Jason's Blog

New Home Builders rolling out the red carpet

Jason Mitchell (Coldwell Banker) — Sat, 03 Jan 2009 10:43:29 -0600

Phoenix area home builders are struggling to sell homes. There has been a 56% drop in New home sales from June 2007 to June 2008 according to R.L. Brown's housing report on the Phoenix area real estate market.

The days of waiting in line to pay a premium for a home from a Phoenix new home builder are a fleeting memory.

However, the competition for fewer and fewer buyers is so fierce that Builder incentives are ever increasing and are tempting many Arizona home buyers.

Builder Incentives include everything from cars, pools, plasma TV's, vacations, upgraded interior fixtures like granite and stainless steel appliances, Green cost saving efforts like solar paneling and financial incentives like no money out of pocket. Some builders offer free pools which can cost as much as a BMW or Lexus

Let me suggest that you look for generous Builder incentives when you make offers and negotiate the purchase of a home from a builder

Buy your next house as a Home!

Jason Mitchell (Coldwell Banker) — Sat, 03 Jan 2009 10:39:35 -0600

Do not think, foremost, as your home as an investment. History tells us that over the "long-term' , families do create a nest egg and acquire capital appreciation. However, The key phrase to remember being "long-term".

A house should be a place to live. A place to enjoy. A place to raise a family. A place to meet friends and neighbors. A place to develop roots and community bonds. A place to call home.

Considering today's real estate market and today's prices, you can realize this important part of the American Dream if you buy with the above factors in mind.

If you buy the home you love, in the community you want, at the price you can afford, (Most importantly, the price you can afford) , all of the secondary reasons home ownership is such a foundation and important part of our culture and economic worth.

Buy your next house as a home, first!
Plan to live in the home for at least 5 years or more.
Make sure you can afford a fixed mortgage payment for at least that time.

If history has told us anything, capital appreciation and equity growth should occur nicely for home owners over a long period of time.

Appraisal Contingency and Cash Buyers

Jason Mitchell (Coldwell Banker) — Fri, 02 Jan 2009 13:36:12 -0600

In the past there has been some confusion on whether or not,

according to AAR Purchase Contract ..... as it pertains to cash buyers,

Can Cash Buyers ** cancel a contract if the home fails to appraise for the purchase price anytime during the escrow period??

In essence,

does the appraisal for sales price contingency runs the life of the contract??

According to the newsletter this month from AAR, This is NOT TRUE!

"Cash buyers can only cancel a contract within the inspection period, if a home fails to appraise.

Lines 59-61 (of the AAR Purchase Contract) only apply if financing is involved.

I hope this helps! and Good luck to all of you!

Only you can decided if home ownership is right for you.

Jason Mitchell (Coldwell Banker) — Fri, 02 Jan 2009 13:34:19 -0600

Home ownership can be a personally and professionally rewarding endeavor where most Americans can raise a family, call a house a home and create wealth.

However, often real estate professionals, mortgage brokers, friends and family will tell you things like

Don't wait, buy now.
renting is a waste of money.
Taking on debt is always o.k.
real estate prices are going up
you don't need a down payment

These are not always the right answers.

Ask yourself if you need to have a place to live, enjoy and call home; you will receive tax advantages, a hedge as a safeguard against inflation and build equity as you contribute towards your nest egg.

please speak with your personal and professional advisers before any decisions. However, also remember...

you are the best expert of your own money and personal financial situation. Only you can decided if home ownership is right for you.

best ideas for cheaper gas

Jason Mitchell (Coldwell Banker) — Fri, 02 Jan 2009 13:31:44 -0600

I wrote a post 6 months ago called my best ideas for cheaper gas.

I listed a few ideas. No one listened to my ideas.

I guess a RECESSION would also work !!

