Arizona Real Estate Contract Change

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Arizona Real Estate Contract Changes – ATTENTION

The Arizona Real Estate Contract is about to change! This does not happen often, because of the long and arduous task of professional committees and work groups that are assembled to has out what is best for buyers and sellers regarding a real estate transaction. The newly proposed version, due out this February, is no exception. It has taken over a year to analyze, propose, has through, and finalize. Don’t forget the impact on all the secondary forms as well. Each additional form must be reviewed for any and all impact the new contract changes may have upon them.

A major change in the upcoming contract is the removal of seller warranted items. In the past, the contract had a section that listed all warranted items a seller must assure a buyer were in working order. This has been changed to wording that now states there are NO warranted items. This does a few things. To mention just a couple… A seller must still make sure the home is in substantially the same condition at closing as it was the day a contract was accepted. It also means a buyer will most likely be counting on their inspector even more than in the past. As a buyer, make sure you have a competent inspector AND that you understand the inspection process and  what they cover and what they don’t. Inspections give a buyer a general sense of a homes condition. They don’t typically inspect every little thing. Talk to your inspector and understand what they inspect and how they inspect it. Also understand that during your inspection period you have the right to hire any home inspection professional for specific inspections as well as general inspections. Meaning, you can hire an HVAC company to inspect just the HVAC. Or you can hire a roof company just to  inspect the roof.

Back to the contract. It is a good idea to sit down with your agent and review the most important tool you will use in buying or selling one of your greatest assets… your home. Take the time to review the paperwork before you list your home or begin your search. Make sure all your questions are asked and answered. If your professional does not know the answer we know where to find it or can even refer you for legal advice. It is best to get a good foundation/understanding of the contract and supporting documents ahead of time.

Example:

Time frames is one of the miss-understood items within a contract. When does a time  period start or end. If you have a ten day inspection period when does it start or end. Days in which an action is taken, such as signing a contract, don’t count in the ten day inspection period. The inspection period starts the following day. When does it end and when do you have to have your Buyer Inspection Notice and Seller Response form returned? On the tenth day (or the last day of your inspection period, which ever is in your agreed upon contract). Turn it in on the eleventh day (in our example) and  your are out of luck. It would be the same as accepting the property as it is. So, it is important to understand these types of things spelled out in the contract. I encourage you to take the time to review the contract with your agent. Arizona Real Estate Contract Changes

Another change in the contract is the leased items section. Many times the notion of solar panels comes up in this discussion. It is important to know and understand your rights and obligations on leased items. Many solar panels are leased items. Did you know a buyer would  have to qualify to take over the lease? What if the seller wants to take the solar panels with them when they move? When do they remove them from the roof? What about roof repair? When does a buyer inspect the roof in coordination to the removal of the panels? Sometimes legal advice is needed to know your rights. Understand that a real estate agent is qualified to help you understand the contract, but many times questions extend far beyond and require legal advice. I again encourage you to review the contract to help you see where you may need additional advice and support.

More To Come

There will be more on the upcoming new contract in coming weeks. Just know that it is changing and you should work with a team (agent, lender, title company) that understands the changes. Many of the professionals we work with were actually part of the group that worked on developing the new contract. In fact, Realty One Groups own Jim Sexton chaired to efforts on the latest contract changes. Thanks to Jim and his team for all their hard work(s).

Contact us and we would be happy to spend time with you to review either the current or proposed Arizona Real Estate contract or any of the supporting documents. Arizona Real Estate Contract Changes

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Scottsdale Development

By | City, Outdoors, Real Estate | No Comments

Scottsdale Development

Development vs. Progress?

Scottsdale Development: Visitors to Scottsdale, Arizona are usually quick to learn of the cities pride in maintaining natural desert open space and most particularly the McDowell Mountain Preserve in East Scottsdale. The iconic McDowell Mountains keep watch over the city like a dutiful sentry and are capped by the well known Tom’s Thumb rock formation. Crisscrossed throughout the area are miles and miles of hiking trails.

