Well maintained 4 bedroom 2 bath with sparkling play pool. short sale. tiled flooring in kitchen and breakfast area. formal living room, plus a family room. plantation sh...
Buyer walked. back on the market. all paperwork already submitted to bank. virtually new 4br/2.5ba plus spacious loft area, and loaded with upgrades. designer satin paint...
Spacious 3 bedroom/2 bath home on corner cul de sac lot. kitchen with refrigerator and built-in microwave. eat-in kitchen/dining area. large bonus room. pleanty of storag...
Well, 2011 is almost over, but the number of distressed properties on the market remains high. In most areas of the Southeast Valley, distressed properties dominate, but there is hope for under water homeowners. The number of foreclosures on the market has been dwindling, as banks try to vacate their inventory through short sales instead. It is certainly more efficient, and more cost effective for banks to sell their inventory this way, as the sale price of a short sale usually exceeds that of a foreclosed home.
Banks must be getting the message becausae the statistics bear this out. Take a look at the number of foreclosure vs. short sale transactions in the below Southeast Valley zip codes.
85249: Short sales=149 Foreclosure sales=21
85286: Short sales=103 Foreclosure sales=20
85296: Short sales=127 Foreclosure sales=18
The market has seen a steady decline in inventory levels since the beginning of the year, no doubt helped by the movement of the short sales. While inventory levels are still high, the levels are declining.
Nationwide, foreclosure sales are accellerating as well. Time on the market for a move-in ready foreclosure was 10.1 weeks in November, the lowest in 15 months. For a damaged foreclosure, the time was even less, at 9 weeks, also the lowest in 15 months. All signs seem to be pointing to a gradual housing recovery.
For more information on the accelerated sales of foreclosures, see the link below:
With some of the lowest mortgage interest rates in 40 years, and prices in some areas of the Valley down 60% from their highs, is there any reason NOT to buy a house?? Well…as it turns out, there is. Although the planets seem to be aligned to aid the average consumer in purchasing a home, many people are still sitting on the sidelines. Since real estate is one of the engines that can drive a recovery, why are people hesitating?
Ther are a few good reasons:
Interest rates are extremely low, which would normally lead buyers to purchase, but, since the Fed has indicated that they will be keeping rates at or near these lows for the foreseeable future, the usual urgency to buy to get the best rate is absent.
Many would-be buyers are already upside down in their existing residence. Instead of taking advantage of low home prices to do that move-up purchase, those buyers are forced to stay on the sidelines because they can’t sell their current home.
Home prices are still volatile. Many buyers don’t want to buy because they fear they will immediately see the value of their home go down, as short sales and foreclosures in their same neighborhoods lead to a lowering of prices. Buying a house though is like buying stocks. It’s impossible to predict the bottom.
When home prices start to go up, and interest rates follow, some people will be regretting that they did not act sooner. Don’t be one of those people. Call me today to help you with the purchase of your next home, or investment property.
Harlan Stork
For more insight into these ideas, click on this link to see a
October’s National Association of Realtors number for existing home sales shows an unexpected trend upward. Does this mean we’re on our way to recovery? Not so fast. Don’t pop the cork on the champagne just yet. Though the number is good, with a 1.4% month over month increase in sales, and a 13.5% increase versus last October, there is still an 8 month inventory of homes on the national market.
A bit of negative news is that 33% of contracts fell out in October vs. 18% in September. Hopefully this does not mean that banks are slowing down on short sales, which represented 28% of October’s transactions. Here’s hoping banks decide to do a full court press, and get as many homes as possible out of their inventory by the end of the year.
Traditionally, the November – January market tends to be the slowest time of the year for home sales. Everyone is too worried about holiday visits, and Christmas shopping to get serious about buying a home. The low interest rates sure are enticing though, and hopefully that will make a difference this year.
For the full story on October’s good news go to the link below.
Like many Realtors here in the Southeast Valley, the sales of some of my listings have been under jeopardy due to the value placed on it by the appraiser hired by the buyer’s lender through an “independent” appraisal management firm. Even with properties that have multiple offers which send the price above the original list price, there is no guarantee that the appraiser will find the home worth as much as the buyer and seller thought at the time of the contract.
