THE TIME IS RIGHT TO BUY

A lender I know is keeping very busy.  Between re-financing existing mortgages and working on new mortgages, he’s doing well.  This is a great time to take advantage of the market.  If you are a first time home buyer (have not owned a home in at least three years), you would qualify for the $8,000 tax credit.  In a previous post, I mentioned how and if you qualify for the credit.  

Here’s some food for thought:

Fundamentals Point To Strength

The basic fundamentals of the housing market point to higher prices ahead. Almost half of the properties being sold today are existing homes that are either owned by banks or homes on which banks are accepting short sales, allowing them to be sold for less than what is owed.

New homes or homes under construction are near all-time lows. The country’s demographics point to more potential buyers coming into the housing market than projected inventory in coming years. This all points to higher prices on the horizon as demand will be greater than supply. This is supported by the fact that the inventory of unsold homes fell 2.7% in January.

There are many reasons to buy at this time…..

GOOD NEWS FOR ARIZONA - FHA LIMITS BACK UP!!

OK, those of you sitting on the fence, it’s time to jump off.  The FHA limits were raised again.  This is treat news.  In addition, if you’re a first time home buyer you’ll qualify for the $8,000 credit if you purchase a home before the end of the year.  

The limits are:  sales price $358,000 the max financing loan amount (96.50%) can be $346,250 in Maricopa county.  Limits vary from county to county.  The information can be found on various sites.  I do have several names of reputable lenders that I’d be happy to share.  In addition, I’d love to help you find the perfect home.  This is truly a buyer’s market.  In addition, you don’t even have to look for a foreclosure or a short sale to find great buys!  

As always check with your financial advisor before making any final decisions.  

HOW TO BE A GOOD REAL ESTATE CLIENT

I’ve been in the “people” business for about 21 years now.  I started out as a fitness instructor.  I loved it that my students/clients did everything I said.  They totally believed that I was interested in their best interests and I was.  I really enjoyed knowing that people were benefiting from my expertise gained both in the classroom and on the job.

Then I became a realtor.  What is is about this profession that makes people think they can say anything they want, nice or not nice?  All bets are off.  Have we not spent time training and continually attending continuing education to be the best we can be?  I’ll give most people the benefit of the doubt.  Selling and buying real estate is an extremely emotional experience.  The seller(s) have, for the most part, put their heart and soul into their home.  When it is time to sell, they are very attached to everything about the home.  Here’s where they go wrong.  Once you’ve decided to sell, think of your home as a house — a piece of real estate.  Once you take the emotion out of the equation it’s easier to take on what negative (and sometimes positive) things are said about your house.  Try to remember why you’re moving.  If it’s because you’re going to buy a house that you like better it’s time to move on.  

Not everyone who walks into your house is going to like it — get over it.  That’s why there are so many different kinds of homes.  You cannot take everything people say personally.  Your selling agent asks other agents for feedback so that they can provide you with constructive reasons why people like or don’t like your property.  This is ultimately important in making any price reduction decisions.  Don’t ask your agent “what makes you think I want to know what others say?”  Well, it’s fairly important, don’t you think?  If your agent doesn’t tell you anything would that be better?  I think not.

What about the buyer who hires an agent to help him/her find a home?  Of course, the buyer is looking to get the best price they can.  Why do clients insist on making tremendously insulting offers to purchase on a home that they like?  What’s the matter with offering an amount that you’d be comfortable paying?  Why, especially in this market, would a buyer play games?  Well, let me say that most likely it’s because people “like to negotiate”, aka play the game.

Here’s a bit of advice from someone who’s seen both sides.  If you’re a buyer and you find a house that you like, make the sellers a decent offer.  Put yourself in their shoes.  How would you feel if a potential buyer “low balled” you on your home?  Probably not too happy.  Yes, it’s a buyers market.  That doesn’t give you, the buyer, the right to insult the seller.  By the same token, if you’re the seller, listen to what your agent suggests as a listing price.  Most agents do their due diligence in checking the comps in the surrounding area prior to listing your home.