At the upper most Northern area of Scottsdale visitors will find the Brown’s Ranch park. This is relatively a new park within the Scottsdale City park system and hiking/biking trails are continually being opened here. Brown’s ranch is a wide open natural desert space with several mountains dotting the area. Brown’s mountain, in fact, takes hikers to the same elevation as the highest trail point on Pinnacle Peak Park.

Now that you have a sense of the area here is the reason for todays blog. The area around Brown’s ranch is under attach once again by developers looking to develop the area surrounding Legend Trails (far North Scottsdale). A proposed change to the Scottsdale Master plan has been made and is far reaching. Known as 19-ZN-2014 the amendment would include a patchwork of development surrounding the Legend Trails community all the way back to the Scottsdale Rd. and Happy Valley Rd. intersection and would include residential homes, commercial real estate, and resort real estate.

Whether you are for it or against it what we try to do is let our readers know of it. You can make up your own minds. You can call the city for more details and give them the 19-ZN-2014 application number. The amendment will go through a round of committee review before coming up to the full review and possibly on the a recommendation to the city council. If you choose to, you can send in a letter to the city and they will include it in the packet that is reviewed by the committee. Make sure to include the application number 19-ZN-2014.

Know what is happening in your area. It DOES effect your real estate values one way or the other, especially if you are figuring out how to sell your house fast. Pay attention to those sign posts that pop up on vacant land. Attend the committee meeting when they happen. Getting involved after is too late. If you can’t attend, maybe your HOA can send a representative and report back to your membership.

Know this. Once our beautiful open desert is developed it is gone for good. Scottsdale is known for our open space. It is a huge draw for residents and visitors alike. Many have worked very hard over the years to maintain the little space left. Let’s keep it open. Scottsdale Development

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©2015  ScottsdaleScott

Top Ten Credit Don’ts During the Loan Process

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Top Ten Loan Process

Top Ten Credit Don’ts During The Loan Process

1: Dont do anything that will cause a red flag to be raised by the scoring system. This would include adding new accounts, co-signing on a loan, changing your name or address with the credit reporting agencies.

2: Dont apply for new credit of any kind. Including those you have been pre-approved credit card invitations that you receive in the mail or online. Every time that you have your credit pulled by a potential creditor or lender, you lose points from your credit score immediately. Depending on the elements in your current profile you could lose anywhere from one to 20 points for one hard inquiry.

3: Dont pay off collections or charge offs. Unless you can negotiate a delete letter, paying collections will decrease the credit score immediately due to the date of last activity becoming recent. If you want to pay off old accounts, do it through escrow – at closing.

4: Dont max out or over charge on your credit card accounts. This is the fastest way to bring your scores down. Try to keep your credit card balances below 30% of their available limit at all times during the loan process. If you decide to pay down balances, do it across the board. Meaning, pay balances to bring your balance to the same level on each card.

5: Dont consolidate your debt onto one or two credit cards. It seems like it would be the smart thing to do, however, when you consolidate all of your debt onto one card, it appears that you are maxed out on that card, and the system will penalize you as mentioned above in 4. If you want to save money on credit card interest rates, wait until after closing.

6: Dont close credit card accounts. If you close a credit card account you will lose available credit, and it will appear to the FICO that your debt ratio has gone up. Also, closing a credit card will effect other factors in the score, such s length of credit history. If you have to close a credit crd account, do it after closing.

7: Dont pay late. Stay current on existing accounts. Under the new FICO scoring model, one 30 day late can cost you anywhere from 50-100 points, and points lost for late pays take several months if not years to recover.

8: Dont allow accounts to run past-due even one dy. Most cards offer a grace period, however, what they dont tell you is that once the due date is passed, that account will show a past due amount on your credit report. Past due balances can also drop scores by 50+ points.

