Canadian’s Investing in U.S. Real Estate!

March 5th, 2010

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With the Canadian dollar above US90¢ and real estate prices in the United States at a historical low, successful Canadian entrepreneurs who may have surplus funds in their business or may even have sold it may be planning to invest in U.S. property.

Business owner’s who may be weighing the costs and benefits of purchasing a condo or home, or other U.S. property such as shares, must remember to factor in any applicable U.S. taxes.

Business travelers to the United States have the opportunity to see places first-hand. Although business owners should be familiar with U.S. business tax rules, they may not necessarily know about personal tax rules.

Generally, income from certain U.S. investments, including real estate, is subject to U.S. tax even if you are not a U.S. citizen or resident. U.S. investments are usually taxed in three ways: on the income they generate, on their sale or gift, and on the death of the owner.

 

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There are complicated U.S. and Canadian tax implications business owners need to consider if they plan to buy U.S. property through their company, especially if they plan to use the asset personally. However, this article focuses on the tax implications of buying U.S. property personally.

But if you are a business owner who, planning ahead to retirement, decides to buy a condo in say, Arizona, and rent it out. Assume you receive US$10,000 in rent in 2010 and our mortgage interest, maintenance costs, property taxes and depreciation total US$8,000.

A 30% withholding tax normally applies to rent paid to a Canadian resident for real estate in the United States. As such, your tenant should withhold 30% of the rent paid to you, or US$3,000, and remit it to the Internal Revenue Service. That can be eliminated by giving the tenant or agent a form that states you will file a tax return and pay tax on the net (rather than gross) rental income. You must file a personal U.S. tax return, separate from any business returns, by the end of the year. U.S. tax on the net rental income in the example would be US$2,000 ($10,000 rent minus $8,000 expenses). If the tenant withholds tax, you can receive a refund, to the extent the withholding tax exceeds the tax payable. State tax (and possibly a small amount of city or county tax) may also apply to U.S. rental income.

Once you elect to pay tax on net rental income, this election will apply to any U.S. rental real estate you hold now and in the future.

 

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You should file a return even if you have a rental loss so you can carry the loss forward to offset future gains and to claim your deductions, including depreciation, which is not a discretionary deduction (in fact, it will reduce the cost base of the property even if you don’t claim it).

If you decide to sell your condo, a withholding tax of 10% of the sale price normally applies under the Foreign Investment in Real Property Tax Act of 1980. You must also file a U.S. tax return to report the sale for income tax purposes. If you realize a capital gain on the sale and the FIRPTA tax withheld is more than the U.S. income tax you owe on the capital gain, you can get a refund for the difference. Again, state tax (including withholding) may apply.

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You may be able to reduce the FIRPTA withholding by applying to the IRS before the sale for a “withholding certificate” if your expected U.S. tax liability is less than 10% of the sale price.

You must also report rental income and capital gains from your U.S. condo on your Canadian tax return. You can generally claim a foreign tax credit for the US tax you paid to reduce your Canadian tax.

When you’re considering selling U.S. real estate, remember the U.S.-Canadian exchange rate will affect the amount of a capital gain taxable in Canada because the cost of the property is converted to Canadian dollars at the exchange rate at the time of purchase and the proceeds are converted at the exchange rate at the time of the sale.

 

If you still own your condo when you die, U.S. estate tax may apply. This tax was repealed for 2010, but it will be reinstated for 2011 (and possibly some or all of 2010) and will continue to impose a potential burden on the estates of Canadians who own U.S. real estate and other property. Some states also have their own estate taxes.

There are ways to reduce your estate’s potential U.S. tax. However, this type of tax planning is complicated and professional advice is advisable.

If you choose to give your condo to a family member during your lifetime rather than in your will, U.S. gift tax will apply. You may also have to pay Canadian tax if a capital gain has accrued, but no foreign tax credits are allowed in Canada for U.S. gift tax. Due to the different tax treatment of gifts in Canada and the United States, gifting real property in the United States is rarely advisable. Tax consequences are different for other types of U.S. property.

Like rental payments, dividends and interest paid by U.S. corporations to Canadian residents are subject to U.S. withholding tax. The Canada-U.S. tax treaty limits the tax to 15% for dividends and zero for interest in most cases. You do not have to file a U.S. tax return to report dividend income on which the correct tax has been withheld or for interest that is exempt from U.S. income tax.

When you sell your shares in a U.S. corporation, Canadian tax will apply to any capital gain but U.S. tax will normally not apply as long as you are not, nor have been, a U.S. citizen or resident. U.S. tax may apply if the shares are in a private company with a majority of its value derived from U.S. real estate. U.S. gift tax does not apply to gifts of U.S. securities by Canadians even though U.S. estate tax may apply to them.

Tax implications should not discourage Canadian entrepreneurs from buying property in the United States. If you pay careful attention to meeting your tax obligations and take advantage of any opportunities to reduce U.S. liabilities, you can reap the benefits of owning the property while minimizing your costs.  (article supplied by Benita Loughlin of the NationalPost.com

We hope this information was helpful.   When deciding to purchase real estate here in Scottsdale, please contact us at 866-620-2164 or visit our website at www.myhomeinscottsdale.com

 

It’s a Good Life!

