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Recent AZ real estate news articles August 17, 2009

Posted by mkuhbock in Arizona Vacation Property, AZ Real Estate News.
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More news articles on the metro Phoenix real estate market and beyond:

Home Prices: There’s No Quick Recovery Ahead

by Brett Arends
Monday, August 17, 2009

provided by

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So, is our long national nightmare over? Has the housing market finally hit bottom?

There has been some muted — albeit exhausted — cheering from homeowners in recent weeks. But before we break out the champagne……

Valley home building resumes as new builders take over
AZ Central.com – AZ,USA
Phoenix real-estate analyst Jim Belfiore of Belfiore Real Estate Consulting said companies are taking full advantage of recent moves by lenders to sell off …

Foreclosure bill is now tied to state’s budget
Arizona Republic – Phoenix,AZ,USA
Former Arizona State Land Commissioner Mark Winkleman joined Mortgages Ltd., the Phoenix real-estate lender founded by Scott Coles. Winkleman, a real-estate …

Fidelity Releases Metro Phoenix Real Estate Trends and Predictions
Business Wire (press release) – San Francisco,CA,USA
This information is released in partnership with The Cromford Report, a daily report tracking the residential real estate trends of the Metropolitan Phoenix …

Foreclosures Forecast to Increase

Foreclosure Investors Rely on Innovative Rental Strategies

New appliances. Upgraded bathrooms. Plasma televisions. Granite countertops. High-end fixtures. These are some of the perks foreclosure landlords are offering their tenants. With the market for home …

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Some interesting news articles over the last week July 31, 2009

Posted by mkuhbock in Arizona Vacation Property.
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The wild and wonderful world of metro Phoenix real estate.

Is it good? – Yes

Is it bad? – Yes

Is it all over the map? – Yes

The market is definitely not for the faint of heart but when markets are in upheaval  there are opportunities for those who buy smart and have the right time horizon in their investment plan.

Below are a couple of recent news articles that you might find of interest, the comments on the ‘New Law’ article are interesting!

Have a great weekend!

Cheers,

Michael

Phoenix Existing Home Sales Increases 71 Percent
NuWire Investor – Bellevue,WA,USA
Phoenix real estate appears to be rebounding with a strong increase in existing home sales. Existing home sales have increased for 12 consecutive months now …

New law triggers fear for housing
Arizona Republic – Phoenix,AZ,USA
“I got a call from an out-of-state lender that is considering holding off on a foreclosure until after September 30,” said Phoenix real-estate attorney Marc ..

TopTenRealEstateDeals.com Introduces The Top 10 Phoenix Real
PR Web (press release) – Ferndale,WA,USA
According to Amy, “It’s old news that the Phoenix real estate market has been pretty hard hit over the last few years. This has created some incredible …

Has the residential real estate market bottomed out? June 16, 2009

Posted by mkuhbock in Arizona Vacation Property.
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Now that we are recession battle weary and it seems like forever since we have heard any good economic news many are contemplating the question – are we finally turning the corner? This is the million dollar question and if you don’t like the predictions from one analyst or economist then Google for another and you will have a prediction that is significantly different than the last one you just read.

In any case, one indisputable fact is that we are now hearing more cries from the gallery that we are approaching the bottom of this down real estate market, where even some stats are showing the one off market improving month over month.

See recent article:

ASU-RSI: Beginning of the End or Price Plunge

Published: June 15, 2009 in Knowledge@W.P. Carey

Sales data from March indicates that a trend change in housing prices might be underway in the beleaguered Phoenix metro market. click above title link for complete article

I think we are close to the bottom as the supply and demand curves are leveling out and price reductions in most areas have begun to stagnate. We will continue to see depressed prices for properties that have been run down and are in need of a complete rehab so one must compare apples to apples and focus once again on value versus solely on just price per square foot.

Yes I could buy a house down the street at $40 psf versus one four doors down that is listed at $60 psf but the one at $40 needs to be rebuilt inside where the $60 house just needs some minor updating, so if you compare the value the $40 psf house probably needs $40,000+ in rehab work and you still might find more issues down the road with a beat up property so is it really the deal you thought it was?

In many parts of Metro Phoenix and North America for that matter good properties that are priced at market are selling quickly at their asking price, this is a sign that we are bottoming out in some geographical markets and that if we dont move upwards we will perhaps bounce along the bottom for a while.

Here is an interesting article with a country wide geographical view of the market:

Buying and Selling 2009: What It’s Really Like
by Dana Dratch
Monday, June 1, 2009
provided byBankrate

For buyers and sellers, the past few months have been schizophrenic.