Gas Tax Cut - a Gas Tax cut would provide immediate relief. However, people fear a tax cut would just cause more gas consumption.
Income tax cut - I would suggest a tax break on the first $75K income. This group is more affected and has less discretionary income and savings. An income tax cut for certain incomes would open more disposable income. The problem with a tax cut is that while effective, it is not immediate. A tax cut has to pass the House, Senate and then a Veto by the President.
Increase taxes - spending money on programs for finding alternative energy sources. However, I don't know anyone who likes higher taxes.
Open U.S oil reserves - by drilling in places like Alaska - less dependent on foreign oil - I have read that the US has more than 50 years of untapped Oil reserves.
Raise taxes on SUV's , trucks and high use vehicles - Increase incentives for more fuel efficient vehicles. These are standard in Europe - why not here?
Regulate Oil speculation- commodities traders have had an impact on prices betting on future growth - again difficult to control global markets.
Increase tax breaks/government benefits to providers of public transportation. Thus, passing on lower costs for commuters.
Carpool, Ride a Vespa, bicycle or walk

Reminder:: the reasons you buy a home

Jason Mitchell (Coldwell Banker) — Tue, 30 Dec 2008 10:42:02 -0600

remember the reasons you are buying a home.

Is it a place to live? A place to raise your family?
Are you planning on retiring?
Do you need the favorable tax advantages?
Are you looking for a hedge against inflation?
Are you looking for long-term appreciation?
A place to live and call home? (I always say this twice)

If you answer ‘yes' to most of the questions above, consider the fact that you can buy real estate and have all of the benefits of home ownership and own your house at a steep discount from the prices of 3 years ago.

Always speak with and consult industry professionals for advice on what is right for you as each situation is unique.

how low can we go

Jason Mitchell (Coldwell Banker) — Tue, 30 Dec 2008 10:40:46 -0600

House prices plunged again in October, with the rate of year-over-year decline accelerating to a new record high of 19%.

The peak-to-trough decline in the Case Shiller 10-city index is now 25%; the 20-city index is down 23%.

According to a new report called Cluster stock , " We still occasionally hear folks predicting that the overall house-price decline might be on the order of 20% or so--or maybe 25%, tops.

Might be time to adjust those forecasts. Given the current rate of decline and the fact that house prices still have yet to reach their long-term historical average relative to incomes and rents, we remain comfortable with our prediction of a 35%-40% total decline.

Unless the rate of price decline moderates soon, this could even prove conservative.

I am curious what you think?

are we going lower in housing prices?
would lower interest rates help ?
Would you recommend a family member buy?

thanks for sharing

have we hit a bottom? Is the end in sight? Is it time to buy??

Jason Mitchell (Coldwell Banker) — Mon, 29 Dec 2008 18:57:52 -0600

Does that mean we have hit a bottom? Is the end in sight? Is it time to buy??

Inventory levels would indicate that we have some time to go. However, The Federal Reserve Chariman Ben Bernanke appears set to continue to lower interest rates.

Federal lawmakers are committed to work with Government backed lending institutions (Fannie Mae , Freddie Mac ) to stimulate the Real Estate Market and banks are working with consumers to help keep them in their homes.

Don't let the naysayers fool you. If it's not the time, to buy, there is plenty to indicate, at least here in Maricopa County and the cities of Scottsdale to suggest we are very close.

Spec Builds in Inventory - Discount in price not in value

Jason Mitchell (Coldwell Banker) — Mon, 29 Dec 2008 18:56:55 -0600

Spec Builds in Inventory -

Discount price - no discount in product or value.

If you can be a little more flexible in all of your specific desires. Many New Home Builders have some home in current Inventory.

Either Buyers could not qualify or the Builder built as "Specs" , homes available for purchase immediately. These homes are often built 70-100% to completion; thus offering a few less choices.

However, what you lack in choices, is often well made up for in pricing as these builders need to sell them more quickly as they are costly to keep each month.

Don't Venture into short sale waters without an Expert

Jason Mitchell (Coldwell Banker) — Sat, 27 Dec 2008 10:16:29 -0600

Short Sales are complicated transactions.

