The Economy
The Buyer’s Market is Long Gone!
Monday, October 26th, 2009 | Money, Real Estate, The Economy | No Comments
As a Realtor(R), I get a kick out of the way the media is reporting the housing market. The reports are very mixed with foreclosures and housing starts. But they are not out trying to buy a house or they would be reporting a whole different story.
Just a few months ago, if a Realtor(R) was able to have a buyer in their car looking for a home, life was easy. Look at a couple of houses, take a coffee break, look at a couple more, pick the best one and put in an offer 10% below list price and you had a contract. Then over night BOOM!
I wrote and podcasted that you may have missed the market. Boy was that an understatement! I am doing things routinely now that I would have thought unethical just a little while ago. Our buyers need to be ready for a real ordeal. Last week a buyer put in an offer for a property at about $100,000. They went $5,000 over list only because that was all they could qualify for. Remember that if they can close on a house before December 1 there would be an $8,000 check to sweeten their deal .Well that was last week and almost 10 days later, NO ANSWER from the bank! There were 10 contracts on that property and no one knows if any of them will get the house. But nine of them will get closer to the drop head date and lose $8,000.
Back in the day before banks ruled the real estate system, 24-hour response time on a contract was standard. So one offer at a time would be about the maximum written. But now one offer sitting on a banker’s desk can cost my buyer big cash. Even if there wasn’t a tax credit, one contract in a week or two when it might take 15 or 20 offers to get a signed contract hurts the buyer. Interest rates might easily raise out of the range of our buyers so affordable housing is at risk with the delayed response from our friendly bankers. So that is what I see about the foreclosure side of the market.
Now that market is sweet compared to the short sale market. I have contracts were buyers are trying to buy a home putting in an offer from as long ago as JUNE!!!!!! There is one bright spot. You usually don’t hear a whole lot of complements for a bank. I have a praise for one bank that I have seen the better service than I expected, that bank is GMAC. They responded quickly waited while we negotiated with the 2nd mortgage lender and approved a sale at market price.
I guess my thoughts drifted with this post. The banks own the market and even though homes are very affordable, be prepared to look hard and put in lots of offers.
This Year’s Monthly Active Listings and Sales Price in Peoria
Saturday, October 3rd, 2009 | Investment, Real Estate, Statistics, The Economy | No Comments
This Year’s Monthly Active Listings and Median Sales Price in Peoria Arizona.
Active Listings Median Price
Jan. 1584 $180,000
Feb. 1586 $184,669
March 1580 $165,625
April 1422 $172,750
May 1231 $169,314
June 1119 $170,000
July 1015 $166,000
August 1030 $166,000
Sept. 1018 $165,000
Does it look like in March prices hit bottom and have stabilized? The inventory has been steadily declining by more than 30%. What does it mean? In today’s market, no one knows! Will things change if the tax credit isn’t extended? Are the banks intentionally holding back inventory to stop price decline? One thing that is certain, its not the best time to sell? Well, if you are moving up it might be a great time to acquire your trophy home. If your job is secure. This looks like a good year for gamblers and a very uncomfortable year for the timid.
Thank you Cromford Report.
Peoria Arizona Real Estate Agent at Work
Wednesday, September 23rd, 2009 | Investment, Money, Real Estate, The Economy | No Comments
Peoria Arizona Real Estate Agent at Work
As a Peoria Arizona real estate agent many people think I take people to see houses, write up some forms and collect an enormous check. Here are some recent activities that I feel helps my clients. The is why I love doing this kind of work. I love to help people. I hear two main reasons why people don’t buy a home. Since the average net worth of a renter was $1,500 verses $175,000 for a home owner, the economic and social improvement makes a very significant improvement to the whole family. Home owners change jobs less frequently. Their children are more likely to graduate from high school. There daughters are less likely to have children out of marriage. The benefits of home ownership goes on and on and on. This information comes from several studies. One main study was conducted by the National Association of Realtors Now getting back to the issue of as a Peoria Arizona real estate agent the reason I hear why people don’t buy a home is:
- “My credit score is too low.”
- “I just can’t afford to buy a house!”
