Phoenix Real Estate Market News

1. Don't make lowball offers. Every lender has a certain dollar amount they want to net from the sale. Typically first lien holders (lenders) want to net at least 85% of the fair market value of the home. If you lowball, you have a good chance of having your offer rejected and you may not have the opportunity to make a counteroffer.

2. Listing agent experience is crucial. It's up to the listing agent to submit the short sale package, along with your offer, to the bank(s). If this isn't done in a certain way with the right documents from the seller then your offer may not see the light of day.

3. Seller must qualify for short sale. Make sure your agent confirms with the listing agent that the sellers are able to short sell. If the sellers don't have a financial hardship then the short sale has a good chance of not being approved.

4. Don't ask for a home warranty to be paid by the seller. Most lenders will not pay for home warranties.

5. Be prepared to wait. Short sale transactions typically take many months to close escrow. So if you have to be in a home in less than 60 days you may want to pass on short sales.

6. Don't submit offers without proof of funds or a loan approval. You've got to prove that you can buy the home otherwise your offer won't be considered.

7. Most likely the property is being sold AS-IS. However the seller should be able to provide a property disclosure statement. Make sure your agent gets it for you.

I hope this information has given you some insight into buying a short sale. So don't shy away from a home just because it's a short sale...have your agent check into it for you. You could be the next owner!

If you're not already working with an agent, give me a call! I'd be happy to help you.

Joe Janus - Phoenix, Scottsdale and Paradise Valley AZ Homes for Sale

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We’ve all heard the horror stories about short sales but here are just a few of the important advantages that anyone looking to “short sell” a home or buy a short sale MUST be aware of.

•You will be eligible, under Fannie Mae guidelines, to buy another home in 2 years instead of 5 to 7 years.

•If your credit report does not reflect a 60-day+ late pay, under Fannie Mae guidelines, you will be eligible to buy another home immediately.

Fannie Mae Mortgage Eligibility (Primary Residence):

•A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years.
•A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after 2 years

Fannie Mae Mortgage Eligibility (Non-Primary Residence):
•An Investor who allows a property to go to foreclosure is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years
•An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed investment mortgage after 2 years.

Future Loan with any Mortgage Company:
•On any future loan application, a prospective borrower will have to answer YES to question C in Section VII of the standard 1003 that asks “Have you had property foreclosed upon or given title or deed in lieu thereof of the last 7 years?” This will affect future rates.
•There is no similar declaration or question regarding a short sale.

Impact to Credit Score:
•Score may be lowered severely due to a foreclosure. Typically will affect score for over 3 years.
•Only late payments on mortgage will be reported as paid or negotiated. This may have less of an impact on a credit score, if all other payments are being made.

Credit History:
•Foreclosure will remain as a public record on a person’s credit history for 10 years or more severely impacting your credit score.

Current Employment:
•Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. A foreclosure, in some cases, can be grounds for immediate reassignment or termination.
•Short Sale is not reported on a credit report and is, therefore, not a challenge to employment.

Future Employment:
•Many employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant can have and it may challenge employment.
•Short sale is not reported on a credit report and is therefore not a challenge to employment.

Deficiency Judgment:
•In 100% of foreclosures (except in those states where there is no deficiency), the bank has the right to pursue a deficiency judgment.
•In some successful short sales, it is possible to convince the lender to give up the right pursue deficiency judgment against the homeowner.

Deficiency Judgment (amount):
•In a foreclosure, the home will have to go through an REO process if it does not sell at auction. In most cases, this will result in a lower sales price and longer time to sell in a declining market. This will result in higher possible deficiency judgment
•In a properly managed short sale, the home is sold at a price that should be close to market value and may be better than a Foreclosure sale resulting in a lower deficiency.

Buyer Advantages
1. Homes sold under short sale terms are usually owner-occupied.  Normally, these homes are more likely to be maintained in better condition than a foreclosed home.  Not all sellers are behind in payments.  There are other considerations that may occur which has necessitated the need for the homeowner to sell.
 