9: Dont dispute anything on your credit report. When you send a letter of dispute to the credit reporting agencies, a note is past onto your credit report, and when the underwriter notices items in dispute, in many instances, they will not process the loan until the note is removed and new credit scores are pulled. WHy? Because in some instances, credit scoring software will not consider items in dispute in the credit score – giving false date to the lender.

10: Dont lose contact with your mortgage and real estate professionals. Don’t do anything without the ok of both professionals in the transaction, until you have your keys.

© 2013 ScottsdaleScott.com

Another Phoenix Housing Bubble?

By | Market Conditions, Real Estate | No Comments

Another Phoenix Housing Bubble?

Are We Headed for Another Housing Bubble?

The following is from The Cromford Report. I find it very interesting and I wanted to share it with you. There are so many rumors thrown around. The Cromford Report is a well respected analysis group here in the Phoenix metro area that has a strong record of real estate analysis.

I ask you to resist in believing in rumor. I ask that you resist spreading rumor. Follow the numbers. Look at the history. We try to bring you data that makes a difference to our home buyers and home sellers so they can make informed decisions. Another Phoenix Housing Bubble?

THE CROMFORD REPORT:

April 11 – It’s hard not to notice the plethora of silly articles suggesting the Greater Phoenix housing market is in another bubble, or that prices are soon going to fall. There are a variety of theories but they can all be seen as bogus when examined carefully.

Ten reasons why there is NOT a bubble in Phoenix housing right now:

  1. The population of Maricopa and Pinal Counties is growing much faster than the housing stock – this is fundamental, yet is hardly ever mentioned.
  2. Prices are being driven up by a chronic lack of supply, not by excess demand. Demand is close to normal. Bubbles always have excessive demand from foolish trend followers.
  3. Prices are still at the same level as 9 years ago. They still have a lot of room to increase yet.
  4. Most buyers are putting their own money in with cash or large deposits, not borrowing it all from foolish lenders as in 2004 and 2005.
  5. Lenders are still being ultra cautious. Demand could increase if they ease up.
  6. Investors are mostly buying to rent and filling their homes quickly with tenants – if and when these landlords sell it is a neutral event for the market – one extra home becomes available and one extra family needs a home to live in.
  7. If investors started to sell off the small number of empty rentals it would slightly improve our market balance, not create a glut of supply.
  8. There are several major long term obstacles for developers trying to increase the supply of new homes. Shortage of labor and affordable, accessible land are just the first two.
  9. We have a low vacancy rate both in homes for rent and for sale. Multiple generations and even multiple families are sharing single homes.
  10. No bubble has ever occurred in the same market twice in the same generation. However after a recent bubble everyone is hyper-sensitive to every price increase and numerous false cries of “bubble” are par for the course.

Given the unprecedented imbalance we now have between population growth and new home building, we have several years of rising prices in front of us. How fast and how high they rise I cannot tell, but the idea that prices could fall significantly in the near term because of excess supply is foolish. The only circumstance that could unravel things is a sudden collapse in demand caused by people leaving Central Arizona in droves. Far more likely is a surge in demand from both people and companies deciding to migrate from California. Compared to most of California, housing in Central Arizona is still ridiculously affordable even if interest rates were to double.

Nobody has a good track record of predicting mortgage interest rates, but in any case multiple studies have shown no significant statistical correlation between homes prices and interest rates. So when interest rates eventually rise, as they surely must one day, this is as likely to increase demand as it is to decrease it. This event would definitely decrease affordability, but we note that one of the times of highest demand (February 2005) was also a time of very low affordability. In fact large numbers of people signing up for mortgages they could not afford was the key characteristic of the February 2005 market.

–END–

Another Phoenix Housing Bubble?

Wow, that is interesting stuff. Certainly contrary to what many local news outlets would have you believe.


© 2013 ScottsdaleScott.com

Representing Scottsdale Home Buyers & Home Sellers

 

Scottsdale Home Sales

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Scottsdale Home Sales

Scottsdale Home Sales Results

Active Sales information in the Scottsdale, Arizona area.