So I as a Peoria Arizona real estate agent went and got training to coach my clients not only improve their score and how they can afford a home, but how to make their paycheck go farther than they ever thought possible. I am a Peoria Arizona Real Estate Agent not a credit repair person. The improvement in credit score is only a side benefit of the strong cash flow techniques that I as a Peoria Arizona Real Estate Agent share with my clients.
Here is an introduction to a series of videos I am creating to provide important information that many people do not know and probably don’t even know that they don’t knock.
I as a Peoria Arizona Real estate agent see my clients better able not only qualify for a better home mortgage, but since credit scores have so much to do with pricing like car insurance, health insurance, home insurance and many other monthly expenses, they save thousands every year. Here is just one part of the cash flow enhancement program.
There about 25 different ways for people to stretch their cash, get out of debt and pay off a mortgage in a small fraction of the 30 years that most people choose as a mortgage period. All these improvements can come usually with the same income and with very little cutting back on life-style spending.Here is one example of how to help improve a client’s lifestyle as a Peoria Arizona Real estate agent. I had a couple, Mr. and Mrs. Client, who were close friends in Sun City West. They were in a beautiful duplex. Mrs. Client, the wife, had impeccable taste and the property was absolutely the best home for showing in the neighborhood. They had family issues with grandchildren that made staying in Sun City West very difficult. They made up their minds to list after the majority of the valley’s retirement communities were getting ready to leave for their summer residences in cooler climates. That meant that most of the potential buyers were thinking more about going back home than purchasing a new residence in Sun City West. I as a Peoria Arizona Real estate agent created a killer visual tour.
I as a Peoria Arizona Real estate agent held open houses at various times of the day several days of the week. When I as a Peoria Arizona Real estate agent first started in March I would get about 2-3 showings. In less than 30 days almost no one would come to the door. It looked like they had missed the market and would have to take their home off the market until September when the “Snow Birds” returned. Then one couple who already owned a property in Sun City West came to view the home. They put in a very attractive offer. One of the very nice terms of the offer was that since the buyers were going back to their summer home, my clients could stay and rent their property until they were able to purchase their new home.
While all this was taking place, the Phoenix real estate market changed very rapidly. The market went from a buyer’s market to a seller’s market overnight. THey found a few properties and there offers were started on the investments they wanted were usually 10% under list price. 10% up till that time was considered a good offer. Now the tables were changed. I would take them to a property. We would put in an offer and lose it to another buyer. The sad part was that they were not so exacting to demand the absolute perfect home. They were willing to do some repairs. I as a Peoria Arizona Real estate agent would take them out to see homes three to four times a week. They started with a rather small area in Northwest Phoenix. They looked mostly in Peoria or Phoenix. All they really wanted was a home with 4 bedrooms, open floor design, an RV gate and three car garage. They also thought it would be nice if there either was a pool or a place. I as a Peoria Arizona Real estate agent had given them access to the MLS through a service called Home Scouting Report. This is one of the very few systems where the home shopper can create their own searches, save them in a password protected area, and they automatically get updates on the properties in their notebook and the MLS searches for the homes in the area. They would look every day and I as a Peoria Arizona Real estate agent would take them out to see properties. I soon found that properties were listed as active but already had contracts signed by the sellers. Many times either a bank was involved or the bank doesn’t make decision quickly. A home can only be sold once, so mostly the Mr. and Mrs. Client were wasting their time.
Day after day, I as a Peoria Arizona Real estate agent would show homes, they would put in a contract and no results. Finally, I started prescreening the listings. I wouldn’t take them to a property unless the listing agent returned a call and verified that the listing really was still available. Then came the fateful day! I wasn’t able to contact the agent for this one listing. As soon as they walked in, they were ready to put in an offer. This home had everything on the list but the RV gate! When I as a Peoria Arizona Real estate agent called the agent, he said he already had 13 offers. I asked him if my buyers could still put in an offer. He said that he would wait until I as a Peoria Arizona Real estate agent could send in an offer. I asked Mr. and Mrs. Client how high they could go and still sleep at night. In went the offer and they got it. Yea!!!!!
