Jim Little's Sun City AZ Real Estate Blog » Foreclosure

Why Buy A Sun City AZ Home NOW?

jim — Sat, 20 Jun 2009 19:53:07 +0000

The Phoenix area real estate is rising from the ashes just like its namesake, the mytical bird.

The lowest priced homes, under $100,000 are selling withind a few days, often with multiple offers.

Bank owned homes, (REO) ar also selling very well. REO new listings have been averaging 4,000 per month. Pending sales in this category are currently 6000. Obviously, even the older, stale inventory is now being absorbed. As a side note, this means if there really is a “shadow inventory” of foreclosures that haven’t been listed yet, the market seems to be standing ready to buy them.

On a more local level, homes for sale in the Sun City neighborhood have decreased in the last couple of months, and sales + pending sales have increased, a sure sign of a recovery in its early stages.

New appraisals are coming in at or above contract prices, and the Market Condition Report appraisers are now required to file no longer defines properties as being in a declining market.

Interest rates, while still at an artificial low, are starting to creep up. If you are thinking about buying a home, do it soon. Historically, when interest rates reach a low, they will rebound to prior levels quickly. This rebound can be very dramatic. Interest affects buyer costs much more than the sales price over the term of a loan. It also limits the home you can buy on any given income. Act soon to take advantage of these very attractive rates.

The government First Time Buyer Tax Credit is working, bringing renters into the market. HUD is now allowing lenders to provide bridge loans so the tax credit can be used toward closing costs. This reduces the out-of-pocket expenses for a home buyer. It is important to note that this is for closing costs, not for down payment purposes as some reported in error.

Another promising piece of news, Friday 6/19/2009, large banks began paying back the TARP loans. It is nice to see this program seems to have worked, but 75% of the money loaned has yet to be repaid.

And last, it is a small step, but GM announced Friday the company would be recalling 900 laid-off workers. Just a drop in the bucket, but the right direction anyway.

More About Foreclosures

jim — Tue, 19 May 2009 22:10:58 +0000

An addendum to my last post. As I mentioned, one of the problems with foreclosed property is the poor condition we often see. Sometimes the poor condition is intentional abuse by the former owner/occupant. I guess they blame their financial condition on the lender who loaned them the money to buy the home, and than take it out on the house, kicking in walls, breaking windows etc.

Announced in my office meeting today, 5/19/09: The FBI has 3 agents doing nothing but investigating this kind of intentional vandalism. A good idea that someone is doing something about it now that the horse is out of the barn.

I’m not sure what federal statute this would fall under either.

5 Things to Know Before Buying a Foreclosed Home

jim — Sun, 17 May 2009 21:42:05 +0000

Expect the property to be in terrible condition. Many foreclosed homes were abused as the former owners realized they were going to lose the home to the bank. Often the home has damaged and missing items. (A friend just sold one with NO KITCHEN. Additionally, the first thing a lender does is turn off the utilities. Gas, Electric and Water. Any landscaping will die, the pool will turn green, gaskets and seals in the plumbing will dry out.
The home is being sold AS-IS and with no disclosures. That is reasonable, after all, the lender has never lived in the home, and may be located in a far away city. HOWEVER, this means inspections and careful consideration of possible costs are very important to you when you buy a foreclosed home.
Here is a GOOD One! Expect the addendum or counter offer from HELL. The lender Will send a counter or addendum 7 or more pages long that will attempt to remove all protection for the buyer, and bias the proceedings in the lender’s favor. It is IMPERATIVE that you have an experienced agent to help you. The lender will negotiate on some of the items in this counter. A good example is the offer includes 10 days for the buyer to make inspections. Lenders will often counter with 5 to 7 days. Yes, you can insist on 10 days. This is just one example, there are hundreds more.
There will be HUGE communication problems. Listing agents dealing in foreclosures are notorious for not answering phones, returning phone calls or reading/answering emails. The lenders they represent are far, far worse, and will only communicate by email or fax. The title companies (chosen by the lender, not the buyer) are swamped but try to help.
There will be many delays and closing may be late. If the delays are on the lender’s side, too bad, you will have to put up with it. If the delay of closing is on the buyer’s side, the buyer will be charged $100 a day or more until escrow closes.

Jim Little, YOUR SUN CITY REALTOR