This is a subject about which I have often been tempted to put pen to paper, but have shied away from it for various reasons. However, an article in a prominent Arizona newspaper recently has forced me to re-think that decision.
Once again, we are told how a young couple, trying to get ahead in this world, were duped by some big, bad lender. Apparently, they were approached by a lender who told them that he could move them into a much bigger house and that at close of escrow they would receive $20,000 in cash. The article also stated that they signed loan docs in a parking lot and that they were not notarized at that time. The article then goes on to state that even though they could not afford the payments, the lender “promised” he would help them refinance within a couple of months to obtain a more affordable payment. Well apparently the lender subsequently went missing, and now, boo hoo, they cannot keep up the payments. Well, cry me a river!
There were so many warning signs in the above scenario; what could possibly have caused the buyers to overlook them. Oh right, that perennial standby-greed.
I am reminded, in this case, of the many people who are duped by Nigerian internet scams who end up sending vast sums of cash to those predators. They whine how they were taken advantage of, when in many cases the scammers openly admit that they are taking money that is not theirs, and need your “help”. In both instances the “victims” are overwhelmed by their own greed.
Unfortunately, it is a result of the general sense of entitlement that many people possess today. Do you really “own” a home if you are putting no money down? Do you really “own” a home if you get cash back at closing as legal as that may be and therefore have nothing invested in said home? We make it too easy for people to buy homes they cannot really afford, which makes it too easy for them to walk away when times get tough. This is one of the reasons the real estate market in Phoenix, indeed in the U.S.A., finds itself in the perilous state it is today.
Do not misunderstand me, banks are extremely willing co-conspirators in this whole scheme. Watch how they scream for federal assistance as their greed comes home to roost.
Ultimately, if a deal sound fishy, it probably is. If it seems too good to be true, it probably is. Exercise some restraint and take responsibility seriously.
Unfortunately, for some folks who crave the ultimate American dream of homeownership, their zeal and greed impedes their ability to exercise caution, turning the whole exercise into a nightmare.
Please act carefully and responsibly.
Monday, October 29, 2007
Wednesday, October 03, 2007
Reverse Mortgages Help Phoenix Homeowners
A few days ago, Mrs. K was talking on the phone to Grandma, who was lamenting the fact that Grandpa never "believed" in life insurance so he had never taken out a life policy. Later, as we discussed it, I pointed out that while there had been no insurance windfall after his demise, he had provided for his spouse by ensuring that their home was paid off in full. In fact, Grandma has not had a mortgage payment in twenty years.
It is unusual for a realtor to cover this subject as it is somewhat out of our area of expertise. Which is Realtor-speak for "I don't make any money from this." It's like when your mechanic says of the mystery squeak "They all do that" is mechanic speak for "I don't know how to fix it".
I digress; eventually the conversation led to reverse mortgages and people's perception of them. Most folks think it is a scam. And they could not be more wrong. I do not intend to cover all the intricacies of a reverse mortgage in this article, but I will provide links at the end so that you, dear reader, may undertake further research.
Very simply put, if you are over the age of 62 and, either, own your home outright or have sufficient equity to pay off the loan and still have equity remaining, you are in business. You must also live in the home.
You may never be kicked out of your home or owe more than its value. You can receive the equity in any of the following ways: As a single lump sum, as a credit line account from which to withdraw funds or to be left to grow as an interest-bearing fund. You may elect to collect a fixed monthly stipend for as long as you live in your home. Or, you may concoct a combination of all of the above to best suit your needs.
From a practical standpoint, the only other requirements are that you keep both taxes and insurance on the home current.
Remember that this is a H.U.D. program under the auspices of the F.H.A. If a member of your family is sceptical, and they have a right to be cautious, reassure them that this could be a way to ease their financial burden.
In fact, our Grandma decided to downsize from her 2 acre property to a more manageable condo. The surplus cash will be invested wisely to provide a monthly income, thereby preserving all capital whilst still retaining the flexibility to obtain a reverse mortgage in the future if needs require it.