In 2009, sellers are battling shrinking home values and a constricting pool of available buyers. Buyers are sensing opportunities on home prices and home mortgages — if they have the credit, job security and ready cash to qualify. click above title link for complete article

The real estate free fall might just be over but what ever you do make sure that you educate yourself before jumping into the real estate pool. There are some great deals for the new homeowners, investors and those that might be looking to move back in after a real estate set back.

Good luck and happy house hunting!

Cheers,

Michael

Metro Phoenix Real Estate – Is the glass half full or half empty? March 31, 2009

Posted by mkuhbock in Arizona Vacation Property.
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Like most people I always hear about those that buy low and sell high but have rarely experience that phenomena myself. The Metro Phoenix real estate market holds a lot of promise for the average investor / homeowner to change their luck.

Metro Phoenix real estate has and is going through a tumultuous time, depending upon the survey, study or report, the Phoenix real estate market is horrible and continuing down the path to utter despair with no end in sight. See a recent Forbes report on the 10 Best and Worst US Housing Markets, we made it to number 2! Most would see the glass as half empty if not total dry, like being out in the Phoenix summer 115 degree heat. But it is a dry heat and as it happens every year in Phoenix the temperatures will moderate and with open arms welcome the shivering masses that are escaping the bitter cold from elsewhere in North America.  Thus I see this as the glass being half full.

Tell me where can you now purchase a principle residence, investment property or vacation home at these prices (2003 levels or lower) and live in an area where everyone wants to either visit to escape the cold and golf, retire to, move to because of the climate and lifestyle or beat the losing investment habit and buy low by getting in at the bottom and sell high in the future while enjoying a respite from the cold.

Thus is the Metro Phoenix real estate glass not securely half full? Add the global aging demographic and reports like the following Forbes report highlighting the top 10 cities where Americans are relocating, Phoenix is #4.

Last month in Phoenix I golfed with 5 different couples that were in Phoenix to get out of the cold and begin the journey of looking to relocate/retire in a more comfortable part of the world.

Thus saddle up to the Phoenix real estate bar and order a big, cool half full glass of opportunity! 🙂

Cheers,

Michael

How to afford Arizona vacation real estate in 2009 – Joint Ownership March 17, 2009

Posted by mkuhbock in Arizona Vacation Property.
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Hi All,
How can someone make a real estate investment in todays challenging economic climate a reality? Well read on to find out! 🙂

We all read the headlines and hear the dialogue about how the economic sky is falling, the bank and mortgage crises, global equity market realignment, the drop in the price of oil and gas and of course the plummeting value of real estate. With all of the bad news maybe we just need to focus on the glass being half full.

Lets focus on Arizona vacation real estate opportunities, although everything mentioned above is also a fantastic opportunity, and why now is one of the best times in history to get into the real estate market.

Metro Phoenix is one of the top ten residential real estate markets that got hit hard by the sub prime debacle and the effects of an over inflated real estate rush over the last 5 years. Today the opportunity to pick up well built, located, and priced properties in Metro Phoenix is abundant. Depending upon areas you can purchase an investment or vacation home for 50 to 60% of what it was valued in the peak of the market.

Great deals but how to afford the opportunity and investment in today’s market when your net worth has taken a big hit?

Unfortunately not everyone has the financial ability to put down $200,000 in cash or take out a large mortgage to leverage the buying opportunities that abound in Arizona, and specifically metro Phoenix.

As I mentioned in a previous post, Joint Ownership is a wonderful vehicle to leverage today’s market and real estate opportunities.

If you get 3 to 5 families together (2 would even work) and work through the proper processes and requirements (identifying needs, wants, desires and must haves) the capital costs of a vacation home along with the monthly operating expenses can be split evenly between the joint owners.

As an example, 5 families split a $400,000 metro Phoenix home (buys you something nice with 5 bed 3 bath, stainless, granite, 3 car garage and pool) then add $50k for any upgrades that might be needed and furniture. Thus you have ownership in a fully furnished vacation home, a 3 hour flight away, for $90,000 all in with a monthly operating cost of around $200.

At the end of the day you can probably never use it more than your proportionate share of 2.4 months a year (spread throughout the year). Now you have an asset that will substantially appreciate over time and somewhere to call home when it is minus 40 in Canada.

Take a look at what less than $400,000 could buy you in the Metro Phoenix market today.

4154 E Laurel Avenue, Gilbert, AZ

The structure of a Joint Ownership investment is easy and I am happy to assist with that if there is a need.

Cheers,

Michael

Phoenix Real Estate Auctions – Buyer Beware February 12, 2009

Posted by mkuhbock in Arizona Vacation Property, Uncategorized.
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I recently found this blog and the author did a nice job on explaining the different types of residential real estate auctions in Phoenix.

