If you are still living in your home and it forecloses, you MUST read this. Please do not believe what you see on TV. The police will not be knocking at your door the next day. Here is the truth…

90% of the time, your lender will take your home back at the foreclosure auction. Within about one week, they will assign your home to a Realtor whose job it will be to list your home for sale for the lender. This Realtor will contact you to discuss the process. They will ask how long you need to move out and they will typically offer you money “cash for keys” to move out. They typically offer between 1K- 4K, depending on how hard you negotiate with them. When you do move out, the Realtor will meet you at the house to ensure that you have left it in good condition. Then, they will give you the check.

If you are the homeowner, they will typically give you up to 30 days to move. Some banks will give you more money if you move sooner.

If you are the tenant, they must honor your lease. If you have a written lease, you can stay through the end of the lease. If you do not have a written lease, they must give you up to 3 months. Again, most banks will offer you cash for keys if you are willing to move out sooner.

For the other 10% of the time – your house may be sold to an individual. In this case, if you are the homeowner, you have 5 days to move out. If you are the tenant, the same information above applies. You must pay your rent payment to the new owner.

If you don’t move, the new owner – bank or individual – must go through the standard eviction process. This process takes about 3 weeks in Arizona. And, then is when the police come knocking on your door and force you out. – Let’s don’t get to that point. It’s not fun for anyone.

We are seeing some interesting trends in our market, some of which would be anticipated as seasonal, and others that are more indicative of the continuing shifts in the Valley market segments:

• Valley wide, we are seeing inventory swelling.
• Valley wide, we are seeing price per square foot gains slowing.
• Short sale closings have increased to 26% of the market share.
• The Northeast Valley is beginning to realize improved absorption for the first time in three years.
• The only area of the Valley that saw absorption increase from July to August was the Camelback Corridor.

* Absorption defines the percentage of active inventory that becomes pending inventory, or the rate at which the active inventory is being absorbed and sold.

CURRENT CONDITIONS IN THE PHOENIX MARKET:

• There are 29,547 single family detached homes actively on the market in MLS. That is an increase of 335 listings for the week.
• There are 36,738 active listings in MLS, which includes patio homes, town homes, condos and loft properties

Keep your eye out for next weeks update!

Good news regarding your credit! Many credit repair companies are having luck removing late payments, short sales and even foreclosures from credit. You see, when creditors report these things to your credit report, there are several steps that must be followed in order for the claims to be valid. Because there are so many people having trouble with making payments right now, the creditors are having a hard time keeping up. When the credit repair company questions a claim, if it wasn’t reported correctly, it must be removed. Of course, it can’t be guaranteed. If they reported correctly, the claim stays on as valid.

I highly recommend that you start the credit repair process as soon as your short sale is closed. It is definitely worth it! Check out our Preferred Partners for a credit repair company referral.

The Northeast Valley may finally be riding the wave toward a balanced market.  Because the Northeast Valley has not experienced the level of distress evident in other areas of the Valley, the buyer perception of value has not been present that has caused the seller’s market in areas of the Valley in the lower price ranges.

According to the Cromford Report, the Northeast Valley fared much better in June than most areas of greater Phoenix! The number of active listings fell, the number of sales rose and supply dropped to 6.8 months.  That may not seem significant, but it is the first time in several years that the Northeast Valley has had active supply drop below 7 months.  Additionally, new notices of trustee sale in the Northeast Valley fell 16% in June.

Levels of distress in currently active inventory, and inventory sold in the last 30 days are as follows:

Active Sold

Carefree                                    26%                50%

Cave Creek                                45%                53%

Chandler                                    70%                70%

Fountain Hills                            31%                54%

Gilbert                                       60%                69%

Glendale                                    72%                77%

Goodyear                                   64%               66%

Mesa                                          75%               72%

Paradise Valley                          20%                40%

Peoria                                        72%                75% 

Scottsdale                                  33%               47%

Surprise                                      9%                57%

Tempe                                        5%                47%

Current Conditions in the Phoenix Market:

• There are 28,339 single family detached homes actively on the market in MLS. That is an increase of 339 listings for the week.
• There are 35,084 active listings in MLS, which includes patio homes, town homes, condos and loft properties.

We hope that this information will be helpful as you get out and enjoy some cooler temperatures this weekend!

There seems to be a lot of misunderstanding about HOA dues. HOA dues must be paid through closing on any type of sale or they can follow you as a personal judgment – even after foreclosure.

Through a short sale, we have the opportunity to negotiate with the lender to pay some or all of your HOA fees. In the past, most lenders would pay all of your past due HOAs. That has changed dramatically in 2010 as it came to light that HOAs do have the right to follow you after sale if they are not paid. Now, most lenders will pay at least $500 toward HOA. However, some lenders will not pay anything to HOA at all. Therefore, we do recommend that you remain current on your HOA fees or you set aside some money to pay HOA fees that may be due in order to close on the short sale.

Non-payment of HOA fees is not a reason for a seller to cancel a sale. It can be seen as breach of contract and further action could be taken by the buyer.

We are not able to find out what your past due HOA fees are until we are in escrow due to the fact that there are hefty charges for third parties to obtain this information. You can contact them and most HOAs will give it directly to the homeowner. So, if you are concerned about past due HOA fees, please be pro-active and call your HOA so that we are all aware of what we are facing.