Anyway, that nice Jim Rockford advertises them on T.V. so how bad can they be?
Resources used:
http://www.rmaarp.com
http://www.hud.gov
http://www.ftc.gov
It is unusual for a realtor to cover this subject as it is somewhat out of our area of expertise. Which is Realtor-speak for "I don't make any money from this." It's like when your mechanic says of the mystery squeak "They all do that" is mechanic speak for "I don't know how to fix it".
I digress; eventually the conversation led to reverse mortgages and people's perception of them. Most folks think it is a scam. And they could not be more wrong. I do not intend to cover all the intricacies of a reverse mortgage in this article, but I will provide links at the end so that you, dear reader, may undertake further research.
Very simply put, if you are over the age of 62 and, either, own your home outright or have sufficient equity to pay off the loan and still have equity remaining, you are in business. You must also live in the home.
You may never be kicked out of your home or owe more than its value. You can receive the equity in any of the following ways: As a single lump sum, as a credit line account from which to withdraw funds or to be left to grow as an interest-bearing fund. You may elect to collect a fixed monthly stipend for as long as you live in your home. Or, you may concoct a combination of all of the above to best suit your needs.
From a practical standpoint, the only other requirements are that you keep both taxes and insurance on the home current.
Remember that this is a H.U.D. program under the auspices of the F.H.A. If a member of your family is sceptical, and they have a right to be cautious, reassure them that this could be a way to ease their financial burden.
In fact, our Grandma decided to downsize from her 2 acre property to a more manageable condo. The surplus cash will be invested wisely to provide a monthly income, thereby preserving all capital whilst still retaining the flexibility to obtain a reverse mortgage in the future if needs require it.
Anyway, that nice Jim Rockford advertises them on T.V. so how bad can they be?
Resources used:
http://www.rmaarp.com
http://www.hud.gov
http://www.ftc.gov
Wednesday, September 26, 2007
Phoenix-Marketing Tips for Selling Your Home
Today I was conducting an MLS search for a client in an area that was entry-level priced, so consequently there were many, many homes to choose from. Whilst refining the search to better tailor it to my customer's needs, I could not help but be amazed by how many Realtors had "shot themselves in the foot" in the remarks portion of the listing. Buyers have a multitude of choices, in this market, when choosing a home. The last thing you should do as listing agent, is relegate your home to the "only see if nothing else suits" pile.
In the next few paragraphs I will furnish actual examples of search-ending folly, which range from the merely unimaginative to the downright ridiculous.
"Motivated seller"; if I had a dime for every time I saw this phrase in a listing I would be much wealthier than I already am. It ranks right up there with the adjective "nice" on the blandness scale. From the same family of real estate no-nos we also get "instant equity" which ranks right up there, but also earns points for its ability to foster law suits later on. Its cousin "below appraisal", while technically accurate, is plain silly because by definition an appraisal is merely a snapshot of value based on historical sales, which in our falling market will naturally have been higher.
Another turn off for buyers is "chandelier does not convey". It seems innocuous, but nobody likes to have something taken away from them. If it does not convey, take it out before you list the home. It makes for more pleasant negotiations.
Homebuyers, like all consumers, are a very visual bunch. It is hard to get enthused over a home that only has one photo. Worse still, some have none. If the lister does not care enough to display the attributes of the home, why would you expect a potential buyer to care. Also, I do not buy into the "It's a new listing" argument. In this day and age, who does not own or have access to a digital camera? Come on people, make an effort!
Huge co-brokes are also a turn-off. After all, who is ultimately paying for them? The buyer, of course.
How about this one; "Seller will contribute (car)(boat)(helicopter) whith reasonable offer." Reasonable to whom?
