November 2015 MLS Market Report for Phoenix

Home equity returns in a big way, nearly a million U.S. homeowners came up from underwater on their home loans in the third quarter of 2015, finally owing less than their home is worth.  The nation's overall negative home equity rate fell to 13.4% of homeowners with a mortgage, down a full percentage point from the second quarter, and up 16.9% from a year ago, according to Zillow, the Seattle-based real estate firm.  Historically, the typical negative equity rate is lower than 5%.  The supply of homes for sale is very tight nationwide, but it is especially tight at the entry level.

The real estate market remains pretty much unchanged in Phoenix and the West Valley since last month.  Home buying and selling still continued to be unexpectedly busy during what is normally our "off season."  Interest rates are still low, but for how much longer is the big question.  Inventory is still low and the number of Active listings is down 11.7% from last November, however Pending Listings is up by almost that same percentage, 11.4% from last year.  In the popular price ranges heavy competition still remains.  

Sellers should take advantage of this time before rates increase.  Sellers should continue to remain realistic about pricing their home.  If your home isn't selling, it probably is overpriced.

The monthly market report is ready for you to view or download.  Click on the image below to access this month's market report.  Please feel free to share this information with your family and friends. 

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Verrado Hometown Holidays 2015

Celebrate the holidays the Verrado way, with their annual tree lighting celebration, breakfast with Santa, a home tour and more! New this year, show off your talent in one of their two decorating contests.

Links to details about each event are below.

Saturday, December 5 
Breakfast with Santa | 8-10 AM
Blood Drive | 8 AM - 1 PM
Verrado Assembly's 12th Annual Tree Lighting Celebration | 5-9 PM
Gingerbread House Decorating Contest | 5-9 PM (viewing)

Sunday, December 6 
Joy of Giving Celebration | 4:30-7 PM

The Joy of Giving Celebration honors the giving spirit of All Faith Community Services, Buckeye Super Heroes and Homeless Youth Connection, a local nonprofits and service partners of The Giving Tree.  You are encouraged to bring a toy, clothing, or non-perishable food items to help thousands of Buckeye families.  The evening will include a special appearance by Santa, holiday music, crafts and refreshments.  Verrado's Joy of Giving Celebration will be held at the Verrado Golf Club.

Sunday, December 13 
We Heart Verrado Christmas Home Tour | 4-8 PM

December 15- 18 
Holiday Home Decorating Contest

Thursday, December 31 
New Year's Eve Celebration | 7:30 PM - 1 AM

Verrado always makes the holidays special for their residents and guests!

What Do Buyers Need to Know About FHA Financing and FHA Appraisals?

The majority of home buyers use financing to purchase a new home.  FHA loans are a popular option since the downpayment is low and the qualification criteria can be more forgiving than some conventional loans.

It's important to know that when using a FHA loan to buy a house, your lender will use a HUD-approved home appraiser to determine the value and inspect the property.  You are probably thinking "doesn't a home inspector inspect the house, not the appraiser?"  Yes, typically the appraiser is mostly concerned with determining the current market value of a home, but with a FHA loan the HUD-approved appraiser must also inspect the home to ensure it meets HUD's minimum property standards.  

The FHA appraisal guidelines include instructions for appraisers to inspect the property. According to the guidelines the HUD-approved appraiser must visually inspect the property inside and out.  While doing so the appraiser must take photos of the property showing the front, rear and sides of the home, as well as any value-adding improvements such as a pool.  In addition, the appraiser must take a photo of the comparable sales used in the appraisal report. Last, the appraiser must provide a street map showing the location of the subject property and the comparable properties used in the report.

While inspecting the property the HUD-approved appraiser must assess the condition of the property for the health and safety of the people who will be living in the home. The home must be habitable and comfortable with no potential hazards for the new homeowners.  Here are some common items that HUD-approved appraisers look for:

• main goal is to find any safety issues with the property
• peeling paint (especially for homes built prior to 1978 due to lead based paint that was commonly used)
• loose handrails or lack of handrails at steps and stairways
• lot must be graded to prevent moisture from entering the foundation or basement
• all bedrooms must have an exit to the exterior, a window is sufficient
• the heating system must provide a comfortable environment 
• the roof must be in good condition
• the foundation must be in good repair

Any items found by the HUD-approved appraisal must be fixed.  The official FHA appraisal guidelines state that "Required repairs are limited to those repairs necessary to preserve the continued marketability of the property and to protect the health and safety of the occupants."  The appraiser will come out for a re-inspection to ensure the items are repaired.  If all items are satisfactory during the final inspection then the buyer can move forward with the loan.    

