As we all have surely heard by now, foreclosed and bank owned properties are currently a major force in the market.  With the rise in foreclosures here in Chandler, Gilbert, Mesa, Phoenix, Tempe and the surrounding Maricopa and Pinal counties, there are certainly plenty of homes to choose from.  If you are in the market to find a bank owned or REO property, Arizona is a great place to find great opportunities. 

Queen Creek, Arizona for example has been devastated by home foreclosures, and has some of the best bargains in the state.  Bank owned properties have been a driving force in this outlying part of the state, and current prices reflect that.  Since the 2005-2006 top the average sales price in Queen Creek has tumbled nearly 50%, leaving many homes ripe for the picking for long term investors and home buyers.  In the chart below, notice the increase of monthly sales starting approximately March of ‘08.  The rising interest in homes coincides with the massive drop in home values you’ll see on the next chart (average sales price chart).

Monthly Home Sales In Queen Creek, Arizona

 Average Sales Price in Queen Creek, Arizona

Other Arizona cities have had similar price corrections.  Buyers have taken notice and are cashing in on some of the best real estate bargains in America.

 At current prices, now is a great time to buy in Arizona.  It’s easy to get started.  If you are considering buying and would like more information on where to begin, would like to view a bank owned property, or would like to gain access to REO lists, please feel free to contact Nathan Mitchell at 480-529-6329, or Nathan@ezlistaz.com.

As foreclosures continue to mount across the Nation, many renters have found themselves being evicted from their homes without much notice, through no fault of their own.  In most situations renters sign their lease agreements (after a typical credit check, which they pay for), make their payments each month, and go on about their lives with a roof over their heads.

It’s been almost a year ago now, a knock came on my door, and an acquaintance of mine asked me if I would please take her dog, as the home she was renting was foreclosed on, and she had no place for her pet!  Even though she was making her monthly rental payments, her landlord had stopped making the mortgage payments, and cut off all communication with the tenant.  It was a very sad moment.  I humbly took the dog.

See another story here

The foreclosed rental property has been a growing trend, another by-product of the declining housing market and economy.  Most renters are left with little time to react, typically lose their deposits, and are left scrambling to find a new place to call home (and those deposits they lost). 

Unfortunately there is very little recourse for a renter in this situation, especially here in Arizona.  Renters do have a right to sue, but more than likely, in the long run would lose more in the effort.  So what is a renter to do?  Especially right now, it does seem like a game of chance when it comes to renting.  You’re probably not going to get your new prospective landlord to agree to you checking his or her credit, so a little extra work up front may save some headache in the (possibly near) future.

1. Find out when the home was last sold.  If you’re using a Realtor to find your next rental home, that should be easy enough.  If you look for homes that have been recently sold, at or near current prices, then your new landlord could be positioned to make those mortgage payments.
2. Ask to see the last 3 months mortgage statements.  If your prospective landlord agrees, you should be able to see what state that particular mortgage is in.
3. Ask that all deposits be held with a 3rd party (such as a title company), until the lease agreement is over. That way, your deposits will have a greater chance of not disappearing if things go wrong.

Executing step 1 could save you a lot of effort, and grief, and is a fairly simple task.  Steps 2 and 3 might be difficult to accomplish, but if you can get the landlord to agree to one of the two, it could go a long way toward your peace of mind when it’s time to sign the lease agreement.

As you may already know, many REO’s that are slated to be sold at auction are also listed through a REALTOR on the MLS, or multiple listing service.  So if you’ve done your homework, and have become familiar with the market, you may be able to pick up these homes before the hype is built up at the auction.  If you have already spent some time researching the idea of purchasing your next home by way of a bank owned property, you may already have found that it is definitely not a new idea.

As an example, Queen Creek, Arizona has been hit with many foreclosures in the market downturn.  If you’ll refer to my most recent Queen Creek market update and pay attention to the market charts, you’ll see that as home prices starting reaching an area of affordability, the buying pace picked up dramatically.  Not only has the pace picked up, the increased buying activity has stayed constant for several months now.  Others have realized it’s a great time to buy!