This one made me laugh out loud, "It's a little rough right now, but will be nice by close of escrow". Doesn't that make you want to jump in your car and race over there. If it is not yet ready for sale, do not list it. You only get one chance to make a first impression. (See remarks re: photos above)
Try to make the property as easy to show as possible. Asking buyers to call Bill, the owner's cousin, to ask him to tell Fred, the neighbor, to leave the key under the mat with 24 hours notice will not likely get the home shown.
This is not rocket science, and in an overcrowded real estate market it is imperative to make the process as easy and smooth as possible for a potential buyer. I hope these tips have helped.
Finally, to my fellow Realtors I have one word, please take heed accordingly "spellcheck".
In the next few paragraphs I will furnish actual examples of search-ending folly, which range from the merely unimaginative to the downright ridiculous.
"Motivated seller"; if I had a dime for every time I saw this phrase in a listing I would be much wealthier than I already am. It ranks right up there with the adjective "nice" on the blandness scale. From the same family of real estate no-nos we also get "instant equity" which ranks right up there, but also earns points for its ability to foster law suits later on. Its cousin "below appraisal", while technically accurate, is plain silly because by definition an appraisal is merely a snapshot of value based on historical sales, which in our falling market will naturally have been higher.
Another turn off for buyers is "chandelier does not convey". It seems innocuous, but nobody likes to have something taken away from them. If it does not convey, take it out before you list the home. It makes for more pleasant negotiations.
Homebuyers, like all consumers, are a very visual bunch. It is hard to get enthused over a home that only has one photo. Worse still, some have none. If the lister does not care enough to display the attributes of the home, why would you expect a potential buyer to care. Also, I do not buy into the "It's a new listing" argument. In this day and age, who does not own or have access to a digital camera? Come on people, make an effort!
Huge co-brokes are also a turn-off. After all, who is ultimately paying for them? The buyer, of course.
How about this one; "Seller will contribute (car)(boat)(helicopter) whith reasonable offer." Reasonable to whom?
This one made me laugh out loud, "It's a little rough right now, but will be nice by close of escrow". Doesn't that make you want to jump in your car and race over there. If it is not yet ready for sale, do not list it. You only get one chance to make a first impression. (See remarks re: photos above)
Try to make the property as easy to show as possible. Asking buyers to call Bill, the owner's cousin, to ask him to tell Fred, the neighbor, to leave the key under the mat with 24 hours notice will not likely get the home shown.
This is not rocket science, and in an overcrowded real estate market it is imperative to make the process as easy and smooth as possible for a potential buyer. I hope these tips have helped.
Finally, to my fellow Realtors I have one word, please take heed accordingly "spellcheck".
Tuesday, August 21, 2007
Phoenix: Short Sales and Foreclosures are Coming to Visit
Without delving too deeply into the reasons for this current predicament, it is a sad fact of life that many Arizona homeowners are running into serious difficulties in meeting their mortgage obligations. As with most areas of life, in order to combat a problem, it is necessary to first admit that the problem exists. If that sounds crazy, you will be surprised how many Realtors get the call "My home is being foreclosed on next week" especially since that procedure comes at the end of a 90 day period. Too many homeowners ignore all phone calls and correspondence from the bank until it is too late. They cover their ears and go "La, la ,la!" However, there are avenues to explore before we get to that point.
If you know you are unable to make this month’s payment and may have more difficulty in the future, contact your lender immediately. Be aware, the bank does not want to talk to a Realtor at this stage; this is a call you must make yourself. Also, make sure you talk to the right department. Just calling the 1-800 will not suffice. It may take some digging, but you must speak to the "loss mitigation" or "work-out" department. The, probably, outsourced employee at the end of the 1-800 does not have any authority to help you, that employee just wants you to make your payment. Some lenders may be willing to modify the existing note, extend the loan period, or give you a six-month break and add those costs to the loan. This is if your financial difficulty is temporary in nature.