Real estate agents are people too and we have feelings.  I had a not too nice realtor experience some years ago, so I understand the stereotypical opinion about realtors — they’re like used car salesmen.  You just never know when you’ll need one!  Some of us take our profession seriously.  We like people and we continually strive to be the best we can be.  This is an extremely challenging time for realtors.  We understand what both buyers and sellers are going through.  Be nice when talking to us, we are performing a service and take great pride in our work.  I care about my clients and enjoy helping people buy or sell a home.  

It takes more muscles to frown than it does to smile!!!

OBAMA AND THE MORTGAGE CRISIS

How sick are we of hearing the word crisis?

Every day we hear something new with regard to the mortgage situation.  I refuse to call it a crisis because someone has to stop the negative press.  The latest topic is that people in foreclosure will be given help in the form of lower interest rates to hopefully stop the foreclosure bleeding (as of this writing the Fed has not lowered the rate).  Yes, this will help some but not all.  Let’s get real.  A lot of these people should not have been given loans in the first place.  If they couldn’t afford to make the payments then, they most likely cannot afford it now.  We should be letting the markets play out — capitalist economies have built-in recessions and the government messing with this one is just going to prolong the pain. 

A wise realtor said “your home is not mortar and bricks, it’s your family”.  So to say that “everyone deserves a home”, yes they do, just not one that they cannot afford. We have been a nation of instant gratification.  This is our opportunity to sit back and take stock.  Do you need that item or do you want that item.  I know that we need to spend to keep the economy afloat, however, the whole system is out of whack and spending out of control….both in the private and public sectors.  

With regard to the bailout, there are a few things that are going to happen.  You know those bad loans…the Freddie and Fannie ones, well there are 401K and other investment plans that have invested in those toxic assets.  That means that people’s retirement accounts will continue to be a target.  This is unfortunately a “by product” of this mess.  So, the whole country is paying for bad mistakes made by buyers, unscrupulous lenders, investors and politicians. 

There’s a group of people who cannot pay their mortgage (actually about 7-9% of the whole throughout the country).  Some are viable problems….i.e., people who’ve lost their job(s) and people with uncontrollable ARMs and who did/do not understand the ARM concept.  These are the people who should be helped.  I do believe that we need to help in certain instances to keep the “whole” together.  There should be stipulations in this mortgage relief program that exclude people who were greedy and are stuck with 3 and 4 homes bought as investments they can ill afford in the long term.

In addition, people wanting to buy a home have to actually “qualify”.  What a concept!  This whole community reinvestment act is what got us in this mess in the first place.  Who said everyone deserves a home?  It was some politician who thought he knows best.  What happened to saving for a down payment and actually having the income to support the mortgage payment? 

I pay my mortgage every month.  My interest rate is 6%.  I cannot refinance because my value has gone down.  Would I like a lower, more affordable rate?  Sure, but I cannot get it.  So every month I pay….on time I might add.  All these bailouts are going to do is create a lot of hard feelings — we’re seeing it now.  The media is pitting the have’s against the have nots.  This is crazy.  

We are heading toward a nanny state of more and more welfare.  People who honestly believe that they are owed something, without working for it.  It’s tragic what is happening.  As Americans we need to stand up and be heard.  I know I do my part and if everyone called or emailed these crazy politicians who think they know better how to spend our money, we’d make a difference.  

The “spending” bill that was passed should have ONLY provided relief for people in jeopardy of losing their homes due to predatory lending practices and job loss; the first time home buyer tax credit; and tax breaks to let people keep more of their money.  What has happened with the passing of this bill is a travesty of proportions most of us have yet to grasp. 

As a realtor, it saddens me to see so many homes going into foreclosure, but as an American it is sadder still to see our country in such trouble.  What happened to the American work ethic?  Why are we expecting government to take care of us?  Remember, payback’s a b——.  And, I believe we’re going to be sorry that we let the government into our homes.

PHOENIX METRO HOUSING INVENTORY

We are seeing Phoenix and surrounding area’s supply of home decreasing. Pending sales have picked up significantly, which means our closed sales will reflect that in March. Welcome news for everyone.

We used to consider a normal housing inventory in our market as one with 6 month supply and just recently were up to 11-12 month supply in Phoenix and over 2 years in Scottsdale with Paradise Valley running a close second.  Phoenix is now looking at a 6 ≤ month supply- very nice. South East Valley is looking at 7 and ≤ months housing inventory- still nice, and overall market supply is at 8 and ∏ months. Maybe our Phoenix realtors can entertain a light at the end of this very long tunnel. Scottsdale from 750 up and Paradise Valley luxury homes are still way up there but hopefully is this Housing market actually does continue to move, we will create motion in that sector as well.

