Mortgage Loans = Late, Late, Late Closings

As a listing agent it is so frustrating to be at the mercy of the lender that the buyer has selected in a transaction.  Lately, the number of escrows that have had delayed closings is steadily rising because the buyer's lender does not have the loan documents to title in time.  I wish that lenders had late document delivery tracked like the airline industry.  I think if the public could see the track records of the mortgage loan industry, they would make wiser selections.

I think the processors, underwriters, loan officers should call the sellers and buyers directly if they realize  loan docs are going to be delivered to title late.  If they could hear and feel the angst they cause the buyers and sellers, the mortgage employees would try harder and work to anticipate any processing problems.  In almost every case, the late documents cause the seller to lose money on the sale and the poor seller does not even have a say in who the buyer selects as the lender.  In my 13 years of real estate, I do not recall any loan officer calling my seller to apologize for their inefficient service and for the extra costs incurred by the seller due to loan docs being delivered late to title.

The mortgage industry's reputation took quite a hit over the past 5 years. At this point, they should be trying to build up buyer and seller confidence.  However,  I am afraid that the frequent late closings caused by the lenders are a sign that they are once again sliding into the great abyss.

I Signed a Quit Claim Deed. Do I Still Owe the Debt?

QUESTION: My significant other and I are separating and have signed a quit claim deed on the property. Now I discovered that my "other" is falling behind on the payments and the bank is contacting me. Am I responsible even though I signed the quit claim deed and my name is off the title?

Yes. The note or promise to pay the lender and the title are 2 separate documents. If your name is on the note, you are responsible for the repayment... even if your name has been removed from the title.

A quitclaim deed is the simplest way that one person (the grantor) can transfer property, such as a house, to another person (the grantee). It is often used among family members to remove or change someone's name from the property title. While the concept is simple and straightforward — relinquishing all ownership claims to a particular property — it's also important to note what a quitclaim can't do.

In renouncing the claim, the grantor makes no guarantee of promise that the property is free of debt. Another important distinction is that the grantor makes no promise that no one else claims to own the property. The quitclaim deed says, in effect, that the grantor is signing over whatever ownership he or she may have in the property. It does not even guarantee that the grantor has any ownership interest at all.

Providing all parties are in agreement, a quitclaim is a convenient way to establish title without the time and expense of litigation. A simple form is filled out, taken to a notary, and signed and stamped, making it legally binding. The document is then photocopied, distributed to all parties, and then filed at the local land records office.

Some title companies are reluctant to insure the title when a quitclaim deed was used to transfer title. They might recommend use of a warranty deed. A warranty deed conveys full title to the property and warrants that title against defects (sometimes referred to as a "cloud"), such as tax liens, legal judgments and unpaid debts. For this reason, warranty deeds are often used between buyers and sellers of property.

Do you have a question? Write us at marydrefs@cox.net or call us at 623-694-0354.

The Latest Trend in Countertops........

Granite remains one of the most popular counter top materials in Arizona kitchens and baths, in spite of being one of the most expensive choices on the market. Homeowners love its colors and the many dramatic grain and vein patterns that can be found all in the same slab. Granite is mined in quarries all over the world, including India, Italy, Brazil and Peru.

It’s a substance that does need to be handled with special care and is a bit tricky to install as a replacement for existing counters.

Although granite can handle heat pretty well, you should place hot pans on a trivet or cutting board when you take them off the stove instead of directly on your counter top. Use only mild, neutral cleaners on granite; use nothing with ammonia in it.

Granite is also a porous material and will be sealed by the installer after it is put into your kitchen. But you have to seal it regularly with costly sealers – maybe every six months. If you let that seal wear off, granite can stain when an acidic liquid like red wine gets spilled on it. You can’t leave a slice of lemon on a granite counter top overnight, or you could end up with a big hole in finish of the granite. Edges and corners of granite counters can chip and need repairs.

Take a Second Look at Quartz

If you’re thinking about replacing your countertops, another popular material that deserves your attention is quartz, a synthetic that can look like stone. It’s an engineered, man-made product that combines 90 percent ground quartz bound together with a 10 percent mixture of resins, polymers and pigments.

Sometimes quartz comes sold under brand names like Silestone, Cambria, and Caesarstone. These choices include a wide range of colors and styles. Quartz can also be made into many shapes to create a more dramatic touch in your kitchen.

It wears just as well if not better than granite and doesn’t have to be sealed like granite. In fact quartz had higher ratings in tests done by Consumer Reports. But you can’t use harsh chemicals or abrasive materials on quartz either. Quartz does cost just about the same as granite and sometimes slightly more.