The article can be found here, http://www.transworldnews.com/NewsStory.aspx?id=76055&cat=1

Enjoy,

Michael

Phoenix Real Estate Auctions – Buyer Beware

Home buyers and Investors in the Phoenix Real Estate Market Need to Be Thoroughly Prepared Before Bidding on Properties at Real Estate Auctions

Phoenix, Arizona 2/11/2009 03:13 PM GMT (TransWorldNews)

With the upcoming real estate auctions by US Home Auction, Zetabid and other real estate auctioneers, it is critical for home buyers and investors in the Phoenix real estate market to be armed with property information and prepared for how the auction process works. That’s not to say that deals can’t be had at the real estate auctions because they can for the savvy buyer. But real estate auctions can be both exhilarating, frustrating, and costly for the uneducated buyer. In addition, a buyer’s focus only on auctions to purchase a property can blind them to opportunities for properties on the open market.

The Types of Auctions

It’s important to understand that the Phoenix foreclosed home auctions are just one type of “auction” the Phoenix real estate market sees. Here are a few types to help understand the differences between auctions and the nature of the foreclosed home auctions put on by companies like US Home Auction, Zetabid, and others.

Trustee’s Sale

The Trustee’s Sale represents the true foreclosure auction as this is the legal process by which the primary lienholder (who is owed on the property and pursuing retribution) is foreclosing on the home and will take permanent and legal possession of the property. At the judicial foreclosure or Trustee’s Sale (this is more likely to be the chosen process), other parties have the opportunity to bid on the property but in many instances, the primary lienholder (lender) is the party to take final possession of the home.

Investors and home buyers who want to take advantage of the fact that properties can be obtained at a substantial discount to anything on the market will need to be prepared to pay with cash. As a result, most home buyers are not able to take advantage of these types of auctions. Note: Some investors are purchasing these properties at the Trustee’s Sale, putting a small amount of money into reconditioning the property for resale, and then putting the properties back on the open market and selling at a substantial profit – this isn’t an approach for every investor though.

The “Marketing Auction”

For lack of any better term here, “Marketing Auctions” are where an auction company is tries to auction properties that are currently on the open market for sale through a Realtor by getting home sellers to sign up. Home sellers who have their properties auctioned can cost the home seller anywhere from $1,000 to $3,000 with no guarantee of successful close. In this type of auction, the properties are likely not distressed in terms of foreclosure or short sale. In effect, this type of auction is an expensive marketing tool to raise awareness and potentially find a buyer for a home.

Phoenix Bank Owned or Foreclosed Home Auction

This is the most visible auction type as tremendous amounts of money is being spent on marketing this type of auction here within the Phoenix real estate market. Particulary, US Home Auction or REDC and Zetabid are companies facilitating these auctions. What is different is that the companies are contracting out with the lenders and banks that have a significant number of property assets that they have acquired through foreclosure and want to liquidate as quickly as possible.

Some Items to be Aware of with the Upcoming Phoenix Real Estate Auction by REDC or US Home Auction

1. There is a “reserve price” for the properties. In other words, even though the starting bid price might be $20,000 on a $70,000 (list price) property and your $25,000 bid is the winning bid, if your bid didn’t meet the reserve price of $55,000, you likely don’t get the property unless the Seller agrees anywayt and the property may be put out for bid again. Unfortunately, the reserve price is not disclosed to the public so there is no way of knowing what the real minimum price might be.
2. The sale is subject to approval by the seller. If the seller is not satisfied with your winning bid, the seller can simply decline the sale.
3. US Home Auction or REDC charges a “Buyer’s Premium” of 5%. So, if your bid is the winning bid at $200,000, you can expect to pay US Home Auction an additional $10,000 which is added to the sale price. Make sure to factor this in to your calculations.
4. You are required to bring a $5,000 cashier’s check to the auction in order to be authorized to bid on properties.
5. When buying a property, you will be required to provide 5% of the total sale price (your high bid price + the 5% Buyer’s Premium). The initial $5,000 cashier’s check can be supplemented by a personal check. All of this is due upon completion of a signed purchase agreement by both parties. Once the deal is final, you likely don’t get this back should you somehow back out of the transaction. However, if the property is currently occupied, the contract does allow for a 7 day inspection period within which the buyer does have an opportunity to cancel the agreement at no penalty.
6. IMPORTANT: The Auctioneer can place bids on the behalf of the Seller. This may be done to ensure a property does meet the reserve price. Whether this will happen during this auction or not is difficult to know but something to be aware of when watching the proceedings. I did not see an FAQ addressing this question on their main site. Here is the clause at USHomeAuction.com which I only found by Googling for Terms and Conditions. “The Auctioneer may open bidding on any Property by placing a bid on behalf of the Seller. The Auctioneer may further bid on behalf of the Seller, up to the amount of the Reserve Price, by placing successive or consecutive bids for a Property, or by placing bids in response to other bidders.”
7. You will be required to close no later than 21 days after the auction unless otherwise extended.
8. Make sure to read REDC’s Terms and Conditions thoroughly. Google “REDC terms and conditions” to see this information for US Home Auction.