Phoenix property supply was down 3%, West Valley 1% and the overall market supply was down 2%. Let’s hope the news media can find this interesting enough to report to the public along with all the foreclosure signs they display on the screen. I am so into some positive news.

NE Valley. Inventories are unchanged from last week. Total of 5721 active listings with 255 closings in the last month. About a 22 1/2 month supply.

SE Valley. Inventories are down 1% from last week. Total of 9424 active listings with 1204 closings in the last month. About an 7 3/4 month supply.

Scottsdale over $1m. Inventories are unchanged from last week. Total of 1499 active listings with 26 closings in the last month. About a 57 3/4 month supply.

Scottsdale under $1m. Inventories are unchanged from last week. Total of 2476 active listings with 159 closes in the last month. About a 15 1/2 month supply.

Paradise Valley. Inventories are up 2% from last week. Total of 568 active listings with 16 closes in the last month. About a 35 1/2 month supply. 

$8,000 HOME BUYER CREDIT

A lot is being written about the home buyer credit.  Be sure that you have the facts in hand.  What was originally thought to be a $15,000 credit is now an $8,000 credit.  However, beware the caveats:  a first time home buyer who is someone who has not owned a home in three years or more.  The credit is UP TO$8,000.00 or 10% of the purchase price of the home whichever is smaller.  You qualify if your adjusted gross income is not greater than $150,000 (couples filing jointly) or $75,000 (individuals). 

However, as I’ve often said, a good lender can help you to navigate all the pros and cons.  Because lending money is tighter and the requirements to qualify are higher — actually what they should be — you have to make sure that you have all your ducks in a row prior to even going out to look at homes.  Your lender will pre-qualify you and give you an LSR (loan status report) so that when you find a home and you make an offer the seller knows that you will indeed qualify for that loan.  

NEW AND IMPROVED HOUSING TAX CREDIT

According to the National Association of Realtors, this is how the whole first time buyer tax credit scenario is going to play out: 

So here’s what we have achieved: 1) the loan limits will be raised to $727,000 in high cost areas, 2) the tax credit will be raised to $8,000 with NO payback [a true credit], 3) interest rates have come down 125-150 basis points, and 4) the bill has over $50 billion in it for foreclosure mitigation, with Geitners Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES’s thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.In addition, we preserved what we have - which some tend to forget is always on the table when these negotiations start up again - mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).


The Loan limits have to do with FHA loans.  Remember to check with your lender regarding which areas are considered “high cost areas”.  The $8,000 tax credit (I believe it is $7,500 for an unmarried individual) will not need to be paid back.  This will apply to homes bought January 1, 2009 through at least December 31, 2009.  Also, if you previously owned a home, but have been renting for awhile, check with your lender to see if you qualify as a “first time home buyer”. 

So, if you are thinking at all about buying, now’s the time.  I would love to help you within the Phoenix metropolitan area. 

SPENDING BILL $15K TAX CREDIT - NO MORE

Leave it to our politicians to eliminate a true economic stimulus from this outrageous bill they are set to pass.  The $15k (or 10% of the purchase price) tax credit for first time home buyers would have super charged the housing market.  Instead, once again the people who think they know what’s best for us have screwed it up.  In lieu of the credit, they are raising the limits for Fannie and Freddie.  This is good, but it should have been both. 

Be sure that you have a lender who knows what they are doing and can advise you properly with regard to this whole situation. 

In addition, make sure that your realtor has got a grasp of what’s happening.  It’s a good time to buy and especially if you are a first time home buyer!

STAGING YOUR HOME FOR SALE

Today more than ever, it is important to stage your home.  There are so many homes on the market and competition is fierce.  Your home/listing needs to stand out.  Put your best foot forward — so to speak. 

Take the time to really look at your house.  Notice how I say “house” and not “home” because once you’ve decided to sell, your home is another house on the market.  I know it’s hard to do, but you must now think of your house as a commodity.  Once you can take the emotion out of it, you’ll be fine.

