North Phoenix Agent Blog

OMG. The creative financers are back. Received a purchase offer from a buyer who (1) is upside down in her current mortgage and (2) can’t get approved for a new mortgage because her income is “unusual” (i.e. it’s from disability insurance and oil stock dividends).

Here’s an idea: if you owe more on your current home than it’s worth and you can’t qualify for a new mortgage loan…. maybe… just maybe…. you shouldn’t be out shopping for a new home. I’m jus’ sayin.’

Gone to the pool for a rare day off. Back atcha tomorrow.

Like most Realtors, I spend a fair amount of time in the car, driving around the Valley. Snapped this tonight up in Troon North while photographing a home for a Canadian investor. Got great video of the house to send to my client, but this sunset beauty is all for me (and you).

Must credit my buddy Chris Butterworth from over at the Butterworth Blog for this post idea. Imitation is the sincerest form of flattery, no? Chris does a really fun series on his blog called Moving Stills. And I believe Chris might have gotten the idea from uber cool blogger Theresa Boardman who owns St. Paul (Minnesota) real estate via her long running (and I believe possibly award winning?) blog.

Here’s a JPEG map of the homes currently for sale in Troon and a CMA showing addresses, prices, days on market and price per square foot.

Are you looking for a special home in the Troon area? Please call me and I’ll be happy to set up a custom search in the MLS that pushes the complete MLS listing data right to your email whenever something new hits the market.

I have a client looking for a deal on a home at The Boulders. But like so many potential buyers today, he’s been told by friends and the media that he can get a steal, so he’s half convinced he wants to offer 60% under asking price on a bunch of houses at once — the first seller to accept is the winner of his purchase.  Okayfine.

Being in the trenches daily, I’m here to tell you that 99.9% of sellers are not going to react well to an offer that’s 60% below their asking price. Buyers shouldn’t expect to buy houses at 40 cents on the dollar. Maybe you can do this on a few short sales but be prepared to wait 2 to 4 months for the bank to approve your offer, if they ever do.

So to help this buyer see what’s really going on, I created a spreadsheet for him of market data in the area. It shows home sales in the Boulders since Jan 1 2007, including the initial asking price, the final list price, the days on market and the list to sales price ratios.

Since I’ve been lax lately about blog posts, I’m making my work for that buyer into today’s post. Interested in prices at The Boulders? Look no further.  Homes for sale at The Boulders are here, or email me and I’ll add you to the list of folks who get this data pushed to them daily.

Sale price history at The Boulders is here > > >(click to enlarge, use ‘back’ button to return to this article).

From Inman News, I got a eblast news update that gave me a little more insight into why lenders maybe aren’t so eager to modify loan terms for homeowners facing the possibility of foreclosure.

“On mortgages carrying mortgage insurance that go to foreclosure, investors are protected up to the maximum coverage of the policy, which is usually enough to cover all or most of the loss. This discourages modifications. Why do a modification for $15,000 if the $40,000 foreclosure cost is going to be paid by the mortgage insurer?”  So says Jack Guttentag, professor emeritus of finance at The Wharton School at the University of Pennsylvania. (I found Jack’s comments at Inman.com and I think the site requires a free registration to view the article)

Unlike my last post proposing a “fix” for the foreclosure mess, I’ve got no advice or ideas on this one. I assume it’s the investors who bought the loans from the original lender who are getting payouts from the insurance funds. The bulk of today’s foreclosures are loans carrying private mortgage insurance, since many of them were exotic 80/20 and 80/15/5 loans which left homeowners with little or no equity in the property. Since the news is filled with stories of big banks announcing big losses due to their involvement in the mortgage meltdown, I guess it’s just the banks and the homeowners who are paying the price. Investors (apparently) have their losses covered by insurance.

Being a political junkie, I’m fascinated by the various “fixes” offered by The Big 3 to help American homeowners out of the foreclosure mess. Hillary proposed a moratorium on foreclosures. Congress was debating allowing judges to renegotiate loan terms. Obama …. well, I like him lots but I forget what he proposed. And McCain just yesterday offered a plan whereby homeowners could “go to any post office” and fill out a simple form to apply for a new home loan.

