A while back, I wrote a piece called Condo Re-Financing: Tricky to Impossible. Nowadays, that lending dilemma has grown — it’s next to impossible to get a new mortgage to purchase a condo, according to my favorite lenders Kevin Reiser and Jeannie Bolger. (need an ace loan officer? call me or text me and I’ll forward their info. 602-999-8831). The exception may be luxury condos, think million dollar plus, but I’m not sure that mortgage market is healthy either.

The reason one can’t get a mortgage to buy a condo these days has almost nothing whatsoever to do with the buyer and his/her credit profile. It has to do with the condo community and it’s overall financial health/outlook. Many, many condo (and patio home and townhome) communities have experienced so many foreclosures that their Homeowners Associations are in severe financial distress. Other times, the owner-occupant to investor ratio is so out of whack – with investors owning 75% or more of the units in the community – that lenders won’t lend to anyone who wants to buy there.

If you’re really digging the idea of a condo right now…. check with several lenders first. Getting a mortgage for your new, hip pad might be tricky to impossible.

Want more in-depth explanation of the metro Phoenix condo market outlook? Try this article we wrote waaaay back in Spring 2010. http://thephoenixagents.com/newsletters/viewpoint-2010-0407/

Condo financing near-impossible to get is a post written by The Phoenix Agents at Thompson's Realty. If you're reading this anywhere other than a feedreader (rss subscription) of ThePhoenixAgents.com, the site you're reading this on is guilty of copyright infringement.

Heather Barr is a Realtor and a happy workaholic. She eats more than someone her size ought to be able, and is a runner as a consequence. Her TiVo's full of spy thrillers, police procedurals and Whedonesque sci-fi.

Other posts you might like:

1. Condo refinancing: tricky to impossible
2. Is That Condo FHA Approved?
3. 100% financing eliminated

Image credit Shuttermon via StockExchange

Trulia regularly tracks the buy vs. rent equation and reports again that it’s cheaper to buy a home than to rent in metro Phoenix. See full story here: http://explore.trulia.com/datavis/rentvsbuy/Q2-2011/

Meanwhile, mortgage rates are in free-fall, according to an Inman.com interpretation of Freddie Mac’s rate survey…

Rates on fixed-rate mortgages declined for a seventh week in a row to new lows for the year … Freddie Mac said in releasing the results of its weekly Primary Mortgage Market Survey.

It’s not the ideal time for everybody to buy a home, and mortgages are still a bit difficult to obtain. But it could be a great time for you to buy:

1. Home prices just double-dipped according to Case-Shiller numbers (they’re down over 50% from their Summer 2006 peak)
2. Sellers are frequently willing to pay the buyer’s closing costs,
3. There’s talk in Washington about increasing the minimum cash down payment of the FHA mortgage program from 3.5% to 5% sometime soon, so buying now could save you a couple thousand dollars over waiting

A few questions can help you decide if you should consider buying a home now, or not…

• Are you emotionally & financially ready to be a homeowner?
• Do you have stable employment?
• Do you plan to stay put in your home for 5 to 10 years into the future?
• Do you have a couple months’ worth of salary in savings?
• Have you planned your future budget to account for costs of home ownership like maintenance & property taxes?
• Do you consistently pay your bills on time or even early?
• Do you know what your credit score is? (studies show that people who know their score tend to have better credit ratings than people who don’t know their score)
• Have you talked with a lender to find out how much home you’ll qualify for? (In Arizona, buyers *must* submit a loan approval with a purchase offer)

If you answered yes to all or most of these questions, you’re probably a great candidate to buy a home. Contact your Realtor. Don’t have a Realtor yet? You’re in luck, we’re Realtors. Read what our clients say about us behind our backs, and then give us a shout by email, phone or even text or Facebook.

Ready to start browsing listings online? We provide you a direct link to the private, Realtors-and-appraisers-only Multiple Listing Service. That’s the most up to the second, accurate information consumers can get their hands on. Use our map based home search, or use our Detailed home search to really dial in on your housing wants and needs.