If your monetary problems are an ongoing situation with no end in sight you may try to negotiate a "short pay" with the bank. This is when the bank may agree to accept less than what is owed in order to release the lien from the home and enable you to sell. Most likely, they will try to work with you because the last thing any bank wants is to take the property back. Bear in mind, also, that your setback must be real; if you own other homes or assets you cannot, and should not, expect them to forgive you debt while you still have worth. You will most certainly have to "reverse qualify" to obtain a short pay. In the same way you had to qualify to get the loan in the first place, you will be required to furnish proof you can no longer afford said loan. This is where some people run in to trouble. If you "fudged" your initial loan application, if you "stated" income you did not earn, if you said you were going to "owner-occupy" and you did not; this is when the chickens will come home to roost. Some of these conditions I just mentioned are felonies, so think very carefully a) whenever you apply for a loan b) whenever you try to seek relief. Indeed, with the recent spate of "no-doc", "stated income" loans, which many would argue have fueled this current crisis, you may find the reverse qualification more stringent than the original application.
Remember, a foreclosure or a short pay is going to affect your credit history for a long time to come. Also, remember that in a short pay you will receive an IRS 1099 form from the lender for the short fall, just as if you earned that money. Income tax, therefore, will be due on said amount.
To summarize, if your financial difficulty is short term, most lenders will be very willing to work with you to resolve it. If your difficulties are permanent, it is probably time to consult with a Realtor. You will need them to find a qualified buyer at a fair price, and then you will need their expertise to persuade the bank that this is the fair and equitable solution for all parties involved. In either case, the earlier you acknowledge the problem, the better the resolution.
Finally, make sure the Realtor you choose has the knowledge and experience to see it through, your financial future is Dependant upon it.
If you know you are unable to make this month’s payment and may have more difficulty in the future, contact your lender immediately. Be aware, the bank does not want to talk to a Realtor at this stage; this is a call you must make yourself. Also, make sure you talk to the right department. Just calling the 1-800 will not suffice. It may take some digging, but you must speak to the "loss mitigation" or "work-out" department. The, probably, outsourced employee at the end of the 1-800 does not have any authority to help you, that employee just wants you to make your payment. Some lenders may be willing to modify the existing note, extend the loan period, or give you a six-month break and add those costs to the loan. This is if your financial difficulty is temporary in nature.
If your monetary problems are an ongoing situation with no end in sight you may try to negotiate a "short pay" with the bank. This is when the bank may agree to accept less than what is owed in order to release the lien from the home and enable you to sell. Most likely, they will try to work with you because the last thing any bank wants is to take the property back. Bear in mind, also, that your setback must be real; if you own other homes or assets you cannot, and should not, expect them to forgive you debt while you still have worth. You will most certainly have to "reverse qualify" to obtain a short pay. In the same way you had to qualify to get the loan in the first place, you will be required to furnish proof you can no longer afford said loan. This is where some people run in to trouble. If you "fudged" your initial loan application, if you "stated" income you did not earn, if you said you were going to "owner-occupy" and you did not; this is when the chickens will come home to roost. Some of these conditions I just mentioned are felonies, so think very carefully a) whenever you apply for a loan b) whenever you try to seek relief. Indeed, with the recent spate of "no-doc", "stated income" loans, which many would argue have fueled this current crisis, you may find the reverse qualification more stringent than the original application.
Remember, a foreclosure or a short pay is going to affect your credit history for a long time to come. Also, remember that in a short pay you will receive an IRS 1099 form from the lender for the short fall, just as if you earned that money. Income tax, therefore, will be due on said amount.
To summarize, if your financial difficulty is short term, most lenders will be very willing to work with you to resolve it. If your difficulties are permanent, it is probably time to consult with a Realtor. You will need them to find a qualified buyer at a fair price, and then you will need their expertise to persuade the bank that this is the fair and equitable solution for all parties involved. In either case, the earlier you acknowledge the problem, the better the resolution.
Finally, make sure the Realtor you choose has the knowledge and experience to see it through, your financial future is Dependant upon it.