Other materials to investigate as well include marble, solid surfaces like Corian, slate, paper, recycled glass, bamboo, concrete, plastic laminate, or butcher block!

Question from Homeowner:
"Mary, I am concerned by the sudden increase in homes for sale in Wigwam Creek North?  Will he have another sudden drop in the market like we did in the past?"
Hi Homeowner,
I saw your question regarding the Wigwam Creek market so I ran the numbers.
Currently 18 homes are for sale in Wigwam Creek North. When I sift thru the taxes on these homes, I can see that 12 of these owners bought the house as an investment when the prices were lower. These owners are trying to make a substantial profit. The 6 remaining owners are trying to break even or minimize their loss.
In the past 30 days, 5 homes have closed escrow in Wigwam Creek North. This means we have 3.6 months of inventory in Wigwam Creek North. This indicates the area is still in a seller's market. As we move closer to the 6 month of inventory mark, the seller has less and less bargaining power. Around the 6-7 month inventory level we consider it a balanced market.
Why have more homes come on the market? The price per sq ft in the surrounding communities, as well as in Wigwam Creek North, has been steadily rising. Those investors which may have over extended themselves, may now be looking to sell off some of their inventory because they are happy with the current profit margin.
As prices rise, houses will also stay on the market longer because the pool of buyer lessens. We have had tremendous growth in the number of sales and the rise in home values in the last year in the west valley. Goodyear sold the highest number of homes in the valley in the last quarter. Investors are seeing the wave and wish to take the ride. With the increase in the volume of sales, we have not seen a drop in value and we do not expect one. This is due to the number of new residents moving to the valley due to our economic growth. Home builders that suspended building for years, are now finishing out the communities they started. We are seeing an explosion of growth once again in the west valley.
Mary Drefs
Keller Williams Realty Professional Partners

Is It Cheaper to BUY Real Estate or RENT Real Estate ????

Currently it is 35% Cheaper to BUY than to RENT in the U.S., according to Trulia's Chief Economist, Jed Kelko.

This statistic is based on:

1) the Buyer staying in the house for at least 7 years so closing costs are spread over these years.
2) a national average of 4.8% mortgage interest rate.
3) the Buyer itemizes his/her tax deduction and deducts mortgage interest.

Last year it was 45% cheaper to Buy than to Rent in the US because the average mortgage interest rate was lower at 3.75%.

For Rents to be cheaper than Buying Real Estate, the mortgage interest rates would need to reach 10.5%.

Even though prices and mortgage interest rates are expected to rise again next year, it will still take a long time before we reach an average 10.5% interest rate in the U.S.

So, if Buying is a possibility and you plan to stay in one area for at least 7 years, the best economic decision would be to BUY Real Estate.

Want specific pricing information? Contact our Buyer Specialist, Mike Drefs, at 623-693-1505.

Will the Government Slowdown Affect Your Real Estate Deal?

FHA and VA are the most commonly affected programs as they are funded by the government. However, there is no change to the ability to complete VA or FHA loans due to the government shut down. Both departments will continue to operate and since most of what is needed is automatic, there should be little noticed as a result of the shutdown.

• Word of Caution – if the file has a “hair” on it or is difficult and an UW needs to speak to a live FHA person or get a specific answer from FHA – this is where it could take a bit longer. Normally they return calls and answer questions in 24-48 hours, with the shutdown and running a “skeleton” crew for FHA, then plan for longer time.
• I would give the deals an extra week or so to close if the government shutdown continues longer than the next few days.

What' s REALLY Happening in West Valley Real Estate...

Currently we have 2.5 months worth of inventory in the west valley. This means that if no more homes come up on the market and buyers keep buying at the same pace, there will be no more homes to buy in 2.5 months. However, real estate is not static and more homes are consistently being added to our "For Sale" list. (We have 2 great new listings today!)

This 2.5 months benchmark DOES indicate that we are in a seller's market. Because of this lower inventory, sellers are able to push the pricing ceiling. However, sellers must always keep their eyes on the actual sold prices in their area if the house needs to be appraised. We have seen quite a few sellers reach for the stars when pricing their homes only to have the values corrected when the appraisal results arrive.

Mortgage Interest rates dropped slightly last week. Even if interest rates rise slightly, there is a silver lining. Historically, when interest rates have risen, more loan programs were created and more buyers were able to buy. The number of loan programs available affects the number of real estate sales more than a rise in interest rates. So sellers should not fret if rates do increase.