Metro Phoenix: cheaper to buy than rent is a post written by The Phoenix Agents at Thompson's Realty. If you're reading this anywhere other than a feedreader (rss subscription) of ThePhoenixAgents.com, the site you're reading this on is guilty of copyright infringement.

Heather Barr is a Realtor and a happy workaholic. She eats more than someone her size ought to be able, and is a runner as a consequence. Her TiVo's full of spy thrillers, police procedurals and Whedonesque sci-fi.

Other posts you might like:

1. Metro Phoenix Freeways Names
2. Metro Phoenix Utility Companies
3. Improve your credit score the easy way: Rent Better Credit

Although most of the low-down and no-down payment purchase programs are long gone with the financial crash of 2008, we do have 1 lender who has 1 loan program that’s a 1% cash down payment program.

Here’s an example of a recent client of mine who used this program.

• Home purchase price – $85,500
• Seller contribution to buyer’s closing costs – $2,700
• 1% Down Program’s contribution to buyer’s down payment – $2,137
• Buyer’s cash out of pocket for home inspections, appraisals, utility company deposits, etc., – $500
• Buyer’s cash out of pocket on closing day, all-in – $1,033

The program is good in most of Metro Phoenix, AZ as of January, 2011. Among other things, buyers must meet a minimum credit score, and must have stable and verifiable employment income. Buyers must take a homeowners’ education class which takes about 1-2 hours of studying and about 15-20 minutes in exam time. The program can be used to buy a foreclosure (REO) home. The seller is not required to contribute to the buyer’s closing costs, but may.

Not all buyers qualify, and not all homes qualify. But it could be a viable option for you if you’re a little low on cash but want to be a homeowner.

Contact me for more details.

Heather Barr, Realtor
The Phoenix Agents at Thompson’s Realty
602-999-8831 or Heather@ThePhoenixAgents.com

photo credit: user daimon057 at the online photo sharing site StockExchange

Buy a home for 1% cash down is a post written by The Phoenix Agents at Thompson's Realty. If you're reading this anywhere other than a feedreader (rss subscription) of ThePhoenixAgents.com, the site you're reading this on is guilty of copyright infringement.

Heather Barr is a Realtor and a happy workaholic. She eats more than someone her size ought to be able, and is a runner as a consequence. Her TiVo's full of spy thrillers, police procedurals and Whedonesque sci-fi.

Other posts you might like:

1. Cash vs Loan by Size of Home
2. Cash Buyer? Got Your POF?
3. More First-Time Home Owner Mortgage Assistance!

Legislation that extends until Sept. 30 the closing deadline for claiming the homebuyer tax credit — HR 5623, the Homebuyer Assistance and Improvement Act of 2010 — was passed by the Senate by unanimous voice vote Wednesday and could be signed into law by President Obama today.  (source, Inman.com)

Buyers still needed to be under contract on the home purchase by April 30, but now have an additional three months to close the purchase.

Home buyer tax credit extended is a post written by The Phoenix Agents at Thompson's Realty. If you're reading this anywhere other than a feedreader (rss subscription) of ThePhoenixAgents.com, the site you're reading this on is guilty of copyright infringement.

Heather Barr is a Realtor and a happy workaholic. She eats more than someone her size ought to be able, and is a runner as a consequence. Her TiVo's full of spy thrillers, police procedurals and Whedonesque sci-fi.

Other posts you might like:

1. First-Time Home Buyer Tax Credit Fact Sheet
2. Home Buyer Tax Credit Extension Is a “Go”, Here’s Why
3. Home Buyer Tax Credit Law Passed

Real life observation: women who go to the gym in a full face of makeup with their hair done just so. . . . they crack me up.

This has nothing at all to do with real estate.

Or. . . does it?