Now comes the part where I really do my job. Most people don’t know that a real estate transaction takes about 45 people of different occupations to get the transfer of a property done correctly. One thing I hesitate in doing is recommending other professionals. This time I recommended two service providers. The home inspector and the pool cleaner. The home inspector did a great job! I as a Peoria Arizona Real estate agent have been recommending him because he carries the equipment to find problems that other inspectors can’t find. For example, he was inspecting a home where I was the buyer agent when he found a water leak IN THE WALL. I was happy when he climbed into the attic and found missing struts. Apparently, when the air conditioning company installed the systems when the home was built nine years before this inspection, they removed some of the roof structure and didn’t replace it when they were finished.
This was a good reason to get back to the negotiating table with the bank that was selling this foreclosure. The appraisal was below our offered price and we have a structural problem. Normally, an agent would be very disappointed thinking that commissions were going to be missed because this deal could fall though. I as a Peoria Arizona Real estate agent on the other hand had already discussed with Mr. and Mrs. Client that I hoped we could find a reason to go back to the negotiation table. Since I am a Certified Negotiation Expert and had a good working relationship with an excellent listing agent, my clients not only saw the price of their new home lowered by $15,000, the bank also repaired the roof. All Mr. and Mrs. Client had to do was to clean the carpets, put in granite counter tops and paint the interior of their new home. Even though this process took several months, their new home was beautiful and they were very happy. I was very satisfied that I as a Peoria Arizona Real estate agent had helped them along the way.
Mr. and Mrs. Client had also just taken a real hit in their stock portfolio and were looking to a way to generate passive monthly income. After many conversations and soul searching they decided that I should help them find rental properties. Now I had the job of not only finding them the home of their dreams, I was to help them replace their lost monthly income. As a Peoria Arizona real estate am not qualified to implement retirement entities, so I introduced them to associates who helped them convert their IRAs and Roth IRAs to self directed so they could buy properties on their own. So while Mr. and Mrs. Client and I were looking for their new home they were also looking at investment properties. I have some experience with investment properties as well as a strong background in business. I have owned as many as three businesses in two different states simultaneously. And I also spent nine years consulting with small business. I knew how to put together a business plan. The Clients really couldn’t make up their minds if they were looking for single or multi-family units. They had decided on real estate as investment because the market had dropped so far that great deals were available and positive cash flow was attainable. The Clients already have another rental property and knew many of the challenges with rental properties. When the finally moved into their new home, they were ready for a rest they have a duplex ready to renovate and a short sale offer on a nice townhouse.
Keeping up with the numbers is critical, especially in a volatile market like we are seeing today. As Peoria Arizona real estate agent, I have found “The Cromford Report” to be a great tool. Here is a short city comparison for Septemver 22, 2009
Price per Sq. Ft. Peoria, AZ $87.24 Glendale, AZ $70.89 Avondale, AZ $57.64
Annual Appreciation Peoria, AZ -20.4 Glendale, AZ -26.6 Avondale, AZ -31.5
Days on Market Peoria, AZ 111 Glendale, AZ 80 Avondale, AZ 67
Average Sq Ft. Peoria, AZ 2106 Glendale, AZ 1829
Avondale, AZ 1954
As you can see, a real estate agent does more than show homes and do paperwork.
Secret Tools to Stretch Your Paycheck Part 1
Tuesday, September 8th, 2009 | Investment, Money, Safety, The Economy | 4 Comments
Here is a quick and easy secret tool to stretch your paycheck. Many people are finding that they can’t seem to save any money or lower their debt. Foreclosures and bankruptcies are at record highs. Unemployment looks like it is going to get worse before it gets better.
There are several tools that you can use to take control of the cash you have coming into the household. When I began showing my clients some the these tools they are amazed that they didn’t know that they didn’t know. They all believed that they were doing all they could do with the money they made. They are always surprised to see just how much more they could do with just one or two secret tools and how far it stretched their paycheck.
One well hidden secret is YOUR CHECKING ACCOUNT IS NOT A GOOD TOOL! A personal line of credit PLOC or LOC is a tool that can give considerable flexibility in stretching the paycheck to those wage earners with a good payment history. The easiest LOC to get is usually with the same bank as your checking account. An example of how to use this tool is shown on the video; If you can’t get a line of credit we will be showing alternatives that will give your the ability to stretch your paycheck too.
