Which is better:

The freedom of a condo? Or the land value of a house? You’ve found the area where you want to live. You have your financing arranged. But, you are stuck.

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This week and next I’ll be sharing some ideas to help you sort it all out by comparing the pro’s and con’s of each option. Today, I’m going to focus on the bonus features of a detached, residential house. (If you’re leaving toward a condo, you’ll want to read this, though, as you’ll get advice, too, since I’ll be comparing the two options.)

1.   The land Will Never Go Away

90% of all millionaires become so through owning real estate.”
~ Andrew Carnegie

Let’s face it. Buildings fall down.

But unless you live on an island in the Mississippi, your land will probably not go away.

This is a drawback for condominiums. Although many are built to last, some have been thrown up so quickly in recent years, they may not last 30 years.

Ask yourself this question:

Which is more important to me at this time in my life: being free from yard and home maintenance or buying something that I will have 20 years from now?”

[image: PrimeImageMedia.com]

2.   No Shared Walls

In a condo development, you may hear your neighbors. If you are the kind of person who does not like to see the same neighbors almost every day in close proximity, you may consider a house.

You can build a privacy wall or grow bushes around your home. Your back yard can be a fantastic get-away.

Ask yourself this question:

Do I enjoy the sense of community that I can have by sharing a common living area. Or, do I prefer more space that I can call just my own?”

How much more are you willing to pay for that luxury?

3.  Greater Flexibility to Improve and Remodel

Most condominiums, if built with block construction, give you some flexibility to re-arrange inside. You may be able to remove some walls and expand rooms.

However, once you start talking about windows, balconies, and patios, the restrictions begin to pile on.

If you have a house, you can go crazy repainting, adding features, and personalizing your home.

However, you must still adhere to city code for things like wall height and that massive Trojan Horse water slide you are planning to build in the back yard.

Get to know and love these two links:

City of Phoenix Historic Preservation

City of Phoenix Residential Building Permits

4.  Your Property Value is Tied to the Success of Neighbors

In a condominium, all owners pay into a fund that maintains the common property, including landscaping and insurance for things that owners share, such as walls and a roof.

In a house, you don’t have to pay these monthly assessments. But, then again, you have very little power over your neighbor, who has decided to park a massive pink RV between your two homes.

Or, if your neighbors don’t take crime prevention seriously, will your neighborhood likely improve or decline?

Ask yourself this question:

Am I willing to spend the time volunteering with the neighborhood association in order to protect my property value?”

Hint: You will want to ask a similar question for condos.

5.  Keeping Up Appearances

People often talk about keeping up appearances in the negative, as if it is all about superficiality.

But in a neighborhood, keeping the street looking good has a very direct impact on your property value.

If you are inclined toward a condominium because you don’t have to mow the lawn, consider this:

• The Average HOA Assessment = $200/month
• Average gardener = $100/month

6.  Other Things to Consider with Houses

Growth potential tends to be higher.

Condo boards politics can be tricky.

Houses are more adaptable for growing a family.

Always meet the neighbors before you buy, as part of your inspection period.

Kenneth “Ken” Clark
REALTOR(r)
At Your Service!
HomeSmart
(602) 561-5881
Ken@GetYourPHX.com

 

Please spread the word. We have two open houses this weekend.

Saturday from noon until 3pm – 4729 N 76th Pl. in Scottsdale
This is a great single level home in Villa Monterey. Corner unit with rare side access gate to backyard. 2 bedrooms plus bonus den area. Updated kitchen with granite counter tops, built-in oven, smooth cook top, and eating area. Expansive living room huge window overlooking private yard. Huge master suite with updated bath. Private backyard with covered patio and mature citrus trees.

Drop by and say hello to Michelle Conley, the newest Get Your PHX team member.

Sunday from 11am to 2pm – 140 E Coronado Rd.

Villa del Coronado is one of the most sought after and unique co-op communities in Phoenix, steps away from museums, light rail, health clubs and restaurants. This 2 bedroom, 1.75 bath home has seen numerous improvements over recent years: opening up the living and dining rooms, UV protecting on the windows, renovating the kitchen a installing a beautiful master bathroom. Don’t miss the huge 5′ x 24′ living room balcony and the 5′ x 14′ off the master bedroom. Located in an elevator building, this unit is one of the few with a permitted full size washer and dryer and a detached garage! Cash buyers or seller may carry. All utilities and property taxes are included in the monthly HOA fee. This is perfect for refined downtown living.

