Happy Veteran’s Day on Friday!
Lots’s going on this weekend in Tucson….
Loft Film Fest 2016
Fri. 11/11 – Sun. 11/13, times vary
The Loft Cinemas provides an intimate and unique setting for film fan to experience hand-selected festival favorites from Cannes. $10-$125
Second Annual Tucson Comedy Arts Festival
Fri. 11/11 & Sat. 11/12, times vary
TIM Comedy Theater
A celebration of storytelling, improv comedy, and standup comedy acts from Tucson and around the country. $5
Gather: A Vintage Market
Fri. 11/11 – Sun. 11/13, 10am – closing varies
657 W St. Mary’s
Gather: A Vintage Market starts the holiday season with their November theme “Gather for the Holidays” including over 10 trees decorated with unique themes.
Valley Crafters Fall Show & Sale
Fri. 11/11 & Sat. 11/12, 9am – closing varies
San Pedro Valley United Methodist Church
Valley Crafters offers a wonderful variety of Arts & Crafts, gifts, and sweet treats.
“Beauty and the Beast” & “L’Enfant et les Sortileges”
Fri. 11/11 – Sat. 11/12, 7:30pm
University of Arizona
The University of Arizona Opera Theater presents two operas, “Beauty and the Beast” by Vittorio Gianni and “L’Enfant et les Sortileges” by Maurice Ravel. $20
A Tucson Thanksgiving –
Demonstration Class & Dinner
Fri. 11/11, 5:30pm
The Carriage House
Chef Janos Wilder offers one of his most popular classes featuring some of his favorite thanksgiving dishes in his signature southwestern style. $80
A Salute to America
Fri. 11/11, 7pm
The Gaslight Music Hall
This Veteran’s Day we honor our brave men and women in uniform by celebrating the lyrics and melodies that make our country great. $30
34th Annual Hats Off to Heroes Tribute to America’s Veterans
Sat. 11/12, 10am-10pm
This free event will have military displays and veteran resource centers, food truck round, live music, and a fireworks display.
Sahuarita Pecan Festival
Sat. 11/12, 9am-5pm
Green Valley Pecan Company
The 8th Annual Sahuarita Pecan Festival includes food, arts and crafts music, dancing, and family-friendly activities.
Sundays in the Garden, Fall Concert Series
Sun. 11/13, 1:30pm-3pm
Tohono Chul Park
This Fall Concert Series showcases a variety of local musicians and music types.
Youth Blues Fest
Sun. 11/13, 5pm-8pm
Monterey Court Studio Galleria and Cafe
Youth Groups and individuals will be performing from many of the major schools in the area.
For select listings we have the ability to create 3D custom maps of a home and surrounding land. This new technology is designed to give potential buyers a little more of a feel about a property that can be ascertained from a 2D picture.
Pathway to Purchase Down Payment Assistance Program for City of Tucson starting Monday, July 18
The new down payment assistance program, Pathway to Purchase, is scheduled to begin taking application this coming Monday, 7/18 at 1 PM.
This program is available for only the city of Tucson and South Tucson. Here are the basics:
Income limit: $92,984 annual income
Sales price limit: $371,936 maximum
Debt ratio: 45% maximum
Minimum credit score : 640
Max LTV: 95%
Down payment assistance: 10% of sales price up to maximum of $20,000. 0% interest, no payments, forgiven after 5 years
Loan type: Conventional, 30 year fixed rate, owner occupied
Reduced mortgage insurance cost
Eligible properties: existing single family, townhouses or eligible condos
Buyers do not need to be first time homebuyers but cannot have ownership interest in any principal residence at the time of closing
Borrowers must complete Homebuyer Education Course
Current interest rate: 4%
In Arizona solar power is a very attractive alternate power solution. As Real Estate Agents we are often asked about how a solar system affects the value of a home. The answer is ‘it depends’.
It depends on if you own the system or lease the system. If you own the system, studies have shown that houses with solar systems increase the value 3-4% (depending upon age and condition of the system) over similar homes in the area.
However, when it comes to leasing solar systems it may not add any value to a home. In fact, we have seen solar leases make selling a home more difficult.
Some solar leases allow the seller to take the system with them to the new house (with some costs to do the transfer of equipment), or to pre-pay the lease. Those options may make solar leases more viable.
