even if your buyer could care less, and the appraisal did not mention anything about a stove and tip-over protection. A second appraisal is typical to cover the Bank's "you know what" to validate the purchase price. The second part of question can make you cross-eyed. FHA is scrutinizing the "Identity of Interest," between the buyer, seller and other parties participating in the sales transaction. And we aren't talking about being personally related. One bank informed us that if the property is owned by an investor, an LLC, and the selling real estate brokerage is an LLC, and if there is any ownership between the two, then FHA will not do the loan until after the 90 days is up. So, just to be clear, it is not okay during the first 90 days but the 91st day it becomes acceptable. This is one bank's interpretation of the ruling. Regardless, documentation on the LLC will be required. HUD is closely analyzing the purchases of these flopped properties. Be prepared for additional documentation and second appraisals. FYI: If your seller purchased the property under his name, then transferred it to an LLC at a later time, the date of the deed transfer, not the purchase, could start the clock for the 90 day flipping/flopping guidelines.
Wednesday, May 5, 2010
Phoenix Metro Area March Home Sales
Phoenix region home sales held at a three-year high in March as a broader group of buyers entered the market, resulting in a slightly smaller share of sales to investors. For the second month in a row there were strong signs of price stability, including the first year-over-year increase in the region’s overall median sale price in more than three years, a real estate information service reported.
Buyers paid a median $135,000 last month for all new and resale houses and condos sold in the Phoenix metro area, flat compared with February but up 3.9 percent from $129,000 a year ago, according to MDA DataQuick of San Diego, which tracks real estate trends nationally via public property records.
Last month’s year-over-year increase is the first since the Phoenix region’s median sale price rose 1.4 percent in January 2007, to $255,000. Prior to this February, when the median was the same as a year earlier, the median had fallen on a year-over-year basis for 36 consecutive months.
The March median was 48.9 percent short of the peak $264,100 median reached in June 2006. Last month’s figure was also lower than the 12-month high for the median, which was $142,700 last November. The post-housing-boom low for the median was $125,000 in April 2009.
The median paid last month for resale single-family detached houses was also $135,000, up 2.4 percent from $131,900 in February and up 12.5 percent from a year earlier. It was the second consecutive month to post a year-over-year gain for the resale house median. However, last month’s figure was still 49.6 percent lower than the $268,000 peak in June 2006.
The median paid for resale condos in March was $94,000, up 2.7 percent from February but down 14.2 percent from a year earlier – the smallest annual decline in 19 months. The March resale condo median was 49.6 percent lower than the $186,500 peak in April 2007.
An alternative price gauge rose for the second consecutive month in March: The median paid per square foot for resale single-family (detached) houses was $75, up from $73 in February and up 15.4 percent from a year earlier. However, the figure remained 56.1 percent below the $171 peak in June 2006.
There are multiple reasons for recent year-over-year gains in various median sale prices. While the increases do indicate widening price stability, they also reflect significant changes in the types of homes selling this year compared with last. For example, there has been a substantial decline in foreclosure resales. Last month they represented 51.5 percent of the resale market, compared with 66.2 percent a year ago. In the past, foreclosed properties tended to sell at a discount and were located in some of the most affordable areas. Over the past year lenders have increasingly steered distressed borrowers into foreclosures alternative such as short sales and loan modifications.
In addition, today a smaller percentage of sales occurs below $100,000. Last month 30.6 percent of homes sold for less than $100,000, compared with 35.6 percent a year earlier. The combination of lower prices, lower mortgage rates and a soon-to-expire federal tax credit has stoked more sales in mid-to higher-priced neighborhoods, which also puts upward pressure on the median, which is the point where half of the homes sold for more and half for less.
It’s no surprise the median sale price didn’t budge between February and March: Foreclosure resales held steady, and there was little change, month-to-month, in the distribution of sales across the home price spectrum. For example, last month 28.4 percent of sales were over $200,000, compared with 28.0 percent in February. Moreover, the percentage of sales that were resale houses, resale condos and newly built homes changed little last month compared with February.
Where prices head from here depends largely on the economy’s ability to create jobs, as well as on the magnitude and timing of future foreclosures and the market’s response to waning government stimulus.
Last month a total of 9,626 new and resale houses and condos closed escrow in the combined Maricopa-Pinal counties metropolitan area, up 41.1 percent from the month before and up 16.0 percent from a year earlier.
A rise in sales between February and March is normal for the season, with that gain averaging 29.0 percent since 1994, when DataQuick’s complete Phoenix-area statistics begin.
March’s total sales were the highest for that month since March 2007, when 10,712 homes sold. Total resales – houses and condos combined – were the highest for a March since 2006.
Existing (not new) condo sales saw the biggest annual gain last month, rising 117.3 percent from a year ago. In March, condos were 12.4 percent of total sales, compared with 6.6 percent a year ago.