Why Use Trusts?
Friday, January 9th, 2009 | Investment, Money, Real Estate, The Economy | No Comments
Estate Planning – Bypassing Probate
1. Assets held in trust are not part of an individual’s estate; therefore, those assets would not be included in probate because they are already held in trust for the benefit of another individual. If a beneficiary dies, the beneficial interest in a trust may be part of their estate; however, this would not affect the asset or the trust, unless dictated by the Declaration of Trust and Trust Agreement.
2. The best example if this is Anna Nicole Smith. This was the 20-Something model that married the 90-Something Texas oil billionaire. The billionaire left Smith several million dollars and his children contested his Will. Although the Will was modified several years prior to his death, the children contested on the grounds that the billionaire was not competent to make the change. The children said the Will was not valid and a judge agreed and entered a different judgment.
a. The Billionaire’s wishes were not honored
b. He was found incompetent after his death
c. The children were granted the majority of the estate
There are several version of what “really” happened … either way, if these assets had been placed in Trust for Smith, they would not have been part of the Billionaire’s estate and very difficult to contest. The title to any such assets would be held in trust and a Trustee would have ultimately made the decision as to the disposition of them; in accordance with the Billionaire’s wishes.
3. Probate is the publicizing of an individual’s Last Will and Testament. A Probate judge makes the Will a matter of public record in order to determine if there are any outstanding debts which should be settled prior to the disposition of the assets. In other words the Court says this; “Hey, this guy has assets. Is there anyone who has reason why this Will should not be recorded? Does this person owe you any money? Is there anyone who’d like to screw this guy?” If no one comes forward, the judge allows the heirs to have the proceeds of the Will.
4. Since assets held in trust are not part of anyone’s estate, these assets bypass probate and continue to be held in trust for the benefit of another person. The trust can hold these assets for up to 20 years, as directed by the Grantor or creator of the trust. After 20 years, a new trust would have to be created or the assets liquidated.
Privacy – Avoiding Becoming a Target
1. Since trusts are private documents created by individuals they may be kept from public view. In fact, most trust documents forbid anyone from disclosing the documents to a third party or anyone who is not a party to the trust; Trustee, Director, Beneficiary, Etc. Disclosing the documents would be a breach of contract and any disclosing party would be liable for damages.
2. The assets of a trust are likewise, private and may not be disclosed to anyone outside the trust. The members of the trust are the only individuals who know what assets the trust holds. Land, vehicles, ATVs and other items which have a “Title” can become part of the public record; however, only the “Owner” or “Title Holder” may be made public. If a Trust holds title to an asset, the name of the Trust is public, but the Declaration of Trust, the Trust Agreement, any Beneficiaries and other information about the Trust remains part of the private agreement.
3. If an individual is sued and they don’t “own” anything, it will be difficult for liability to attach to an asset. Trusts are not “Owned” by anyone. Trusts have Trustees who handle the legal affairs of the trust and its assets (Trusts can’t be liable for the actions of a Trustee). Trusts have Directors who tell the Trustee what actions to take with regard to Trust assets (Trusts are not liable for the actions of the Directors). Trusts have Beneficiaries who may have the right to receive proceeds, avails, dividends and other funds produced by the assets; however, Beneficiaries to NOT have any ownership in the asset of the Trust (Therefore, Trusts may not be held liable for the actions of a Beneficiary).
4. As beneficiary, an individual may “control” an asset without the liability of ownership. The fact that an individual is a beneficiary is private and their interest in the trust is private. An individual may control hundreds or properties without appearing on title.
Asset Protection – Avoiding Liability
1. Private Jet Crash with Signer
a. To be completed
2. Victoria A. – Lost properties due to fire at property
a. To be completed
3. John R. – Charlotte, NC
a. Imagine you leave for the weekend and a well-deserved vacation. When you return, through no fault of your own, you are embroiled in what you think is a baseless lawsuit? You have insurance, right? Of course you do. The problem is your insurance doesn’t cover All Terrain Vehicles and that is what your neighbor borrowed while you were out of town.