Be sure to eliminate as much clutter as possible.  Remember, you are selling the space, not your belongings.  Put away all personal items.  Begin to pack your things into boxes and stack them neatly in the garage.  The vast majority of buyers cannot “see the forest through the trees”.  So, it is important to “trim those trees”. 

Be sure to start outside.  Stand on the sidewalk or street in front of your home.  Be objective, perhaps call a friend or relative to help you.  Pretend it’s a home that you were going to buy.  What would be your first impression?  First impressions are huge!  Don’t we all judge a book by its cover?  Why would people want to walk into a home that had a terribly messy outside?

Sweep the walk, trim the trees, paint the door if it needs it, fix the screen door; make sure that the door frame is clear and clear of debris.  If it’s spring, plant flowers, or get a flower pot.  It’s amazing what a few dollars and a little elbow grease will accomplish. 

Here are a few pictures of before ….

and after…….

Here’s a before of a family room…..

Here’s that same room after…..

Just by moving furniture around, changing the lighting and adding other pieces from other rooms in the house, this room looks much more inviting…..

Staging is not about decorating your home, it’s about SELLING your home….B. Schwarz

UNDERSTANING NEW HOUSING TAX CREDIT

Be sure when you go to see a lender about purchasing a home and using the “first time home buyer” government tax credit incentive, you are armed with as much information as possible.  The following was sent from a lender I know.

Facts You Need to Know – The $15,000 Home Buyer’s Tax Credit

The home buyer tax credit amendment that was added to the Senate version of the economic stimulus package recently has stirred great interest.  Many people are curious about the details, or don’t have a complete understanding of how it works. 

This provision was introduced by Senator Johnny Isakson from Georgia.  In this provision, anyone buying a primary residence during a one year time period beginning on the date of enactment would be eligible for a tax credit of as much as $15,000 or 10 percent of the home’s purchase price, whichever is less.

Here are a few facts that may help further explain the amendment.

• If you recently purchased a home and qualified for a new home buyer tax credit, does this mean that you will qualify for it if the provision becomes law? According to Rob Dietz, an economist for the National Association of Home Builders, the answer is no.  The date that the amendment is effective is the date of enactment, so if you have previously completed the purchase, you are not qualified for the program.

• Isakson’s press release states that “The amendment would sunset the current $7,500 housing tax credit on the date of enactment.”  In this statement, what does the term “sunset” mean?  The proposed $15,000 credit which applies not only to new homes, but all home purchased would take the place of the $7,500 new home buyer tax credit.  This is the meaning of the term “sunset” in this statement.  So, if you are currently operating under the $7,500 credit, from the date of enactment on the new credit takes over and no one else gets the old $7,500.  This is stated by Joan Kirchner, Senator Isakson’s Deputy Chief of Staff.

• Is it likely that this provision will become law?  The economic stimulus package is becoming increasingly controversial, and the $15,000 home buying provision is a component of this package.  The House of Representatives version of the stimulus bill has already passed, and there is pressure on the Senate from the White House to do the same.  The massive size of the package, now more than $900 billion, has caused some Republic Senators to take measures to slash provisions in order to lower the tab.  The National Association of Realtors along with the National Association of Home Builders strongly support this tax credit, and Kirchner believes that it will remain in the stimulus bill that is signed into law.  Because it was unanimously adopted and both sides agreed to accept it, there was no roll call vote, so this provision is in.  Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable predicts that the amendments will make it into the final package.  “It’s a targeted solution that will address housing as well as taxpayers – both of which need help,” he said.

• Does this tax credit need to be paid back?  Not according to Dietz.  This is the difference between the $7,500 first time home buyer credit, which was in effect a 17 year repayment, which translates into a no-interest loan.

• Participation – Are there any restrictions or income limit?  According to Kirchner, there is no income restriction and the tax credit would be limited to primary residences.  It is necessary to occupy the property for at least two years as your primary residence, and it applies to any home (meaning a condo, house, foreclosed, new, or previously owned).

• Can the credit be used for the 2008 tax year?  Chris Cook, a legislative assistant to Senator Isakson, says yes.  If you decide to buy a home this year (2009), the provision will allow you to file your taxes as if you bought the home on December 31, 2008.