Many of the buyers we’ve worked with in the past 2 years or so are shopping in the lower price ranges. Single family homes with 3 bedrooms and 1 or 2 baths. Price range is about $70,000 to $100,000.

Inevitably the selection of houses we see includes something just like the two homes below.

Home Number One

The Realtor’s description reads like this -

A/C replaced 2 years ago, new roof in 2009 with transferable warranty, water heater only 5 years old. Exterior painted last month. Seller will buy 2-year home warranty. This home has been well cared for by original owner. Price reduced to $105,000!

This house has pictures like these:

. . . and it looks like this from the front:

.

Then there’s the other option. . .

Home Number Two

Inside, it looks like this:

But it looks like this on the outside:

. . . and the Realtor description on this house says something like this:

Complete remodel! Travertine floors, maple cabinets, stainless steel appliances. New carpet, new paint. Seller will not issue Disclosure Statement about condition or provide CLUE insurance history. Ready to move in at $97,900.

Home number one has all the fundamentals dealt with. The big-ticket, expensive items to replace have all been replaced. The cosmetics are, well, to be kind: dated.

Home number two is an obvious investor fix and flip. The investor just completed a total overhaul of the house but refuses to provide a disclosure statement listing what he or she knows about it. Nice! Plus, that chain link fence in the front makes me reach for the eye bleach. I guess the seller’s message here is “we don’t really like our neighbors much” ?

It’s the curse of The Shiny

Guess which house the majority of buyers make an offer on? Home number 2.

Buyers get stars in their eyes over the fancy, shiny interior remodel and forget that they’re buying a home they know nothing about that could possibly need a roof, A/C unit and water heater in the first couple years of ownership. Plus miscellaneous plumbing &/or electrical problems as yet unknown, because even the best home inspection can’t possibly uncover everything.

Sure, the interior cosmetics of home number 1 are dated. It looks like the Brady Bunch just moved out. I get that. I do, I really do. I don’t want to live in the Brady house anymore than my buyers do.

I just can’t help feeling that I’m not really doing my job 100% when I can’t convince the average buyer to consider for more than a few fleeting moments the incalculable value of a house with the big-ticket stuff already paid for. Even if it’s an extra $7,000 in purchase price and has 15 year old cabinets and counters… The value of having a new roof, A/C and water heater are nearly priceless to cash-strapped first time homebuyers.

Too many home buyers act like the star-struck middle-aged men at the gym: so blinded by The Shiny of a middle-aged woman in Kabuki makeup and a fancy hairstyle they can’t focus on anything else. Not even their own good.

edited to add links below

What is a Seller’s Disclosure Statement?

What is a CLUE insurance report? (scroll down a bit in the article linked here, to about 1/3 of the way through the article)

The Shiny is a post written by The Phoenix Agents at Thompson's Realty. If you're reading this anywhere other than a feedreader (rss subscription) of ThePhoenixAgents.com, the site you're reading this on is guilty of copyright infringement.

Heather Barr is a Realtor and a happy workaholic. She eats more than someone her size ought to be able, and is a runner as a consequence. Her TiVo's full of spy thrillers, police procedurals and Whedonesque sci-fi.

No related posts.

The conventional wisdom (and a lot of mortgage companies’ advertising) currently says that you can buy a house for cheaper than you can rent an apartment in the Greater Phoenix area.  Is it true? Mmmmm…  Yes and no.

Case in point:

First time home buyer, starter home in the south end of the 85016 ZIP code. House is in good repair but cosmetically it’s stuck in the mid-1950s. Three bedrooms,  1 bathroom, 1 carport, average sized yard, 1100 square feet.

Current rent on 900 square foot, 2-bedroom apartment about 5 miles away from the home noted above = $615. Expected mortgage payment on the new house noted above = $505.

So, yes! You can buy for cheaper than you can rent! Except…

It’s a PITI

When you’re a renter, you pay the rent and then you’re done. But home ownership means extras.

