The Rental Picture is changing in the Valley of the Sun.  For more info:  December 2014 Rental Stats

In essence, the number of rentals is down every month except one in 2014.  On the other hand, rents are pretty good!

Here is the data from ARMLS that this info is based on:

Beware Boutique and Niche Lenders

The words "boutique" and "niche" have no place in lending for mortgages for a subdivision type of property.  If your loan officer is the  "Owner",  "President", or some other high-powered type of title, beware the consequences!

Two clients of mine have become victim of shoddy and slovenly practices by lenders from "boutique" agencies.  While the name "boutique" conjures up ideas of unique goods and high quality, my experience with these types of lenders engenders the exact opposite.

One story involves two Sellers, and one Buyer, all clients of mine that suffered excruciating delays in their transactions due to the inexperience of the lender.  We (my client and I) were told by the lender that all was fine - until within days of closing we were told that things were not fine.  We could tell that things weren't going well when the other agent stopped taking phone calls or returning emails promptly.

In each case, the lender - who swore up and down that he had all the necessary documentation - needed additional documentation from the Buyer to close the loan.  In one case, the documents were unobtainable because they were in the moving van somewhere between the east coast and Phoenix.  In the other two cases, it was documentation that could have been obtained easily at the beginning of the transaction but wasn't because the loan officer - even thought they were the president of the company - didn't know enough to ask for them until the underwriters asked for it.  The delay here was caused by the lack of follow-up on the lender.  It would take them days to follow up on something when a good lender would have never had the problem.

One lender was the spouse of the agent representing a buyer who wanted to buy my Seller's house - talk about a red flag!  When this was pointed out - my seller ignored the warning and decided to sell anyway.  The lender had assured us that the loan was a slam-dunk and there was nothing standing in the way of a smooth close, until there was that little documentation problem that delayed things a week, which took us into a holiday requiring another week.  Then it was discovered that something was incorrect in the package sent to the underwriter, which took another week.  What a mess!  All of these things should have been handled up front, or within 24 hours of the problem being discovered.  Taking a week to fix a documentation problem is not acceptable!

Most of the Realtors out there have working relationships with lenders based on an expectation that the lender will perform as they have in previous transactions.  Lenders with integrity will turn down loans that they are not experienced with.

However, if the lender recommended by a Realtor happens to be their spouse or relative, find another lender.  Find out how many loan officers are in a given lender's company.  If there are less than 5, be very careful!  Talk to a couple different lenders to get their opinions on how a loan should be done for your circumstances.  You will be surprised that there are lots of loans out there for you!

December is Not for Listing

Even though we have had less than a stellar year for sales of property within the Phoenix Metro area, at least we are following the normal pattern of highs and lows in the numbers of sales per month.   Buyers are likely to wait until after the holidays to make a commitment to own a new home now.  Sales will gradually taper off until about the end of January when people who made offers early in January are completing their transactions.  Following that, there is a bit of a "feeding frenzy" from buyers as they shake off the holiday lethargy and move forward with their plans for the new year.

So, if you are planning on listing a property, the best time to do it would be in mid-January, to take advantage of the surge of buyers coming in the nicest months of the year!

Why "Free" money is not free

There are a number of programs in the Phoenix area that advertise "free money".  The truth of the matter is that the money isn't free at all, there are several hoops to jump through first.  Every program is different, but you can't just go with a hand out and expect someone to plop a bunch of dollars into it.  Here are some of the requirements and restrictions that apply to free money.  Not all of these apply to every free money program.

1) Income limits - you have to be under a certain income limit to qualify for the money.  Usually, everyone in the household is considered.  I once had a client denied because of his daughter's part-time job a a theater put him $45 over the family income limit

2) Education Requirement - Often, you must attend classes to qualify for the free money.  The hourly requirement for classes goes from 8 to 40 hours spread over 5 - 10 weeks.

3) You must occupy the home for a minimum amount of time - Usually, if you sell the home within 5 years, a portion or all of the money must be repaid from the proceeds of the sale.  This includes situations where you must move for a job, or if the neighborhood declines.

4) Participation is not guaranteed - Just because you meet all the qualifications, you may not be allowed to participate because the handouts are overseen by a board.  If the board does not like you, you won't get your money.

5) You may not get all the money offered - for example, there is a program that is supposed to give you 5% of the purchase price towards your down payment.  What they don't explain is that half of that goes towards administration fees, so you only really get 2.5%.  However, that part is still free.

6)  It takes a long time - your seller must be patient, because the review process to be certain that you qualify can take up to a month or more.  This is in addition to the regular escrow process, so you could be looking at 2 - 3 months for the home to become yours.

7)  You can't have any other debt - you may have to pay off credit cards and other loans in order to qualify.