You should work with an experienced short sale listing agent who has been successful with working with banks and asset managers.

A short sale expert can help prepare a detailed short sale approval package that would include

personal financial information requirements
BPO (broker price opinion)
Comparative Market Analysis (CMA),
work hand in hand with a savvy title company to prepare a net proceeds sheet after cost of sale,
can inform the seller that there are other possible options prior to a short sale including, loan workout, deed in lieu of foreclosure or foreclosure
Understand what types of offers the bank is most likely to accept

Please note, there are other options to explore first. If a short sale is your last resort, make sure you seek legal advice first.

Americans Are Pointing the Finger of Blame

Jason Mitchell (Coldwell Banker) — Fri, 26 Dec 2008 11:05:04 -0600

Americans are pointing fingers in every direction looking for blame; Including the Governments role, or lack thereof in what started as a sub-prime meltdown, than a real estate housing debacle and now a worldwide credit crisis.

This look to the government to help every aspect of our lives when things are bad (think oil) is not generally what most Americans want; The majority of voting Americans think the Government should mind their own business and not ‘regulate' every aspect of our lives.

I believe this is a unique crisis. The lending and Banking industry (Bear Stearns, IndyMac), especially Fannie Mae and Freddie Mac are simply too important to consumer confidence and the Real Estate economy to fail.

I also have supported variations of Congressional legislation such as the Homeowner Rescue act that would aid struggling homeowners and keep many from foreclosure.

Most opinions pointed out that the secret victim of all this fallout is the good paying, strong credited neighbor .... who put down large cash payments when they bought.

These home buyers cannot walk away.

They are stuck with mortgages that cannot be adjusted per proposed legislation. Now anchored in homes with a drastic drop in value in large part due to foreclosures of those who cannot afford or never could truly afford to pay

shopping for a home on-line ?? Follow these 6 steps

Jason Mitchell (Coldwell Banker) — Fri, 26 Dec 2008 11:02:30 -0600

if you are going to buy your next home on-line make sure you follow these tips.

extended Close of escrow so that you have plenty of time to get the best available finance. You can always close early.
Financing details must be in the contract so that if you do not get satisfactory finance you can cancel per finance contingency without breach -Terms of finance would include who pays for pay for loan costs (and appraisal)
Choice of Escrow company. In Phoenix, the seller pays for Title Insurance and will often demand use of Title and escrow company of their choice. However, all items are negotiable and I prefer my buyers to have control of escrow to best protect earnest monies
Inspection Period time frames including response times. Contingencies regarding this period are crucial.Inclusion of any other reports the buyer may need to determine the suitability of this particular property
Buyer (and seller ) cancellation contingencies to allow for offer contract cancellation. Make sure you know these time frames and have them spelled out clearly.
Cure Period Notices. In Arizona, virtually everything is ‘curable' with a 3-day cure period. Arizona ‘Cure periods' can be changed and negotiated to reduced. Make sure you know what these cure periods time-frames.

A hedge against inflation - best reason to own a home

Jason Mitchell (Coldwell Banker) — Wed, 24 Dec 2008 09:35:42 -0600

A hedge against inflation is arguably the most important reason to own a home in Phoenix.

Simply, put if you buy real estate in Scottsdale and you monthly mortgage payment on a 30-year fixed rate mortgage is ,

for example, $2,000/month, that payment is fixed for 30 years and never increases. It actually will go down. As inflation goes up (which it always does) and rents in your area and home prices rise, your monthly payment never changes for 30 years. You know that the amount you pay on your Scottsdale or Phoenix area home per month is fixed in time and will never rise as everything else around you does.

There are many great reason to own a home in Scottsdale, Phoenix , etc... such as

long-term investment
tax benefits
a place to live and call home
a hedge against inflation

Yet, there has been rarely a better time to buy real estate in Scottsdale or Phoenix with fixed mortgage interest rates at historic lows and prices 30% discount to where they were just several years ago.