Do you still need to get a home inspection if you are getting an FHA loan?  Absolutely.  While the home inspector may make note of items that the appraiser will find, the opposite is not true.  The HUD-approved appraiser is focused on health and safety only.  The appraiser does not complete a full home inspection like a licensed home inspector does.  It's important to have a qualified home inspector inspect the property as well.

If you are using FHA financing it is important to look at the condition of a home prior to making an offer.  Determine if there are any safety red flags that may complicate the transaction. Also speak with your Realtor and decide if you could address those items in your offer to make sure they will be repaired for your financing requirements.  Sometimes it is a good idea to get a professional home inspection completed prior to the FHA appraisal to determine if there are any issues that the FHA appraiser might find.  It's usually easier to negotiate repairs with the seller either up front during the offer negotiations or during the home inspection period. And with the TRID rules some buyers may not be able to complete the appraisal during the first ten days anyway (length of standard home inspection period in Arizona).

Westpark Community in Buckeye, AZ 

The subdivision of Westpark is located off of Miller Road and Lower Buckeye Road, just south of the I-10.  Westpark is close to all that the City of Buckeye has to offer.  Continue south on Miller Avenue and you will find historic downtown Buckeye with shopping, restaurants and more.  To learn more aboutthe City of Buckeye you can visit their website, www.buckeyeaz.gov.  Just a few miles east is the Sundance area that includes a grocery store, shopping, restaurants and more.  Learn more about the Sundance area:  Sundance Community in Buckeye.

Many homeowners choose Westpark for it's easy access to the I-10 and lower home prices than homes closer to the Goodyear/Avondale area.  By driving farther west on the I-10, home buyers can snatch up some great properties at great prices.  

Other homeowners like Westpark due to it's proximity to both the elementary school and the high school.  Westpark Elementary School is located within walking distance from all homes in Westpark.  The elementary school is a part of the Buckeye Elementary School District.  You can visit the district's website at www.besd33.org.  Or you can view the district's boundaries map here:  Buckeye Elementary School District Boundaries Map.

Youngker High School is located just outside of the Westpark subdivision and is a part of the Buckeye Union High School District.  To learn more about Youngker High School visit their website: www.buhsd.org/youngker.   Youngker High School website.  And to learn more about the district visit:  www.buhsd.org.

There are numerous green belt common areas walking paths and tot lots in the neighborhood.  The new Skyline Regional Park is an 8,700 acre park in the southern White Tanks Mountains, which is just on the other side of the I-10 from Westpark. Once completed the park will feature restrooms, educational areas, dry camping and 28 miles of hiking, biking and horseback riding trails.  Skyline Regional Park will also include equestrian parking, water trough and hitching posts.  Learn more at the Skyline Regional Park website.

Associated Asset Management (AAM) manages the Westpark HOA.  AAM can be contact at 602-957-9191.

View Westpark Homes For Sale

View Buckeye Homes For Sale

October 2015 MLS Market Report for Phoenix

The monthly market report is ready for you to view or download. Click on the image below to access this month's market report.  Please feel free to share this information with your family and friends.

The Phoenix real estate market is STILL unexpectedly busy! We are usually slowing down for the holidays by now so it's great to see so many active buyers out there looking for a new home and taking advantage of the still low interest rates.  Competition and multiple offers are still common especially among homes $200,000 and less.  Buyers still need to be aggressive with their offers.

Even with all of the activity prices are remaining stable so sellers need to remain realistic about their home's market value.

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Should you add a solar panel system to your home?

Solar power is becoming more and more popular in Arizona.  With an average of 296 days of sun and probably the sunniest state in the US, it seems like a no brainer for everyone to jump on the solar bandwagon.  In fact most of us wonder why don’t more people have solar panels on their homes?  

Well for starters solar panel systems are not cheap.  While they do lower your electric costs, the initial purchase and installation is a pretty hefty upgrade for most homeowners.  

There are many factors to consider when determining the price of purchasing a solar system but the typical home installation ranges from 3 to 7 kilowatts and costs between $15,000 and $40,000.  The average for 5KW of system typically costs around $20,000.  The price can increase if you have to modify an older home with a roof that can’t handle the weight.

There are some ways to decrease the purchase and installation price through tax exemptions, tax credits and rebates. 

• The Solar Investment Tax Credit is offered through the federal government.  According the the website www.seia.org this credit is a 30% tax credit for solar systems on residential homes.  Under the current law it remains in effect through December 31, 2016.  

• Arizona’s Energy Equipment Property Tax Exemption allows homeowners to not pay tax on the value added to the property by the energy system installation.  There are some restrictions so speak to a tax expert to learn more.  And make sure to update the county assessor when you install the equipment, you will need to provide the county assessor with the documentation of the purchase and installation within 6 months.

