Archive for the 'Home Buyers' Category
Do you know your credit score?
March 4th, 2008 categories: Home Buyers, Prescott Homeowners
Do you know your credit score?
Credit scores are a vital part of being a consumer and citizen of the United States. A credit score is a number that helps lenders and others predict how likely you are to make your credit payments on time. Each score is based on the information then in your credit report.
If you want to rent an apartment and do not have good credit scores, your apartment application may be turned down by the landlord. Your scores also may determine how big a deposit you will have to pay for telephone, electricity or natural gas service.
Companies that want to lend you money look at your credit scores all the time. They look at your scores when deciding, for example, whether to change your interest rate or credit limit on a credit card, or whether to send you an offer through the mail. Having good credit scores makes your financial dealings a lot easier and can save you money in lower interest rates. That’s why they are a vital part of your financial health.
Today, many people have credit scores that are suffering due to adjustable loans, credit card debt and so on. Not to mention the foreclosure and short sale market and it’s far reaching effects.
There are 5 parts to evaluating your credit score. As a rule, credit scores analyze the credit-related information on your credit report. How they do this varies. Since FICO scores are frequently used, here is how these scores assess what is on your credit report.
| 1. | Your payment history – about 35% of a FICO score Have you paid your credit accounts on time? Late payments, bankruptcies, and other negative items can hurt your credit score. But a solid record of on-time payments helps your score. |
| 2. | How much you owe – about 30% of a FICO score FICO scores look at the amounts you owe on all your accounts, the number of accounts with balances, and how much of your available credit you are using. The more you owe compared to your credit limit, the lower your score will be. |
| 3. | Length of your credit history – about 15% of a FICO score A longer credit history will increase your score. However, you can get a high score with a short credit history if the rest of your credit report shows responsible credit management. |
| 4. | New credit – about 10% of a FICO score If you have recently applied for or opened new credit accounts, your credit score will weigh this fact against the rest of your credit history. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur. If you need a loan, do your rate shopping within a focused period of time, such as 30 days, to avoid lowering your FICO score. |
| 5. | Other factors – about 10% of a FICO score Several minor factors also can influence your score. For example, having a mix of credit types on your credit report – credit cards, installment loans such as a mortgage or auto loan, and personal lines of credit – is normal for people with longer credit histories and can add slightly to their scores. |
There are many resourses available to check your credit. Make sure you keep your credit in good health. It may come in handy some day…
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Is There Light At the End Of The Tunnel?
February 21st, 2008 categories: Home Buyers, Prescott Real Estate Trends, Real Estate News
Things are picking up, you can feel it. The phone is ringing, Real Estate Agents seem a little more optimistic. Buyers that have been sitting in the stands are stepping into the court, realizing that this is a great time to buy a house. It’s not a surprise that last week brought a 12 percent jump in the number of people applying for mortgages to purchase a home. Could it be a hint that the Spring real estate market could be better than a lot of the pundits believe?
Well, it probably would be a mistake to make too much fuss over a single week’s statistical report from the Mortgage Bankers Association of America.
After all, the National Association of Realtors’ latest pending home sale index — which looks out over the horizon to predict sales activity a month or two ahead — registered a decline of one and a half percent.
But you can’t simply ignore all those new mortgage applications. They’re real. Somethings going on — and it could be that the word is finally getting out to consumers that home loan rates at an average 5.6 percent for a 30-year fixed-rate mortgage — are close to 40-year lows.
Money for home purchases right now is cheap, no question. And we all know housing prices are lower this year than they were last year – sometimes by 10 and 15 percent or more, depending on local market conditions.
So a 12 percent jump in purchase applications could be a significant development … or just a fleeting statistical fluke. We’ll keep you up to date on it.
Another potentially important factor looking forward: The federal economic stimulus package signed into law this week opens the door to more affordable home purchases in some of the hardest-hit, high cost markets in California, New England, Florida and the Mid- Atlantic states.
Rather than being stuck with expensive “jumbo” loans — with rates of one to two percent above standard — buyers will now be able to take out mortgages with lower rates, even if the loan amounts go to nearly $730,000.
Those new “budget-priced” jumbos will be available not only through Fannie Mae and Freddie Mac, whose lower capital costs get passed onto borrowers, but also through the FHA, whose capital costs are even lower.
There’s a hitch, though: These special jumbo deals will only be available this calendar year. They disappear December 31st.
Buyers and sellers who want to benefit from this part of the stimulus package need to get into the game fairly soon.
Who knows? Maybe the economic stimulus package — which most people think of in terms of tax rebate checks — just might bring some heat and energy to the housing market, just in time for Spring.
