Short sales sound worse than they are.

Two years ago they took a lot longer and confused many more people (agents and lenders, alike). Now the systems are in place to make these transactions close more smoothly.

Even more important, if you qualify for the HAFA Program, you could get up to $4,500 for short selling your home!

A short sale is where the seller owes the bank more than than the property is worth. The term “short sale” literally means that the property is being sold “short” of what the seller owes the bank. In a short sale transaction the bank must agree to accept less money than what the seller owes and agree to release all liens on the property so that the property can be sold.

If you’re thinking about short selling your home there are a few short steps to the process:

1. Find an Attorney to speak to about your short sale. This shouldn’t cost you a lot of money. You can usually get an initial consultation for about $250. You DON’T need to have an attorney negotiate with the bank for you. If you have a tax attorney or CPA, speak with him or her, too!

2. Get your Property Listed. Listing your property with a seller with short sale knowledge is key to a smooth transaction. This is where I come in.

3. Find a Buyer. You should know that the average “days on market” are much, much lower now than they were even six months ago. This really should not take us long.

4. Send a contract to your lender along with proper documentation. We’ll work with you to make sure all the paperwork is in order for quicker approval. This is the part of the process that takes the longest. But I can take much of the pain out of this.

5. Get Approval and Close Escrow. This part goes largely the way normal sales go –inspection, appraisal, close of escrow.

Just when you thought the world of home finance could not get more exciting, more changes are headed our way in the form of mortgages.

OK, I’m going to type the following but then explain it, so bear with me.

Effective for case numbers assigned on or after April 18th, 2011, FHA is increasing the Annual MIP on all forward mortgages by .25%. For an FHA loan where the home buyer makes the minimum 3.5% down payment, their MI will increase from .90% to 1.15%. And though that sounds scary and monetarily foreboding, it’s not that complicated.

First, What is an MIP? Well, the Federal Housing Administration (FHA) encourages mortgage lenders to approve loans for buyers by promising to pay FHA-insured mortgages in full if buyers default on the loans. Collecting the FHA mortgage insurance premium (MIP) on every loan allows the FHA to make good on those promises. Most FHA loans require two types of MIP payments: an upfront premium paid in full at closing, and an annual premium paid monthly over the life of the loan.

FHA’s guidelines are very lenient, although most lenders have overlays in order to bolster the product, and claim that borrowers with credit scores of 580 or more can put down as little as 3.5 percent. The FHA will increase its annual mortgage insurance premium by 0.10 of a percentage point for loans under $625,500. This annual premium is broken down in monthly payments. The upfront mortgage premium is also increasing by 0.75 of a percentage point, bringing the premium to 1.75 percent of the loan amount, which can be financed/added into the mortgage.

What does this mean for you? In the Mortgagee letter issued by HUD, they state that they anticipate this change will have minimal impact on borrowers but will significantly strengthen the Mortgage Insurance Fund.  While I would agree that an extra .25% is not huge, You can save that extra .25% by going under agreement in time for the lender to order the FHA case number prior to April 18th. And you can always put down more than 3.5%

See, not so scary.

If you have questions or need to discuss mortgage options,

Please call Jeannie Bolger, Sr. Loan Officer for more information.

Or call me for more information about the market: 602-456-9388.

16th Street Should Not Be Ignored

That is the message of Por Vida Gallery. Our January 2011 Get Your PHX was a celebration of 16th St. and we are going back to see what’s new.

Por Vida owners Pablo Luna, Thomas “Breeze” Marcus, and Lalo Cota have a foothold and a new statement that they want to share with you.

Lalo Cota tells us that 16th is the next logical step in art in Phoenix. First Friday, he says, can’t be about just 3rd and Roosevelt anymore. He tells us that space has become too much about food and artists are struggling. So it is time to expand.

Come see if the leading edge of art in Phoenix truly is making a move east and see Douglas Miles’ transfixing =Apacheria= show in which Miles challenges cliché images of Native American life through mixed media.

This will be the most engaging Get Your PHX that we’ve hosted for some time. So, don’t miss it!

Special sponsors to be announced soon!

Please join us and RSVP at our Facebook Fan Page.