Stephen & Alice Proski
office@myhomeinscottsdale.com

Posted in Home Buyers, Living in Arizona, Local Market Conditions, Local Real Estate News | 2 Comments »

Home Values Still Going Down

February 12th, 2010

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Maricopa County homeowners will begin to receive their latest property valuations in the mail today. Most will see a third straight annual drop in home values.

Residential property values fell an average of 15.2 percent in 2009, according to the latest report from the Maricopa County Assessor’s Office.  Values fell 23 percent in 2008, following a 13 percent drop in 2007.

“It’s still bad but not as bad,” county Assessor Keith Russell said.

Last year, the overall median value of homes in the county fell to $131,700 from $155,300.

Some Valley cities fared better than others. For example, home values in Tempe declined 13.4 percent in 2009, while they dropped 27.3 percent in Tolleson.

 

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County homeowners have yet to see declines in property taxes similar to the drops in property valuations, and they won’t again this year.

Many Phoenix-area municipalities and school districts are facing budget gaps and will likely have to raise property taxes this fall.

Property-tax bills lag valuations by 18 months in Arizona and are based on a complex formula that includes funding for multiple municipalities and school districts. Most property-tax money goes to education.

The tax bill homeowners receive this September will be based on 2008’s valuation. Assessments going out now will be reflected in 2011 tax bills.

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To save money, the Assessor’s Office is now printing property valuations on a single sheet of paper that is folded to postcard size for mailing.

County property valuations were previously sent in standard business envelopes that also contained several public-information inserts.

The Assessor’s Office saved 40 percent in printing costs by switching to the single-sheet valuation report.

“We want people to know about the new format for their valuations so they don’t mistake them for something else and throw them away,” Russell said.

If property owners think their valuations are too high or low, they must lodge an appeal with the Assessor’s Office by April 13.

 

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Last year, 20,000 people appealed their real-estate valuations in Maricopa County, double the number of appeals from 2005. About 1.5 million properties were valued by the Maricopa County assessor during 2009.

For more information about your home value, check with www.maricopa.gov

It’s a Good Life!

Stephen & Alice Proski

Posted in Home Buyers, Home Sellers, Local Market Conditions, Local Real Estate News | No Comments »

Scottsdale Golf Country Clubs Woo New Members With Cut Rates

January 15th, 2010

 

 

 

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It’s a buyer’s market for golf-club memberships according to a recent report by Peter Corbett of the Arizona Republic.

At most of Scottsdale’s country clubs, a lingering recession has cut the number of new members coming in the front door while financially strapped current members are going out the back door, industry officials say.

And potential new members know they are in the driver’s seat, said Matthew McIntee, a vice president for Crown Golf Properties, which owns and operates Golf Club Scottsdale”There are a lot of bargain hunters,” McIntee said. “People are coming in expecting a pretty deep discount.”

Golf Club Scottsdale is trying the hold the line on its $110,000 membership with $800 monthly dues. But other clubs have slashed membership costs, opened their courses to non-resident play and have otherwise gotten creative to lure golfers with deep pockets in their plaid pants.

Golfers, meanwhile, are trading down from luxury golf to more affordable courses, said Tim Eberlein, director of the Golf Academy of America-Phoenix.

 

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Golf Club Scottsdale, the city’s newest Country Club at 122nd Street and Dynamite Boulevard, is about halfway to its limit of 350 members, McIntee said.

The 5-year-old course, which has no homes surrounding it, has seen its sales slow.

To some extent, that is due to a downturn of people relocating to Scottsdale or buying second homes here, McIntee said.

The Country Club at DC Ranch cut its golf membership last year from $135,000 to $75,000 in the wake of the economic downturn. Monthly dues are $950. Clubhouse memberships start at $5,000.

That price cut helped boost sales to 49 new members in 2009, up from 30 the previous year.

The club saw the biggest dropoff in membership in 2008 when the economy first started to tank, said Melanie Halpert, membership director.

The Country Club at DC Ranch has picked up new members from golfers living outside DC Ranch, she said.

 

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Terravita Golf Club has also added non-resident members, said Steve Mallory, Terravita’s golf director.

Now the club southwest of Scottsdale Road and Carefree Highway is offering one-year trial memberships.

“Like other private clubs we’re being creative to attract new golfers to the industry,” Mallory said.

Terravita’s full membership is $40,000 plus monthly fees of $554. A trial membership is $5,000. That up-front fee is applied to a full membership for those who join within the first year.

Terravita’s members can use their own golf carts, which keeps players’ costs down.

Mallory explained Terravita’s strategy of being the smallest house in a wealthy neighborhood, or in this case, a more affordable country club among some very pricey neighbors.

“When the economy takes a downturn, people are watching their disposable income and a golf club may not be their highest priority,” he said.

Terravita differs from many other clubs in that it is not an equity membership. Some clubs allow members to recoup a percentage of their initiation fee when they choose to leave the club.

“But sometimes that refund doesn’t come to fruition as quickly as the seller would hope,” Mallory said.

 

 

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Members put their name on an exit list and wait their turn to sell their membership. Sometimes the clubs sell three or four of their memberships for every one membership that an exiting member is allowed to sell.

That can lead to a long wait, especially in a recession.

McIntee of Golf Club Scottsdale said his club’s exit list is not as long as he feared it might be, but added that the economy has steamrolled over some of his members.

