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Scottsdale AZ Short Sale Information

Friday, September 3rd, 2010

Foreclosure is a fairly well understood process, but as “short sale” signs sprout like weeds all over the metro Scottsdale/Phoenix area you may wonder what it’s all about.

When a lender agrees to accept a mortgage payoff amount less than what is owed in order to facilitate a sale of the property by a financially distressed owner, it’s called a short sale. The lender forgives the remaining balance of the loan.

Everyone loses — or wins

Short sales are a mixed bag for the buyer, the seller and the lender.

If you’re a seller, a short sale is likely to damage your credit — but not as badly as a foreclosure. You’ll also walk away from your home without a penny from the deal, making it difficult for you to find another place to live.

The buyer gets the property at a reduced price, but the property in all likelihood has its share of problems — think fixer-upper — and will need to go through considerable red tape in order to make the deal happen.

The lender takes a financial loss, but perhaps not as large a loss as it might if it forecloses on the property.

Before you even start considering getting involved in a short sale, there are two situations in which an attempt at a short sale is almost certain to fail.
Two short-sale killers

No default on loan — Lenders almost never will accept short sale offers or requests for short sales until the borrower is far behind in payments and a notice of default has been issued.

Bankruptcy — If the seller has filed for bankruptcy, forget it. Few, if any, lenders will consider a short sale when the seller has filed for bankruptcy because negotiating a short sale is considered a collection activity and collection activities are prohibited in bankruptcies.

Can it work for you?

Buying a home in a short sale can be a hassle, so why should you consider it? Mainly, it boils down to the bottom line. You will get the property for a substantial discount. Since the lender is eager to continue to get paid back the money it loaned out. Since the seller plays an active role in the short sale process, you will probably have their complete cooperation. This is not always the case with a property that has gone through foreclosure.

Whether you’ve become aware of the distressed situation on a property through your agent, a FSBO ad or word-of-mouth, this is not a do-it-yourself project. A short sale is one real estate deal where you really need to get help from an experienced agent or attorney. Not all real estate agents know how to handle a short sale, so make sure you consult with one who can demonstrate special training or a good track record with short sales. You may want to select an agent who holds the Certified Distress Property Expert (CDPE) designation or the Short Sale and Foreclosure Resource (SFR) designation. These agents have the knowledge and experience to assist you.

Why lenders (might) agree

It might seem counterintuitive for a lender to go along with a short sale. After all, a lender is legally entitled to pursue the full balance of the loan. When a homeowner falls behind on payments, the lender can (and often does) hold the borrower responsible for every penny owed.

And yet more and more lenders are willing to consider approving a short sale.

Lenders are painfully aware of just how bad the current foreclosure crisis is. They know the cold reality is that a large number of struggling borrowers will end up losing their homes and often see the advisability in accepting the inevitable and trying to minimize their losses. Yet, some lenders seem to remain in denial.

Foreclosure is an expensive and time-consuming process for a lender. By agreeing to a short sale, the lender wraps up this little mess quickly, and perhaps with less of a loss than it would have incurred with a foreclosure.

Remember, after foreclosing, the lender owns the home and has to maintain it, insure it and pay taxes on it. So instead of receiving payments each month, the lender is now forking out money every month. Plus, short sales help the lender look good on paper — the property never gets listed as an actual foreclosure, which helps the lender’s numbers. They see it as the lesser of two evils — if the numbers make sense for them

The entire process gets far more complicated and uncertain of success if there is more than one lender involved. Second or junior lien holders often are the ones absorbing most of the loss. If there is a second mortgage or a home equity line of credit, you’ll need approval from all. In addition, you may find your mortgage loan was sold to an investor and therefore you also need approval from that company.

Short sale properties appear to be the norm in our real estate market and will probably be around for several more years. It is unfortunate that individuals are loosing their homes to either foreclosure of short sale, but on the other side of this ugly mess are buyers/investors who are taking advantage of this housing market.

If you would like more information about the short sale process from either the buyer’s side or seller’s side, please feel free to contact us at 602-620-2164 or visit our Scottsdale Real Estate website  and check-out the drop down menu for Short Sale Help!

It’s a Good Life

Stephen & Alice Proski

Posted in Local Market Conditions, Scottsdale AZ Short Sales, Scottsdale Real Estate News | No Comments »

Banks Need To Fix The Mortgage Crisis

Saturday, May 22nd, 2010

The banks need to start working with homeowners now. If they don’t we are going to see a ripple effect in the economy that made the last meltdown look tame. We can see no reason why the banks are forcing homeowners to go 60 to 90 days late on their mortgage just to get a loan modification which doesn’t really solve the problem.

The banks should be willing to short sell properties back to property owners at market rate instead of forcing the homeowner to do a short sale to a third party and have to move out. We can see reasons why the banks haven’t done this, but at this point with home prices continuing to drop and foreclosures on the rise we believe it will be in everyone’s best interest if the banks start working out deals on principle reductions. They were bailed out by our government with “our” tax dollars and have done nothing but some token maneuvers to placate those who really need help.

The mortgage crisis is dragging on the economic recovery as more homeowners fall behind on their payments.

More than 10 percent of homeowners had missed at least one mortgage payment in the January-March period, the Mortgage Bankers Association said Wednesday. That’s a record high and up from 9.5 percent in the fourth quarter of last year and 9.1 percent a year earlier

Around 4.3 million homeowners, or about 8 percent of all Americans with a mortgage, are at risk of losing their homes.