• P = principle: repaying the mortgage money you borrowed
• I = interest: the convenience fee for borrowing said money
• T = taxes: specifically property taxes on the house you buy
• I = insurance: the lender who lent you the mortgage money will require you to have homeowners’ insurance on the property

Back to our Case in Point buyer from above paying $615 in rent and expecting to pay $505 for her new mortgage. The $505 is only PI, and doesn’t include TI or anything else involved in home ownership. Taxes & insurance add another $150 monthly. So rent, $615. PITI home ownership costs, $505+ $150 = $655.

But don’t forget the WUST and the MAINT, two acronyms I made up.

WUST:

Water, utilities, sewer, trash. Your new house is probably bigger than your old apartment, so you’ll spend more heating & cooling it. What about HOA fees (Home Owners Association)? Factor those in.

MAINT:

Homeowners also face maintenance costs that renters don’t.

• what if the roof if it leaks? (smallish new roof, ballpark $6,000)
• A/C and heater systems don’t last forever (ballpark cost $5,000)
• the cost of keeping up the landscaping. Even Xeriscape yards require a bit of upkeep
• replacing the faucets when they leak, the toilet flapper if it goes, the appliances when they go, the patio roof when it leaks… you get the idea

Home ownership is a lot more than paying rent. Yes, your new mortgage payment may be less than your old rent. But there are other costs it’s easy to forget about when dreaming about becoming a homeowner.

On the other hand, there’s a big fat tax advantage to being a homeowner: you can deduct mortgage interest paid from your federal taxes. And in your first few years, nearly your entire mortgage payment goes towards the interest you owe, so you can plan to deduct nearly all your mortgage payments from your taxes!

Thinking about becoming a homeowner? Call or email me. I’ve got the coolest little spreadsheet that lets you estimate all your home ownership expenses – PITI, WUST, MAINT and even your negotiables like cell phones, movies & entertainment and groceries — so you can make a wise decision.

Heather Barr, Thompson’s Realty
602-999-8831 or Heather@ThePhoenixAgents.com

Buy for less than you pay in rent? is a post written by The Phoenix Agents at Thompson's Realty. If you're reading this anywhere other than a feedreader (rss subscription) of ThePhoenixAgents.com, the site you're reading this on is guilty of copyright infringement.

Heather Barr is a Realtor and a happy workaholic. She eats more than someone her size ought to be able, and is a runner as a consequence. Her TiVo's full of spy thrillers, police procedurals and Whedonesque sci-fi.

Other posts you might like:

1. Rent vs Buy
2. Can I Buy Now, and Rent My Old House?
3. Landlords, Do You Owe Rent Tax?

File this in the category of Stuff You Should Know.

The website at FHA.com is not run by the FHA (Federal Housing Administration) or by HUD (Housing and Urban Development) or by any other governmental agency.

It’s run by a (presumably for-profit) group that collects information from users including their social security number, credit information, income & debt information, employment, etc. FHA.com then “shares” that information with “third party affiliates”.

In other words, they’re not going to give you a loan and they’re not the FHA. It’s likely they’re going to sell your information to a loan originator, who will then pester you about mortgages.

FHA.com does disclose this information.. . . .

We are not the FHA. They insure the FHA loans that our lenders assist people in getting. If you need to contact the FHA directly, you can do so at:

US Department of Housing and Urban Development
451 7th Street, S.W.
Washington, DC 20410

. . . ..but this disclosure is buried pretty far down in their page structure. Nice how they don’t list a phone number or website link. I will. You can reach the FHA by telephone at (800) CALL-FHA or (800) 225-5342, or online at fha.GOV

FHA.com is not the FHA is a post written by The Phoenix Agents at Thompson's Realty. If you're reading this anywhere other than a feedreader (rss subscription) of ThePhoenixAgents.com, the site you're reading this on is guilty of copyright infringement.