“The golf business is in a tough spot now,” McIntee said. “But each segment of the market will survive. The challenge is to be one of the best in your segment.”

With that being said, you can see the struggling economy has affected some of the most wealthest of people, those who can afford a pricy golf club members.  Maybe that is why we are seeing more people flock to public courses these days.

Again, thanks for reading our blog and if you would like information about golfing course communities, please feel free to give us a call anytime at 866-620-2164 or send us an email at office@myhomeinscottsdale.com

 

It’s A Good Life!

 

Stephen & Alice Proski

 

 

 

Posted in Just For Fun, Local Market Conditions, Local Real Estate News, Outdoor Activities | 7 Comments »

Federal Recession Aid-Get It While You Can

December 18th, 2009

 

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Time is running out to take advantage of some of the government programs set up to help consumers during the economic meltdown.

Among them are programs meant to shore up the credit markets, which allow for more available credit and lower interest rates on loans for homes and automobiles, as well as tax benefits to entice consumers to buy that new house or car

 

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Mortgage-Backed Securities Purchase Program. This Federal Reserve program is slated to end in March. Since its implementation in January — and expansion in March — of this year, the Fed has been buying up mortgage-backed securities from Fannie Mae, Freddie Mac and Ginnie Mae in an effort to keep the mortgage-securities markets afloat. By the program’s scheduled end, a total of $1.25 trillion in mortgage-backed securities is expected to be acquired.

The upshot for consumers has been mortgage interest rates at or near historic lows, says Paul Ballew, senior vice president, customer insights and analytics for Nationwide, an insurance and financial-services firm.

Once the program ends, however, rates most likely will rise, says Keith Gumbinger, vice president at mortgage-education firm HSH Associates.

The question is, how much?

“By our reckoning, rates are about three quarters of a percentage point lower with the Fed’s program,” Mr. Gumbinger says. “Not that we expect interest rates to go screaming off into the night, but rates half or a full percentage point above where they are now isn’t unthinkable” once the program ends.

A one-percentage-point rise could add more than $150 to a monthly mortgage payment for a $250,000 30-year fixed-rate loan.

For homeowners thinking about refinancing, it’s probably best to act now. After the program ends, “there will be more uncertainties in the marketplace than there are now,” Mr. Gumbinger says. “Rates may be affected and the availability of credit might be affected.”

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Home Affordable Refinancing Program (HARP). HARP, part of the Making Home Affordable initiative, is slated to end in June. It assists homeowners with little or no equity in their homes, who otherwise wouldn’t qualify for refinancing, to refinance their mortgages backed by Fannie Mae and Freddie Mac. HARP is aimed at homeowners whose houses have lost value and who now have a mortgage that’s higher than the house’s value.

Homeowners who qualify for HARP should take advantage of the program before it ends because later on they might not be able to qualify for a refinance without it, says Greg McBride, a senior financial analyst for personal-finance site Bankrate.com.

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Home-Buyer Tax Credit. Consumers also have less than five months to take advantage of the home-buyer tax credit, which originally was part of about $288 billion in tax benefits in the $787 billion economic stimulus package. The credit has been extended — and expanded — through June 2010, though you must have a contract in place by April.

First-time homebuyers get a tax credit of up to $8,000, while existing homeowners may qualify for up to a $6,500 credit if they’ve lived in the same home for five consecutive years in the eight-year period ending on the date of the new home purchase. It must be a primary residence.

You’ll need to show proof of purchase and income limits apply. See the Internal Revenue Service Web site, www.irs.gov, for more information.

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Term Asset-Backed Securities Loan Facility (TALF). Slated to start winding down in March, TALF is a loan program meant to help thaw credit markets. Investors were reluctant or unable to buy loans from lenders, and lenders that didn’t want to keep those loans on their own books stopped making loans.

TALF was “designed to provide financing so that those transactions could take place,” says Mr. McBride. “Investors could buy those loans, lenders could sell those loans and then pump more money back into additional loans.”

Consumers have been seeing TALF’s effect on their ability to get auto loans and on interest rates, says Karen Dynan, vice president and co-director of the Economic Studies program at the Brookings Institution.

According to Federal Reserve data, the average rate for an auto loan from auto finance companies was 6.41% in October 2008. Over 2009, however, rates have come down significantly, with an average rate of 3.42% in October.

If the program ends in March, there’s a chance rates could go up, Ms. Dynan says.

Mr. McBride says if the markets are in working order when TALF ends, there shouldn’t be a spike in interest rates. But a hiccup in the credit markets could cause them to tighten up again, which could cause rates to rise again in the absence of TALF.

Sales-Tax Deduction for New Vehicle Purchases. There are only a few weeks left to take advantage of a tax deduction meant to entice would-be car buyers.

You can deduct state and local sales and excise taxes on your 2009 tax return for up to the first $49,500 of the price of a new car, light truck, motor home or motorcycle. The eligible vehicle must be purchased between Feb. 17 and Dec. 31, 2009, and there are income limits.

“If you’re on the fence about…buying a car, this is a good time to go ahead and do it” because you could save hundreds of dollars on your taxes, says Nick Rizzi, CEO of tax-preparation firm Smart Tax.

As you can see from the information posted above, the Federal Government is trying to stimulate the economy and keep us out of further banking problems…….we may not fully support some of these programs, but we have seen a significant increase in housing sales this year which should hopefully start us back to a road of recovery in the metro Scottsdale/Phoenix marketplace. 