Please let us know if you have any questions.

Thank you!

We just took a listing that won’t be listed for a week or so. It’s a Townhome with only one shared wall. The owners have completely remodeled it. And, the owners want to stay and rent back. I think you could get it on short sale at about $43,000. If I put it on the market, it would sell for $70,000 due to the quality of their remodel.

Tenants would LOVE to stay! This cute little dollhouse has been TOTALLY REMODELED on the interior. It is a MUST SEE!

Rent would be about $800 – $850. The tenants would sign a 1 or 2 year lease.

3 bedrooms plus 20×10 Bonus Room (currently used as 4th bedroom). Tile in all the right places. Upgraded countertops and custom paint. New trim, light fixtures, blinds, French doors. Ceiling fans. Nickel hardware in kitchen and doors.

Cross Streets: Broadway and Gilbert Road

Community: Summer Place Terrace

Are you interested?

First:

Fannie Mae has announced new consequences for those who engage in “strategic default,” which describes the decision to default on a loan when one is able to afford the payments, but believes that the property value is significantly less than the mortgage amount owed.

Borrowers with documented hardships who make a good faith effort to resolve their situation by working with their lender in an attempt to secure a loan modification, short sale, or deed in lieu of foreclosure will be able to obtain a new loan in two to three years.

Borrowers who participate in strategic default will be denied a new loan for seven years, and in states that allow lender recourse, Fannie Mae will also seek to recoup losses in court through deficiency judgments.

Second:

The federal government has passed the legislation giving home buyers an additional three months to qualify for up to $8,000 in federal tax credits for buyers who had fully executed contracts in place by April 30^th.  The original deadline for closing transactions was June 30^th, which has now been extended to September 30^th.  This will be very helpful for buyers who made offers on short sales that did not close by June 30^th.

Current Conditions in the Phoenix Market

* There are 27,078 single family detached homes actively on the market in MLS.  That is a decrease of 88 listings over last week – which is the first time in four weeks that we’ve seen a decrease.

*  There are 33,968 total active listings in MLS, which includes patio homes, town homes, condos and loft properties.

Wishing you and your family a safe and fun filled holiday weekend!

The Department of Treasury approved a huge $1.5 billion aid plan for states that qualify for the “Hardest Hit Fund”.  Of this fund, Arizona will receive the 4^th largest portion at $125.1 million.  It is unclear exactly how these funds will be appropriated, further information is expected by August.  To inquire about access to these funds, homeowners must contact their current loan servicer to see if they may qualify for help.

Click here to read the full article in the Wall Street Journal.

We are observing some very optimistic trends in our market, but there are also theories that are more pessimistic.  In an effort to bring you "fair and balanced" information, it’s time for another edition of "The Good, the Bad, and the ?"

The Good:

• Average days on market for active and sold listings has been consistently decreasing over the past year.
• The price per square foot for sold properties has increased over the past year. 
• Overall appreciation Valley wide is showing positive, rather than negative figures, an almost 40% difference over last year.

The Bad:

• We have observed a slowing in the market with the expiration of the tax credits.
• The pending sales figure for this month has decreased fairly significantly over recent months.
• Although we have been celebrating the decrease in the percentage of foreclosure sales, approximately 40% of the non-foreclosure sales in May were actually properties that had previously been foreclosed upon and were then flipped by investors.

The ?:

• There is still speculation and whispering about possible "shadow inventory," or inventory that is being held by the banks, or will be in the near future that could flood the market.
• It is still unknown how many Alt-A borrowers will be forced to default by loan rate adjustments, loss of employment, decrease in income, or strategic default.  Alt-A loans could be a ? through 2012.
• In the spirit of "fair and balanced" that also means that it is unknown how many won’t default, and it is unknown how many more people will take advantage of affordability and low interest rates to purchase in our fantastic Valley communities.

Current Conditions in the Phoenix Metro Area

• There are 27,078 single family detached homes actively on the market in MLS.  That is an increase of 641 listings over last week.
• There are 34,121 total active listings in MLS, which includes patio homes, town homes, condos and loft properties.

I hope that this information will be useful to you over the coming week!

As the old "Virginia Slims" ad campaign so eloquently put it – "We’ve come a long way, baby!"

Looking back to two years ago, Valley wide we had a 10 month supply of inventory and absorption was in the single digits.  Today, Valley wide, we have a 4 month supply of inventory and absorption is at 25%!

Looking back to just one year ago, appreciation was -35% versus +7.1% today.  Comparing sales for the first half of 2009 to sales for the first half of 2010, sales have increased by 22% this year.  Comparing the month of May 2009 to the month of May 2010, active listings are down 11% and sold volume is up 2%.  Things appear to be heading in a positive direction!

Valley wide, in the price range under $350,000 it is definitely a sellers market with less than a 4 month supply of inventory.  In the price ranges between $350,000 to $475,000 it is a balanced market with approximately a 5 month supply of inventory.  In the price ranges above $475,000, it is definitely a buyer’s market with more than a 6 month supply of inventory, and of course the price ranges over $1million have a 16 month supply of inventory.

Current Conditions in the Phoenix Market:

* There are 26,437 single family detached homes actively on the market in MLS.  That is an increase of 300 listings over last week.

*  There are 33,450 total active listings in MLS, which includes patio homes, town homes, condos and loft properties.