Heather Barr is a Realtor and a happy workaholic. She eats more than someone her size ought to be able, and is a runner as a consequence. Her TiVo's full of spy thrillers, police procedurals and Whedonesque sci-fi.

No related posts.

You know how fix and flipping works in a cynical world, right? Basically. . . . investors buy a craptacular house at foreclosure auction or elsewhere and do no substantive repairs. They slap a thick coat of paint on everything and install cheap new carpet, then resell it as “Remodeled!” with a seriously  jacked up price.

Traditionally, the FHA had a rule in place stating they would not fund buyers who were purchasing a property the seller owned for less than 90 days. This was designed to protect buyers (and the government backed money they used to purchase) and discourage excess profiteering by fix and flip investors.

Some weeks back, the FHA reversed themselves in this area by announcing a new policy that’s generally known in the industry as “The FHA Flipping Waiver.”

FHA changed it’s policy to help the market in clearing some of the excess foreclosure properties for sale which are often holding down pricing at artificially low levels. I don’t know how it worked around the rest of the country, but my opinion is that Fix and Flippers are basically, usually helpful here in metro Phoenix Arizona.

Lenders reserve the right to have additional regulations, above and beyond what FHA guidelines say. It’s taken some time for these lender ‘overlays’ to shake out into a coherent whole but it has finally happened.

What the Heck Does this Mean to Me, A Buyer?

The general rule of thumb if you’re shopping for a home and you’re looking at fix and flips is this:  you won’t be allowed to use an FHA mortgage to buy if the seller of the home you love has

• Owned it for less than 90 days AND
• Has jacked up the price more than 20% over his/her purchase price
• Also, don’t have any sort of pre-existing relationship between yourself, the buyer, and the seller

If the investor has owned the home for less than 90 days and it’s priced 20% or more over the investor’s purchase price, you could potentially still buy the home, but you can’t use an FHA mortgage to do it. That means a ‘conventional’ mortgage, which means a higher down payment than the FHA 3.50%. Plan on 10% to 25% cash down payment if you want that spruced up fixer flipper home.

90 Day Fix and Flip Rule is a post written by The Phoenix Agents at Thompson's Realty. If you're reading this anywhere other than a feedreader (rss subscription) of ThePhoenixAgents.com, the site you're reading this on is guilty of copyright infringement.

Heather Barr is a Realtor and a happy workaholic. She eats more than someone her size ought to be able, and is a runner as a consequence. Her TiVo's full of spy thrillers, police procedurals and Whedonesque sci-fi.

Other posts you might like:

1. FHA and Fix ‘n Flip Do Not Mix
2. REOs Rule, But Not Everywhere
3. Bad MLS Photos, The Flip Side

Buyers using an FHA mortgage who are shopping for condos (or patio homes, or townhomes) need to be aware there’s a list of FHA-approved communities. If the community is not on the FHA-approved list, your FHA mortgage money might not be good there.

Bookmark this website and check for FHA-approved status before you fall in love with something you can’t actually buy. And keep an ear to the ground for anticipated changes to the FHA mortgage program. Most watchers expect higher down payment minimums, decreases in allowed seller concesssions, costlier mortgage insurance, and tougher credit score requirements. Our blogging lender friend Justin McHood writes about expected FHA rule changes on his Arizona Mortgage Team blog.

Need help? Want advice? Call or email me anytime. I do lots and lots of condo shopping with my buyer clients, all over the Northeast and Northwest parts of the Valley. From downtown Phoenix & Old Town Scottsdale all the way up to Desert Ridge, Peoria and Cave Creek, if it’s a condo, I’ve probably seen it.

Is That Condo FHA Approved? is a post written by The Phoenix Agents at Thompson's Realty. If you're reading this anywhere other than a feedreader (rss subscription) of ThePhoenixAgents.com, the site you're reading this on is guilty of copyright infringement.

Heather Barr is a Realtor and a happy workaholic. She eats more than someone her size ought to be able, and is a runner as a consequence. Her TiVo's full of spy thrillers, police procedurals and Whedonesque sci-fi.