This just in from the desk of my friend Jeannie Bolger, of Nova Home Loans:

There were some changes other than weather as of October 1^st this year. For those of your looking to buy a home, there were several mortgage changes effective last Saturday.

For those looking into FHA (Federal Housing Administration) loans the maximum loan has been reduced state wide. As you may recall, in 2008 a temporary boost to Federal Housing Administration-guaranteed loan was passed. That boost expired October 1^st and

In Maricopa County new loan limits are:

Anyone looking into VA Funding has noticed a decrease, sometime more than a full % for purchases, on funding fees.  Across the board these are positive changes, as the VA loan is already perhaps the best loan option available for today’s veterans and active duty service men and women.

Regular Military Funding:

Reserves and National Guard:

Beginning October 1, 2011, USDA Rural Loans have annual mortgage insurance (3%, paid monthly) and reduced the upfront guarantee fee on purchases from 3.5% to 2%. Unlike FHA insured loans, USDA’s annual insurance fee is for the lifetime of the loan, which is definitely something to think about when considering loans.

Loans can be complicated, but they don’t have to be. Contact Jeannie at (602) 385-4812 today for help.

And, of course, give me a call at 602-456-9388 for property questions.

You’ve heard me ramble on about how great it is to live in Central Phoenix. It’s the truth! CenPho is the place to live and offers residents so much that other cities just don’t offer.

But, check this out. Here’s another reason you should consider moving in to CenPho if you are not already here: a long commute may increase your chances of divorce by 40%. Really.

One recent study in particular conducted by the Umea University in Sweden showed that there was a large increase in the risk of divorce with an increased commute.

OK. I’m being a little facetious. But there is probably some truth here. The two hours you are NOT travelling to and from work you could spend with your main squeeze at the Phoenix Art Museum, or one of the upteen thousand new restaurants downtown.

One thing the study does not mention is the importance of the aesthetic on our lives. Even though Phoenix has torn town waaay too much of its architectural heritage, what’s left still gives people something that the burbs can’t –a sense of space and identity.

A sense of history really brings out the artistic side of people with architecture and individuality when it comes to homes and businesses.

The various cultures and demographics of everyone living in CenPho make it so unique and lively that there is something for everyone. I’m constantly reminded of Richard Florida’s book The Rise of the Creative Class.  Its kinda old news now. Remember when he came to Phoenix in about 2003 to speak and we filled up the Orpheum? Much of what he said has held true, despite the economic downtown

1) If you build an organic (versus top-down) community, the creative class will come.

2) Areas with dense urban centers and creative outlets survive economic downturn better than other areas.

This is true of Phoenix. We saw it ten years ago and we see it today.

I’m just sayin’.

I’ve had first time home buyer clients who are frustrated by how much distressed property there is in the market. They can’t afford a renovated home, but they can’t afford to fix up the property on their own.

Well, there is an answer.

The U.S. Department of Housing and Urban Development (HUD) offers homebuyers the opportunity to secure a loan known as a 203(k) loan. This loan is administered through the Federal Housing Administration (FHA) and gives homebuyers the necessary funds to rehabilitate a home.

Many times, a bank will be hesitant and may reject lending money when the home is not habitable. This is where the 203(k) loan comes into play and can help homebuyers obtain the necessary funds to not only buy the home but to purchase the necessary upgrades to make it habitable.

This loan is an incredible opportunity and is coming into play more now than ever since the housing market took a dive. With many people facing foreclosure, they stripped their house of everything that wasn’t, or was, bolted down leaving the house a complete disaster. This loan gives homebuyers the chance to come in and fix up the house.

This does two things: 1) increases the value of the home and surrounding area and 2) boosts the economy of the community by having another family living and buying in the area.

My friend Jeannie Bolger, of Nova Home Loans is well versed in helping you get these “fixer-upper” loans. Jeannie has been trained to help guide clients through the entire process.

But as with any mortgage, there are some criteria both the homebuyer and the home must meet:

1)      The homebuyer must meet FHA financing guidelines which means a FICO score of 640 or more and a debt to income ratio of 31/43 (see FHA for more info)

2)      The home must be the primary residence

3)      For the home to qualify, it must be existing for more than one year

4)      The work must be completed by a Licensed General Contractor – sorry do-it-yourselfers

5)      Work starts after you close on the home and must be completed within 6 months

There are also two types of 203(k)s that homeowners can choose from depending on the extent of the work required:

1)      Streamline 203(k) – this includes uncomplicated repairs and improvements to home up to $35,000 and no more than 2 subcontractors needed for entire project

2)      Standard 203K – this is for major repairs and improvements along with structural improvements to property exceeding $35,000 – up to 6 months PITI (principle, interest, taxes and insurance) can be included in mortgage if property cannot be occupied during construction. A Licensed General Contractor is needed if layered work is involved

These 203(k) loans are a great way to get our housing market back up and running. With a wide selection of homes in the Central Phoenix area, there is something for everyone.