Sometimes the solar lease is a good deal – saves more money than if you didn’t have a solar system. We have seen studies that say the average person saves 10% to 15% on your electric bill after you calculate in your lease payment.
Keep in mind the solar lease companies are making money also. So obviously you are sharing a portion of your savings as their profit. A buyer client recently told us that he looked at solar leasing and was told he could pre-pay the 20 year lease and save 50% of the total costs. That pre-payment would be a lot of savings in lease payments and ultimately in electricity costs for someone that could afford to pre-pay the system.
The advantage of a pre-paid lease is the on-going maintenance of the system is covered. If you own a solar system outright you would have to pay for any maintenance. With the lease the equipment disappears after 20 years and with owning the equipment it would remain. (But, would it be obsolete after 20 years?)
In Arizona, over the last few years, the utility companies have reduced the amount they pay for energy put back into the power grid from individual solar systems. So you pay full price for the power you use from the utility, but may only get paid a fraction of cost of power you put back into the grid from your solar system. The solar reimbursement rates are an on-going regulatory issue in Arizona.
Having a solar lease can make selling your home more difficult. This is because not only do you have to sell the home itself, but you have to sell the lease to the buyer.
Assuming a solar lease may make some marginal home buyer borrowers not qualify for their financing on the property. Most investor buyers consider solar leases something that cuts into their cash flow and not a positive.
On a recent transaction with a solar lease involved, the buyer didn’t want the system. The solar company wanted us to provide them the buyers contact info so they could contact them and ‘sell’ them the lease. Buyer ultimately didn’t want to be contacted and ended up cancelling out of the deal.
So ultimately, if you are considering leased solar be prepared for a potentially harder time to sell your home. If you can afford to purchase the system that may produce the most savings and the desirability of the home to buyers.
We do believe in solar and like that clean energy is produced from the sun — making a decision to install solar has to also make sense financially.
No matter how much time you spend on researching and educating yourself about your home purchase, it’s hard to cover every detail. Here are a few tips for avoiding rookie mistakes with your first home purchase.
Earnest money is a deposit you pay when you make an offer on a home—it’s a way to show the seller that you mean business. Usually you can’t get it back, but there are several circumstances that allow you to recover your earnest money.
1. Appraisal contingency: With an appraisal contingency, you can recover your earnest money if the home is appraised for less than your offer. This gives you a better negotiating position—if the seller doesn’t agree to a lower price, you can get your earnest money back and walk away from the deal.
2. Inspection Contingency: It may be your dream home at the surface level, but an inspection could reveal major, major problems—such as issues with the foundation, or flood damage. In that case, you can get your money back if the seller doesn’t agree to fix the issues or agrees to lower the price.
3. The seller backs out: Obviously, if the seller changes their mind about the transaction—maybe they decide not to sell, you get your earnest money back. However, seller can not just change their mind – it would take mutual agreement.
4. Your house hasn’t sold (AKA Sale Contingency): Many buyers can’t afford a new home if they’re still financially responsible for their old one. In this case, you can work a sale contingency into the contract, and get your earnest money back if the home doesn’t sell soon enough.
5. Financing issues: Though there are some limits on financing contingencies, you can get your money back if you’re unable to get a loan.
If you would like more information on this topic, please contact me.
FHA recently released it’s ‘FHA Back-to-Work’ guidelines:
The following is from Mortgagee Letter 2013-26, Back-to-Work – Extenuating Circumstances.
“As a result of the recent recession many borrowers who experienced unemployment or other severe reductions in income, were unable to make their monthly mortgage payments, and ultimately lost their homes to a pre-foreclosure sale, deed-in-lieu, or foreclosure. Some borrowers were forced to file for bankruptcy to discharge or restructure their debts. Because of these recent recession-related periods of financial difficulty, borrowers’ credit has been negatively affected. FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”
FHA and some mortgage companies are allowing for a consideration for borrowers who have experienced an Economic Event.
So in essence, if you have a documentable economic hardship you may be able to qualify for a new mortgage earlier than the traditional 2-3 years for a short sale and 5-7 years with a foreclosures.
What is a Short Sale?
A real estate transaction in which the sale of the property is less than the balance owed on the mortgage is called a short sale. Yes, it is possible to sell a home for less than the mortgage.