Being in the trenches myself, so to speak, I’m not thrilled by any of these plans. Barack, I don’t remember what you proposed to help homeowners but I still like your inspirational change message. Most economists say Presidents don’t impact the national economy one whit, so I’d rather have someone inspiring sitting idle in the Oval. Billary: a moratorium is helpful only if the homeowner can resume making the payments at the end of the term.

John, I respectfully submit that most American facing foreclosure aren’t having trouble applying for a new loan; they’re having trouble getting one. Why? Because they can’t afford the current payments, they frequently owe more on the house than it’s currently worth, and to rub salt in the wound, they’ve dinged up their credit score badly by missing a few mortgage payments they can’t afford.

My Plan To Fix The Foreclosure Problem (and maybe enter the presidential race)

• A moratorium on foreclosures for 6 months
• Sellers must attend counseling and sign an agreement to save their usual mortgage payment for the 6 months of the moratorium
• Congress directs lenders to do the following: (1) write down principal, (2) lower interest rates and use fixed (not adjustable) rates, (3) lengthen loan terms, and (4) use the homeowners’ credit score from before they missed their first mortgage payment to calculate the refinance terms

If done properly, both homeowners and lenders can win. It won’t be easy but it’s going to be awfully difficult to ride this out without doing anything. Under this plan, homeowners will build a little savings account to guard against future emergencies, and come out of it with a future mortgage payment they can afford.  Lenders get to charge & collect more interest over the life of the new, longer loan and write down a heckuva lot less in losses through principal write downs than through out and out foreclosure. (Some of the out of work mortgage lenders could get a new, temporary job as mortgage & credit counselers too, although they make a easy scapegoat in this crisis so that might be a hard sell on Capitol Hill.)

Handy Example - Homeowner owes $250,000 on a home currently worth $215,000 and struggles to make the monthly payment on their post-adjustment-period ARM loan, which began with a teaser rate of 5.125% but is now at 7.25%.

• $250,000 loan at 7.250% for 30 years = $1705 a month, principal & interest
• $225,000 loan at 6.000% for 45 years = $1206 a month, pricinpal & interest

While the homeowners are probably rejoicing at their $500 a month savings, notice that the lender wasn’t forced to write down the entire pricinpal loss. The home is worth only $215,000 but the homeowner refinances $225,000. This should prevent the talking heads from ranting that we rewarded folks who knowingly got in over their heads. Importantly, this should help more Americans facing foreclosure actually stay in their house and keep making mortgage payments they can afford long into the future. Finally, fewer foreclosures equals less downward pressure on home values.

Sure, some homeowners won’t save the money they’d normally spend on mortgage payments. Sure, some lenders won’t write down the principal and/or interest enough to make a difference to the homeowner. Sure, some homeowners will still be so angry and (dare I use the word?) bitter that they’ll still choose to walk away from their abode, stripping it bare on the way out the door. But I think it’s better to try than to do nothing.

I’m sure there are other problems with my plan, holes I didn’t see and issues I didn’t think of. I’d like to know what readers think. I’m a relative guppie in the blogging world compared to some of the big fish who (graciously) read me. Want to leave your 2 cents? Please do! 

 This post inspired by my Dad, the Original Political Junkie. He’s got a steel trap mind for everything that happened in the political arena since about 1954, and he should have been making millions in Washington as a policy wonk or a Senior Advisor on anything. He chose instead to quietly step in to help a formerly single Mom raise her 2 kids. I’d be lost without him.

With my usual go-to lending gal, Kristi Collins, on hiatus this week, I’m turning to my other go-to lenders, Aimee & Shailesh Ghimire of CTX Mortgage, and Larry Cappalletti of the local company Capp Mortgage. The text below is taken directly from an email report I receive regularly from Shailesh & Aimee. Want to get this in your IN box too? Email them at aimee.ghimire@ctxmort.com

Rates 

• 30 Yr Fixed, Conventional - 6.000% with 0 points
• Same - 5.750% with 1 point
• 5.625% - 5/1 Jumbo ARM with 0 points and No Fee
• 5.875% - 7/1 Jumbo ARM with 0 points and No Fee

Market Report - The Dow ended the week at 12,325.42, down 2.3%. The broader S&P 500 sank a similar 2.7%, to 1332.83. The NASDAQ, which last week rose the most, this week sank the most, down 3.4%, to 2290.24.