The number of newly built homes sold in March rose 40.7 percent compared with February but fell 5.0 percent from a year ago to the lowest level for a March in more than a decade. Builders continue to struggle to compete with low-cost foreclosures and other distressed sales.
Much of the housing demand still comes from investors and first-time buyers.
In March, 45.6 percent of all Phoenix-area home purchase loans were government-insured FHA mortgages, a popular choice for first-time buyers, according to an analysis of public property records. Absentee buyers purchased 39.8 percent of all homes sold in March, down from 41.2 percent in February, and paid a median $118,000 last month. Absentee buyers are mainly investors, but include second-home buyers and others who indicate at the time of sale that the property tax bill will go to a different address.
Buyers who appear to have used cash to purchase their homes accounted for 39.7 percent of all March sales, down from 43.6 percent in February. Last month’s cash buyers paid a median of $109,000. Specifically, these were transactions where there was no indication of a purchase loan recorded at the time of sale. Some of these “cash” buyers could have used alternative financing arrangements outside of a typical, recorded purchase mortgage, and in some cases these buyers might be taking out mortgages after their purchases. All-cash deals have become popular in many Western markets where prices have dropped sharply, luring investor buyers who don’t always qualify for traditional mortgages. Moreover, sellers favor the relative speed and certainty of all-cash transactions.
Last month about 3.5 percent of all homes sold had been “flipped,” meaning they had previously been sold on the open market between three weeks to six months prior. A year ago it was 1.4 percent.
Foreclosure activity rose in March: The 5,962 single-family house and condo units foreclosed on in the region represented a 28.6 percent increase from February and a 52.1 percent gain from a year earlier. For the first quarter (January through March) of this year, the number of housing units lost to foreclosure fell 2.4 percent from fourth quarter 2009 but rose 7.8 percent from first quarter 2009.
The foreclosure figures are based on the number of trustees deeds filed with county recorder offices. The document signals that a home was lost to foreclosure. The foreclosure totals can include units that the county assessor has designated as condos, but are currently used as apartments (e.g. a 100-unit complex designated as condos but used as apartments could be foreclosed on and those units would be reflected in the foreclosure total for that month). For this reason and others, the number of foreclosure filings has seesawed month-to-month over the past year, and a single month’s increase or decline doesn’t necessarily indicate the beginning of a lasting trend.
Phoenix MSA Home Sales
Number of sales Mar-09 Mar-10 Yr/yr%Chng
Resale houses 6,794 7,524 10.7%
Resale condos 549 1193 117.3%
New homes 957 909 -5.0%
All homes 8,300 9,626 16.0%
Median sale price Mar-09 Mar-10 Yr/yr%Chng
Resale houses $120,000 $135,000 12.5%
Resale condos $109,500 $94,000 -14.2%
New homes $194,000 $191,981 -1.0%
All homes $129,900 $135,000 3.9%
Media calls: Andrew LePage (916) 456-7157
Copyright 2010 MDA DataQuick Information Systems. All rights reserved.
Buyers paid a median $135,000 last month for all new and resale houses and condos sold in the Phoenix metro area, flat compared with February but up 3.9 percent from $129,000 a year ago, according to MDA DataQuick of San Diego, which tracks real estate trends nationally via public property records.
Last month’s year-over-year increase is the first since the Phoenix region’s median sale price rose 1.4 percent in January 2007, to $255,000. Prior to this February, when the median was the same as a year earlier, the median had fallen on a year-over-year basis for 36 consecutive months.
The March median was 48.9 percent short of the peak $264,100 median reached in June 2006. Last month’s figure was also lower than the 12-month high for the median, which was $142,700 last November. The post-housing-boom low for the median was $125,000 in April 2009.
The median paid last month for resale single-family detached houses was also $135,000, up 2.4 percent from $131,900 in February and up 12.5 percent from a year earlier. It was the second consecutive month to post a year-over-year gain for the resale house median. However, last month’s figure was still 49.6 percent lower than the $268,000 peak in June 2006.
The median paid for resale condos in March was $94,000, up 2.7 percent from February but down 14.2 percent from a year earlier – the smallest annual decline in 19 months. The March resale condo median was 49.6 percent lower than the $186,500 peak in April 2007.
An alternative price gauge rose for the second consecutive month in March: The median paid per square foot for resale single-family (detached) houses was $75, up from $73 in February and up 15.4 percent from a year earlier. However, the figure remained 56.1 percent below the $171 peak in June 2006.
There are multiple reasons for recent year-over-year gains in various median sale prices. While the increases do indicate widening price stability, they also reflect significant changes in the types of homes selling this year compared with last. For example, there has been a substantial decline in foreclosure resales. Last month they represented 51.5 percent of the resale market, compared with 66.2 percent a year ago. In the past, foreclosed properties tended to sell at a discount and were located in some of the most affordable areas. Over the past year lenders have increasingly steered distressed borrowers into foreclosures alternative such as short sales and loan modifications.