2. A short sale may provide you with the opportunity to purchase the “perfect” home for you.  If you are looking for particular features in a home or a particular neighborhood, purchasing a home via the short sale process may provide you with a unique opportunity.
 
3. The bank may agree to sell the home for less than the current market value, which has already been depressed by the number of foreclosures on the market.
 
4. Buying a home via a short sale means that you (the buyer) should receive all required property disclosures from the seller as required by law.  Homes sold through the foreclosure process do not offer this advantage.  A lender cannot be required to give the same disclosures as a seller because the lender has never occupied the property and therefore has no first-hand knowledge of property conditions, etc.

Navigating the waters of a short sale is a tricky and time consuming process but more and more homes are closing escrow when they're done correctly.

Feel free to call on me if you have questions about short selling your home or buying a short sale. I'd be happy to help. My phone number is 602-620-6267.

*The above data is believed to be accurate but is not guaranteed. Appropriate legal counsel and tax expertise should be obtained before proceeding with a short sale.

Joe Janus - Phoenix, Scottsdale and Paradise Valley AZ Homes for Sale

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1. Property is Priced Incorrectly

PITFALL: This is the most common mistake made with all properties and the most common reason a listing expires and a property doesn’t sell.

SOLUTION: The right agent will go through a detailed listing price strategy with you that will allow you to see exactly where your property should be priced based on it current condition, sales in your area and most importantly how much time you have left to sell.

2. The Short Sale Proposal is Incomplete

PITFALL: This is one of the most common reasons why a short sale does not get approved. Most agents do not understand the short sale process and what your lender will be looking for.

SOLUTION: An experienced agent understands this process in detail and will work with you to present a complete and cohesive proposal to your lender.

3. Inadequate Follow Up and Communication

PITFALL: If your agent does not follow up with everyone involved as your short sale goes through each threshold or step in this process you may not know that your file has been delayed and you again may run out of time.

SOLUTION: The right agent knows exactly how to follow up to ensure that your lenders issues are addressed in a timely manner and will make certain you do not have unnecessary delays.

4. Not Enough Time

PITFALL: It is critical that your agent understand the foreclosure laws in your area. They should be able to show you an estimated timeline. They should also know how to communicate with your lender and what to provide that in some cases can stall your foreclosure for weeks or months in order to let you negotiate a sale.

SOLUTION: Make sure you provide your agent accurate information as to exactly how many payments you have missed and any correspondence you have received from your lender. This will allow your agent to understand your situation and work to improve it.

5. Your Deal is Not Submitted Properly

If you do not follow the directions you receive for submission then you are expecting an over-worked, under-staffed department to go out of their way to handle your file. There is very little likelihood of this happening. If you are instructed to fax your file, fax it and send a backup copy in the mail. If you are instructed to mail two copies, mail two copies. Once you have a contract, have gathered your information and completed your proposal you do not want your deal to fall apart because no one sees it.

6. The Buyer’s Offer is Too Low

PITFALL: Many agents will encourage you to submit any offer they get. The reality is that short sale is not the same as a fire sale! In order to have a legitimate chance at getting your deal approved you must have an offer that is more attractive to the lender than a foreclosure.

SOLUTION: The right agent will work with you to properly negotiate any offer that you receive to get ‘highest and best’ from each buyer so you are presenting the best solution possible to your lender.

7. The Buyer’s Contract is Not Strong Enough

PITFALL: In today’s economic climate, just because a buyer is willing to make an offer on a property does not mean that they are truly qualified to purchase. The reality is that a buyer needs to be preapproved for financing, closing funds need to be verified and their ability to buy needs to be confirmed.

SOLUTION: An experienced agent is familiar with the details of exactly what must be verified in order to qualify a buyer to submit an offer on your property that has a chance at closing. Don’t risk this process with an uneducated agent who does not have these answers.

Don't risk your financial future and the potential sale of your home with an agent who doesn't have all the solutions, call me at 602-620-6267 or send an email today.

On Weds, Nov 4th, 2009, Congress nearly voted unanimously for The Unemployment Compensation Extension Act which included an amendment that extends and expands the Home Buyers Tax Credit.  President Obama signed the bill today, Friday, November 06, 2009, setting it into effect.