Other posts you might like:

1. The Dodgers Spring Training facility gets approved: another feather in Glendale’s cap
2. New Listing – Condo on the Mountain
3. Moving Stills 9 – High Rise Condo

Question: Could a qualified person get a $8,000 tax credit to buy a $10,000 house?

Answer: In short, no. You can’t get $8,000 for buying a $10,000 house. Why?

There’s no minimum purchase, but the tax credit is written as “10% of the purchase price, up to $8,000″. Thus, if you spent $10,000 on a home, you’d get 10% of that price – or $1,000 – as a tax credit.

One other important point: there’s no such thing as a $10,000 home in metro Phoenix that one would actually want to live in. If it’s priced at $10,000 it’s either uninhabitable or located in an area where even the criminals are afraid to walk the streets at night. Phoenix is no different from any other big city in the US: the really cheap real estate is really cheap for a reason.

See this post for an example of a Phoenix-area house listed for sale at $12,500 — http://thephoenixagents.com/the-highs-and-the-lows-3/

.

This was originally a comment I wrote in reply to a reader who emailed me about our post explaining one aspect of the $8,000 federal tax credit for new home buyers.

$8,000 Tax Credit for Buying $10,000 Home? is a post written by The Phoenix Agents at Thompson's Realty. If you're reading this anywhere other than a feedreader (rss subscription) of ThePhoenixAgents.com, the site you're reading this on is guilty of copyright infringement.

Heather Barr is a Realtor and a happy workaholic. She eats more than someone her size ought to be able, and is a runner as a consequence. Her TiVo's full of spy thrillers, police procedurals and Whedonesque sci-fi.

Other posts you might like:

1. 1 More Thing to Do Before Buying a Home
2. Update: Home Buyer Tax Credit
3. Improve your credit score the easy way: Rent Better Credit

This is a phrase you’re seeing a lot lately in the MLS listings on entry-level housing in metro Phoenix:

This is a property acquired at trustee sale in the past 30 days and will not qualify for FHA due to the cure period requirements. Will qualify for VA or conventional.

Well, actually what you typically see is something a lot more cryptic, like “This is an acquired property” which kills me because, well… aren’t they all? Digressions aside…

These homes are called Fix and Flips.* And my point is that the fact they are Fix and Flips usually goes in the private, Realtors-only Remarks data field. Consumers can’t see that data field. And many buyers need to know, because FHA mortgage rules do not allow buyers to purchase homes that the seller has not owned for at least 90 days.

If you’re using an FHA mortgage, there’s no point looking at a house the owner just bought 25 days ago, because he can’t sell it to you. By the time he can sell it to you, it will likely be gone, sold to someone else.

As a buyer, how do you know if you’re looking at a fix and flip? Usually you can’t tell.**

The Internet is chock-full of information but you still need a professional to help filter the good from the useless. Contact a Realtor, begin creating a relationship now, so that when you’re ready to actually buy you’ve got someone you know and trust who’s already on board with your purchase plans.

*Sadly, what I often end up calling these homes is “an essentially crappy house with a thick coat of fresh paint and some new light fixtures.”

**The tax records are publicly available and sometimes a good clue to how long the seller has owned the home. But the tax records are anywhere from a couple of weeks to a couple of months behind the pace of home sales.

FHA and Fix ‘n Flip Do Not Mix is a post written by The Phoenix Agents at Thompson's Realty. If you're reading this anywhere other than a feedreader (rss subscription) of ThePhoenixAgents.com, the site you're reading this on is guilty of copyright infringement.

Heather Barr is a Realtor and a happy workaholic. She eats more than someone her size ought to be able, and is a runner as a consequence. Her TiVo's full of spy thrillers, police procedurals and Whedonesque sci-fi.

Other posts you might like:

1. Bad MLS Photos, The Flip Side