In addition, today a smaller percentage of sales occurs below $100,000. Last month 30.6 percent of homes sold for less than $100,000, compared with 35.6 percent a year earlier. The combination of lower prices, lower mortgage rates and a soon-to-expire federal tax credit has stoked more sales in mid-to higher-priced neighborhoods, which also puts upward pressure on the median, which is the point where half of the homes sold for more and half for less.
It’s no surprise the median sale price didn’t budge between February and March: Foreclosure resales held steady, and there was little change, month-to-month, in the distribution of sales across the home price spectrum. For example, last month 28.4 percent of sales were over $200,000, compared with 28.0 percent in February. Moreover, the percentage of sales that were resale houses, resale condos and newly built homes changed little last month compared with February.
Where prices head from here depends largely on the economy’s ability to create jobs, as well as on the magnitude and timing of future foreclosures and the market’s response to waning government stimulus.
Last month a total of 9,626 new and resale houses and condos closed escrow in the combined Maricopa-Pinal counties metropolitan area, up 41.1 percent from the month before and up 16.0 percent from a year earlier.
A rise in sales between February and March is normal for the season, with that gain averaging 29.0 percent since 1994, when DataQuick’s complete Phoenix-area statistics begin.
March’s total sales were the highest for that month since March 2007, when 10,712 homes sold. Total resales – houses and condos combined – were the highest for a March since 2006.
Existing (not new) condo sales saw the biggest annual gain last month, rising 117.3 percent from a year ago. In March, condos were 12.4 percent of total sales, compared with 6.6 percent a year ago.
The number of newly built homes sold in March rose 40.7 percent compared with February but fell 5.0 percent from a year ago to the lowest level for a March in more than a decade. Builders continue to struggle to compete with low-cost foreclosures and other distressed sales.
Much of the housing demand still comes from investors and first-time buyers.
In March, 45.6 percent of all Phoenix-area home purchase loans were government-insured FHA mortgages, a popular choice for first-time buyers, according to an analysis of public property records. Absentee buyers purchased 39.8 percent of all homes sold in March, down from 41.2 percent in February, and paid a median $118,000 last month. Absentee buyers are mainly investors, but include second-home buyers and others who indicate at the time of sale that the property tax bill will go to a different address.
Buyers who appear to have used cash to purchase their homes accounted for 39.7 percent of all March sales, down from 43.6 percent in February. Last month’s cash buyers paid a median of $109,000. Specifically, these were transactions where there was no indication of a purchase loan recorded at the time of sale. Some of these “cash” buyers could have used alternative financing arrangements outside of a typical, recorded purchase mortgage, and in some cases these buyers might be taking out mortgages after their purchases. All-cash deals have become popular in many Western markets where prices have dropped sharply, luring investor buyers who don’t always qualify for traditional mortgages. Moreover, sellers favor the relative speed and certainty of all-cash transactions.
Last month about 3.5 percent of all homes sold had been “flipped,” meaning they had previously been sold on the open market between three weeks to six months prior. A year ago it was 1.4 percent.
Foreclosure activity rose in March: The 5,962 single-family house and condo units foreclosed on in the region represented a 28.6 percent increase from February and a 52.1 percent gain from a year earlier. For the first quarter (January through March) of this year, the number of housing units lost to foreclosure fell 2.4 percent from fourth quarter 2009 but rose 7.8 percent from first quarter 2009.
The foreclosure figures are based on the number of trustees deeds filed with county recorder offices. The document signals that a home was lost to foreclosure. The foreclosure totals can include units that the county assessor has designated as condos, but are currently used as apartments (e.g. a 100-unit complex designated as condos but used as apartments could be foreclosed on and those units would be reflected in the foreclosure total for that month). For this reason and others, the number of foreclosure filings has seesawed month-to-month over the past year, and a single month’s increase or decline doesn’t necessarily indicate the beginning of a lasting trend.
Phoenix MSA Home Sales
Number of sales Mar-09 Mar-10 Yr/yr%Chng
Resale houses 6,794 7,524 10.7%
Resale condos 549 1193 117.3%
New homes 957 909 -5.0%
All homes 8,300 9,626 16.0%
Median sale price Mar-09 Mar-10 Yr/yr%Chng
Resale houses $120,000 $135,000 12.5%
Resale condos $109,500 $94,000 -14.2%
New homes $194,000 $191,981 -1.0%
All homes $129,900 $135,000 3.9%
Media calls: Andrew LePage (916) 456-7157
Copyright 2010 MDA DataQuick Information Systems. All rights reserved.
Saturday, January 30, 2010
GREAT NEWS FOR INVESTORS!!
HUD announced that it will lift the 90 Day Seasoning Rule for FHA financing, starting Feb 1, 2010. What does this mean to you? You can buy a home, fix it, and sell it to a FHA buyer, without having to own it for 90 days.
There are some restrictions that apply, so be sure to check with your FHA lender or broker.
There are some restrictions that apply, so be sure to check with your FHA lender or broker.
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