So, here’s the deal…

The original tax credit of $8,000 which was to expire on November 30th, was available to first time homebuyers (defined as an individual who has not owned a home within the last 3 years).
 
The new bill centers on extending the popular $8,000 credit for first-time homebuyers that was included in the stimulus package. The credit will be available through next June as long as the buyer signs a binding contract by the end of April 2010.  It also increased the income limits from $75,000 for an individual and $150,000 for a married couple, to $125,000 and $225,000 respectively.

The program has also been expanded to include a $6,500 tax credit for existing homeowners who buy a new place after living in their current residence for at least five years.

Remember, this is a tax credit.  This means that if a first time home buyer were to expect a tax refund of, say, $1000, they would actually receive a tax refund of $9,000.  The extension for the first time home buyers, along with the inclusion of the tax credit to existing homeowners will hopefully incent more people to dive into the Phoenix real estate market again.

If you have questions feel free to contact me at 602-620-6267 or via email. You can also download a one page breakdown of the tax credit provisions and frequently asked questions.

Joe Janus - Phoenix, Scottsdale and Paradise Valley AZ Home for Sale

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Architecturally Distinctive homes for sale in Phoenix, Scottsdale and Paradise Valley AZ

ZIP code 85016 comprises a 10 square mile area of Northeast Phoenix.  Another one of my favorite zip codes in the city due to its location to central Phoenix activities, light rail, amazing shopping at the Biltmore and Scottsdale Fashion Square, and outdoor activities with nearby Camelback Mountain, Picacho Peak and Dreamy Draw mountain reserves! 

It lies between Thomas Road in the south and Phoenix Mountains Park in the north. The western boundary runs along 16th Street and the eastern boundary runs north along 32nd Street until it hits Lincoln Drive. From this point north the eastern boundary runs just west of 40th Street. It lies north of ZIP codes 85004 and 85008, with ZIP code 85014 to the west and 85018 and 85253 to the east. ZIP codes 85020 and 85028 lie to the north.

85016 includes the Biltmore district, Camelback Colonnade, Town & Country Shopping Center, Camelback Esplanade, Los Olivos Park, Biltmore Fashion Park, Granada Park, Desert Storm Park, Arizona Biltmore Golf Course, and the southern section of the Phoenix Mountains Park.

It seems as though we may see an increase in November ’09 due to the much higher number of pending sales holding this month compared to last.  With a lower pricing average, which very well could be directly related to the number of pre-foreclosures in this area (20%), we may see a trend in upward advancement of purchases in the next coming months.  All in all, change in this zip code isn’t all that drastic and seems to be holding steady (relatively speaking). 

With the Tax Credit of $8,000 for first time home buyers (those who haven’t owned a home in the last 3 years) and the tax benefits in deducting mortgage interest, the lower housing pricing, the amount of inventory available along with the extremely low mortgage rates, now is still certainly a great time for anyone even thinking about the possibility of becoming a home owner to take it one step further and let’s start looking.  Even those of you who have been thinking that you may want to upgrade, an upgrade in today’s market is relatively easy to find.

 - Active Listings for October '09 - 197, down from 198 in September '09
- Listings holding Pending Sales rose to 52 for October '09, up from 41 in September '09
- Closed sales are down for the month of October '09 so far at 23 with an average of 66 days on the market, down from 36 in September '09, with an average of 154 days on the market
- Days on Market for Active Listings are up a stitch for the month of October '09 at 190 from 181 in September '09
- 20% of the total active listings are pre-foreclosures
- 11% of the total active listings are lender owned properties
- Annual Appreciation dropped a stitch in October '09 to -42% from -39% in September of '09.

Joe Janus     - Architecturally Distinctive homes for sale in Phoenix, Scottsdale and Paradise Valley AZ

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One of my favorite zip codes when it comes to Scottsdale homes for sale, 85258, comprises an area of North Scottsdale stretching from Indian Bend Road in the south to Shea Boulevard in the north. The western boundary is Scottsdale Road and the eastern boundary runs along highway 101 and the Salt River Pima Maricopa Indian Community until it reaches ZIP code 85259.