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Prescott Real Estate; a year in review
February 19th, 2008 categories: Home Buyers, Home Sellers, Prescott Homeowners, Prescott Real Estate Trends, Real Estate News
2007 Prescott Real Estate. A year in review:
Wow! What a transition… To say that Prescott experienced some major Real Estate adjustments in 2007 is an understatement. We enjoyed double digit appreciation for several years, and came to expect it as normal. Although the trend started to slow toward the end of 05, many home sellers, and Realtors didn’t start to feel the burn until 07. In 2007, average home prices adjusted downward in almost all neighborhoods. Days on market adjusted upward along with interest rates. The interest rate increases kept many first time home buyers out of the market all together, or afraid to take the plunge. Buyers looking to up size could no longer afford the larger home and were forced to stay put.
A large listing inventory, and fewer buyers made 07 an especially challenging year for home sellers. 50% of the listing inventory sold, which was down from 79% in previous years. Only 13% of the vacant land on the market sold. Days on market widened to 158 days which was quite a switch from the ” good old days” when homes sold before they hit the MLS. Not to mention the foreclosure market and sub prime lending disaster which we may not see the bottom of until 2009.
2007 brought many changes to our local Real Estate companies. There was simply not enough business to support the growing number of Licensed Realtors in the area. Currently there are 1,643 Licensed Real Estate agents belonging to PAAR (Prescott Area Association of Realtors) that number is down from well over 1,700 in 2005. I predict that in 2008-2009 more of our local Realtors will be forced to leave the Real Estate business. Mortgage companies and well as Escrow companies have seen their share of cut backs, consolidations and lay offs.
Eventhough lost sleep and my graying hair was a big part of 2007, I am always the optimist and hope that 2008 brings sunnier condition to our Prescott Real Estate market. The sooner we all accept “what is” in the Real Estate market, the brighter the sun will shine for all of us. Here’s to a great 2008!
Here are some sales statistics comparing 2006 to 2007.
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Does this Real Estate market make me look fat?
February 19th, 2008 categories: Home Buyers, Prescott Real Estate Trends, Real Estate News
Working in this Real Estate market can make you feel uncomfortable. Like jeans that are too tight, you cannot wait to take them off!
The Real Estate market is in the news a lot these days… Pick up the newspaper, turn on the TV, talk to your neighbor, sadly it’s all pretty negative. There’s no dening it, things are tough out there. I watched a story on the news yesterday about a Real Estate office in Georgia that has converted into a florist, because the phone stopped ringing and houses stopped selling.. I know many Realtors that now work at Home Depot or Lowe’s because there’s simply not enough Real Estate clients to go around..
Many of the people commenting on the state of Real Estate don’t know much about Buyers or Sellers, or what it’s like working in Real Estate;
Here are some observations on the Prescott Real Estate Market….
Homes are selling. Not a lot, but some. What is causing most homes to sell in this market is the price. People are looking for deals. Homes priced at market value may end up sitting in the market for quite a while, simply because there are so many of them. Homes that are selling in under 100 days are usually priced slightly below market value, offering more and costing less than their competition.
Vacant Land. Ouch. About 10 vacant lots are selling in Prescott per month. When there is an abundance of residential properties on the market, vacant land takes a back seat. Right now, the cost of building far exceeds the cost of purchasing re-sale. There are new homes on the market listed at $140.00 to $150.00 per square foot, including the land. The cost of new construction is approxmiately $200.00 +, not including the land. If you are in the market for vacant land, we’ve got some great deals.
Interest Rates are low. They are approacing the 2005 levels again putting more money in buyers pockets. Hopefully buyers will realize that the bottom of the market is now. Anytime this year is a great time to buy a house.
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The Telephone Line; Here are some important phone numbers
February 19th, 2008 categories: Home Buyers, Home Sellers
Moving into or out of a home is a stressful process. Turning utilities on or off, cable TV or Satellite, where do I get trash cans, who is a good veterinarian? Here are some important phone numbers you’ll need to get started.