Monday, July 30, 2007
Phoenix Real Estate Price Wars
I was recently involved in a real estate transaction in Phoenix, thank the Lord, that I feel bears repeating because there are lessons to be learnt for both buyers and sellers in this difficult market.
The subject was an entry-level home in Phoenix that had just been reduced from $229,000 to $219,000. It had been empty for about a year, but the sellers were long time owners (over 20 years) so they were not in distress. However, they felt the home was priced right, given the vagaries of the market in the Valley of the Sun, and they were probably correct. Plus it had a remodeled kitchen and an impressive 4-car garage, which was an absolute boon to my client, who I represented as a buyers agent. He wanted the property, because of the garage, and was willing to pay full price. We started at $212,000 which is an amount that is respectfully close to asking and not insulting in any way. The Lister had told me in light of the reduction they would probably not go lower than the asking at this point. Whilst she was at the owners' home presenting the offer, she called me to say, "if you re-wrote the offer at $215,000 today, they would sign it, as they are going on vacation in the morning, and did not want to mess around with a counter-offer. If not they would counter back at $219,000." Verbal negotiations are not valid, all offers must be reduced to writing, so I said "Do what you have to do." Remember, they had already indicated they would accept $215,000 so their $219,000 counter could be countered back by a $215,000 counter from my client if needed. Why the rush? Two hours later, they accepted the $212,000 without any counter. Why? Well, buyers have a lot of choices these days, so if a well qualified one comes along it is important to take them seriously. In this case our offer was close enough that they could "smell it".
Too many people start way too low then the seller feels insulted and takes it personally. In fact, it is a business transaction but both buyers and sellers can get over-emotional because we are dealing with their home, with all the hopes and memories that that can contain.
I also try to dissuade clients from annotating offers with language like "final offer" or "firm". They are combative terms and I find them to be petulant. Be
business like in negotiations and allow people to keep face and respect. It will turn out better in the long run, and you will feel better, too.
I also avoid advertising homes as "with instant equity" or "tens of thousands below appraisal". Seriously, does anyone buy into that nonsense? It always reminds me of T.V. ads from jewelers who guarantee "our items will appraise at twice our price". Good, will you buy them back from me then? I could make a tidy living popping in and out of jewelry stores all day.
The truth is that, in the cooling market that is Phoenix real estate at the moment, correct pricing will help you find the few real buyers that are out there. Negotiating fairly and with respect will help you close the deal, and keep that buyer. And, of course, your integrity.
The subject was an entry-level home in Phoenix that had just been reduced from $229,000 to $219,000. It had been empty for about a year, but the sellers were long time owners (over 20 years) so they were not in distress. However, they felt the home was priced right, given the vagaries of the market in the Valley of the Sun, and they were probably correct. Plus it had a remodeled kitchen and an impressive 4-car garage, which was an absolute boon to my client, who I represented as a buyers agent. He wanted the property, because of the garage, and was willing to pay full price. We started at $212,000 which is an amount that is respectfully close to asking and not insulting in any way. The Lister had told me in light of the reduction they would probably not go lower than the asking at this point. Whilst she was at the owners' home presenting the offer, she called me to say, "if you re-wrote the offer at $215,000 today, they would sign it, as they are going on vacation in the morning, and did not want to mess around with a counter-offer. If not they would counter back at $219,000." Verbal negotiations are not valid, all offers must be reduced to writing, so I said "Do what you have to do." Remember, they had already indicated they would accept $215,000 so their $219,000 counter could be countered back by a $215,000 counter from my client if needed. Why the rush? Two hours later, they accepted the $212,000 without any counter. Why? Well, buyers have a lot of choices these days, so if a well qualified one comes along it is important to take them seriously. In this case our offer was close enough that they could "smell it".
Too many people start way too low then the seller feels insulted and takes it personally. In fact, it is a business transaction but both buyers and sellers can get over-emotional because we are dealing with their home, with all the hopes and memories that that can contain.