There are currently 2,260 homes available for purchase in the Scottsdale, Arizona area. Surely we can find you one of them if you would like to live in what is called “The West’s most Western Town.” I call it home and I love it. I know you will too. There is something for everyone here and we are surrounded by many other cities that are just minutes away and easy to get to with our well  planned highway system.

Finish watching a Diamondbacks baseball game at 9:30 p.m. and be home  watching the game wrap-up on TV in North Scottsale in less than 30 min. Or take a hike along one of our many beautifully maintained hiking paths in the McDowell Mnt. preserve allowing you to see over Camelback Mnt. and clear to downtown Phoenix.

Our area has some of the best galleries, theater, and shopping found in the country. And, don’t forget our sun. We only get 7″ of rain a year on average. That means a whole lot of sun for you.

So, how do you find a home in Scottsdale, Arizona if the market is said to be “changing?” With market knowledge that’s how. We can help you not only understand the current inventory, we can help you understand past pricing of the same home and understand trends so you can make informed decisions. We’ve gone from a recovery market to a recovered market. Prices are rising and inventory is once again falling. We keep an eye on average days on market and since we visit so many homes we see the change in quality of the homes. We can help you understand this and more too.

You can count on us.

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Extended Mortgage Forgiveness Debt Act

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Mortgage Forgiveness

Arizona Association of REALTORS® blog post on the extension to the Mortgage Forgiveness Debt Act.

Mortgage Forgiveness: From time to time I repost articles that I want to make sure my readers see and can possibly benefit from. Today is one of those cases. Below, please find a repost of an article on the Mortgage Forgiveness Debt Act extension posted by AAR contributor Charlie Allred, Jan. 10, 2013 Link to full article


Repost:
What the Extended Mortgage Forgiveness Debt Act Means for REALTORS®
by CHARLIE ALLRED on JANUARY 10, 2013

It was recently announced that the Mortgage Forgiveness Debt Relief Act was extended to December 31, which is great news for Arizona REALTORS® and our clients. The Mortgage Forgiveness Debt Relief Act relieves a homeowner of the debt owed when he or she chooses a short sale, a deed-in-lieu, or allows their home to foreclose. When debt is cancelled, the homeowner will receive a 1099-c for the debt. The Mortgage Forgiveness Debt Relief Act allows the amount of the 1099-c to be non-taxable if it is the homeowner’s primary residence.

Many struggling homeowners with underwater mortgages choose to short sell their homes to avoid foreclosure. Had the Mortgage Forgiveness Debt Relief Act not been extended the underwater portion of the mortgage would have become taxable income. If the homeowner was facing a good deal of taxable income, the homeowner would likely choose foreclosure and bankruptcy to avoid the taxable income.

What does the extension mean for underwater homeowners?

If a homeowner chooses to short sell their primary residence and the short sale is completed by the end of 2013, the debt cancelled is non-taxable. This is good news for homeowners because a short sale is still a good option to avoid foreclosure and help the homeowner into a better financial future.

Top 5 Reasons this is a win for REALTORS®

Homeowners can choose to short sell as a foreclosure alternative.
Homeowners choosing to short sell means less foreclosed homes.
Less foreclosed homes means neighborhood values should stabilize or increase.
Home values increasing means more income for REALTORS®.
Home values’ increasing amplifies the number of homeowners that can now sell their home through a traditional sale.
The extension means many homeowners will continue to choose to short sell their homes instead of allowing their homes to go to foreclosure. This will continue the short sale listing niche for REALTORS®. I know many agents were concerned about this extension and had stopped marketing for short sale listings because of the uncertainty.

For more information, read the Mortgage Forgiveness Debt Relief Act of 2007 in full.


Scottsdale, Phoenix real estate sales and purchases email us.
Ask for Scott Farmer, REALTOR®, GRI, and remember, when it comes to real estate: “It’s A Farmer’s Market”
Scottsdale Scott: Scott Farmer, Scottsdale Real Estate Home Sales