So if you are a First Time Home Buyer, we would welcome the opportunity to assist you with your home purchase and help you receive a hefty tax credit in the process.  Give us a call anytime at 602-620-2164 and we can start the process immediately.

Until next time, hope you enjoy the post.

 

Stephen & Alice Proski

 

 

 

Posted in First Time Home Buyers, General, Home Buyers, Local Real Estate News | 3 Comments »

Good Time To Buy A Condo!

December 14th, 2009

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The Federal Housing Administration puts its long-awaited new financing rules for condominium units into operation last week — immediately affecting sales in hundreds of condo projects across the country.

 

Among the key make-or-break rules that condo marketers, buyers, lender and realty agents now need to know about are the following:

FHA won’t insure mortgages in buildings or complexes where less than 30 percent of the units haven’t already been sold.

At least 50 percent of the units in a project must be owner-occupied or sold to purchasers who intend to occupy them.

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No individual owner or investor can hold title to more than 10 percent of the units in the entire project.

No more than 25 percent of the square footage of a condo project can be non-residential — in other words, used for commercial purposes.

No more than 50 percent of the units can have FHA insured financing on them. FHA doesn’t want to “concentrate its risk” in any single project.

No more than 15 percent of the units in a project can be 30 days or more delinquent on their monthly payments to the condo association.

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Although some developers and in urban areas welcomed the new rules, industry critics say they will actually curtail the availability of low down payment FHA financing for many individual buyers. Others say some of the percentage thresholds are off the mark.

 

 

For example, we recently lost two of our sales in a condo development project because there were too many renters and not enough owner occupied units to meet the FHA requirements.   The developer needed cash flow so they decided to lease a large majority of their condo units rather than wait for sales and closing.

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Andrew Fortin, vice president for government affairs at the Community Associations Institute, which represents condominium, cooperative and planned unit developments across the country, told Realty Times that the 25 percent commercial-use cutoff is “problematic” because many projects have been designed for “mixed use” in urban areas.

Fortin’s group also is critical of the new 15 percent delinquency ratio on association dues. Not only is a 30-day delinquency measure “a very arbitrary standard,” he said, but it’s also not a good indicator of the association’s underlying financial health.

The bottom line is this, since the decline to the market and the overwhelming number of apartment complexes that tried to go condo- conversion, it has been hard to get FHA financing for a number of condo projects in the metro Scottsdale/Phoenix area. This new change that was just implemented last week, will significantly help with our future condo sales and hopefully make that segment of our market more desirable.

 

Until next post, have a good one,

 

Life is Good!

 

 

Stephen and Alice

 

p.s. Don’t forget to head over and take a look at our home away from home:  www.myhomeinscottsdale.com website for anything you need related to buying or selling your home!  Enjoy.

Posted in First Time Home Buyers, Home Buyers, Local Market Conditions, Local Real Estate News | 1 Comment »

High Ho! High Ho! A Hiking We Will Go!

November 20th, 2009

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Fall is in full swing and the weather is ideal for some mountain hiking!  Yes, we said hiking.  According to Sunset Magazine and Frommers, the valley of the sun offers some outstanding hiking trails year round, but they can get very difficult during the summer heat.  That is why we love the fall and winter weather changes so we can get outdoors and do some hiking in and around this wonderful and beautiful city of ours.

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Several mountains around Phoenix, including Camelback Mountain and Piestewa Peak, have been set aside as parks and nature preserves, and these natural areas are among the city’s most popular hiking spots. The city’s largest nature preserve, South Mountain Park/Preserve (tel. 602/534-6324; www.phoenix.gov/PARKS/southmnt.html), covers 16,000 acres and is one of the largest city parks in the world. This park contains around 50 miles of hiking, mountain-biking, and horseback-riding trails, and the views of Phoenix (whether from along the National Trail or from the parking lot at the Buena Vista Lookout) are spectacular, especially at sunset. To reach the park’s main entrance, drive south on Central Avenue, which leads right into the park. Once inside the park, turn left on Summit Road and follow it to the Buena Vista Lookout, which provides a great view of the city and is the trailhead for the National Trail. If you hike east on this trail for 2 miles, you’ll come to an unusual little natural tunnel that makes a good turnaround point.

 

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Perhaps the most popular hike in the city is the trail to the top of Camelback Mountain, in the Echo Canyon Recreation Area (tel. 602/261-8318; www.phoenix.gov/PARKS/hikecmlb.html), near the boundary between Phoenix and Scottsdale. At 2,704 feet high, this is the highest mountain in Phoenix and boasts the finest mountaintop views in the city. The 1.2-mile Summit Trail that leads to the top of Camelback Mountain is outrageously steep and gains 1,200 feet from trailhead to summit. Yet on any given day there will be iron men and iron women nonchalantly jogging up and down to stay fit. At times, it almost feels like a health club singles scene. To reach the trailhead, drive up 44th Street until it becomes McDonald Drive, turn right on East Echo Canyon Parkway, and continue up the hill until the road ends at a parking lot, which is often full. Don’t attempt this one in the heat of the day, and bring at least a quart of water. Although people do this hike in sneakers, I would never dream of bagging this peak without good hiking boots on my feet.