An appraisal is supposed to be a “snapshot in time” value that a willing and able buyer will agree to pay for a property. It should be a reflection of the quality of the home, as well as the forces of supply and demand. However, due to the Dodd-Frank Act, which requires maximum distance between the lender and the appraiser, the appraiser is now chosen at random. So, if you live in a custom community in Chandler, you may get an appraiser with six months of experience that lives and works primarily in Glendale. This appraiser may have no working knowledge of the area, the builders, or the local market. So the appaiser’s local bias, rather than market conditions, may skew the value.
My job as a Realtor, is to screen the appraiser as best I can through a series of questions, to ensure local knowledge BEFORE the appraiser shows up at the door. Another appraiser can be requested if the questions show a lack of local knowledge, but only before they show up to do the appraisal. Make sure before you list your home, that you have a Realtor who looks after your interest before a problem arises. HARLAN STORK
How Appraisals Are Derailing Home Sales
New requirements are resulting in more cancelled or delayed contracts. By ANNAMARIA ANDRIOTIS
Three months ago, real estate agent Gary Rogers says he was conducting a fairly routine home sale. Then he received the home appraisal’s report, which valued the three-bedroom colonial in Waltham, Mass., at $430,000, rather than the $448,000 selling price the buyer and seller had agreed to. Unless the buyer agreed to put up more money, or the seller to lower the price, the deal was off. Fortunately, after nearly two weeks, Rogers says the two sides agreed to meet in the middle.
In the past, appraisals rarely disrupted a home sale. But realtors and housing experts say new requirements and a difficult housing market are doing just that. Year-to-date through September, one third of realtors have said appraisals resulted in buyers and sellers delaying or canceling contracts or renegotiating to a lower sales price, according to the National Association of Realtors. That’s up from 29% in all of 2010 and up from less than 10% prior to 2009.
Indeed, lenders say they’re requiring more thorough home appraisals. Appraisers determine the value of a home largely by reviewing the prices at which similar homes nearby sold for in recent months. During the housing boom, appraisers could cite as few as three recently sold homes; today, lenders are often requiring two to three times that, says David Stevens, president and CEO of the Mortgage Bankers Association. To meet that quota, appraisers say they sometimes have to use homes that aren’t similar and may be foreclosures or short sales, though they are taking into account what this property would have sold for if it wasn’t a distressed sale, says a spokesman for the Appraisal Institute, an association of real estate appraisers. “Appraisers have become much more cautious,” says Jack McCabe, an independent housing analyst in Deerfield Beach, Fla.
To be sure, a more thorough appraisal process does have its benefits. It lets a buyer know whether they’re offering too much to buy a particular home. “For buyers, the appraisal is a check and balance — it’s there to ensure the buyer isn’t overpaying and the lender isn’t over-lending,” says McCabe.
It may also make houses cheaper for buyers — though not without more hassle. If the appraisal value comes in below the agreed buying price, the lender will typically offer a smaller mortgage. For example, on the house that Rogers sold, the buyer would have gotten a mortgage for $358,400, or 80% of $448,000. But when the appraisal value came in at $430,000, the lender adjusted the mortgage amount to 80% of the appraisal figure, or $344,000. The contract the buyer and the seller had signed, however, stated the higher buying price of $448,000, and the buyer (and potentially the seller) had the option to decide if they wanted to make up the $18,000 difference.
Typical solutions include having the buyer paying that difference out of pocket or the seller lowering his price — or both. And sellers often do lower their prices: For example, during the three months ending September, 13% of realtors reported contracts were renegotiated to a lower sales price, compared to 10% who said contracts were canceled and the 8% who said contracts were delayed.
Here are ways to make the process easier, say experts, and how to deal with complications.
How sellers can prepare:Before putting their home on the market, sellers should research what similar homes near them are selling for by looking at online listings, visiting open houses and speaking with realtors, says Rogers. “It’s always good to get more than one opinion,” he says. They can also ask for their own home appraisal, which could give them a sense of how close (or far off) the figures are. The cost of an appraisal varies but typically ranges from $250 to $600.