I also try to dissuade clients from annotating offers with language like "final offer" or "firm". They are combative terms and I find them to be petulant. Be
business like in negotiations and allow people to keep face and respect. It will turn out better in the long run, and you will feel better, too.
I also avoid advertising homes as "with instant equity" or "tens of thousands below appraisal". Seriously, does anyone buy into that nonsense? It always reminds me of T.V. ads from jewelers who guarantee "our items will appraise at twice our price". Good, will you buy them back from me then? I could make a tidy living popping in and out of jewelry stores all day.
The truth is that, in the cooling market that is Phoenix real estate at the moment, correct pricing will help you find the few real buyers that are out there. Negotiating fairly and with respect will help you close the deal, and keep that buyer. And, of course, your integrity.
Thursday, June 28, 2007
Home Sales at Lowest Levels in Four Years
The National Association of Realtors reported another drop in existing home sales in May, a rate of sale not seen since June 2003.
In fact, some areas of the country, notably the north-east and north-west has seen a small rise in sales. Unfortunately, that means the stats are being pulled down by a disproportionate fall in sales in other areas, for instance, the south-west, and of particular relevance to us, of course, here in the greater Phoenix metropolitan area.
The main reasons for the regional differences are as follows; while housing growth was quite dramatic in the Pacific north- west, for example, it was largely driven by an underlying growth in the local economy. Such was not the case in Arizona. We fell victim to a confluence of circumstances; lots of new construction, lax lending requirements, and a booming national economy that made Phoenix, and its environs, attractive to non-resident speculators. The professionals moved in, and out, quickly but left the impression among amateur speculators that it was easy money. Many of these people are now left holding the bag.
Here in Phoenix we now have inventory at over 60,000 units representing, at current sale rates, an eight to ten month housing supply. Not a positive thing if you need to sell your home. What never ceases to amaze me, and I am sure it does you, is that they are still building thousands of homes throughout the Valley of the Sun. I have said this before but it bears repeating, developers that sold you a home in 2004 for $150,000 that now could sell in the secondary market for $225,000, can still build and sell an identical home for that earlier low price today. They will continue to price their new builds at, or below, what the market will currently bear, until their inventory is reduced.
The good news is that our economy here in Arizona is strong and tens of thousands of people are relocating to our great state each month. Ultimately, the housing market will return to some form of equilibrium, just not in the very near future.
If you need to buy a home you are in a good position; if you want to trade up to a larger home, likewise; if you have to sell (and I mean absolutely have to) set a reasonable price and they will come. If you need to sell three or four or more homes...well you're an investor, you'll think of something.
In fact, some areas of the country, notably the north-east and north-west has seen a small rise in sales. Unfortunately, that means the stats are being pulled down by a disproportionate fall in sales in other areas, for instance, the south-west, and of particular relevance to us, of course, here in the greater Phoenix metropolitan area.
The main reasons for the regional differences are as follows; while housing growth was quite dramatic in the Pacific north- west, for example, it was largely driven by an underlying growth in the local economy. Such was not the case in Arizona. We fell victim to a confluence of circumstances; lots of new construction, lax lending requirements, and a booming national economy that made Phoenix, and its environs, attractive to non-resident speculators. The professionals moved in, and out, quickly but left the impression among amateur speculators that it was easy money. Many of these people are now left holding the bag.
Here in Phoenix we now have inventory at over 60,000 units representing, at current sale rates, an eight to ten month housing supply. Not a positive thing if you need to sell your home. What never ceases to amaze me, and I am sure it does you, is that they are still building thousands of homes throughout the Valley of the Sun. I have said this before but it bears repeating, developers that sold you a home in 2004 for $150,000 that now could sell in the secondary market for $225,000, can still build and sell an identical home for that earlier low price today. They will continue to price their new builds at, or below, what the market will currently bear, until their inventory is reduced.
The good news is that our economy here in Arizona is strong and tens of thousands of people are relocating to our great state each month. Ultimately, the housing market will return to some form of equilibrium, just not in the very near future.