• The State of Arizona also offers homeowners complete sales tax exemptions on the purchase of solar power equipment.  Make sure the solar company is registered with the Arizona Department of Revenue prior to purchasing the system. 

• Some utility companies offer a rebate when you install a solar system so check with your utility company and your solar company to verify if you are eligible for any incentives ro rebates.  

In addition to the tax exemptions, tax credits and rebates, purchasing a solar panel system could add value to your home.  Like most upgrades you won’t get dollar for dollar return.  Solar panels that are owned by a home seller add 4 to 6 percent to the value of a home.  This is often less that the cost of the panels and the installation.

Financing is available thru third-parties.  A power purchase agreement (PPA) allows the homeowner to pay a specific rate for the electricity that is generated each month.  An installer/solar company builds a solar energy system on a property at no cost.  This solar system offsets the monthly electric bill and the solar company sells the power generated by the system to the homeowner at a fixed rate that is lower that the local electric company.  When a PPA ends the homeowner can extend the contract or buy the solar system from the company.

For those that don’t want to or aren’t able to purchase or finance a solar system, there is an alternative to forking out that amount of cash, you can lease the system from a solar company.  Some solar companies even have a zero down payment option.  This leasing option is a great way to start saving money on electricity without having to pay for the solar system up front.

There are some important things to think about before you lease a solar system.  Houses with solar leases can be difficult to sell and leased solar panels do not necessarily add value to a home.  For some buyers it may decrease the value in their mind or skip the home all together.  The buyer must take over the solar panel lease and the buyer has to qualify with the solar company.  Solar companies typically require a higher credit score than most lenders do for qualifying. Some companies that offer a zero down payment lease can make it very difficult for you to transfer the lease to a new buyer to assume the lease.  In addition, the lease payments are figured into the debt to income ratio of the buyer and could cause them not to qualify.  

There are many other factors to consider when purchasing a solar system.  It's important to do your homework and investigate your options as well as the solar companies that you are considering working with.

Before you purchase a solar panel system speak to your accountant about the tax benefits.  Before you sign a solar panel lease make sure to read the lease carefully.  You should also weigh the pros and cons making sure to include the issues you may have when it’s time to sell the property.

Avoid TRID delays!!

On October 3rd, 2015 the process of obtaining financing and closing on a home changed.  What's the most important things that you need to know so you don't delay your closing?  Or risk losing out on a house?

Pre-Qualification

The new Purchase Contract requires that all buyers using financing include a pre-qualification form with their offer.  It is even more important than ever to contact a lender and get the pre-qualification process started prior to looking at homes.  You can't submit an offer without it.  Make sure to choose a lender that is set up for the changes.  

While your lender cannot require it, it's best to try to get as much of the financing process completed as possible upfront, so request that your lender review your documents supporting your income, assets, employment, etc.  It could save you the money of an appraisal and home inspection down the line.  Better yet, get pre-approved, you can still be pre-approved under the new TRID guidelines.

New Application Process--PENCIL

While your lender can review your information and issue a pre-qualification form or a pre-approval, they cannot collect a formal application from you until the have the following items:

Property Address

Estimated Value of Property

Name of Consumer (Buyer)

Consumer Social Security Number

Income

Loan Amount

As you can see these items create the acronym PENCIL.  Once those 6 items are in place the application date starts and your lender must adhere to the TRID timelines.  So until you find a property and have an accepted offer, you cannot officially start the application process.

Loan Estimate

Why is the application date important?  Your lender is now required to deliver a Loan Estimate (replacing the Good Faith Estimate and TIL) within 3 business days of the application date.  You can shop around and get multiple Loan Estimates.  After you have reviewed the Loan Estimate you must provide your lender with your Intent to Proceed.  You can only proceed with one lender.

Closing Disclosure

Your lender must provide you with a Closing Disclosure (replaces the HUD-1 Settlement Statement) 3 business days prior to the consummation date.  You can then review the numbers, ask any questions and request any corrections.  If you are ready to proceed you can sign the closing documents at the title company after the 3 days waiting period is complete.

Temporary Longer Closing Period

Buyer and sellers need to be aware that some lenders are suggesting to add a little padding to the close of escrow as everyone get used to the new changes.  Lenders are recommending 40 to 45 day closes for the first few months.  Sellers need to realize they may have to be flexible with closing dates for the next few months.

September 2015 MLS Market Report for Phoenix

The monthly market report is ready for you to view or download.  Click on the image below to access.  Please feel free to share this information with your family and friends.

The Phoenix real estate market is unexpectedly busy!  Prices remain stable and there are tons of buyers out there looking for a new home.  Our market is still experiencing low inventory so competition is still common.  

Buyers need to be aggressive with their offers and sellers need to be realistic about their homes market value.

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