With oil prices hitting a new $112 high on Wednesday, there was more yak about inflation, but that didn’t seem to hurt the Treasury market. The yield on the benchmark 10-year Treasury ended Friday at 3.460%, actually a smidge down from where it began the week. Mortgage rates should continue to be in a good range.

INFO JUNKIES, THIS WEEK’S FOR YOU… Last week, a few corporate earnings reports had a big market impact, so things should be super interesting this week, as 200 companies reveal their Q1 numbers. With the financial sector a big focus for the last few months, pay special attention to reports from Bear Stearns rescuers JPMorgan Chase, plus Wells Fargo, Merrill Lynch, Citigroup, and US Bancorp.

Adding to the corporate noise will be a host of economic indicators. March PPI and CPI indexes will give us a read on inflation. (Heather’s post publishing note - the PPI numbers came out today and were downright dismal. PPI shot up to 3 times expected levels, which is bound to add fuel to the flames for those arguing that inflation is a big worry and therefore the Fed should stop slashing interest rates.) March retail sales, housing starts, and building permits will measure our economic health, along with a leading indicators reading and the Philadelphia Fed Index. Initial Jobless Claims will be watched for any creep toward recession levels, which hasn’t happened yet.

Current Fed Funds Rate: 2.25%

I saw a cute guest bath towel idea today while touring a home for sale with clients. Snapped a pic with my phone. It’s a little blurry and the colors are a bit off but I think the idea will come through.

In any case, it was a cute idea for a guest bath. The under-towel was a dark chocolate brown hand towel, hung straight on the bar, with no fold. The 2 over-towels were a nice toffee color hand towel in a standard tri-fold. The insets were small frameless pictures measuring about 3 by 5 inches. I bet they came from a home discount store like Tuesday Morning and I’m sure cost less than $5 a piece. They’re anchored onto the accent hand towels with an elastic band in a chocolate brown. Finally, the flowers are plastic sprigs and I bet you could pick ‘em up at Michaels for about 50 cents a piece.

Of course the pictured towels are off-center & hung crooked. That pretty much speaks to the condition of the entire home. My clients called it the “dirty red house” because it was . . .  well . . . dirty and disorganized, and filled with red accent candles, chair covers, froo-froo’s and fringe. I should have photographed the master closet. It was filled to bursting with clothes and you couldn’t see the floor through the layer of dirty, discarded and (to my nose) damp clothing strewn about the floor. Here’s a word to the wise when your home is for sale: resist the urge to discard the day’s worn clothing by tossing it on the floor of your closet. Buy a hamper with a lid and use it.

I haven’t written much lately. It’s because I’m working 13 hour days with buyers and sellers crawling out of the woodwork it seems. So, a short post about the anecdotal evidence I’ve got that says the metro Phoenix real estate market is improving.

• I’ve got 4 new listings in 2 weeks, all priced aggressively to move within 30 days
• I’ve also got 3 new buyers, money in hand, FICO score safely in the mid- to high-700’s, ready to buy this month
• My A/C guy is busier than he can keep up with, with new work based on home inspection findings
• His friend who does truss work for area builders, says he’s busy again after a 1-1/2 year lull
• A friend of mine who works for Pulte says their sales office is slammed; she’s working Saturdays again
• We have 55,598 active listings in the Arizona Regional MLS which is higher than I’ve seen since I started tracking in Oct 2007 (this is all property type, Active only, not AWC)
• 6,626 properties are ”pending” today, which is 11.84% of the Active inventory (up from 10.00% on March 12, and a meager 6.06% on January 6)
• 4,589 properties have sold in the past 30 days, which means we’ve got 12.19 months of inventory on the market (down from 15.48 on March 12 and a dismal 19.30 last November)

So what does it all mean? It seems we’re getting our usual spring inventory increase. With an already bloated market full of too many under-improved and over-priced houses, this should be bad. But the good news it we seem to be selling it. Nobody would claim a 12 months’ supply of housing for sale is a good market, but it’s a definite improvement over where we’ve been.

Have we turned the corner? My gut says yes, but I want another month or two of watching the “months supply” number drop before I’ll change my market call from Hold to Buy.