Some Items to be Aware of with the Upcoming Phoenix Real Estate Auction by Zetabid

1. There is a “reserve price” for the properties. In other words, even though the starting bid price might be $20,000 on a $70,000 (list price) property and your $25,000 bid is the winning bid, if your bid didn’t meet the reserve price of $55,000, you likely don’t get the property unless the Seller agrees anywayt and the property may be put out for bid again. Unfortunately, the reserve price is not disclosed to the public so there is no way of knowing what the real minimum price might be.
2. The sale is subject to approval by the seller. If the seller is not satisfied with your winning bid, the seller can simply decline the sale.
3. Zetabid charges a “Buyer’s Premium” of 5%. So, if your bid is the winning bid at $200,000, you can expect to pay Zetabid an additional $10,000 which is added to the sale price. Make sure to factor this in to your calculations.
4. You are required to bring a $5,000 cashier’s check to the auction in order to be authorized to bid on properties.
5. When buying a property, you will be required to provide 5% of the total sale price (your high bid price + the 5% Buyer’s Premium). The initial $5,000 cashier’s check can be supplemented by a personal check. All of this is due upon completion of a signed purchase agreement by both parties. Once the deal is final, you likley don’t get this back should you somehow back out of the transaction. However, if the property is currently occupied, the contract does allow for a 7 day inspection period within which the buyer does have an opportunity to cancel the agreement at no penalty.
6. IMPORTANT: The Auctioneer can place bids on the behalf of the Seller. This may be done to ensure a property does meet the reserve price. Whether this will happen during this auction or not is difficult to know but something to be aware of when watching the proceedings. Buried in Zetabid’s Terms & Conditions is this one sentence comment. I did not see an FAQ addressing this question on their main site. “The Auctioneer reserves the right to place bids on behalf of the Seller.”
7. You will be required to close no later than 30 days after the auction unless otherwise extended.
8. Make sure to read Zetabid’s Terms & Conditions thoroughly. You can find these on the individual home listing pages on their website.

Critical Tips

* If you are seriously looking at buying a property through the foreclosed home auctions and have not had a Realtor search and show you other bank owned properties on the open market, you are making a mistake in excluding them from consideration. The auctions are not the only potential source for great deals and there are simply great bargains out there already listed for sale. To exclude these from consideration may mean that you are ignoring opportunities that are even more compelling. Be diligent and research all your home purchase options.
* Visit the properties you are interested in before the auction and have qualified professionals with you to inspect the property for issues. This would include a contractor for any repair and remodeling work you would have done.
* Conduct thorough analysis of comparable properties to ascertain the possible value for the homes you are interested in. A Realtor can help you do this.
* Come to the auction prepared with your estimates as to what you want to pay for a foreclosed home. If you haven’t done this, don’t bid on the property.
* At the foreclosed home auction, if the bid price exceeds your estimates for what you want to pay for the property, walk away and let the property go. Be firm with your estimates regardless of what the crowds may be doing during the bidding process.
* Look online to see the bidding order or call ahead. You could be at the auction all day if you don’t know when the house you are interested in is to be auctioned. Save yourself the hassle by checking ahead.
* On auction day, go a little earlier than the scheduled time for your particular property of interest in order to have time to sit down and watch how the process works.
* Finally, if you are at all unsure about your buying a home through the auction, then don’t follow through. Whether it is a resale property on the open market, a new build, or an auctioned property, do not purchase a home if you feel you may have buyer remorse. Be confident that you are getting the right property at the right value based on your needs and objectives.

Summary

Buyers considering purchasing personal or investment homes at a foreclosed home auction in the Phoenix and Valley real estate market need to understand that the auctions (except the Trustee’s Sale) really represent a distribution method for the lenders to liquidate properties. There very well may be deals to be had at these auctions but the buyer needs to be fully aware of the value of a property or properties that he or she is going to bid on. As well, the buyer should be aware of what other opportunities exist for deals outside of the auction process. Only with all of this information and awareness can the home buyer really ascertain the value of a given home at the home auction and what they should pay for it.

About David Lorti
David Lorti is a professional Realtor for RE/MAX Elite in the Phoenix Real Estate market. He holds a MBA and Certified Negotiation Expert designation and his insights have been quoted in numerous news outlets. His website, LortiHomesArizona.com, and blog, LortiHomesBlog.com, offer additional market insights on Phoenix Arizona Homes. Visit his site for an even more detailed review of Phoenix foreclosed home auctions.

david@lortihomesarizona.com
http://www.lortihomesblog.com