How buyers can protect themselves:When buyers make an offer, they should include statements in the contract guaranteeing they’ll receive their initial down payment (typically 3% to 5% of the agreed buying price of the home) back if full mortgage financing doesn’t come through for the agreed price or the appraisal value is below the offer that’s in the contract, says McCabe. Separately, the buyer (who’s required to pay for the home appraisal) should ask for the appraisal report and look at what properties the appraiser used as comparisons, says Rogers. It should, he says, include homes that are in the same neighborhood and the same style. In other words, a colonial home shouldn’t be compared to a ranch.
What to do if appraisal value comes in below the purchase price:In this situation, experts say buyers have several options. If they’re no longer interested in the home, they can walk away. (However, without a contingency clause — see previous section — they risk losing their initial down payment.) But if they still intend to buy the house and they can prove the report excluded similar, nearby properties or had some other issue, they can appeal or ask their lender for a second appraisal.
If those strategies don’t work, the buyer and the seller can consider working out an agreement on their own. Lastly, to report a problem with an appraiser, consumers can contact their state’s appraisal board.
While many buyers feel that buying a short sale is a long drawn out experience that is not worth the time or trouble, new data suggests otherwise. Whether you are a first time home buyer, a second home buyer, or an investor, being patient on a short sale may give you the best value for your dollar.
In a market like ours here in the Southeast Valley of Phoenix, which is dominated by short sale listings, avoiding short sales may also put a severe limit on the number of homes available for you to buy. Don’t let poor information limit your options. The article below lets you know how short sale equals value in many cases. Harlan Stork
Short Sales Offer Significant Discounts in Several Major Cities By: Krista Franks 10/31/2011
Short sales are growing throughout the nation as distressed homeowners and servicers continue to seek alternatives to foreclosure and home buyers increasingly opt for the significant discounts that come with short sales.
With 9,145 completed short sales, the Los Angeles area had more short sale transactions than any other metropolitan statistical area (MSA) in the second quarter of this year, according to a recent blog post from RealtyTrac. These short sales came with an average discount of 32 percent and at an average price of $350,237. Phoenix ranked second in number of short sales for the second quarter with 8,434 short sales, which came with an average discount of 27 percent and an average price of $133,793.
According to the RealtyTrac blog post, the metros with the highest numbers of short sales in the second quarter were:
1. Los Angeles 2. Phoenix 3. Cape Coral – Fort Myers, Florida 4. Oxnard – Thousand Oaks – Ventura, California 5. Reno – Sparks, Nevada 6. San Francisco 7. San Jose 8. Portland 9. Atlanta 10. Milwaukee
Short sale savings averaged more than 30 percent in Cape Coral – Fort Myers, Florida; San Francisco; San Jose; and Milwaukee. Reno – Sparks, Nevada, experienced a 50 percent rise in short sales from the first quarter to the second quarter of the year, while San Francisco saw a 47 percent rise in short sales. Atlanta and Milwaukee also saw significant increases in short sales over the quarter – 21 percent and 20 percent respectively.
Your first home purchase is exciting, but it can also be stressful. Here are some tips to limit the trauma and help you find the home of your dreams the first time around.
The most important step in selecting a home is knowing how much you can spend. If you already use an electronic budgeting system, you’re ahead of the game. If not, track your expenses for the past several months to a year. Try to quantify the “gray areas” of cash withdrawals that disappear on small purchases. Now add up your current rent and other related expenses. If you’ve been saving money toward your down payment, note that, as well. Finally, ask yourself where you can tighten your belt with your existing discretionary purchases. This is the maximum amount you could pay per month. Now ask yourself if this is reasonable, given your current savings and possible expenses. Only you know the answer to that. When you’ve arrived at a comfortable number, write it down, and save your calculations. You’ll take this to the bank when you apply for loan preapproval. For now, you have an estimated payment you can use while shopping online. Continue reading →
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Well, 2011 is almost over, but the number of distressed properties on the market remains high. In most areas of the Southeast Valley, distressed properties dominate, but there is hope for under water homeowners. The number of foreclosures on the market has been dwindling, as banks try to vacate their inventory through short sales instead. It is certainly more efficient, and more cost effective for banks to sell their inventory this way, as the sale price of a short sale usually exceeds that of a foreclosed home.
Your first home purchase is exciting, but it can also be stressful. Here are some tips to limit the trauma and help you find the home of your dreams the first time around.
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