Home Prices Surge Courtesy of Wall Street

I am sure you have been hearing that home prices have been on the rise in Phoenix AZ. Here is an article that give some in depth information as to why this is and what we can expect in the future. Some choice snippets are below and here's the link to the full article

"It’s no secret that Wall Street has been bullish on real estate. Housing stocks have surged over the past year, many teetering on the edge of overbought, and billionaire investors like Warren Buffett have been exceedingly vocal about the investment opportunities brick and mortar properties have represented. "

"Not surprisingly inventory levels plummeted as demand increased, putting upward pressure on prices that have created a ripple effect. "

"many areas have welcomed notable year-over-year price increases as well — though none quite as much as Phoenix, which welcomed a nearly 23% uptick in prices throughout 2012,"

Ask Debi, How do I figure out what I can afford?

Hi Debi,
We are just starting to look for a new home but we are not sure how much we can afford. We don't know what the up front costs are or what a payment will be. Can you guide us in the right direction? Thank you!
Searching Suzanne

Dear Search,
This is a really good question and you are definitely ahead of the game to start your home searching process here.

One of the first thing you should do is take a look at your savings and figure out how much you have for a down payment. Right now the minimum down payment is 3.5% for an FHA loan.  Of course there are some other options for down payments. See this article about coming up with a down payment.

The next step will be to find a really good loan officer. Choosing your loan officer is just as important as choosing your Realtor. You should ask friends, family and your Realtor for referrals. Also, here is an article on how to choose a loan officer.

Your loan officer will be an invaluable resource throughout your home buying process. A good loan officer will be able to explain what type of loan program will fit your needs, how much of a down payment you will need, estimate your closing costs and tell you what your payment will be.

Here are some links to articles on home buying costs and affordability.
Can you afford to buy?
Mortgage Pre-Approval
Basic Mortgage Questions

Good luck in the process and remember the great saying by Alexander Graham Bell- "Before anything else, preparation is the key to success"

-Debi

Ask Debi, How to choose a real estate agent

Dear Debi,
How do I choose a real estate agent to help me sell my home and help me buy a new home? I have heard some horror stories and I want to choose someone that will look out for my best interests.
Sincerely,
Leery Lucy

Dear Leery,

You are right to want to do some research about who will represent you when you are making such a momentous purchase and sale. There are some really great articles around the web about just this topic so I will summarize some of the best points and then link to them at the bottom.

First, ask around. The best realtors have done such a good job for their clients that they all sing their praises and are happy to refer them.

One you get a few referrals don't be afraid to reach out to them. This will be a good first test. Is the agent responsive? A full time agent should be ready to respond to inquiries very quickly. If you are selling your home do you want potential buyers having to wait several days for a response to their questions? If you are buying a home, do you want to wait a few days to find out if a home is still available?

Another question you may want to ask is if the agent is familiar with the areas that you will be looking in. Some agents specialize in certain areas and some agents are pretty familiar with a large swath of the City. It is good to have an agent with experience in the area that you are buying and selling in.

You can also do some research online. Of course you should google the agent's name and see what comes up. You can also check out their website and also look online at zillow and trulia for agent profiles and reviews.

The bottom line is you want to feel like the agent is honest and looking out for your best interests but you also want an agent that can educate and inform you along the way. A good agent is your best asset when buying or selling a home.

Here are some links to articles on how to choose a real estate agent.
How to choose a real estate agent do's and don'ts
Questions to ask your potential Realtor
7 tips for choosing a Realtor

Good luck making your choice and remember the lovely quote by Tehyi Hsieh- "Life is partly what we make it, and partly what it is made by the friends we choose."

-Debi

Ask Debi, Is it worth it to pay for a home inspection?

Hi Debi,
We just had our offer accepted on a newer house in the Peoria, Arizona area. The home was built in 2006. The house looks like it is in pretty good shape and the seller has indicated that they will not fix anything. Do you think we should get a home inspection and what would be the point if the seller will not fix anything?

Sincerely,
Analyzing Annie

Dear An
The short answer to your question is yes, you should get an inspection. Regardless of whether or not the seller will fix anything it is a very good idea to know of any major issues the house may have. This information can be used to cancel the contract if you find a very costly deal breaker of an issue. It is also possible to negotiate with the seller if you still want the home but find an unexpected and costly repair.
The cost of an inspection is typically $350-$450 and the piece of mind that you gain in knowing all that you can know about this momentous purchase is incomparable.

Ask Debi, Short Sale Timelines

Dear Debi,
My husband and I just put in an offer on a short sale. Our agent told us that the offer was accepted by the seller but we have to wait for the bank to approve it.  How long should we expect to wait until we can close on this house?
Sincerely,
Ready to Move

Dear Ready,
Congratulations on getting an accepted contract! A short sale can take anywhere from 2-4 months to get approved. There are a few questions you can request that your agent ask the listing agent in order to get a better idea how long of a wait you are in for.

1. How many lenders does the seller have? If there are two lenders this means two approvals which will take about twice as long. 
2. Has the seller submitted the paperwork to the lender? If the seller has not submitted the paperwork yet it may add additional time for the approval. 
3. Which mortgage company is the seller working with? Some mortgage companies post their timeline on their website.

This is not an all encompassing list of questions but just getting answers to these three will give you an idea of how knowledgeable and responsive the listing agent is and you can gauge the time line from there.

You may also want to ask your agent to request weekly updates from the listing agent. You may get a few updates of "nothing happened this week". Do not get discouraged, this is not unusual. 

Good luck with your short sale and remember that your patience will pay off!

-Debi

Ask Debi, Why aren't there very many homes on the market?

Dear Debi,
I have been looking for a new house for a few months now but it seems like there aren't very many homes to choose from and the stuff that comes on the market gets snapped up really fast. Why do you think there aren't very many properties for sale in the Phoenix area?
Sincerely,
Flummoxed Franky

Dear Flum,
I feel your pain, I really do. The real estate market in Phoenix is challenging for a buyer right now. There are several factors that are creating the lack of inventory. The top three reasons I am noticing are:

1. Homeowners are not putting their homes on the market because they are still under water but with the new HAFA and HARP programs homeowners are able to refinance and stay in their homes with a more affordable payment. 
2. Investors are buying up the homes at trustee sale and instead of "fixing and flipping" they are keeping the homes and leasing them out to maximize their investment while our home prices in Arizona continue to rise. 
3. Banks have been slower at foreclosing and have become better at approving modifications. 

There is a great article in the Wall Street Journal that has a few more reasons for the lack of inventory.

The real estate market is always changing so keep your eyes open, hire a great Realtor to help you keep on top of the new houses that hit the market and your perfect home will find you!

Phoenix Posted Largest Home Price Gains in the Nation

Hey all you sellers out there, check out the latest data from Arizona Business Journal!

"The latest figures released Tuesday by Zillow Inc. show Phoenix home values soared by 22.5 percent year-over-year during the last three months of 2012."

If you have been thinking of selling your home and want to know your options, please give me a call. Now could be the time!