Whatever area of town you’re interested in – Chandler, Gilbert, Mesa, Tempe, Phoenix, Queen Creek, or anywhere in the Phoenix Metro area, you can easily begin your research here, and find a great bank owned/REO home at a great price.  Just let me know what part of town you’d like to start in, and I can provide you with daily updates with lists of homes brand new to the market.  It’s that simple!

If you have any questions, or would like more information on selling or buying a home here in Arizona, please feel free to contact me at Nathan@ezlistaz.com.

Many homeowners here in Phoenix, and the surrounding Maricopa and Pinal county areas, are still in danger of foreclosing.

This is a tough question to ask (and to be asked, for sure), but it is a question I ask these days of homeowners when they contact me inquiring about selling their home.  There are many people here in the Valley that are facing ARMs that are ready to adjust, or have already adjusted, or have had any other life happenings that would bring them to the need (not necessarily the want) to sell their homes…quickly…

As the real estate market has changed here in the Chandler, Gilbert, Mesa, Queen Creek, and other Phoenix areas (and across the U.S.), home prices have tumbled (to put it lightly), and many homeowners have found themselves upside down in their homes, otherwise known as owing more than the home is worth.

Homeowners who need to sell, and owe more than the home is worth, need to sell their home short of what is owed, also referred to as a short sale.

Click here for a basic overview of a short sale.

If you have come to the decision that a short sale is your only course of action, one of the first questions that may come to your mind is this: “How do I go about selling my home short, and what can I expect over the next several months?”

The first thing you should do:

Call 888-995-HOPE (the Homeownership Preservation Foundation), schedule a counseling appointment and GO SEE THEM!  The Homeownership Preservation Foundation was founded to help you keep your home by working out an arrangement with your lender(s). Visit them online: http://www.995hope.org/   If you really want to stay in your home, this should be your first step.

***Click here for an overview of new housing legislation, enacted to help you stay in your home***

If there just isn’t any possible way to keep your home, then you may want to proceed to the next steps:

***Remember each individual’s situation is different. There are many different circumstances, from who one’s lender is, to one’s annual income and other life matters.  Please use the following only as an informational piece.  Consult your Realtor, accountant, and/or lawyer for specific information for your specific needs!***

Get a copy of your credit report at www.annualcreditreport.com.  This is a free service (from a government mandated site) and will not only let you know where you stand financially, but could also be a piece of the short sale “package” that your Realtor may send to your lender.

Get your records ready and make copies of all of your financial statements. This will also be a part of your short sale “package”.

Next, contact a Realtor in your area and schedule an appointment to talk about putting your home on the market.  Once you have decided on a Realtor, and decided on an initial list price, it will be time to put your home on the market.

Here in Phoenix it’s extremely difficult (impossible, really) to predict when and at what price a home will ultimately sell.  Each market (the East Valley, for example) is different, and there are many smaller markets (Chandler, Gilbert, Mesa, Queen Creek, and the subdivisions within those cities) within those markets.  You will need to have patience and need to keep up with the current market in your area to be sure you are in the correct pricing “ballpark”. This will allow you to get the most showings possible, with the end result being an offer presented.  When offers finally come in, be prepared for some offers to be quite a bit lower than your asking price.  This doesn’t always happen, but it is very possible.  These “lowball” offers are typically fishing expeditions (someone looking for a great deal).  Consult with your Realtor on how to proceed, just keep in mind that if you’re receiving offers, you’re most likely in the correct pricing area.

As soon as you’ve decided on an offer, your agent will send in the short sale package to your lender(s).  At that point you will play the waiting game.  Remember, your lender, and the associate assigned to your file (in the department sometimes referred to as loss mitigation), are also working hundreds, if not thousands of files just like yours.  Patience is the key here! Keep in mind that your Realtor will continue to “work” the file and keep in contact with your lender as much as possible.  Be ready to wait up to two months or more to receive a response from your lender on the offer you’ve submitted to them.

Every lender is different, and there are a countless number of circumstances that may surround your particular situation.  Not every lender will agree to a short sale, and typically there is no way of finding out if they will or not until you get to this point.

