So I was doing renewal hours so that I can renew my license at the end of the month and I was sitting in a Short Sale class. In the class we discussed the basics around short sales and had an open discussion regarding how the banks operate or don't operate. But I heard something that made my SKIN CRAWL!

First let me make a disclaimer, I can only speak in regards of transactions that occur in Arizona, and you should always have your clients speak with a Real Estate Attorney and/or Tax Attorney to see how a short sale will effect them long term.

As I was sitting in my class, another Realtor spoke up regarding her recommendation to her client during the transaction. She had advised her client to take a $50K promissory note...that's right $50K. The loan was not a Home Equity Line of Credit (which is not covered under the Arizona Anti-Deficiencies Statutes, but can be negotiated and removed during the negotiations with the banks), but rather a second mortgage. So by advising her client to do this, she has allowed him to waive his rights' under the Arizona Anti-Deficiencies Statutes and he has now taken on a $50K credit card bill where he is probably paying around $800-$1000 a month.

So here is the solution, when the agreement letter is sent to the listing agent, there is going to be verbiage in the letter that creates a loop hole for the bank to pursue your client at a later date. This verbiage is almost always in the agreement letter and the agreement letter is usually a form letter. What you need to do as the listing broker, is call your contacts at the respected bank/s and let them know that under AZ Statutes they need to REMOVE THE VERBIAGE. By doing this step, you are protecting the interest of your client. A little negotiation goes along ways. If you are having problems with the bank not wanting to remove the verbiage, move of the chain of command at the bank (this can be fun sometimes, play a game to see how far you can go, I have made it to the Regional President of one bank and I know people who have made it to CEO's of some of the largest banks in America). If you are not making head way at the $10 and hour employee and they won't transfer you, hang up and dial the same number, you will get someone new.

It is scarey to see what some Realtors are advising clients to do. My wife and I only take clients who have talked with a Real Estate Attorney. It usually cost the clients $250-$500 for a consultation, but everyone of our clients come back with a detailed picture of what they getting into. Plus, we now have released a good portion of liability. Lastly, read the bank documents before having clients sign them, and don't let your clients sign a promissory note, but rather work harder and threaten the bank that the deal will fall apart if the verbiage isn't removed from the letter. The bank will remove it, you just need to tell them that this is Arizona and your client is protected under the Arizona Anti-Deficiencies Statutes.

Please protect your clients, if you are not comfortable with short sales, we can help and we do pay referrals on short sales (we have a referral scale that we use do to the extensive work required, please call for details). Our goal is to help over 100 famlies avoid foreclosure this year. Best of luck to you all.. 

So I had to laugh the other day when I heard yet another Realtor say "I will not show a Short Sale". Come on people, we are all professionals aren't we? (I believe, that if your a professional, then you adapt with the ever changing environment.)

So here is the insight, with more and more banks being pressured to work with the homeowners and the public outrage that comes with a foreclosure by a bank who has received tax payer money, the real estate market, especially the Phoenix Metro area is changing and we are seeing a surge in short sales and a minor decrease in the REO market. If things continue, banks are going to slow the foreclosure process but increase the short sale and modification processes. So if you are not showing a short sale, WHY NOT? You are doing your clients a dis-service as most short sales are still in decent condition and you are not doing yourself justice. I will say, that there are agents out there that have no business listing short sales for numerous reasons. For example, we just closed a short sale where we represented the buyer and it took 6 months to close, with us having to step in and negotiate with the bank because the other agent was unsure of what he was doing. 

Well, to keep this short....Show a short sale (say that five times really fast), it will most likely be the largest supply of homes in the Phoenix market real soon.

Well, the election is finally over and know all those signs get to come down on every corner of Phoenix. Well, I am not going to talk about the presidental election as that is out of my realm, but I did want to congradulate the citizens of Arizona for pulling the rug out from under the unions by defeating Prop 201 (the so-called Homeowner Bill of Rights). I was pleased to see the Arizonians still stand for values and fairness and don't believe that you should be able to file a lawsuit just because you want too.

But the greatest news is that Prop 100 passed which prohibits the state from taxing us once again when we decide to sell our home. Afterall, we pay yearly property taxes already. So congradulations Arizona. There is a long way to go still, but we have set out on the right foot so far.

What is a Real Estate Transfer Tax?

A real estate transfer tax (RETT) is a state or local government imposed tax that is collected when you transfer ownership of your home, land or commercial real estate. Typically, once the tax is initiated, the rate can be increased by the state, county or city at any time.

Why are Transfer Taxes Proposed?

Too often, this form of taxation serves as a new source of revenue to balance a government's bloated budget caused by overspending. Once this type of tax is put in place, not matter how low the tax rate is in the beginning, it always ends up being raised.