This ZIP code includes Pavilion Lakes Golf Club, Lake Margherite, Lake Nino, Lake Angela, Rotary Park, Comanche Park, Shoshone Park, Zuni Park, Scottsdale Healthcare-Shea, Scottsdale Ranch, Gainey Ranch, Mountain View Park, McCormick Ranch, Camelback Lake, Lake Serena and the northern section of the Scottsdale Pavilions shopping center.

- Active Listings for August '09 - 248, down from 251 in July '09
- Listings holding Pending Sales hold steady at 29 for both August and July '09
- Closed sales are down for the month of August '09 at 18 from 27 in July '09, with an average of 151 days on the market
- Average Price for the month of August '09 is down at $467K from $584 in July '09
- Days on Market for Active Listings are down a stitch for the month of August '09 at 182 from 185 in July '09
- 14% of the total active listings are pre-foreclosures (short sales)
- 3% of the total active listings are lender owned properties
- Appreciation came up in August '09 to -18% from -19% in July of '09.

Joe Janus - Scottsdale Homes for Sale

On August 20th, 2009 journalist J. Craig Anderson with The Arizona Republic reported that after a record breaking 27 months of decline in the Valley's median home price, some of the most influential local real-state analysts predict that home values finally have hit the bottom of the slide.  According to the most recent 3 month trend, most areas around the Valley seem to be leveling out, rather than what has become the norm of the downward spiral.  Great news!

The following figures were obtained from The Cromford Report, and report the annual median home prices (single family residences only) as of August 2009 in the following zip codes:

Phoenix 85016 - $168,000
Phoenix - Arcadia District - 85018 - $334,900
South Scottsdale - Old Town - 85251 - $242,000
Paradise Valley - 85253 - $1,500,000
Scottsdale - 85254 - $315,000
Scottsdale - 85255 - $579,900
Scottsdale - Gainey/McCormick Ranch - 85258 - $460,000

Annual median home prices by city overall:

Phoenix - $89,900  < $37,600 LESS than the median prices in 2002! >
Scottsdale - $411,750
Tempe - $212,500
Mesa - $140,000
Chandler - $218,000
Paradise Valley - $1,500,000

Given the recent 2 year downtrend in the Valley's home prices, most of us know of family and friends who have lost most, if not all of their equity, along with the rising number of folks who lost their homes altogether.  In spite of what seems to be such a slew of negativity, a first time home buyer (defined as one who has not owned a home in the last 3 years) purchasing a home now and closing before December 1st, 2009, will benefit from the governments tax credit of up to $8,000, not to mention the extremely low prices and mass of inventory out there! 

Before you start your search of Phoenix homes for sale, please contact me and let's chat about your situation and let me help you.

Joe Janus, Phoenix/Scottsdale and Paradise Valley AZ. Homes for Sale

A short sale can be an excellent solution for a homeowner who owes more on their home than what it is worth and has to sell. Unfortunately a number of myths about short sales have developed and it is important you understand the reality of this process if this is a solution that you feel meets your current needs.

1. Short Sales are Impossible and Never Get Approved - Nothing could be further from the truth!

• Are short sales more difficult? Yes.

• Do you need to learn a new process? Yes.

• Are they impossible? No, No, No!

2. Banks are Not Accepting Short Sales; They are Waiting on a Bailout - Really? You may have heard this; the reality is that banks (and the government) are trying to do anything they can, within reason, to avoid foreclosing on property. To think that they would deny a Short Sale in hopes that some future legislation will pass and pay them for their loss is preposterous.

3. You Must be Behind in on your Mortgage in Order to Negotiate a Short Sale - While it is true that initially some lenders wanted you to be in default (missed a payment) before they were willing to consider a short sale – this trend has almost all together reversed.

Today, lenders are looking for verifiable hardship, monthly cash flow shortfall or pending shortfall and insolvency. If you meet these three requirements and are in a position where you will soon not be able to afford your mortgage, act now! Don’t wait until the countdown clock to foreclosure has started and you have even less time left.