 

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At the east end of Camelback Mountain is the Cholla Trail, which, at 1.5 miles in length, isn’t as steep as the Summit Trail (at least, not until you get close to the summit, where the route gets steep, rocky, and very difficult). The only parking for this trail is along Invergordon Road at Chaparral Road, just north of Camelback Road (along the east boundary of the Phoenician resort). Be sure to park in a legal parking space and watch the hours in which parking is allowed. There’s a good turnaround point about 1.5 miles up the trail, and great views down onto the fairways of the golf course at the Phoenician.

 

 

The 2,608-foot-tall Piestewa Peak, in the Phoenix Mountains Park and Recreation Area/Dreamy Draw Recreation Area (tel. 602/262-7901; www.phoenix.gov/PARKS/hikephx.html), offers another aerobic workout of a hike and has views almost as spectacular as those from Camelback Mountain. The round-trip to the summit is 2.4 miles and gains almost 1,200 feet. Piestewa Peak is reached from Squaw Peak Drive off Lincoln Drive between 22nd and 23rd streets. Another section of this park, with much easier trails, can be reached by taking the Northern Avenue exit of Arizona 51 and then driving east into Dreamy Draw Park.

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Of all the popular mountain trails in the Phoenix area, the trail through Pinnacle Peak Park, 26802 N. 102nd Way (tel. 480/312-0990; www.scottsdaleaz.gov/parks/pinnacle), in north Scottsdale, is my favorite. The trail through the park is a 3.5-mile round-trip hike and is immensely popular with the local fitness crowd. Forget about stopping to smell the desert flowers; if you don’t keep up the pace, someone’s liable to knock you off the trail into a prickly pear. If you can find a parking space (arrive before 9am on weekends) and can ignore the crowds, you’ll be treated to views of rugged desert mountains (and posh desert suburbs). November through April, there are guided hikes Tuesday through Sunday at 10am. There are also wildflower walks, full-moon hikes, and astronomy evenings here. To find the park from central Scottsdale, go north on Pima Road, east on Happy Valley Road, and north on Alma School Parkway, and turn left on North 102nd Way.

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Another great place to go for a hike in the desert is north Scottsdale’s McDowell Sonoran Preserve (tel. 480/998-7971; www.mcdowellsonoran.org), where you’ll find miles of relatively easy and un-crowded trails. The best place to access these trails is at the Lost Dog Trailhead at 124th Street north of Via Linda. To reach this trailhead, drive east on Shea Boulevard, turn north on 124th Street, and watch for the parking lot after you pass Via Linda. The 2.5-mile Ringtail Loop Trail is a good choice for an hour’s hike.

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North of Scottsdale, in the town of Cave Creek, you’ll find a couple of my favorite hikes. The Black Mountain Trail is an un-crowded alternative to such popular hikes as Camelback Mountain and Piestewa Peak. This 1-mile trail leads to the summit of Black Mountain, and from the top you can gaze out over all of Cave Creek and Carefree. Keep an eye out for lizards lounging on the rocks at the summit. To find the trailhead, take Schoolhouse Road south from Cave Creek Road for 1/4 mile and park on the side of the road at the end of the pavement. The hike starts on the road that seems to lead straight up the mountain and then veers off onto the narrow trail. Both longer and less strenuous hikes can be found 3 miles north of Cave Creek at Spur Cross Ranch Conservation Area (tel. 480/488-6623; www.Maricopa.gov/parks/spur_cross). Here you can wander by the water along Cottonwood Creek or hike up on the slopes of Elephant Mountain. In spring, the wildflowers here can be gorgeous. Best of all, this is the closest desert hiking that really has the feel of being away from the city. To reach the trailhead, take Spur Cross Road north from Cave Creek Road. There is a $3 day-use fee.

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As we meet along the trails, keep in mind they are for everyone’s enjoyment even the critters……

 


Until next post, have a good one,

 

Life is Good!

 

 

Stephen and Alice

 

p.s. Don’t forget to head over and take a look at our home away from home:  www.myhomeinscottsdale.com website for anything you need related to buying or selling your home!  Enjoy.

Posted in Just For Fun, Living in Arizona, Outdoor Activities | 4 Comments »

The Pitfalls and Solutions of a Short Sale

October 30th, 2009

Are you having some financial hardships and considering a short sale to avoid foreclosure? We understand the situation you are in and want to know all the facts before you make a decision.

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As a homeowner and considering a short sale it is important you understand the process. The following are some the most common mistakes agents and homeowners make when handling a short sale.

1. Your Property is Priced Incorrectly

Pitfall: Your Property is Priced Incorrectly

This is the most common mistake made with all properties, and the most common reason a property doesn’t sell.

Solution: Agent Providing Understanding and Transparency

Your real estate agent will go through a detailed listing price strategy with you, allowing you to see exactly where your property should be priced based on its current condition, sales in your area, and most importantly, how much time you have left to sell.

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2. Your Short Sale Proposal Is Incomplete

Pitfall: Your Short Sale Proposal is Incomplete

This is one of the most frequently seen causes for the rejection of short sale proposals. Most agents do not understand the short sale process and what your lender will be looking for.

Solution: Understand All Aspects of the Process

Your agent should understand the short sale process in detail and be able to explain it clearly. The agent should also be able to communicate effectively with both you and lenders to produce a complete and cohesive proposal.