And don’t forget, the Realtor, Lender, HUD Consultant and Contractor will hold your hand throughout the WHOLE process.

If you would like more information on the 203(k) loan, or just on homes in CenPho, give me a call today at 602-456-9388.

If I have to hear another person predict a massive “shadow inventory” I’m going to turn green, and you wouldn’t like me when I turn green.

Well, not really green, more like red with some veins popping out on my forehead and my head spinning around.

So what am I talking about? Well, I’m a news junkie and when I hear every pundit on TV prattle on about  a shadow inventory, like its the forthcoming of the “four horsemen of the house-pocolypse,”  Where is the data to back it up? If they were looking at the same data as I am, then they wouldn’t be saying this nonsense.

I mean, come on, just do some quick research and see for yourself. The Cromford Index is the best guide out there and comes directly from the MLS as well as the county court and recorder’s documents. I would say those are just a teensy bit credible, I mean after all, they take the information directly from sales, right?

Yeah, that’s what I thought.

So what exactly is a shadow inventory? At its core, shadow inventory refers to properties, which are on their way to foreclosure or are already foreclosed that have not yet been sold or put on the market (for whatever reason, we don’t know).

Well, here is why there will be no shadow inventory in the Phoenix area:

1)      A house will not be part of any inventory of foreclosed homes until it has been given a foreclosure notice (see “Pending Foreclosures” on the graphs below). Even if it is a short sale, it probably has a foreclosure notice pending, so it is likely part of the big purple area below. A foreclosure notice is when the bank sends you a note to say, “Dearest customer. We noticed you stopped paying your mortgage. While we love you very much, we will throw your sorry butt out on the street by such and such date unless you pay up. Signed, Your Favorite Bank.”

(Click on graphs to enlarge)

That’s it. That is all there is. You could try to argue that more homes are going to go in to foreclosure because the economy is going to go in to a double-dip recession, but it is waaaay too early to predict that. Further, the foreclosures are going down because the market is clearing of those properties that were purchased at the peak of the market. There are just fewer of them now.

So, please. Tell your friends. Tell your family. Tell your neighbors and strangers whom you don’t even know.

Let’s put this shadow inventory myth to bed for good…

If you are buying a house, this means the inventory is dropping and prices are going to go up. So, don’t delay. If you are looking to sell a house, times are getting better for you. Either way, call me at 602-456-9388.

Did you notice how some major stores are starting to close up shop in urban settings which in turn is affecting the surrounding areas?

I’m talking about major stores such as Target, Best Buy, even Safeway – these stores are considered “anchor stores” because they “anchor” and are supposed to bring stability to the local area. That Target at 7th Ave and Camelback has been closed for a couple years now.

So, what happens when one of those stores closes its doors?

I started thinking about this over the weekend after hearing an interview on National Public Radio about the subject and they used the book store Borders as an example since they are closing up stores after filing for bankruptcy.

You may be thinking the same thing I was at first that with these anchor stores leaving, the surrounding neighborhoods and community would be greatly affected in a negative way. Well, in many cases that may be, but for cities and developers who get on the ball, these closures can lead to positive developments.

If approached with the right mindset by city leaders, smaller stores and boutiques can come in and flourish, filling the void and revitalizing the area. This is what makes the Central Phoenix area so amazing! There may not necessarily be major anchor stores in the area, but it’s the artistic boutiques and small shops that fill in the holes like grains of sand between large rocks that make the area a solid and thriving community!

Most of you probably remember when, Richard Florida (of the famed book Rise of the Creative Class) came to town in about 2003. The interview on NPR with a Brookings Institute researcher really just backs up the same arguments.  Although major anchor stores leave and are replaced, as long as there is a culture that brings people together, you will have a community.

Further, a few failed stores in a whole line of smaller stores has less of a devastating impact that the loss of an anchor store.

This is what makes Central Phoenix such a dynamic micro-economy and why I love working and selling homes in the area. There is so much life and vitality that is often missing in other areas. There has been so much work done over the past decades to revive the area that just makes it the place to live!

I’ve love to hear what you think about this.

If you were one of those homeowners who had a foreclosure recently, did you know that you could become a homeowner again sooner than you think?