I could just as easily have called this “Behind the Cupboard Doors” but I’m a child of the 80’s when the Iron Curtain still existed (remember it?) and so Behind the Curtain has a certain zing to my ears.

In any case, when your home is for sale, potential buyers will visit it. And believe me, buyers will open your cupboards, pantry, linen closets and medicine cabinets. You may feel like those things are sacred, but they’re not. So open ‘em up yourself and straighten ‘em out.

Start in the pantry. Open up wide and discard anything you didn’t remember was in there. Food banks are nearly always in need of donations. Try St. Mary’s Food Bank, my own church which maintains a food bank, or this list of Arizona food banks. Now that you have a little room in the pantry, straighten and organize what’s left. Facing is important. This is simply lining up all the canned goods so their labels face out towards your eye when you open the door. It’s a silly little simple thing but it’s effective. It gives people a sense of orderliness. Buyers think that if you had time to face your pantry items, your house has probably been well cared for too.

Next, tackle your medicine cabinets. Take out your prescriptions! I can’t stress this enough. Even if you only put them in a shoebox under the bed, it’s better than leaving them in the medicine cabinet. Folks will open it and snoop. Rarely, scripts have been known to disappear from homes for sale. While you’re at it, you should also remove any non-prescription meds that have a street value like Sudaphed (used in making meth), cough syrups (an easy high for youngsters) and aerosol canisters (huffing, another easy high for kiddies seeking a thrill).

Visit your linen closet. Fold everything neatly and stack it all by size or color.

Face and organize your fridge & freezer. I know it sounds ridiculous. But it won’t seem ridiculous when your house is 1 of the 6 that sold out of out of 100 on the market in your area. (Needless to say, you must remove any fridge items that are unrecognizable and/or are ready to walk out on their own.)

Finally, tackle the kitchen cupboards. Remove anything you don’t need to use in the next 6 months. Box it up and put it in the garage, storage shed, a hall closet or even a rented storage space if necessary. You’re going to have to pack it anyway; you might as well get an early start. Now that you’ve created some room in there, go back to my 3rd paragraph about facing the items in your pantry. You want to re-arrange everything until you have a neat sense of orderliness in the cupboards. When buyers open the cupboards and see some neatly arranged things surrounded by plenty of empty space, they’re going to be struck by how roomy your home is. Why, their stuff will fit in here no problem! They’ll have room to spare! They can buy more stuff! Never mind that you just spent an afternoon removing your excess stuff.

Bottom line: if buyers open your cupboards, pantry and closets to find some neatly arranged stuff and lots of empty space in which they can imagine putting their stuff…. well the job of selling them on your house is at least half done.

If the thought of all this organizing makes you want to poke your own eyes out, rest assured there are staging and packing companies who will do it all for you. Call me for their contact info. And put down the sharp scissors.

Rates bounced around a little last week but begin this week about where they were before.

• 5.8% - Conforming loan, 30 year fixed
• 5.6% - Conforming loan, 5/1 ARM
• 8.4% - Jumbo loan, 30 year fixed
• 8.25% - Jumbo loan, 5/1 ARM

We’re seeing increased activity in the mortgage market. Combined with the improved numbers for March sales & listings (55,000+ listed and 3322 sold) this is another month with incremental movement in the right direction. Things are looking up!

Changing up the theme again. Hope it’s still readable and nothing gets lost. Call it spring cleaning; I was ready for a new look.

One of my favorite sayings is “They call it real estate beige because it sells houses.” Don’t know where it came from. Brilliant as I am, I’m 100% certain that I’m not the first one to say it. But it is true. The most inexpensive high-return thing you can do when selling your home is slap on a fresh coat of paint. Do the baseboards, trim and doors while you’re at it. Expect it to cost about $1.15 to $1.30 per square foot (use your home’s total square footage here).

So what’s Real Estate Beige? These are some good beige tones from Dunn Edwards.

Swiss Coffee, Pearl White, Pale Wheat and Cottage White are all going to look like a nice off-white once the job is done. Same with the old standby Navajo White.  Swiss Coffee & Navajo White are in the taupe-y color family. Pearl White has a bit more yellowish undertone and Cottage White has a beige-tan undertone. If the room you’re painting gets lots of sun, you might be happier with Swiss Coffee, Pearl White or Najavo White.