If you need to buy a home you are in a good position; if you want to trade up to a larger home, likewise; if you have to sell (and I mean absolutely have to) set a reasonable price and they will come. If you need to sell three or four or more homes...well you're an investor, you'll think of something.
Thursday, May 31, 2007
Phoenix Real Estate Market-How healthy is it?
Recent reports show that nationally, home prices have dropped for the third straight quarter. Interestingly, here in Arizona we were reporting less sales, but sales prices were actually increasing. What does it all mean? Well let us not forget that anyone can pull a set of statistics and interpret them to suit their own purposes. In this case, nothing nefarious is occurring but we do need to analyze the stats carefully. What is happening in the Phoenix metropolitan area is that although the number of homes sold has gone down, the ones that have sold are at the higher end of the price range. This reflects a couple of interesting points in the Arizona real estate market. Firstly, the fact that more expensive homes are still selling just reveals a broader fact of life that the more wealthy among us are not as affected as the less financially fortunate, by the overall economy or the ups and downs of a finicky real estate market. Secondly, the folks in entry level homes who desire to trade up for something bigger or better (and this is an excellent time to do this) are experiencing a great deal of difficulty in selling their current homes due to unrealistic pricing and an over-abundance of inventory. The pricing problem is one I encounter all the time. Otherwise intelligent folks cannot seem to grasp that the "investor" fueled madness of two years ago is over. I point out recent comparable sales and the response is universal. Those people just "dumped" the property at below market prices. The old "grassy knoll" conspiracy trick!
The overall economy is generally healthy. In the Pacific Northwest prices have either held, or dipped slightly, due to excellent job growth. Here in Arizona, the economy has some catching up to do, to help siphon off excess inventory. That may take time. Also, banks are tightening up lending parameters; making loans, particularly "low-down" or "no-qual" loans, much harder to get. Lenders are now seeing an increase in foreclosures, Arizona ranks 7th in the nation, as their previously lax requirements are coming back to haunt them.
Lenders are also starting to process "short-pays". This is a situation whereby a bank will forgive a portion of the debt secured by a home, in order to allow it to be sold. Traditionally, in a foreclosure a bank would receive, after expenses, around 70-75% of sale proceeds, whereas a short pay could net as high as 90% of proceeds. See your Realtor, or accountant, for more details of both procedures.
It is not all gloom and doom. There will not be any catastrophic decline in house prices, as we saw in the 90's, due to the underlying strength of the economy. Some of the huge "investor" fueled increases will inevitably be given back. However, the market will stay robust, but it will need a year or more to rid itself of the so-called investors, the foreclosures and for inventory levels to return to normal.
Look on the bright side, at least the weather is excellent!
The overall economy is generally healthy. In the Pacific Northwest prices have either held, or dipped slightly, due to excellent job growth. Here in Arizona, the economy has some catching up to do, to help siphon off excess inventory. That may take time. Also, banks are tightening up lending parameters; making loans, particularly "low-down" or "no-qual" loans, much harder to get. Lenders are now seeing an increase in foreclosures, Arizona ranks 7th in the nation, as their previously lax requirements are coming back to haunt them.
Lenders are also starting to process "short-pays". This is a situation whereby a bank will forgive a portion of the debt secured by a home, in order to allow it to be sold. Traditionally, in a foreclosure a bank would receive, after expenses, around 70-75% of sale proceeds, whereas a short pay could net as high as 90% of proceeds. See your Realtor, or accountant, for more details of both procedures.
It is not all gloom and doom. There will not be any catastrophic decline in house prices, as we saw in the 90's, due to the underlying strength of the economy. Some of the huge "investor" fueled increases will inevitably be given back. However, the market will stay robust, but it will need a year or more to rid itself of the so-called investors, the foreclosures and for inventory levels to return to normal.
Look on the bright side, at least the weather is excellent!
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