If your lender has agreed to the terms of the offer you’ve presented to them, they will send you an agreement letter and you will then be able to proceed with the sale of home, assuming the buyer that has put in the offer is still waiting to buy the home.  In many short sale cases here in Maricopa and Pinal counties, the first potential buyers have moved on because they are just unwilling to wait so long for a response. Thankfully they DID put an offer in, and ultimately helped you to receive an agreement letter from your lender!  At that point, you’ll have to continue marketing the home until you find a buyer at the lender’s agreed upon price (or maybe you already have backup offers).  Then, if all goes well, within 30-45 days or so (after having a contract) you will have accomplished your goal, and sold your home, rather than letting it foreclose.  You can now get on with life.

**NOTE**  There may be tax and or legal ramifications in regards to selling your home short.  It is highly recommended that you consult an accountant and/or attorney before deciding on a course of action.

If you have more questions about short sales in Chandler, Gilbert, Mesa, Phoenix, Queen Creek  or the surrounding Maricopa or Pinal county areas, please feel free to contact me, my phone number is 480-529-6329.  My email address is Nathan@ezlistaz.com.

… in a nutshell…

FHA Mortgage Refinance and Insurance Program

This would assist troubled homeowners by allowing them to refinance to a lower mortgage with an affordable rate.  It’s a voluntary program to both the borrower and the existing mortgage holder.  The existing mortgage holder would need to agree to release the lien at an amount less than owed.  There will eligibility requirements that both borrower and mortgage holder will have to meet.  In addition the new loan may not exceed 90% of the appraised value of the home.  No second liens will be allowed for at least 5 years.  HUD will be entitled to 50% of the appreciation in the appraised value of the property (HUD will be entitled to 100% of the first year’s appreciation).

Federal Housing Finance Agency to Oversee Fannie Mae and Freddie Mac

This will be a new independent agency to oversee, and regulate Fannie Mae and Freddie Mac.

The Treasury Department will also be granted emergency authority to purchase securities, including equity, and will also increase the existing credit lines of both Fannie Mae and Freddie Mac.

Mortgage Disclosures

The Truth in Lending Act requires delivery of certain disclosures 7 days prior to loan origination.  These disclosures must include examples of how payments would change with a rate adjustment.  The maximum possible payment must be disclosed.  The borrower must receive these disclosures before paying any significant loan fees.

Loan Originators Must Be Licensed

The licensing can be either State or federally regulated, as necessary.  All individuals involved in originating loans must be licensed and registered with the State or HUD.  Minimum standards must be met, including education (and continuing education), and testing. 

FHA to Raise Loan Limits

Limits will be raised to a minimum of $271,000, and the minimum down payment will increase to 3.5% of the purchase price.

Other Noteworthy Inclusions

$3.9 billion in community grants to purchase abandoned and foreclosed properties.

The extension of servicemembers foreclosure protections from 90 days to 9 months.

Creation of credit and housing counseling programs

A first time homebuyer tax credit and increase of the standard deduction for property taxes.

There are other provisions to this Act.  Please feel free to visit this website http://banking.senate.gov/public/_files/HousingandEconomicRecoveryActSummary.pdf

for more information.

This photo was taken outside of a home in Queen Creek, Arizona.  

Looking to buy your home at an auction?

The Phoenix Arizona real estate market has been hit hard by the downturn in home values, due largely in part to an almost uncountable number of bank owned properties and foreclosures.  If you’re in the market for a home, finding a foreclosure can be a way to pick up an even better deal.  There are several avenues to take when considering buying a foreclosed home.  One way is to buy at an auction.  Many times these auction homes are homes that haven’t been able to sell for many months, for one reason or another, and the owner (a bank or investor) is getting desperate to sell.  . 

Be sure to have REALTOR representation when you’re looking for foreclosed and auction homes.  An experienced REALTOR will be aware of the pitfalls and drawbacks of buying these types of properties, and will be able to protect you and negotiate for you throughout the process.  Using MLS and recorded sales data, your REALTOR will also be able to help you figure out whether or not the home is actually a good deal. 