3. There Has Been Inadequate Follow-up and Communication

Pitfall: There has been inadequate Follow-up and Communication

As your property goes through each stage of the short sale process, an agent can jeopardize the transaction by not properly communicating with everyone involved. As the homeowner, you may not know that your file has been delayed, and that you again may run out of time to close and avoid foreclosure

Solution: Select and Agent with Experience

The right agent knows exactly how to follow-up to ensure that your lender’s issues are addresses in a timely manner, and will make certain you do not have unnecessary delays.

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4. Not Enough Time

Pitfall: There Isn’t Enough Time

It is critical that your agent understands the foreclosure laws in your area. They should be able to show you an estimated timeline for the process, from start to closing. In addition, they should know how to communicate with your lender. Certain information can be provided to lenders to postpone your foreclosure for weeks or months in order to negotiate a sale.

Solution: Provide Accurate and Useful Information

Make sure you provide your agent accurate information as to exactly how many payments your 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

Pitfall: 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 situation working out in your favor.

Solution: Follow Instructions Closely

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 tow copies. When you reach the point of having a contract, all your information and a completed proposal, you do not want your deal to fall apart because no one sees it.

6. The Buyer’s Offer is To Low

Pitfall: The Buyer’s Offer is To Low

Many agents will encourage you to submit any offer that comes in. The reality is that a short sale is not the same as a fire sale. In order to have a legitimate chance of getting your deal approved, you must have an offer that is more attractive to the lender than a foreclosure.

Solution: Proper Negotiation

The right agent will work with you to properly negotiate any offer that you receive to get “highest and best” from each potential buyer. This ensures you are presenting the best possible solution to your lender.

7. The Buyer’s Contract Is Not Strong Enough

Pitfall: The Buyer’s Contract is Not Strong Enough

Especially in our current economic climate, willingness to make an offer on a property does not mean that a buyer is truly qualified to purchase. The reality is that buyers need to be pre-approved for financing, closing funds must be verified, and their ability to buy needs to be confirmed.

Solution: An Agent Familiar with Qualifying Buyers

Your agent should be familiar with what must be verified in order to qualify a buyer to submit an offer on your property. Otherwise, these offers may have little chance of closing. Don’t risk this process with an uneducated agent who does not appreciate this aspect of short sales.

While these pitfalls may seem troublesome, the right agent, an agent that has earned their Certified Distress Property Expert designation, someone like myself can help you navigate your way to a successful closing. Please don’t endanger your financial future and the potential sale of your home to an agent who does not fully understand this process.

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As a Certified Distress Property Expert, I have completed extensive training in the short sale process, and in assisting struggling homeowners who need real solutions. I understand what you are going through, and I am here to serve and help save your family’s interests. So if you are considering a short sale to avoid foreclosure, please give me a call anytime at 602-620-2168 or email me at alice@myhomeinscottsdale.com and we will do our best to guide through the entire short sale process.

Its A Good Life!

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Posted in Home Sellers | 13 Comments »

Consider Buying A Luxury Scottsdale Foreclosed Home?

October 13th, 2009

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Foreclosures are at an all time high. While it is a difficult time for individuals losing their homes, it is a blissful time for those house-hunting in the Sonoran Desert. Consider a Scottsdale, Arizona luxury foreclosure property for your next purchase and you could save a bundle of money. The properties are plentiful and the price is right for a vacation home or primary residence in sunny Scottsdale, Arizona.

What Do You Know About Foreclosures?

If you are like most people, you probably never purchased a foreclosure, but it is certainly worth considering. Most people have heard about the traditional types of foreclosures, but the luxury home market has now been hit with this problem and it could be a great opportunity if you are in the market to purchase a home in Scottsdale.

Before you make the plunge you should have some knowledge about the foreclosure process have a trained real estate professional like the Proski team on your side. Because there are different types of foreclosures, it is important that you know the ins and outs of the foreclosure process before you leap into the world of foreclosures.

Why Consider a Scottsdale Foreclosure?

Who wouldn’t want a vacation home or primary residence in Scottsdale? We are considered the most livable city in the West. We have about 300 days of sunshine each year, world-class golf courses, 5 star resorts and restaurants, loads of parks and open spaces and our population does not exceed 200,000 people. Visitors from all around the world flock her for the relaxed laidback atmosphere that we provide. We are home to the Barrett-Jackson Car Show, FBR Golf Tournament, Arabian Horse Show, plus a whole lot more.

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How Much You Can Save Buying a Foreclosure

Are you wondering how much you can save buying a foreclosure vs. traditional buying? Take a look at just a few of the foreclosures currently available.
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A golf course house that is 2500 square feet, 3 bedrooms, 2.5 baths, private pool, 3 car garage situated on an elevated golf course lot, previously sold at $660,000. is now on the market for $415,500.00

How about living at the Optima Camelview features over 1700 square feet, 3 bedrooms, 3 baths, with mountain views and walking distance to Scottsdale Fashion Square previously sold at $1,100,000.00 it is now only $505,000. What a deal.
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Looking for the luxury home steal, well how about a 6 bedroom, 7 bath, 8549 square foot home, guard gated community, situated on a 35,000 square foot golf course lot that previously sold at $4,100,000.00 is now on the market at drastically reduced price of $1,000,000.00. This home is located in Desert Highlands.