Live and Love the Golf lifestyle in Fountain Hills Az

Jason Mitchell (Coldwell Banker) — Wed, 24 Dec 2008 09:34:53 -0600

The real estate developer, MCO Properties and MCO Realty, has designed 3 luxury home communities in Fountain Hills, AZ offering a variety of real estate and homes for sale.

Eagles Nest - a gated community with unrivaled mountain vistas of Four Peaks, Superstitions Mountains, and the Goldfields stretching out before you, Eagles Nest offers 244 home sites, 40 miles of walking, hiking and horse trails, all only minutes from Scottsdale, Fountain Hills and Phoenix.

SunRidge Canyon - is a golf community in Fountain Hills, AZ with 541 production homes, 286 custom home sites, an 18-hole championship golf course designed by Keith Foster, neighborhood parks connected by bike paths, and open tracts of undisturbed, natural open space.

FireRock - just minutes away in Fountain Hills and the nearby communities of Scottsdale, Tempe and Mesa, FireRock is a private gated community with luxury custom homes built into the desert terrain of a world renowned 18-hole championship private golf course with panoramic views including the East Valley skyline, Four Peaks, Red Mountain, and downtown Phoenix.

Eagle Mountain - buying a home in this Fountain Hills community will offer panoramic views of Phoenix and Scottsdale, Red Mountain and the undisturbed Sonoran desert canyon terrain of Scottsdale and Phoenix the ‘Valley of the Sun".

Just 15 minutes to Scottsdale, 17 miles to Mesa, 20 minutes to Tempe and less than 30 miles to downtown Phoenix, Fountain Hills, AZ offers majestic views, scenery, biking, hiking, picnicking, children's playgrounds, golf and the lifestyle to just do nothing.

Life in Fountain Hills, AZ truly offers something for everyone (and their friends.)

Fountain Hills AZ - more than just a pretty face

Jason Mitchell (Coldwell Banker) — Wed, 24 Dec 2008 09:33:13 -0600

If you are thinking of buy a home in Fountain Hills, golf enthusiasts rest assure that this Phoenix ‘Malibu' has 3 beautiful public golf courses and one private course.

Desert Canyon golf Club
The Golf Club at Eagle Mountain
SunRidge Canyon Golf Course
FireRock Golf and Country Club

Fountain Hills, AZ gets its name from its world-famous fountain. Centered in Fountain Hills Park, it shoots nearly 600 feet in the air every hour making it the highest fountain in the world. Surrounding the Fountain Hills ‘Fountain' is a 30-acre park with areas of picnics , "disc-golf" and large playground for kids (and adults

The real estate developer, MCO Properties and MCO Realty, has designed 3 luxury home communities in Fountain Hills, AZ offering a variety of real estate and homes for sale.

Mortgage Transparency - the future of wholesale lending

Jason Mitchell (Coldwell Banker) — Tue, 23 Dec 2008 12:08:17 -0600

One of the best, products to come to the lending market is just recently launched by RealEspace called "Rate Window" . About Rate Window:

Mortgage bankers and brokers and real estate agents can now offer this transparent pricing tool to their clients through their websites or blog-sites. The paradigm shift has begun for how consumer's will price their mortgage loans.

Transparency is now available to the public as never before! They will no longer need to negotiate with their mortgage banker or broker like a used car salesman.

The window is open (RateWindow) to the world of wholesale mortgage rates where the public can't be manipulated on the cost of their mortgage loan. Mortgage bankers and brokers and real estate agents with vision will join in on this first to market rate pricing engine so they can wear the white hat.

For more about Rate Window and how it can benefit home buyers, mortgage brokers and real estate agents, please call or email Matt Dunlap

In my humble opinion, Rate Window is the future of the mortgage industry.

More transparency and disclosure is always a good thing. It instills trust and confidence for the consumers and public. Most importantly, transparency protects everyone involved before a situation occurs; not after a problem arises, often before it's too late.