March Get Your PHX
Thursday, March 22nd from 5:30 to 7:30pm.
2800 N. 16th St
Phoenix, AZ 85006 Map Here

This weekend marks the 11th annual M7 Street Fair. The fair and  classic car show features indie crafts, live music, food, cool cars, shopping, vintage trailers and fun for kids in Downtown Phoenix.

Every street fair that we have, every open market goes to building a better downtown. You just don’t get this sense of community in pre-planned developments. I’m just sayin’.

The first fair was 11 years ago, when local vendors partnered up with the School of Architecture at ASU to revitalize phoenix and a deteriorating Melrose Curve. The merchants received grant money from the City of Phoenix Neighborhood Fight Back Program and with the support of the surrounding neighborhoods, the Melrose District began to rebound.  One year after the Seventh Avenue Merchants Association incorporated, they held a “street fair” to commemorate the building of the first lighted canopies on Seventh Avenue.

Just over a decade later, what started as a 6 vendor street fair has grown into a highly anticipated family event with over 140 booths, food, live music, over 200 classic cars, and almost 18,000+ visitors

Its happening this weekend, March 3, from 11 a.m. to 5 p.m. at 7th and W. Glenrosa Avenues

We’ll you there! I’ll be out there with Ru visiting the booths and all that fun stuff.

As an Phoenix home seller, you might be wondering if you should put your home on the market or wait till Spring, which is not all that far away.

Of course, given what is has happened in pricing in the past month, waiting on the sidelines to make your move after the last of the market slump is played out seems like a pretty smart strategy. But while you’re laser focused on the idea that home prices may bubble again, which you may well be right about,  you know that buyers are likely to be more conservative this time around.

As you can see, the number of homes available has dropped significantly in the past year, but the buyers haven’t gone anywhere. So the time is now! The best reason there is to sell now is to buy a better house within your price range while those prices are still low. This is called “trading up”. You may not get what you want from the house you sell in a low market, but you will more than make up for it by buying your newer home in that same low market.

If you’re a home Seller and are serious about selling your home don’t wait! Remember to price it right, have it staged to sell and make your home easily accessible to prospective buyers!

And as always, contact me ken@getyourphx.com or at 602-456-9388

Did you know 40% of single family and condo sales in Greater Phoenix in January were cash purchases. Now, I’m not talking about sacks or briefcases full of cash, but people are buying homes outright and their are some benefits.

• Psychologically,  there is a big benefit in knowing that you own your house free and clear. You also free up quite a bit of income because you will have no rent or mortgage.
• Buying a house with cash means that if the value of the home goes down by 10% then the money you put in also goes down by 10%. The most you can lose is the amount of money you put in. In the case of a 20% down mortgage, if the house’s value goes down 10% then you lose 50% of the money you put in because of leverage.
• When you have the cash to pay for the full amount of a house, it means that there will be no contingencies on getting a loan and the amount of time needed to close a deal is shorter. This generally gives you the buyer more negotiating power for a discount on the price of the home, and with the number of homes on the market quickly drops timing is everything.

But is it for you? Well there’s no tax advantage. But if the amount of cash you spend does not consist of a significant portion of your liquid assets and the amount of savings you get from an all cash deal versus a loan deal is significant, cash might be for you. In other words, you might be earning more money on your investment in a house than other investments.

Now, I’m not a financial advisor and I suggest you speak with one before you purchase a home. But if you want to know more about the market, please give me a call at 602-456-9388.

Arizona is a beautiful place full of fantastic neighborhoods and if you’re moving here, you’ll probably need a little help deciding what community is right for you.

Jeannie Bolger and I have created a guide for new home buyers with links for information about schools and attractions for different parts of the valley.

This guide will be really handy for people moving in to phoenix neighborhoods or for companies to have on hand for their employees.

If you know of somebody thinking to move to Phoenix, or a company that is expanding in Arizona, please share this resource with them.

Download it here and keep it on hand in your office. Ken Clark’s Relocation Guide

Of course, Jeannie and I are just a phone call away if you need anything.

Credit can be confusing. It’s this strange, omnipresent score board of your financial decisions that determines whether you’re a smart financial risk for lenders. But don’t worry. Having a little knowledge on your side will make sure that you’re putting your best foot forward when it comes to raising your credit score.