How about a 1.1 acre lot to build your dream home on that was previously sold for $195,000. is now on the market for $19,900.00. Can you believe that price!

A 4 bedroom, 3 bath, 2 car garage, gated community, private pool and spa situated on Lake Serena in Scottsdale Ranch, yes a water front house that previously sold for $1,350,000. is now on the market for sale at $875,000.00.

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With such a wide range of properties available, your biggest obstacle will be which property to choose. If you thought you couldn’t afford living on a golf course lot or water front property, it’s time to consider a Scottsdale foreclosure. You could be on your way to making Scottsdale your permanent home or favorite vacation home away from home.

So if you want to take advantage of this luxury housing opportunity in Scottsdale, please give us a call at 602-620-2168 anytime. We would be happy to help you find a great foreclosure in Scottsdale.

Life is Good!

Stephen and Alice

p.s. Don’t forget to head over and take a look at our home away from home: www.myhomeinscottsdale.com website for anything you need related to buying or selling your home! Enjoy.



Posted in Home Buyers, Investment, Local Market Conditions | 8 Comments »

When Will This Roller Coaster Ride End?

October 5th, 2009

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“Sales are up.” “Sales are down.” “Prices are up.” “Prices are down.” So what is it? Actually all of these statements are true. One our favorite phrases “it depends” sums up what is going on in our current real estate market. Whether sales are up or down or whether prices are up or down, it just depends on what segment of the market you are looking at. The residential market in the Greater Phoenix area is a mixed market of homes. Hopefully the following information will help bring some clarity to the confusing opening statements.

The number of residential sales for August was down to just above 8,000 homes sold in August for a decrease of 11.6% from July Sales. Still this was the fifth consecutive month in a row with sales of homes over 8,000 with three of the five months having sales over 9,000 homes sold.

Lender owned sales have dropped somewhat while on the other hand short sale transactions have increased. This maybe due to the fact the lenders are willing to wait for a homeowner to try and sell their property versus foreclose on the property and take it back and then place it on the market for sale. We are seeing this to more of the trend that banks are following.

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In August 2008 there were 357 sales of homes between $50,000 to $99,9999 price range compared to 1,457 homes sold in August 2009 in the same price range. Yes things are looking up.

The home sales median price went up $1,000 in August over July. The median price of $126,000 (Greater Phoenix area) in August is up 9% or $9,000 over the median price of $116,000 in April of this year. Have we already bottomed out?

On the other hand, the median price of $126,000 in August 2009 is down 30% or $59,000 when compared to August 2008 when it was $185,000. So I am confused, are things getting better or getting worse? “It depends.”

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Demand for lender owned properties has been hot and the supply for these homes has decreased on the other hand, short sale supply continues to increase. The values of these properties however may decrease as well. If this happens, short sale lenders may further drop the dollar amount they will take on a short sale to get their short sale properties sold. If short sale prices fall far enough, buyers will perceive the purchase of a short sale as a great value and the competition for them will go up, just like it did on lender owned properties.

Lender owned property sales has dropped as a percentage of the total number of monthly sales for the fifth month in a row (April thru August). In March, 2 out of 3 sales were lender owned while in August 1 out of 2 sales was lender owned. The number of short sales closings went up every month so far this year.

So we are seeing inventory declining and sales going up in most cases but why is there still no relief in site? Our guess is we appear to be stabilizing the market somewhat and by doing so, we should start to see some appreciation of values on recent sales. If whatever goes up, must come down, hopefully we’ve been down long enough and its time to go up again.

Listing supplies are down because as stated above, buyers perceived the purchase of lender owned properties as a great value. The Arizona Regional Multiple Listing Service shows residential sales for the last 6 months (March thru August) at 51,913 or 8,652 per month. The home sales median price for this time period was $121,733. The last 6 month period in which there were more sales was June 2005 thru November 2005 at the peak of our real estate frenzy which there were 54,286 or 9,048 sales per month. The home sales median price at that time was $254,833.

So have things gotten better or worse, well again it depends. If you purchased a home at the top of our market in 2005 you have probably seen a dramatic decline in its overall value because of the bank owned and short sales properties that have flooded the market.

The majority of sellers out there are people who must sell because of some sort of distress. They lost their job; the value of their home has dropped; their mortgage exceeds the value of the home; their interest rates have climbed to an unaffordable payment and the list goes on as to the many reasons why most sellers have some form of distress going on and that is why they are trying to sell their home.

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We have lived in the same community for the past 8 years and during the last 18 months the only homes that have sold are the distressed bank owned or short sales properties. A normal seller, ones without any distress going on seem to not have a chance these days. Again, because buyers are looking for the perceived deals and they seem to only focus on short sale and bank owned properties. Hopefully by years end or the first quarter of 2010 the shift will occur and sales will increase across the board within all price ranges and the stabilization we are seeing now will turn into a market increase and the world will be a better place to live in. Okay, sometimes you have to dream.

Until next post, have a good one,

Life is Good!

Stephen and Alice

p.s. Don’t forget to head over and take a look at our home away from home: www.myhomeinscottsdale.com website for anything you need related to buying or selling your home! Enjoy.