John R. is a Realtor and investor from Charlotte, NC. Last year John became the victim of our litigious society and is realizing the difficulties faced by someone with large assets. John carries a large “Umbrella Insurance Policy” in hopes that no judgment will exceed $5 Million. He’s covered at home, work, the car and everywhere he travels. His home is covered. His rental properties are covered; however, his 4WD ATV is expressly NOT covered by his liability policy and that is what his neighbor was riding when he struck a tree and was paralyzed from the waist down.
John left for Myrtle Beach, SC on Friday May 26, 2006. The neighbor, and friend, agreed to watch the house and feed the dogs. John agreed to let the neighbor and his son borrow his ATV. The neighbor had used the ATV on several other occasions and was an experienced rider; however, at some point on Saturday the neighbor was riding with his son and struck a tree. The neighbor’s son was knocked unconscious and the neighbor broke his spinal cord and became paralyzed from the waist down.
When the family returned from the beach, they were informed on the accident (which didn’t even occur on John’s property) and John visited his friend in the hospital. Within a few weeks an attorney filed suit against John for negligence in the maintenance of his ATV. The suit stated that the neighbor was an experienced rider and would not have struck the tree if the ATV was properly maintained (the ATV was a Christmas present 5 months prior).
John’s insurance company immediately informed him of the clause which specifically excluded motorcycles, scooters, 4-wheelers and ATVs or any kind.
It has taken almost 18 months to reach a conclusion and John has liens against the equity in all his investment property, stocks and other assets, which are owned by him and his wife. The neighbor has begun proceedings to seize the property in order to satisfy the judgments. Not only has John lost the equity of his real estate, he has spent more than $125,000 defending the case.
The bright spot is that John’s personal residence is held in a Land Trust for his children. The family’s home is owned free and clear with no mortgages or liabilities and is the family’s most valuable single asset. The liability of the judgment has not attached to the home. Since the home is held in trust for the benefit is their children, it is no longer titled to John and his wife and may not be seized to satisfy any judgments.
John and I spoke at several REIA meetings over the past few years about the need for him to place the rest of his property in trust. This could have significantly impacted the neighbor’s ability to receive any satisfaction to the judgment, while John could have maintained control and tax benefit from the mortgages on the properties.
Greg@WeBuyHouses.ME
We Buy Houses Internet Trust
Asset Investment Trust
112 S. Main St
Clover, SC 29710
877-567-2513 (Ext 101)
Let’s hope!
Saturday, December 27th, 2008 | Money, The Economy | No Comments
For all of you who are worried about the economy, I have decided to review a little history of the US.
From 1890 and 1930 there were four major economic downturns. Of these downturns only one made the name of the “Great Depression!” It started shortly after the stock market crash of 1929 and lasted for more than ten years. Unemployment well into the downturn reached 30%. We are at 6.7% unemployment. This figure may not be calculated the same as in the 30s, but it is pretty easy to see that we don’t have one in three workers without a job.
Looking at the history between 1890 and 1940, what was the big difference between the earlier crashes and lasted about 3 years each and the “Great Depression?” By far and away the biggest difference was the United States government. They tried to fix the problem with the wrong solutions, convinced the public to stay the course, and created misery. The only way we finally got out of the quagmire was WWII. We shipped millions of men both East and West and increased manufacturing of weapons.
Let’s hope that our government entities at all levels refrain from repeating the past failures. WHO knows?
Here we go again.
Tuesday, September 23rd, 2008 | Investment, Money, Real Estate, The Economy | No Comments
As Congress sits around throwing accusations, people are being hurt. The only thing that I see that could be worse is that Congress does something about the economy. I was watching our Phoenix market begin the turn around. Sales were increasing, inventories were beginning to decline and BOOM! The rug gets pulled out from the buyer’s plans with the dramatic changes in seller participation.
The lower priced properties are the most important sector of the housing market. Putting people in properties with monthly payments at or below rent payments is a winning program. The average rent in Phoenix is over $800 per month. Moving into a $100,000 home makes both social and economical sense. But NO! These folks must have at least $3,500 additional money sitting in the bank for 90 days or borrowing only from family members. Remember, there are significant costs involved with moving in.