Whisper and White Beach are nice yellow whites. Whisper is paler, White Beach is a creamy color about like a manilla folder. Little sun and/or a north facing room? The yellow undertones in Whisper and Pale Wheat will help warm up the room.

Ready for a bolder beige that’s a notch above off-white? Try Quicksand (yellowish undertones), Sandcastle or Inside Passage (mustard-y undertones), English Scone (brick red and pink undertones), Sandy Beach (peachy undertones), or Golden Gate (grayish beige undertones).

Want bolder still?! Try Gourmet Honey or Warm Buttersotch which are the darker hues of Inside Passage (yellowish brown tones). Or for beige with a little ruddy, reddish undertone try Travertine, Stonish Beige or Colorado Trail (listed in order from paler to deeper). Finally, Brichwood, Trail Dust and Mesa Tan are good taupe-y grayish beiges with a deeper tone than Sandcastle.

Want help choosing a color? Noelle Carpenter is a fabulous estimator for local company Certa Pro Painters and she offers excellent color-choosing help. You can contact me for her phone number or email her at nCarpenter@CertaPro.com.

Zillow launched a new online mortgage quote system today at their Mortgage Marketplace.  Must give credit to The Phoenix Real Estate Guy, Jay Thompson for blogging about this first.

From Jay: Zillow’s system does not take your name, phone number, email or Social Security Number. Lenders get your request and respond with a detailed loan quote based on information you provide. You then log into Zillow and review the loan quote — which includes rate, APR, terms and cost. Then YOU decide if you want to contact the lender.

How in the world can a lender give you a mortgage quote if they don’t know your credit score?!? Zillow thought of that. Users provide an estimate of their credit score, or use Zillow’s FICO estimator tool if they don’t know their actual score. Zillow then provide users a loan quote that includes rate, APR, terms and cost.

I  don’t normally think much of Zillow, but this seems kinda cool. Kinda like the promise of eLoan without the annoying dinnertime telemarketer calls.

Staging a home for sale is pretty close to vital these days in metro Phoenix. For most folks the professional stager’s recommendations will include de-cluttering. Here are some of the most common de-cluttering tips.

• Remove half of everything on bookshelves
• Remove half of the clothes from each closet
• Make sure remaining hanging closet items are neatly arranged by season and/or color
• Make sure other remaining closet items are neatly boxed and/or stacked and labeled
• Straighten up your pantry with labels facing out, items alphabetized and neatly stacked
• Remove all family portraits from walls & fridge
• If you’re leaving the fridge, straighten and declutter it too. No mystery leftovers!

Tips for Bachelors Only
Guys, I’m sure you’re exceedingly happy in your bachelor life and I celebrate your desire to remain unhitched. But it’s a weird truism  that most homebuyers are single women or married couples. And you know from watching your married buddies that the wife makes all the decisions. So cater to her when you’re trying to sell your swingin’ bachelor pad.

• Borrow some women’s clothes and hang them in half your closet
• Put a few candles and fake green plants on dressers and side tables
• Talk to a professional stager or Realtor who’s a Certified Home Marketing Specialist to discuss ways to disguise your ginormous TV
• Do laundry frequently so the closet doesn’t smell like a high school gym locker
• Wipe down the bathroom counters and shower daily to remove hair and water spots
• Hide to Keg-erator fridge and put some real food in your fridge (condiments and beer do not count)

This sounds like a lot of work, no? And a  big pain in the neck. But the bigger pain in the neck is sitting on the market for months and months and never selling. There are no guarantees in life or real estate, but staging your home will exponentially boost the odds that you’ll sell while others don’t.

I’ve recommended a good deal of packing. Where to put the stuff??! And why do I have to pack before I even sell the house!?? First, you’re going to pack it anyway so you might as well get a head start. Second, Pods.com and BoxCart.com will help you with portable storage needs. And if you sign up with the Valley’s best Realtor (me!) I can get you 3 months of storage free with one of Coldwell Banker’s participating Concierge moving companies.

So that’s it for now. More on staging later. Happy packing!