Forced to Relocate......

Lately we have been getting quite a few calls from homeowners who have been notified by their employers that they are scaling back or shutting down their Phoenix operations. This leaves homeowners with equity in a quandry. Should they sell at the current market price and barely break even, or in some cases, bring money to the table at closing OR should they hang on to their house and rent it out?
Obviously, circumstances vary from homeowner to homeowner. Being an out of state landlord can supply a nice flow of cash...if the rent adequately covers the mortgage payment and HOA dues, etc. But, if you are waiting for prices to return to the '05 prices, you will need to rent your property for a very long time. (i.e. at least 10-15 years)
It is best to look at the real estate market you are moving to and see how prices are there. If you sell your AZ property at a slight loss, but are able to pick up a great bargain in your new locale, then it may be worth bringing a few dollars to the closing.
Also some owners do not have the temperament to be a landlord. If you are the type that is bothered by a scuff on the wall or a few leaves in the yard, then you will probably be an agitated landlord. And, some things are just not worth the aggravation.
We are finding that the majority of those relocating are moving to Washington State and Oregon. In this case, the grass is greener where it actually takes minimal effort to grow.

Arizona Real Estate Update- Avoid Arizona Foreclosure: Fannie Mae Backed Mortgage Loans

Arizona Real Estate Update- Avoid Arizona Foreclosure: Fannie Mae Backed Mortgage Loans: "In the past month, Fannie Mae has become stingy in granting extensions on auction dates even when the seller is in contract with a ready, wi..."

Fannie Mae Backed Mortgage Loans

In the past month, Fannie Mae has become stingy in granting extensions on auction dates even when the seller is in contract with a ready, willing, able buyer who is paying fair market value for a short sale property. This makes no sense to me because Fannie Mae is a government backed loan.
In almost every case, Fannie Mae would receive more money from the completion of the short sale. But, no, Fannie Mae refuses to extend the auction date so the short sale can be completed. Instead, they force the homeowner to go into foreclosure. When the house forecloses, the lender needs to take the house back and care for it. Now the lender needs to pay for the utilities,the lawyers, the pool service, the landscape service, and the commissions for the realtors involved in the new sale. Typically, the house comes back on the market for a lower price than what the short sale buyer was willing to pay. So, in the foreclosure, Fannie Mae receives less in the foreclosure sale than they would have received if they had waited a few weeks and completed the short sale. And,the foreclosure closes typically 3-4 months later than the original short sale closing date.
When Fannie Mae agrees to take this greater loss, who is the big loser. WE ALL ARE. The Fannie Mae loan is government backed. That means that loss increases our US deficit. Ultimately, you and I will pay for this loss thru our taxes.
We can only fight this process by contacting our US representatives and by voting for those politicians who are willing to fight for us and stop increasing the national debt.

Yea for Luke AFB !!!

Kuddos to the government for selecting Luke AFB as the number one site for the new F35's. It looks like Luke AFB will continue to bolster our local economy. We are very thankful for our local service personnel and think of freedom every time we hear a jet pass over.
Also, soon Luke AFB will have the largest solar plant on government grounds in the US. APS will be building this solar operation and upon completion it is expected to service over 3750 homes. Finally, we are using our most plentiful, free resource in Arizona...the sun!
Go Luke AFB! You Rock!!

DO FORECLOSURES HURT HOME VALUES???

A recent study by a MIT economist and 2 Harvard researchers concluded that a foreclosure reduces that home's value by an average of 27%. " In the study, “Forced Sales and House Prices,” which will be published in the American Economic Review, Pathak, Campbell and Giglio examined 1.8 million home sales in Massachusetts from 1987 to 2009. By looking in granular detail at real-estate prices, the researchers have concluded that a foreclosure reduces the value of a house by 27 percent, on average."

So, if my neighbor's house is foreclosing, will this affect the value of my house?
YES, The study concluded that a foreclosure reduces the surrounding home's values by an average of 9%. A bankruptcy in a neighborhood reduces the surrounding home's value by an average of 3%.
Short sales, a transaction in which the property can avoid becoming vacant, is increasingly sought after as a solution not only for homeowners facing foreclosure, but lenders looking to recoup more of their investment.
Interested in a Short Sale? Call me at 623-694-0354.

Canadians Are Here!!

Many people are assuming that because our economy is so bad in AZ, that real estate sales must be slow and few. On the contrary, many current buyers who always dreamed of owning real estate in the sunshine are flocking in from othe US States AND Canada. The beauty of the Canadian buyer is that most are paying cash. Canadians fully realize the values that are currently available in Arizona and are buying it up. Some have the intention of owning a second home now and some are wishing to rent out the property for several years and then use that house as their second home in the future.
Most of the best values available are in the West Valley of Phoenix. Coupled with the growing entertainment and shopping opportunities, www.Westgate.com, www.ArizonaCardinals.com, www.PhoenixCoyotes.com, , the West Valley is the place for all the "smart & savvy" real estate buyers.

New Standards Due Nothing to Reel Fannie Mae and Freddie Mac In

Today's words of wisdom come from Diane Gerdes of The Mortgage Advantage. Thanks to Diane for clarifying what is happening on the national economic scene every week. This week our government is patting itself on the back for passing the Dodd-Frank Financial Reform Bill. However, they missed two major economic components that seem soon to derail any economic progress. Enjoy!


The Economic Cupcake by Diane Gerdes
"The Dodd-Frank Financial Reform bill signed on Wednesday was touted as the most sweeping financial bill since the Glass Steagal Act of 1933. (You remember that law, don't you? It's the one that the banks had repealed in 1999 and was ground zero for the global financial catastrophe). The hefty 2300 page bill signed into law by President Obama is structured to prevent future economic meltdowns. It allegedly gives tools to regulators so they can reel in the banks if they don't behave, but not enough to hurt their profits. The bill did manage to call for nearly 70 study groups, according to CNN Money, to analyze subjects such as fiduciary standards for brokers and analyzing reverse mortgages. It may be years before we feel the full effect of the law.

Two of the most terrifying man-made Frankenstein's living in Uncle Sam's house are Fannie Mae and Freddie Mac, with trillions of dollars in outstanding mortgages that they either own or have backed. The Dodd-Frank Bill did nothing to address their situation: they have cost the taxpayers more than the bail-out banks and auto companies combined.


Both Fannie and Freddie were quasi government entities given quotas for selling mortgages. It was a concoction that bred fraud. For instance, Countrywide Financial Corporation gave loan discounts to employees of Fannie Mae. Fannie and Freddie were both accused of fraudulent accounting practices resulting in huge bonuses for executives of both companies. They funneled campaign contributions to choice government representatives.


The Dodd-Frank Bill was designed to keep Main Street (us) safe from Wall Street (them). But somehow it overlooked the two-headed monster in the cellar... Fannie Mae and Freddie Mac."