This change is only putting a band-aid where there is no cut. The band-aid is cutting off economic blood flow to the real estate market body. Of course Congress could do much more to really trash the economy. There were four significant economic downturns between 1890 – 1929. The downturns rebounded quickly and the country was stronger. In the early 1930s, Congress did the opposite of what should have been done, And the whole world felt the pain. We could still be in that depression if we hadn’t put our men to work on the battlefield. War is definitely the worst way to manage economic down turns.
Let’s put the seller and other assistance programs back in our real estate market.
The short sale is anything but short!
Wednesday, September 17th, 2008 | Money, Real Estate, The Economy | No Comments
The news is reporting home values have declined by 27%. This number changes from month to month, but regardless of the percentage, in almost every neighborhood, Home values are below the high spike of 2006. For you who expect to live in your homes for at least five more years, this housing price fluctuation has very little to do with your life. For those who want to purchase a home, it is almost like after Christmas shopping. Unfortunately many folks who must sell their homes are SOL. Many of these folks have mortgages that are higher than the present value of the home. One way out while avoiding foreclosure is a “Short-Sale’”
I have really been discouraged with the short sale process. (Selling a home below the mortgage value) It seems like lenders are unwilling to do what is necessary to get a sale done. Many banks seem to think it a privilege to buy their vacant home and expect a buyer to wait for months for a decision. I can’t remember any of my real estate associates ever describing an easy short sale. Many short sales take months to complete with special bank generated forms and endless attempts to contact a decision maker. It is not uncommon for me to send 5 copies of personal information in a purchase contract to a bank fax or email before the banks admit they received one contract. What are these folks doing with all this personal information? And after doing 5 – 10 times the work of a normal sale, the bank expects me to cut my commissions.
The people hurt the most are never considered during all this ineptitude. A seller is not considered. Now everyone seems to think the seller just shouldn’t have purchased the property. The bankers are the real experts. They have whole departments with educated staff to evaluation properties on a professional level. The seller, it seems to me, trusted the lender to some extent. Now, he is upside down, looking at having to carry FORECLOSURE on his record. I would have expected that the lender and seller would try to partnership to minimize the loss to both. Unfortunately, it appears that redundant processes and understaffed departments slow the sale process which creates more loss for everyone.
While a file is gathering dust on a desk, the home owner’s life becomes uncertain. Some of these folks live in this home and don’t know when they can leave. Some are investors (considered a dirty word by the politically correct) who are watching their entire life savings dwindle away with an upside down situation.
The buyers are no better off. Imagine if you are trying to purchase your first home. You have a lease that ends in 45 days. What are you supposed to do? Sit on the street with all your posession until someone finally decides to look at your offer?
Only a banker, a government bureaucrat, or someone in Congress could design a system this bad!
2 million troubled borrowers avoid foreclosure
Friday, August 29th, 2008 | Money, Real Estate, The Economy | No Comments
Phil found another interesting article at CNN Money.com
The Hope Now coalition reports that it completed a record number of mortgage workouts in July – but that was outpaced by the increasing rate of foreclosures.By Les Christie, CNNMoney.com staff writer
Last Updated: August 27, 2008: 2:40 PM EDT.My Intro
NEW YORK (CNNMoney.com) — Hope Now has helped more than 2 million at-risk borrowers stay in their homes during the past 13 months, according to numbers released by the coalition on Wednesday. The alliance of mortgage servicers, counselors, and investors assembled to combat foreclosures fixed more than 192,000 problem loans during July, a one-month record that represents a 6% increase over June.
http://money.cnn.com/2008/08/26/real_estate/Hope_now_hits_two_million/index.htm?postversion=2008082714
Some Buy a New Home to Bail on the Old
Thursday, June 12th, 2008 | Money, Real Estate, The Economy | No Comments
Phil send me this aarticle with the note that this has got to stop and I agree whole heartedly. The price of homes changes with the market. This is very short sighted!
Fannie Plans Rules To Avoid Practice Described as Fraud
By NICK TIMIRAOS
June 11, 2008; Page A3
Next month, Michelle Augustine plans to walk away from her four-bedroom house in a Sacramento, Calif., subdivision and let the property fall into foreclosure. But before doing so, she hopes to lock in the purchase of another home nearby.