Need to answer Demographic Questions ??

Jason Mitchell (Coldwell Banker) — Tue, 23 Dec 2008 12:07:03 -0600

As a Realtor at Coldwell Banker, I am often asked about specific demographic questions such as racial makeup, religion base, gender, age, criminality, etc...

However, for several reasons, including not knowing such changing data well enough to answer, the actual answers clients are looking for, and most importantly, Fair Housing Laws protecting discrimination, I am not at liberty to discuss.

However, as a Real Estate professional, I want my clients to have the information, they need personally, to make the right decision on where to live for their family.

Policy Map provides one of the best tools on the market to point buyers, sellers, investors and Realtors to, as they describe, a "goldmine of information" you need to make an informed buying or selling decision.

There is a (small) brightside to real estate price declines

Jason Mitchell (Coldwell Banker) — Mon, 22 Dec 2008 19:31:21 -0600

One of the major problems facing the ailing real estate market is the difficulty for buyer's to obtain loans. Due to the sub-prime debacle, lenders have taken major losses, and in many many cases are out of business. Lenders are afraid to loan even to the most qualified of buyers.

However, I strongly believe, amidst all the negative news surrounding Real Estate, there is something significant being overlooked; and that is the reduced risk to lenders to loan on lower valued houses.

Let me give you an example.

let's say that in 2001 a home priced at $200K would obtain and 80% loan for $160K.

However that same house in 2005 was $400K, this an 80% loan of $320K; a loan 60% higher on the exact same home 4 years earlier. Thus, much less security.

As home prices drop, lenders can more comfortably step into the market providing loans on the same houses. Simply put, lower prices, mean less far to drop (let's face it, we are not going to zero) and higher prices have more room to go down.

This as a simplified example, though, lenders are in the business of loaning money. That's what banks do for profit. They are eager to do this if prices (security in terms of equity in the home) are at more reasonable and safer levels.

Lease Options Help the sellers help the buyers

Jason Mitchell (Coldwell Banker) — Mon, 22 Dec 2008 19:30:10 -0600

one of the challenges facing real estate buyers , and thus, home sellers , is the difficulty for home buyer's to obtain loans. We are suffering in many of the towns of Maricopa County, North Phoenix, Peoria, and Glendale where we have been designated a ‘declining area" ; thus tightening credit further in most of Arizona.

Across the country, lenders have significantly tightened credit and lending standards, making it a challenge for even the most credit worthy buyers to obtain financing.

The biggest space in the mortgage market is the lack of, or virtual disappearance, of 100% Financing.

100% financing or majority financing as it is also know made it possible and for better of for worse to obtain a loan. These days, in Metro Phoenix , Arizona , at least, a buyer needs at least 5% down payment (often more) to get financing.

One way (for those who are willing to rent to a prospective buyer) is to enter into a lease-option ...

Short sale addendum says ...

Jason Mitchell (Coldwell Banker) — Sat, 20 Dec 2008 11:24:51 -0600

language contained in the Short sale addendum says

Language that must be read and initialed says "

"Seller acknowledges that that Broker is not qualified to provide financial, legal or tax advice regarding a short sale transaction. Therefore, the seller is advised to obtain professional tax advice and consult independent legal counsel immediately regarding the tax implications and advisability of entering into a short sale agreement."

Short Sales are complicated transactions.

You should work with an experienced short sale listing agent who has been successful with working with banks and asset managers.

Is the Housing Crisis in the Rear-View mirror?

Jason Mitchell (Coldwell Banker) — Sat, 20 Dec 2008 11:23:43 -0600

Here's one man's humble opinion on our approaching to a real estate bottom

I urge you to be cautious as the future is still a little unclear.

However, if you have been planning on buying a home, can negotiate a great price and most importantly, can afford your fixed mortgage payment, this may be the time to buy that you have been waiting.