Auction homes tend to be vacant for months, and possibly years, with no care, or maintenance for that entire time period.  Common problems with vacant homes these days are vandalism and theft.  From broken windows and holes in the drywall, to missing appliances and plumbing (copper re-sells for high $).  Because these homes are foreclosed, we assume that these homes have clear titles.  That’s not always the case.  Sometimes during the foreclosure process it takes a long time to figure out who really owns the home.  There have also been cases where the home hasn’t even been foreclosed on yet! – Check out this newsarticle  about an auction house that’s had a little trouble in that regard. 

So, with all of that said, a large part of buying an auction home or any foreclosed home will be your due diligence.  Be sure to view the property before bidding.  If you’re unable to view the property, make sure your contract is contingent on your final inspection and acceptance of the home.  Have a licensed home inspector go over the home when you’re under contract and in your inspection period.  A home inspector can find many things that are unseen to the untrained eye. Because many foreclosed homes in Arizona are sold as-is, you’ll need to know what your initial repair costs will be before the home is inhabitable.   

Consider a home warranty for at least the first year of ownership.  A home warranty will go a long way towards protecting you from unexpected failures such as you A/C going out in the middle of your first summer, ouch. 

Bank owned and foreclosure properties are an excellent way of picking up an excellent deal on a resale home.  Just be sure to protect yourself when buying, at a minimum have REALTOR representation, a contract contingent on final inspection, a home inspection, and a home warranty.  These things will keep you protected, and also ensure your great deal on that foreclosure home!

If you’re buying or selling a home in Maricopa or Pinal counties in Arziona, especially Queen Creek, Mesa, Gilbert, Chandler,Tempe, Phoenix, or Scottsdale, please feel free to contact me for more information.  Nathan@ezlistaz.com or visit my website www.ezlistaz.com get home selling information in Arizona, or search the Arizona MLS 24/7 for free!

 With foreclosures on the rise, and home prices declining there are more and more people looking for explanations, and information on what is going on in today’s market.  I talk with clients and customers on a daily basis of course, and it came to my attention that many people don’t quite understand foreclosures or short sales as much as they’d like to, they just know it’s a bad thing for the homeowner, their neighbors, and the country.  Today, I’ll explain the basics of a foreclosure as it happens here in Arizona.

What is a foreclosure? 

There are a number of events and circumstances that can lead up to the initiating of foreclosure proceedings.  Whatever the circumstances may be, the owner of the home has fallen behind on mortgage payments, and hasn’t had the ability to catch up.  A typical scenario might be this:  an owner of a home has fallen 3 months behind in mortgage payments, and the Trustee (an agent of the bank holding the note on the property) sends a Notice of Trustee’s Sale to the owner (and public), meaning the Trustee will sell the property to the highest bidder at auction on a specified date.  This sets the foreclosure wheels in motion.  From the date of the Notice of Trustee’s Sale to the day of auction is a minimum of 3 months.  In the current real estate environment, it’s not uncommon to see sale dates beyond 3 months, by way of a granted extension.  At the day of auction, if the past due payments (and added fees), have not been remedied by the owner of the home, the Trustee will auction off the home to the highest bidder.  Because of the current market conditions, it’s very common that there will be no highest bidder (no one will want the property at the current bid price, which can be the original loan amount), and the bank will wind up taking the home.  At this point the home is a foreclosure, the bank owns the property, and it goes on the books as REO (real estate owned).  This is a very brief, nutshell explanation of a foreclosure.  Each property is unique, and varying actions may be taken (by the lender, or borrower), depending on the particulars of the situation.

As you read have been reading you no doubt have other questions regarding foreclosures or the pre-foreclosure process.  Here are a few of the most common questions I am asked regarding foreclosures:

 “What are the effects of foreclosed homes on property values in my area?”

 “I am interested in purchasing a foreclosure, how do I get started?”

I will cover these topics and others in future postings.  If you are a homeowner facing foreclosure take immediate action!  Time is of the essence, and now is the opportunity to solve your situation.  Please don’t hesitate to contact me at 480-529-6329, or email me: Nathan@ezlistaz.com.

Have a specific question?  Post a comment!