4. Buyers are Not Interested in Short Sales and Avoid Them - This is a myth that potential sellers hear all the time – thankfully the reality is that today it is not. In fact many agents are getting calls from buyers who say “I only want to look at foreclosures and Short Sales!”

Short Sales and Foreclosures have become synonymous – not with issues – but with GOOD DEALS. International buyers specifically are interested in these properties.

5. Listing my Home as a Short Sale is an Embarrassment - It is understandable that you may have reservations about letting the world know that you owe more on your home than it is worth however, understand that according to recent estimates, 1 out of 5 homeowners in the US is in your exact situation.

You are to be congratulated for admitting you need help, taking action, and finding a professional who can work with you towards a solution.
With 40 to 60% of the sales in the US predicted to be Short Sales or foreclosures you are not alone!

6. The Bank Would Rather Foreclose than Bother with a Short Sale - We know you have heard this; you may have even heard it from an overzealous collections agent working for a lender.

The reality is that banks do not want to foreclose on your property. Banks, investors and event the federal government have all publicly said that if a person is qualified for a short sale the deal needs to be considered.

The qualifications are:

A. Financial Hardship – There is a situation that is causing you to have trouble affording your mortgage.

B. Monthly Income Shortfall – You have more month than money! A lender will want to see that you cannot afford or will not be able to afford your mortgage soon.

C. Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

7. There is not Enough Time to Negotiate a Short Sale Before My Foreclosure - This is a myth that probably hurts homeowners the most. Many don’t realize that foreclosure is a process and there is time.

The foreclosing party (in most cases a lender) can stall a foreclosure up to the final day of the process. These days many lenders will stall a foreclosure with as little as a phone call from you letting them know that you are trying to sell. Almost all lenders will stall a foreclosure with a legitimate contract, in our view there is time until the foreclosure process is complete.

If you’re a seller or buyer and have questions about short sales or foreclosures please email me at joe@joejanus.com or call me on 602-620-6267.  Architecturally distinctive homes for sale in Phoenix, Scottsdale and Paradise Valley, AZ.

Check out www.JoeJanus.com to search the entire Phoenix area MLS and get market trend reports, detailed neighborhood information and other resources.

Want to know more about the $8,000 homebuyer tax credit? Well, here are the main points of the credit along with a website you can go to for more details.

Who is Eligible
• The $8,000 tax credit is available for first-time home buyers only.
• The law defines a first-time home buyer as a buyer who has not owned a home during the past three years.
All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits
• Home buyers who file as single or head-of-household taxpayers can claim the full $8,000 credit if their modified adjusted gross income (MAGI) is less than $75,000.
• For married couples filing a joint return, the income limit doubles to $150,000.
• Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time home buyer tax credit.
• Married couples who earn between $150,000 and $170,000 are eligible to receive a partial first-time home buyer tax credit.
The credit is not available for single taxpayers whose MAGI is greater than $95,000 and married couples with an MAGI that exceeds $170,000.

Effective Dates for the Tax Credit
First-time home buyers would receive a $8,000 tax credit for the purchase of any home on or after January 1, 2009 and before December 1, 2009. To qualify, you must actually close on the sale of the home during this period.

Tax Credit is Refundable ***This is a good thing***
• A refundable credit means that if you pay less than $8,000 in federal income taxes, then the government will write you a check for the difference.
• For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $3,000 payment from the government.
• If you are due to receive a $1,000 tax refund from the government, your refund would grow to
$9,000 ($1,000 plus $8,000 from the home buyer tax credit).
You are allowed to claim the credit for a purchase in 2009 on your 2008 tax returns. Consult your tax preparer.

Types of Homes that Qualify for the Tax Credit
All homes, whether single-family, townhomes or condominium apartments will qualify, provided that the home will be used as a principal residence and the buyer has not owned a home in the prior three years. This also includes newly-constructed homes.
For more details on the tax credit, go to www.federalhousingtaxcredit.com

Joe Janus – Phoenix Homes for Sale