Did you know that the credit score you may have purchased from one credit bureau isn’t necessarily the one that your mortgage lender, credit card issuer or auto loan originator will see? There are several different credit scores, even within the same credit bureau. Each of the three credit bureaus (Equifax, Experian and TransUnion) has its own proprietary credit score. 

Luckily, a few years ago Congress required that each of these three agencies to provide you with a free copy of your credit score once a year. Call 1.877.3322.8228 or visit their website to get your score. Hint: they will try to get you to pay for your score, but don’t buy that line. As a lender told me once, the most accurate scores you get when you buy a house are the ones the lender pulls as these are a good indicator of where you are.

Sick of getting preapproved credit cards. You can tell the credit bureau to stop selling your credit information by calling 888.567.8622

Speaking of credit cards, your credit score can be negatively impacted by a late credit card or loan payment, but it can also be affected by less obvious actions. If you close an old credit card account, you’ll reduce your available credit and shorten the length of your credit history, which can negatively affect your credit score. Additionally, applying for new credit can be beneficial to your credit score, but it can also decrease your credit score due to a hard inquiry. Make sure to keep your current credit balance less than 35% of your overall limit

Secure credit cards are a great way to build you credit because you deposit what you spend in advance. Just make sure they report to all three credit bureaus. MidFirst Bank is a great local option for these cards.

Please call Jeannie Bolger, Sr. Loan Officer for more information.

Or call me for more information about the market: 602-456-9388.

I see it more and more everyday. The housing inventory in Phoenix is shrinking and buyers are looking to make offers and get approved as quickly as possible. But for new or first time home buyers the steps to approval can be foreign and slow down the process, which is the last thing you want in this market.

But have no fear! Jeannie’s here!

It’s important as a home buyer to get pre-approval to expedite the process. In short: you want to have a pre-approval letter in hand before you even step foot in a potential home.

Now don’t get confused between pre-qualification and pre-approval.

A mortgage loan pre-qualification is simply an estimate of how much house you can afford and how much money a lender would be willing to loan you. This can be done over the phone in 10-15 minutes by providing information on your income, assets, debts, and a potential down payment amount.

A pre-approval takes more time, but can be just as easy. Getting pre-approved means that you have a tentative commitment from a specific lender for mortgage funding. You provide a home loan lender  with all that fun financial information you probably keep in a drawer in your house (tax returns, pay stubs, assets, debts, etc.) They will run a credit check and work to verify all your employment and financial information. Jeannie can take care of this with you in about an hour in her office.

In the house-buying process, the benefit of being pre-qualified or pre-approved is twofold. Not only do you have the added comfort of knowing what you can afford, the seller may also accept your offer over another if you are pre-approved and the other party is not.

So what are you waiting for?! Please call Jeannie Bolger, Sr. Loan Officer for more information.

Or call me for more information about the market: 602-456-9388.

Over the last couple weeks I’ve seen the same thing happen over and over: houses on the market are in bidding wars within HOURS of coming on the market and they are getting offers well above asking price.

There is a very simple reason this is happening: inventory in Maricopa County has dropped by more than half since January of last year.

This graph should make this very clear. This is terrible news if you are a buyer, but great news if you are listing a property.

This situation is going to last until one or two things happen: (1) Home builders start building more homes and/or (2) people who have been waiting to list their homes put them on the market.

Either way, prices are getting ready to move up. I feel bad for the people last year who told me things like, “it is clear that the market is going to drop again in 2012 because (insert economic theory here).” We agents knew prices were going to go up in 2012 because we’ve been watching this data for a very long time.

Here’s another way to look at it. The “Days Inventory” is going down quickly, too. Another way to see this is if we took the number of houses in the inventory today and divided it by the number of sales every day, how many days would it take until there were zero properties lest to sell. This tells you how quickly things are selling. If you want to break that down further by price, it really tells you a story.

See those charts below. For now, if you are thinking of buying a home be ready to be aggressive in your offers. Give me a call at 602-456-9388 and I can give you more information. Interest rates are still at a historic low. You definitely don’t want to wait until BOTH interest rates AND prices are higher!

Source: The Cromford Report (www.cromfordreport.com)

Active Listings in 2011 and 2012