I think we have some time to go here in metro Phoenix as we are hurt by the result of over development which is a large supply of foreclosed homes.

However, if I can make a broad sweeping theory on why we are getting close (not there yet) to a bottom in housing, here is my thinking .....

In the past several weeks, many large financial institutions and major depositor banks have been giving indication into the current and future financial impact into their impact of the sub-prime debacle.

Many large banks, if not all, were extremely hard hit by exposure to sub-prime mortgages and warned of potential heavy losses going forward as a result.

However, the effect on earnings as a result of sub-prime exposure was less than experts and analysts predicted. Analyst Alex Potter, said, "the U.S. performance was well above worst fears."

In fact, it looks like Wall Street may have overreacted in its estimates of damage to credit markets and housing based upon these earnings reports.

What does all this mean?

... possibly the worst of the sub-prime market and the tightening of credit, may be moving into the rear view mirror.

I do have a crystal Ball. It doesn't work. I cannot predict the bottom.

However, if you agree with Wall Street and need the benefits of a historically low interest 30-year fixed interest rate mortgage and the tax benefits, now may be the time to get in the car and look at the many opportunities to buy a home.

What does FHA eligible mean???

Jason Mitchell (Coldwell Banker) — Sat, 20 Dec 2008 11:21:07 -0600

What does FHA eligible mean???

There are several guidelines that must be met to be an FHA approved community.

However, the primary one to look for is that more than 50% of the homes sold in the community must be owner occupied.

In most parts of the country this is not something to even consider. However, in most of the towns around Phoenix this is can be a difficult hurdle to overcome.

Especially, in the Condo conversion market where the community was 100% rental and was converted to Condo sales. Often times the developer did not sell 50% to owner occupants. Thus, there is a a much greater proportion of rentals than homeowners.

In new home sales and new build subdivisions a similar challenge arises. Although, Builders have all lots and homes available for purchase. In many cases 50% have not been sold when lot sales begin in the first many months.

I encourage you to ask your real estate agent do the research for you.

Do not assume because the community has been around a long time that it is more than 50% sold to owner occupants.

Most residents and even many sales agents who work in these communities do not know

4 More Reasons to Skip short sales

Jason Mitchell (Coldwell Banker) — Fri, 19 Dec 2008 12:13:58 -0600

Here are 4 Good Reasons not to get involved with short sales.

as 80%, some say 90% of offers on short sales do not consummate in a closed escrow

3 month waiting periods prevent buyers from looking for other houses which often result in opportunities lost.
REO /lender owned listings are now priced as well or better than short sales. Make your offers on these homes.
Lenders are more inclined to reject offers that do not have financing with large down payments. Many FHA offers are rejected due to high decline ratios and lengthy underwriting times.
Banks are just not cooperative. In most cases, they prefer to reduce current REO inventory. Further, they can often collect PMI from insurers if the home actually is foreclosed upon.

3 Reasons not to get involved with Short Sales

Jason Mitchell (Coldwell Banker) — Fri, 19 Dec 2008 12:12:56 -0600

Here are 3 Good Reasons not to get involved with short sales.

Average time to get acceptance (or more likely a denial) from a lender is more than 75 days. Some agents say longer.
There is no guarantee the offer will get accepted at or near that price because the majority of Realtor list homes at random arbitrary prices that they think or hope the banks will accept.
estimates as high as 80%, some say 90% of offers on short sales do not consummate in a closed escrow

If you want to sell your home, you let the bubble burst.

Jason Mitchell (Coldwell Banker) — Fri, 19 Dec 2008 12:12:03 -0600

If you want to sell your home, you let the bubble burst.

If you have your home on the market for a maximum of 30 days and do not receive an offer it is priced to high. Period!!

You need to lower the price of your home 3-5% minimum. If you do not receive any offers within 3 weeks. Your home is priced too high. Period!

If you really need to sell your home then let the bubble burst. It hurts initially. However, ultimately, it is the less painful option.