 
Should loan modification programs fail to help, their homes will go up for sale either as a foreclosure or short sale — when the bank agrees to sell the property for less than the original mortgage amount.

Many analysts have been forecasting home prices will dip again as more of these homes go up for sale at deeply discounted prices.

 
The Obama administration’s $75 billion foreclosure prevention program has barely dented the problem. More than 299,000 homeowners had received permanent loan modifications as of last month. That’s about 25 percent of the 1.2 million who started the program since its March 2009 launch.
About 277,000 homeowners, or 23 percent of those enrolled, have dropped out during a trial phase that lasts at least three months.

Economic woes, such as unemployment or reduced income, are the main catalysts for foreclosures this year. Initially, poor lending standards were the culprit. But homeowners with good credit who took out conventional, fixed-rate loans are now the fastest growing group of foreclosures.

Those borrowers made up nearly 37 percent of new foreclosures in the first quarter of the year, up from 29 percent a year earlier. The risky subprime adjustable-rate loans that kicked off the foreclosure crisis are making up a smaller share of new foreclosures. They made up 14 percent of new foreclosures in the January-March period, down from 27 percent a year earlier.

We have seen signs of improvement this year thus far with inventory going down and sales totals have increased.  We have also seen a slight increase in the median price home values, but if this small improvement doesn’t last, then we can be ready for another melt down
 
If you are having difficulities making your mortgage payments and don’t want to let the bank foreclose on your home, give us a call at 602-620-2164 or email us a  and we will help you explore short sale options.

 Regards

 Stephen & Alice Proski

 

 

 

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

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

Friday, 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, Scottsdale Real Estate News | 8 Comments »

Home Values Still Going Down

Friday, 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, Scottsdale Real Estate News | No Comments »

Scottsdale Golf Country Clubs Woo New Members With Cut Rates

Friday, 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, Outdoor Activities, Scottsdale Real Estate News | 10 Comments »

Good Time To Buy A Condo!

Monday, 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 Scottsdale Home Buyers, Home Buyers, Local Market Conditions, Scottsdale Real Estate News | 1 Comment »

Consider Buying A Luxury Scottsdale Foreclosed Home?

Tuesday, 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?

Monday, 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, Scottsdale Real Estate News | 2 Comments »

Canadians Buying Up Arizona

Thursday, 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 | 18 Comments »

Foreclosures On The Rise

Thursday, August 13th, 2009

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The economy maybe showing some signs for recovery, but thousands of homeowners across Arizona moved closer to losing their homes last month.

Arizona had the third-highest foreclosure rate in the United States in July, with one in every 135 housing units receiving a foreclosure filing, according to the latest market report from RealtyTrac, an online marketplace for foreclosure properties.

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Foreclosure filings – default notices, scheduled auctions and bank repossessions – were reported on 19,694 properties statewide, up 17 percent from June and 47.5 percent from July 2008.

There was some evidence that the rate of increase slowed a little in June, but that wasn’t the case last month, said Daren Blomquist, RealtyTrac spokesman.

“There was a short period where they weren’t increasing quite as quickly, but at least in July they’re back to pretty sharp increases on a year-over-year basis,” he said. “We’re hearing that home sales are up in Phoenix right now, and there are some signs that home prices might be stabilizing, which is good news. So Phoenix would be one of those markets that we might expect to see a turnaround in the foreclosure numbers. But we haven’t seen it yet.”

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Scheduled auctions, the first public record in the Arizona foreclosure process, jumped 25 percent from the previous month, while bank repossessions stayed flat. Only Nevada and California had higher state foreclosure rates.

“We’re putting more into the foreclosure pipeline even as we’re still trying to deal with the large numbers that are already in the pipeline,” Blomquist said.

Among metropolitan areas, Phoenix-Mesa-Scottsdale had the ninth-highest foreclosure rate, with one in every 109 housing units receiving a foreclosure filing.

Nationally, foreclosure filings were reported on 360,149 properties, with one in every 355 U.S. housing units receiving a foreclosure notice. That’s up nearly 7 percent from June and 32 percent from July 2008.

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There’s no evidence yet that national foreclosure prevention programs have affected foreclosure filings, Blomquist said.

“We don’t see a quick end to this anytime in the next few months,” he said. “We expect the numbers to continue to be high through at least the end of this year.”

The Government mortgage intervention has had little impact on the locale real estate market. Yes, there has been a significant amount of sales thus far this year compared to last year’s sales, but we continue to see potential buyers only looking for the “deals” and they think deals are only with distressed properties either short sale, pre-foreclosure or bank owned properties.

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We have seen some improvement with the short sale process taking less time to get an answer from the banks. Hopefully in the future the banks will try and move those transactions along at a quicker pace, thus clearing up inventory and reducing the amount of time a buyer must wait to get an answer.

There maybe light at the end of the tunnel for the overall economy, but we feel the housing market still has some significant challenges ahead.

As Certified Short Sale Negotiators, we can help you if you are behind with your mortgage payments and want to avoid the foreclosure process. Give us a call or send us an email, we would be happy to discuss your situation. We are here to help you.

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 Sellers, Local Market Conditions, Scottsdale Real Estate News | 7 Comments »

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