Posted in Home Buyers, Home Sellers, Local Market Conditions, Local Real Estate News | 2 Comments »

Canadians Buying Up Arizona

September 24th, 2009

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FAQ’s - Frequently asked questions about purchasing real estate in Arizona.

We have seen a significant amount of Canadians buying real estate here in Scottsdale, Arizona and the entire valley of the sun. If you’re thinking about buying a vacation home or investment property here in Arizona, then you have come to the right place. From time to time we’ve been asked from our Canadian clients many different questions about the buying and selling of real estate here in Scottsdale, Arizona. So in order to better serve our friends from across the border, we thought we would provide some informational facts that would help in the decision making process.

Well to begin with not everything you may have heard about our real estate market is true. Yes, we have had a significant down turn in our market over the last few years and have seen record levels of foreclosed homes. Have we hit bottom? Well, depending upon whom you talk with we may have already started to rebound.

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Are there still deals out there and can we find a home below market value? Yes you can and we’ve assisted many Canadian’s like yourself find outstanding deals here in Scottsdale and the surrounding communities.

In order to better serve you, here are some facts you need to know when purchasing property in Arizona.

Where do we start?

First off, we recommend finding an experienced real estate agent that you can trust and rely upon for valuable information and “we” want to apply for that job! We can guide you through the process of buying real estate here in Arizona. If you choose to purchase a vacation home or investment property, we have the resources to assist you from start to finish. We can recommend lenders, inspectors, title companies, property management services and contractors to you.

Whatever you need let us know and we will do our best to help you with your Arizona real estate.

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Are there any restrictions for Canadian buyers purchasing a home in Arizona?

There are no restrictions for foreign nationals buying property here in Arizona that we are aware of.

If I don’t want to pay cash can I obtain financing to buy in Arizona?

Yes, we have many lenders that we work with that can obtain a suitable mortgage when purchasing a home in Arizona. If you want to obtain a mortgage in Arizona you will need the following information before a lender can assist you.

1. Copies of passport and visa.

2. Last two pay stubs.

3. Last two bank statements.

4. Last two years tax returns, if self employed a letter from an accountant stating how many years you’ve been in business, and business tax returns.

5. Verification of two years of employment history.

6. International credit report-lender will order.

7. Set-up an American bank account to transfer funds.

8. Down payment around 25% to 35% of total purchase price of home.

What costs are involved in purchasing a property in Arizona?

Most of the cost involved in purchasing a property will be fees that you pay to the lender, which is primarily done through a title company. Arizona is a title bearing state and we do not use Attorney’s to process our real estate purchase and sale contracts. This in itself will save you some money.

You will also most likely pay for a home inspection, termite inspection, an appraisal, the escrow (title) fees, title insurance, recording fees, property taxes and homeowner’s insurance. A good rule of thumb is to figure your closing costs will be approximately 3% of the purchase price. This cost will be considerably less if you are paying cash. It will be around 1% of the purchase price for cash buyers.

Arizona does not have a real estate transfer tax and the Sellers pay for all real estate commissions.

What about property taxes in Arizona?

Good question. You will be pleased to know how low our property taxes are. Each city and county will vary slightly, but taxes are usually around .8 to 1.5% of the assessed value of the property. Taxes are re-evaluated every 24 months in Maricopa County.

Are Canadian buyers subject to capital gains tax when their Arizona property is sold?

The foreign Investment in Real Property Tax Act (FIRPTA) imposes a U.S. tax on income and gains from real estate owned by “non-resident aliens” at the same graduated rates applicable to U.S. persons. It is recommended you consult with an accountant or lawyer for more details.

Can I lease my property out when not in use?

Yes. Typically, our rentals are done either furnished for a short-term basis (1 to 4 months) or unfurnished (6 to 12 months) for a long-term basis. If your property is located within a Home Owner Association Community, you will need to review your Covenants, Conditions and Restrictions (CC&R’s) to determine the length of time you want to lease your property and assess any restrictions.

We have a very large seasonal rental pool here and have clients from around the world who visit sunny Arizona during the fall and winter seasons to enjoy our climate, golf, entertainment and recreational activities.

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What is the best way to decide where to buy?

We suggest that you first consider what activities interest you, such as golfing, fine dining, shopping, hiking, tennis, arts or other entertainment venues. Then, concentrate your search near where those activities are located. For example, if golf is of the first priority, then North Scottsdale, Chandler or Gold Canyon maybe your first choice. If art venues are your preference, then Old Town Scottsdale, Central Phoenix or Carefree maybe preferred. We can assist you in locating the right residence for your tastes and budget.

Are HOA budgets and reserves readily available for my review?

Our real estate contracts are buyer friendly, meaning that you have an inspection period to not only review the condition of the property, but the HOA information before you move forward with the purchase of the home. This protects you from buying into a community blindly and gives you a better state of mind that moving forward is a safe and secure investment.

Hopefully the above information has helped with some of the confusion you may have heard in the past about buying a home in Arizona. We’ve been assisting our Canadian clients for more than 15 years successfully buy and sell real estate here in Arizona and are confident we can do the same for you.

Please feel free to give us a call anytime at 602-620-2168 or send us an email at office@myhomeinscottsdale.com and we would be happy to answer any of your questions and would be honored to assist you with your home purchase here in sunny Arizona.

Posted in Living in Arizona, Local Market Conditions | 13 Comments »

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