Homeowners can find themselves in a situation where they cannot make mortgage payments. There are many reasons why this can occur. Health issues, divorce or a loss of job can put homeowners into a financial bind. Perhaps the homeowners have taken out a second mortgage and the property values have fallen. A short sale may be a solution.
A short sale must be approved by the lender as well as the homeowner. This option allows both parties to avoid foreclosure. Lenders may choose to approve a short sale upon deciding that a moderate loss is acceptable over a foreclosure. This agreement may or may not release the borrower from the deficiency amount remaining on the loan balance.
A short sale process may involve the following steps.
- Seller makes an agreement with the lender to accept a lower selling price on property than the mortgage balance.
- In many cases, the lender forgives the remaining balance.
- The seller can sell their property without a foreclosure.
- The buyer gets a discounted property.
- The lender forgoes the foreclosure costs and burden of selling the property.
- A short sale may damage credit but not as much as a foreclosure.
- Each lender has stipulations on short sales and these procedures must be followed.
- A short sale is very time consuming.
- There is a lot of paperwork involved.
- There is no profit on the sale.
- Not all lenders will relieve seller of deficiency balance.
- The 2007 Mortgage Debt Relief Act allows some exclusion from debt discharge.
- Procedures must be followed on a step by step basis with complete information.
- May get discounted price, but may have repairs
- Additional paperwork involved more than a regular sale
- Very time consuming and tedious with back and forth negotiations.
Short sales are becoming more and more common where home values have dropped in many parts of the United States. There are many advantages and disadvantages of short sales for both a buyer and a seller.
It is recommended that those considering a short sale do their homework on the property. If a seller finds themselves in a financial bind, ask your lender for their short sale requirements. A short sale can be a long term advantage.
Why Should Someone Hire a Realtor verses FSBO?
“Why should I hire a realtor?” is a very common question with all of the internet sources available for FSBO marketing. FSBO is an acronym for the term For Sale by Owner. There are many people who are successful without using a professional in the sale of their home. If you are wondering why to hire a real estate agent, consider the top reasons to hire an agent.
Experience and Education
By hiring the right real estate professional, homeowners can buy the experience and education of a professional. Market and price conditions do vary and hiring an expert saves time and money on the learning curve. Real estate agents have the education and experience to combat unforeseen problems that can occur. This saves a homeowner time and money.
Market and Neighborhood Knowledge
Agents have the internet tools to find any information about available properties. They can run the numbers of comparable sales, find school, crime and demographic information with the push of a computer key. Most of all, agents know your area and can find out the latest news about properties and neighborhoods through their networks.
Property Condition and Pricing
A realtor can make suggestions to homeowners on property conditions to make a home sell faster. They are experienced in market sales and know what buyer’s look for in properties.
Another advantage of using a realtor is they can show a homeowner market comparisons for the home that is to be sold. An agent can make suggestions on the price point. The biggest mistake a homeowner can make is to overprice their home. Many FSBO’s make this mistake. But ultimately, it is the homeowner that chooses the selling price. Hopefully this price reflects the current market conditions to sell.
Agents have access to data that will disclose market conditions for buying or selling a home. There are many factors within market conditions that help with buying or selling. Factors such as average sales price, days on the market, average price per square foot, etc help someone to determine a right or wrong decision based on statistics.
Realtors have professional service networks
Agents work with other professionals who can provide services you many need. They are allowed to give you a list of references.
Agents negotiate and keep your information confidential
A good real estate agent will negotiate on your behalf without the emotions of the transaction. They are skilled and experienced in negotiations. They will fight on your behalf and represent your interests in the best possible light. The greatest asset of all is that a realtor has a moral obligation to keep your information confidential.
Agents work so you don’t have to
Agents have the experience and know how to navigate a listings showings and visits. Your realtor can see through the phone calls of curious people verses serious buyers. A buyer’s agent will protect your interests and keep the listing agents away from you.
Agents handle the paperwork
Along with guiding the real estate process, your agent handles the paperwork from offers to closing. The average purchase agreement is between 6 and 10 pages not including additional paperwork needed for the offer. Federal and State Disclosures are required by loan type and locale. Did you know that most real estate files average one to three inches of paperwork?
Mistakes made in FSBO’s could put a homeowner in court or cost additional money.
The advantages of hiring a realtor are many. To hire a realtor is a great choice.