There is no doubt that a foreclosure affects your credit score, but according to Jeannie Bolger, Senior Loan Officer with Nova Home Loans, it all depends on your situation.

“After a foreclosure, your credit score will definitely go down between 100 and 200 points on the credit FICO score,” said Bolger. “But it’s a tough question because everyone’s situation is so different and it depends on past payment history, mortgage late payments and debt.”

But Bolger also said the waiting period after a foreclosure for an FHA loan is 3 years, for a VA loan it is 2 years, and a conventional loan is 4 years. Although this seems like a long time, it is a perfect time to re-establish your credit and make yourself more desirable for a loan.

And if you did foreclose on your home, Bolger believes there are some important tips you need to follow.

“Do not overbuy and really know what your budget is,” she said. “Have an emergency fund to allow for ‘unexpected’ emergencies and have a savings account to make mortgage payments if you lose employment or get sick.” Have your credit run 6 months after the Foreclosure by a mortgage professional so you will be better prepared to meet the minimum FICO score requirements required by the loan terms.

If you or someone you know foreclosed on a home, there are options available to ensure homeownership again. The US Department of Housing and Urban Development offers tips about foreclosure and information about the process.

If you would like more information on what it takes to buy a home again after foreclosure, give me a call today at 602-456-9388 and I can find you the perfect home in the valley!

Let’s face it, everyone and their grandmother has a cell phone these days.

Aside from the fact that teenagers can’t hold a conversation that includes eye contact, they are great things.

They are so amazing that 90% of Americans send text messages. This is a staggering number! I wonder if they count the “ppl wh txt w/o vwls”?

Another increasing trend is the number of Americans using smartphones! Over 34% of Americans use a smartphone in their daily life and that number is only increasing.

So what does this have to do with you? Well, if you are selling a house, there are new ways to give buyers instant access to information about a home! The number of people using apps, text messages, and a new thing called Quick Response code, or QR for short, are on the rise.

This is what I am most interested in when it comes to using this new technology as an advantage.

Remember last week’s blog post about how short sales are an increasing share of the Central Phoenix market? Unfortunately, this is the new reality for at least the next few years. But if you need to short sell your home, don’t worry! Using tools such as text messages and QR codes, I can help your home get seen above the other homes on the market. (See also my post from yesterday on other Short Sale Resources I’ve developed.)

Want to know how it works? It’s so simple and you can try it yourself!

Text the special 6-digit code on the flag to the number and you will receive information on this house.

Or, if you have a smartphone and a barcode scanner app on your phone, scan the special code and you will be directed to a special website with information on the house.

HOW COOL IS THAT?!?

Using this technology is a great idea and can really help increase the number of people that view the home. Using the old-fashioned flyer box is fine; the problem with those is the fact that you will have to continuously check and replace the flyers otherwise there might be a missed buyer.

Smartphones are amazing pieces of technology and having the ability to quickly access information can make buying or selling a home much easier.

I wrote last week about how the market inventory is shrinking, and that an increasing number of homes are short sales.

Ironically, the average days that a house sits on the market is actually going down dramatically this year. See the graph below.

That tells you that people are making offers faster and short selling banks are getting answers quicker than last year.

If you are thinking to short sell, now is the best time since the crash started.

I want to tell you how I work to get them closed. If you’ve been thinking to short sell, the following could save you some greenbacks.

Many agents work with large law firms that charge you a huge retainer to represent you to the bank short selling the property. In my experience, these firms are not necessarily any faster at getting them closed. In fact I represented buyers who waited 4 months for the firm’s negotiator to get an agreement letter from a bank, only to find that they lost the agreement letter for a month. The deal fell apart due to this.

I’m sure most attorneys are working hard. But I think some are taking on too many clients, or are promising too much.

Here is how I work.

First, if you are thinking to short sell, I refer you to the Law Offices of Roberta Voss (602-697-0730). She won’t represent you as a negotiator to the bank. But she will sit with you for a reasonable fee and make certain you understand the short sale process from the legal perspective. (Whatever you do, don’t skip that talk with an attorney.)

Second, I work directly with either Old Republic Title or Chicago Title, both of whom have dedicated short sale teams that communicate with the bank directly. Why is this such a big deal? Well, because, first, they charge you nothing, zilch, nada! Second, because they are on the phones with the banks all the time, they can get heard above the din.

Third, I use social networks, text networks, QR codes and mobile websites to make certain everybody sees your home.

There is a lot to think about with short sales. If you are thinking to take this step, please give me a call first at 602-456-9388.