This list of restrictions is not complete, but covers the major hurdles in obtaining free cash for a house purchase.  One good thing is that you can often combine programs in order to get enough cash for a down payment and your closing costs as well.  You can get into a home for $0 out of pocket.

Have  a great day!

Tim


#FreeMoney  #FirstTimeHomeBuyer

Some of the text in the commentary at the end got a little garbled in the conversion to .jpg files, but I think it is obvious from the charts that this is the first month in over 13 months that sales have exceeded last year's numbers, even with the apparent lack of interest on the part of Buyers.  The government is re-working some of its awful lender policies, and trying to make things more affordable for people who work for a living.  It ends with a prediction of a "better" 2015, and predicting that in 2016, the market will "take off"

5 "Truisms" that are No Longer True - 1 of 5

Recently, I had an opportunity to provide counsel for a young friend of mine about possible career goals and expectations.  I talked for an hour or so about being a Realtor, and the various paths you can take within real estate.  As I poured out the information, I also thought back to when I was his age (30-ish) and trying to find my way towards an early retirement and the "Good Life".  I thought about what advice I had received, and how hardly any of the advice had actually worked out, and decided to set my thoughts down for anyone considering "climbing the ladder".

Non-Truism #1 - Work hard and you will be rewarded with promotions, additional income or other material factors.This is number one on the list for many reasons.  It should be re-worded to "work hard and you will not be fired".

There was a time when hard work was a requirement for promotion or bonuses.  When if you out-worked the other guy, you would be chosen for advancement.  This was true when companies had loyalty to their employees, and companies hired from within their own work force.  It is a principle that helped the entire country grow as a result of confidence in one's own future, and caused those who believed in it to plan their lives around a personal conviction that good, hard work will provide for a person and their family.  Companies actually wanted you to stay and work until you retired.  They provided pension plans, family picnics, and other loyalty-building activities for their employees.  Working for a company meant that you had an extended family that you could rely on for help and assistance in times of need.  Chances were the boss knew your name, your spouse's name and at least how many children you had.

What we have now no longer reflects anything of the nurturing company of yore.  Companies provide jobs with no career paths attached to them.  Your job is where they put you and expect you to stay forever.  You can not expect to grow with the company, or expect that your hard work will be rewarded with a promotion or bonuses.  There is no company loyalty, because there is nothing that the company can provide that doesn't cost the shareholders points on their returns.  Your worth to the company is only the work product that you put out today.  If your boss is moving up, retiring or otherwise leaving the position, chances are that the person who fill's the vacant position will come from outside the company.  Working hard allows you to keep your position when a "downsizing" occurs so that you can take on more work than you had before without additional compensation.  Your continued employment is to be considered your reward for putting in long hours and coping with the additional workload.  Companies no longer consider experience an asset, and they don't want to acknowledge that the more experience you have, the more valuable you are.

There was a time when a person would be considered a hiring risk if they had more than 1 job in two years.  This is also a consideration when a person is applying for a mortgage.  I have recently met many people who have held up to 5 jobs in 3 years.  When asked why they changed jobs so frequently, the answer is nearly always the same:  "I couldn't move up in the job that I had, so I took another that either paid more or had better benefits or both".

There is no company loyalty, so why should a person be loyal to a company?  Working hard only gets you a little experience to enable you to change companies for a better job.  This encourages a mindset that is now preventing middle management to change companies instead of looking within a company for opportunities.  Benefits are dwindling and morale is in the toilet.

Without the possibility of a secure future, how is a person supposed to cope?  What are the rules supposed to be now?

Why Normal People Can't Get a Mortgage

This is the best article I've seen that lays out the problems that the Federal Government is causing because of its meddling in the mortgage industry.  Dina ElBoghdady explains why credit requirements have gone up, why the housing market is so sluggish, and why the recovery will be slow.

Click here to read the article

On a separate note, I just dropped a little over $12,000 into a rental property that had been pretty messed-up by some prior renters.  I am now hiring a Private Investigator to check backgrounds of all my potential renters.  Some of the money was for deferred maintenance - exterior house painting for example - and some vandalism that occurred.  But the majority of it was for things that the renter did like swap out a toilet - cram toys down the other toilet so badly it had to be replaced, repaint the entire interior because a little monster had drawn all over it with crayon, replaced the filthy carpets (they could not have vacuumed...) and a host of other things.

So, I am back now, and will hopefully be contributing a bit more frequently to your knowledge and perspective on the valley housing market.

Have a great day!

Tim


#RealEstate #Avondale , #Goodyear , #Buckeye , #Glendale,  #Phoenix, #Surprise, #Peoria, #Tolleson, #Laveen, #Waddell , #Wittman