Home Utilities
APS Electric - (928) 776-3636
City of Prescott Water, Sewer, Trash (928) 771-1291
Unisourse Natural Gas (928) 445-2211
Cable One, Cable TV Service (928) 445-4511
Dish Network, Satellite TV Service (928) 443-9797
Qwest Telephone (800) 244-1111
Ferrell Propane Gas (928) 445-3940
Flame Propane Gas (928) 445-3191
Emergency Services
Prescott Police Department (928) 778-1444 or for emergency call 911
Prescott Fire Department (928) 445-5555 or for emergency call 911
Life Line Ambulance Service (928) 445-3811
AAA Advanced Air Ambulance (800) 633-3590
Transportation Services
Shuttle U (928) 442-1000 To and from Sky Harbor Airport
Van Go (928) 717-8264 Door to door shuttle to Sky Harbor Airport
Executive Transport (928) 445-LIMO (5466)
Pet Care
Mile High Animal Hospital (928) 445-4581 (Highly Recommended)
Thumb Butte Animal Hospital (928) 445-2331
Hassayampa Canine Spa and Resort (928) 776-0932 (Highly Recommended)
(As a dog owner, this is the only boarding facility I recommend. It’s a wonderful facility and very affordable)
Yvonne’s Pet Grooming (928) 445-7244 (Highly recommended)
Financial Services
Grand Canyon Financial Services (928) 443-8583
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Existing Home Sales To Hold Steady In Early 2008
February 19th, 2008 categories: Home Buyers, Home Sellers, Prescott Real Estate Trends
Here is an atricle that I thought was interesting and was published in the Arizona Realtor magazine, Feb. 2008 issue.
Over the next few months, existing home sales are expected to hold fairly steady as indicated by pending sales activity, and then rise later in the year and continue to improve in 2009, according to the latest forecast by the National Association of Realtors.
Lawrence Yun, NAR Chief econimist, says there is a pull and tug exerting itself on the market. “One one hand, we have pent up demand from the four million jobs added to our economy of the past two years of sales decline”. On the other hand, consumers continue to wait for additional signs of market stabilization. There are more people with financial capacity now than in 2005, but many are trying to market time their purchase. As a result, the exact timing and the strenght of a home sales recovery is a bit uncertain. A meaningful recovery in existing homes could occur as early as this spring, or further delayed toward late 2008.
The pending homes sales index, a forwared looking indicator based on contract signed in November fell 2.6 percent to a reading of 87.6 from a strong upward revision of 89.9 inOctober, but remains above the August and September readings and indicated a broad stabilization. The index was 19.2 % below the November 2006 level of 108.4. “Although there could be some minor slippage in the first quarter, existing home sales should hold up in a narrow range before trending up”, Yun says.
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Buyer Tips
February 19th, 2008 categories: Home Buyers, Prescott Real Estate Trends
Prescott, Arizona is definitely a buyers market. There’s a lot of great properties on the market to look at, and simply put, we just need more buyers. I know some are waiting for the bell to ring that indicated the housing market has hit bottom, others may be waiting to see what’s going to happen with the economy. Be that as it may, if you’re looking for a home right now, here’s some tips to make the process easier.
1. Pre-quality with a mortgage lender. Find out exactly how much you quality for. There’s no need to look at homes you cannot afford, or on the other hand, under estimate what you do quality for. In Arizona, a LSR (loan status report) is required from a lender in order to submit an offer on a property. This is the first critical step to buying a home. It’s painless and only takes a half hour or so.
2. Choose a qualified Agent to represent you. There are a lot of buyers driving around looking at homes calling the phone number on the sign, not really working with a Buyers Agent.
An experienced Realtor is wealth of knowledge. They know market values, trends, past sales and so on. Find an Agent you work well with and make it a team effort.
Commit to one Agent, and they will commit to you.
3. Get A Home Inspection. It’s the best $300.00 to $400.00 you’ll ever spend. Uncovering major defects or potential repairs is the purpose of a home inspection. Make sure your inspector checks the roof, furnace, electrical, air conditioning and plumbing. These are items than can be very expensive to repair or replace. Interview your home inspector, ask for a sample copy of their report. A home inspector is an important member of your Real Estate purchasing team.
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Don’t let your dream home become a nightmare… Get a home inspection before purchasing a new home
February 19th, 2008 categories: Home Buyers, Prescott Homeowners
Don’t let your dream home become a nightmare…… Get a home inspection..
According to the National Association of Realtors, 84% of home buyers requested that a home inspection be performed as part of their purchase contract.
99% of Licensed Realtor recommended to their buyers “inspect the home you are buying”.Home inspections are a now a standard step to purchasing a home. You wouldn’t buy a used car without first having it inspected? Home buyers want to know what they are purchasing, and they should. No one want to move into their dream home and have it become a nightmare. Roofs, furnaces, air conditioners or electrical repairs can cost thousands. And then you have to find the right contractor, have your house torn apart, and then write the check. This can be a hassle as well as an emotional rollercoaster. Protect yourself from the start and have the home your’e purchasing inspected. Here are some questions to ask a home inspector.
- First, ask for recommendations and names of qualified home inspectors. Speak with all of them to determine which will be most qualified to inspect your home.
- Ask for qualifications. Is he or she a member of the American Society of Home Inspectors or National Association of Home Inspectors?
