What As-Is Really Means – REO Buyers Beware

I recently worked with a Buyer on an REO (bank-owned) transaction.  Her budget was tight so we had been slugging it out with all the other bargain hunters here in Gilbert to find a great home at a great price.  Because we hoped to close the deal sometime in 2009, we decided to forego short sales and that left mostly REO's.  It was tough to find a home within my Buyer's budget that met all of her criteria.  We were outbid several times, when we finally thought we hit pay dirt with a great little home in Neely Farms. Here's how the property was described in the listing: BANK OWNED PROPERTY. THIS IS A GREAT PROPERTY FOR A FIRST TIME HOME BUYER … [Read more...]

Bank-Owned Homes – Selling like Hotcakes!

I recently posted about the zombies of real estate - the short sales.  At the opposite side of the spectrum are the foreclosed homes, commonly known as REO's (Real Estate Owned) or homes owned by the bank.  REO's are being listed at very competitive prices and often sell in a matter of days. In many areas, the majority of homes sold are REO's. Here are some interesting statistics from February: In Gilbert, 51% of homes sold in February were REO's. Only 16% of homes listed were REO's.  Months of inventory of REO's: 2.5 In the City of Phoenix,  81% of homes sold in February were REO's. Only 36% of homes listed were REO's.  Months of inventory … [Read more...]

Are Short Sales Worth It?…The Zombies of the Real Estate Market

Short sales are the most misunderstand real estate transaction out there.  A short sale, or "pre-foreclosure" sale occurs when the Seller is selling the home for less than what is owed to the bank, or banks, if there is a second mortgage on the property.  The transaction can only take place if the bank (or banks) approve the sale, and believe me, this makes for a very difficult transaction that can stretch out for many, many months. With the growing number of homeowners in financial distress, it is no surprise that the number of short sales on the market has increased dramatically.  There is even a cottage industry of companies to support … [Read more...]

Homeowner Bailout Plan – Good, Bad or Ugly?

As a Realtor, I get asked lots of real estate questions. The question of the day is most certainly "What do you think of the Obama's Homeowner Bailout Plan?" And I have to say, it is not an easy question to answer. There are so many levels to the current housing situation, and effects from other areas of the economy that will certainly influence the direction of the housing market. But here are a few things that I do know: Too Many People Are Losing Their Homes Who Shouldn't: I have personally worked with a number of homeowners who got behind on their mortgages and tried to work with their banks to get caught up. Guess what? The banks … [Read more...]

First Time Homebuyer’s Tax Credit – Update

The Housing and Economic Recovery Act of 2008 authorized a $7,500 tax credit for qualified first-time home buyers - those buyers who have not owned a home in the last three years. The homes had to be purchased on or after April 9, 2008 and before January 1, 2009. Although the $7500 would be fully refunded when you filed your tax return - either as a credit to your tax bill or as a refund - the tax credit that had to be paid back over a period of 15 years or when the house was sold, whichever occurred first. For more details on the Bill, check out the National Association of Homebuilder's Summary at … [Read more...]

The Fed cut rates…why don’t mortgage rates follow?

In an effort to bolster the US economy, the Federal Reserve has lowered the prime rate several times over the last few months. But Fed rate cuts don't always translate into lower mortgage rates. Today, rates are falling, but that trend will reverse if investors conclude that the Fed's monetary stimulus, combined with Congress's promised fiscal stimulus, will bring unwelcomed high inflation. Rising inflation would bring higher mortgage rates. Mortgage rates are not determined by the Federal Reserve. Mortgage rates are actually determined by the investors who supply the capital to fund those rates. Mortgage loans are brokered by banks and … [Read more...]

Now, That’s Depressing!

Prices have declined, interest rates are low and there is a LOT of inventory to choose from. So why aren't more Buyers jumping on the band wagon? With all the negative press these days, who can blame them. I actually heard a news story that compared today's real estate market to the Great Depression! The Great Depression was a result of the Stock Market Crash of 1929 when speculators who were buying stocks on margin saw their overinflated profits turn into nightmarish losses. When buying on margin, you can invest $1 to buy $10 worth of stock. If the stock goes up, you can increase your investment ten fold. Unfortunately, if the stock … [Read more...]