- Does the inspector have a license? Inspectors are not required to be licensed in all states.
- How many inspections do they do each year?
- Can you contact their past clients?
- Do they carry Errors and Omissions insurance?
- Is there a guarantee of the work?
- What specifically does the inspection cover, what part of the home is not inspected?
- What type of report is provided?
- How long does it take to receive the report, and how much does it cost?
Protect your investment. Get a home inspection!
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When is a “Short Sale” the right exit strategy?
February 19th, 2008 categories: Home Buyers, Home Sellers, Real Estate News
When is a short Sale the right exit strategy?
There are several ways to lose a home but signing away ownership in a manner that destroys your credit score, embarrasses the family and strips an owner of dignity is one of the most painful. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a “short sale.”
When lenders agree to do a short sale, it means the lender is accepting less than what is owed on the property. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose. However, foreclosures are expensive to the mortgage company and in a declining market, taking a lesser payoff and getting the property off the books may be in everyone’s best interest.
If you are considering buying a short sale, there could be drawbacks. For your protection, I suggest that all borrowers and home sellers:
- Obtain legal advice from a competent real estate lawyer
- Call an accountant to discuss short sale tax ramifications.
As a real estate agent, I am not licensed or qualified to give advise on legal or tax consequences. Except for certain conditions pursuant to the Mortgage Forgiveness Debt Relief Act of 2007, be aware the I.R.S. will consider debt forgiveness as income, and there is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. In some states, this amount is known as a deficiency. Speak with an attourney to determine whether your loan qualifies for a deficiency judgment or claim.
Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.
Call Your Mortgage Lender
You may need to make a half dozen phone calls before you find the person responsible for handling short sales. Ask to speak with a manager; someone who is capable of making decisions and moving your case forward.
Lenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following:
- Property Address
- Loan Reference Number
- Your Name
- The Date
- Your Agent’s Name & Contact Information
Preliminary Net Sheet
This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your closing agent or lawyer should be able to prepare this for you, if you do not know how to calculate any of these fees. If the bottom line shows cash to the seller, you will probably not need a short sale.
Hardship Letter
The sadder, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.
Income and Asset Statements
It is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.
Comparative Market Analysis
Sometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes:
- Active on the market
- Pending sales
- Homes that have sold in the past six months.
Purchase Agreement & Listing Agreement
When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to allow payment of certain items such as home warranty plans or termite inspections.
The Sweeky Wheel Gets The Oil
Stay in close touch with your short sale case manager. Call them daily for updates and progress reports. If everything goes well, the lender will approve your short sale within a few weeks.
We have successfully sold and closed short sales. When working through a short sale, you are faced with bureaucracy, lots of phone calls, and dealing with a mortgage company representatives that may not be that nice to work with. But for a home seller that is behind on payments and no way out, a short sale may be daunting, but a better alternative to foreclosure.
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2008 Prescott Real Estate Market Forecast..!!
February 19th, 2008 categories: Home Buyers, Home Sellers, Real Estate News
Who remembers the psychic Jeanne Dixon? We could use someone like her on our team! She could answer the most FAQ 
“what’s the Real Estate market going to do this year?” “Are things going to improve?”, “is my homes value ever going to come back up?”
These are great questions I wish I had answers for. Here are some of my thoughts for the 2008 Real Estate market.
- In 2008, I don’t think that home prices will increase in Prescott, they may even dip a little further. Home prices will not start to stabilize until the back log of homes absorbs and sells. That is a huge ingredient to recovery in the housing market. Foreclosures hitting the market will also effect home prices. Bank owned re-sales are of no value to bank unless they sell. Banks are motivated sellers and often offer homes at reduced prices, putting the squeeze on private home sellers.
- I can say with certainly that the number of Licensed Realtors Will continue to decline. Currently there is not enough business to support the number of licensed Realtors in the Prescott area.
- Interest rates will remain steady, or even drop a little further.
- Buyers are looking for the bottom. When you really look at what is going on in the market, this could be a great opportunity to buy. Interest rates are low, inventory is high, sellers are motivated. Although property values may be flat for another couple of years, your home is an investment you can enjoy for a lifetime. You may not see much appreciation over the next year or so, but you will in the future. In all likelihood, buyers that purchase homes in 2008 will make money in the long run.
- Home Sellers need to except the truth about home values. Many home sellers are still dwelling in 04 and 05 market. Those days are long gone. I know it’s painful to hear that your property is worth considerably less that it was a few years ago, and unfortunately, these market conditions will be with us for a while. So, if you need to sell, bite the bullet and price your home right from the start. If you don’t need to sell, stay put and enjoy yourself until things turn around.
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