What are the Problems with a Transfer Tax

IT'S DOUBLE TAXATION!

Governments already collect taxes on your property based on the property's value. This new tax would unfairly cause a second tax to impact your home or property.

DAMAGES YOUR EQUITY!

Since the tax is assessed against the total value including the amount you owe on your mortgage(s), the overall equity earned by the seller is decreased.

SLOWS AN ALREADY SLOW MARKET!

In the current slow market, a transfer tax would make it more difficult for people to buy or sell homes. Once a transfer tax is put in place, it can be raised at any time. This costs people buying or selling their homes even more money.

PUNISHES THE HOME OWNER!

A home is often the biggest and most important asset a person has in life. A transfer tax reduces the equity people have worked hard building. People already pay multiple taxes and fees on their homes. This tax will layer on one more significant closing cost you will have to pay.

IMPACTS LOWER INCOME THE MOST!

This tax imposes the higher tax burden on lower income households that typically spend a larger percentage of their income on their home.

Vote YES to PROTECT YOUR HOME on November 4^th!

Here is the latest market updates from Sept. 2008. It appears that we are trending to a better market for sellers, but make no mistake, it is still going to be a while, hopefully 6-9 months.

Information deemed reliable but not guaranteed. Data provided by ARMLS.

So the stock market fell by more than 700 points today and I was quite encourage about the outlook for the real estate market. You must think that I am crazy, but let me explain before you judge me. As I was driving to the office this morning I was listening to talk radio and heard a story that made me laugh. See in the North part of Phoenix there is a new development/shopping center that is opening up and needs around 260 people, so they held a job fair and had 700+ people show up. 40% of the people were from the real estate industry. This is appaling. What that number tells me is that a huge part of our industry needs to either get out of the house and go to work on their business or just get out all together.

So let me ask you this if you are still a dedicated REALTOR, are you shifting and getting your unfair share of the market? Has you shifted you business to compete in today's market? Is your office supporting you, or are they waiting for you to quit?

If you are struggling but are dedicated to surviving this market, I would highly recommend reading the book SHIFT by Gary Keller. It is a great book that details the 12 things all agents need to do right now to survive this market. Also, if you are interested Gary Keller is coming to Phoenix on Nov. 11, 2008 to present the concepts in person, so if you would like to go let me know and I will let you know how to registrar. The tour cost $20, but that also includes the book and it is open to ANY agent wanting to improve their business.

So I recently read an article at azcentral.com titled 'Home buyers, builders split on Prop. 201" and basically the article goes on to talk about how homeowners who bought new homes have no rights or warranties. But lets first take a step back and analyze who is proposing this Prop. and what the expected outcome is. Prop 201 is sponsored by Arizona AFL-CIO, that's right the Unions. But you ask yourself, "I thought that Arizona doesn't have unions"? Well, you are partially right. Arizona is a "Right to work state" and what that means is that an employer can hire and fire as needed and they don't have to bow down to the unions and pay higher wages for those who refuse to give 100% ALL THE TIME. ( Disclaimer: I am not saying people who are members of a union don't give 100%, what I am saying is that to many unions reward workers for sub-standard work, which has lead to a decline in manufacturing, just look at the economic condition of Detroit. Enough said!)

So why is the Arizona AFL-CIO sponsering a propisition that is related to home building? Well, and I say this from personal experience as I built homes for a number of years, the union is trying to use the promise of FALSE HOPES to persuade you the consumers that you have been taken advantage of by the builders and that your home is falling apart as we speak. There for, by changing the laws, if we bought a new home and after ten years (which is the current builder structural warranty) if anything is not to your liking, you can sue the builder for what ever you want. This is silly, just think about it for a minute, if passed builders are going to have to warranty normal wear and tear for ten years. So who is going to pay for that? After all, after ten years, I believe that the homeowner is responsible for replacing the worn carpet, not the builder..

Okay, so back to why is the unions sponsoring this proposition? For years and years, the unions have been protesting every builder and putting those annoying door hangers on your garage door (that in itself is annoying) saying that your home builder used sub-standard contractors and that your home needs immediate repair. What I find funny about that is those same subcontractors that are being protested against are the same contractors that the union members are trying to get a job with. By creating a false fear, unions are hoping that the uninformed consumer won't pay any attention and just blame the easiest person which in this case is the builder.

To sum things up. Homeowners are already protected by the AZ Register of Contractors and if Prop. 201 is passed, unions will destroy Arizona in just the same way that they did in Michigan. Oh by the way, it is ironic that all those residents who lost their jobs in Michigan because the cost of manufacturing made it impossible for Ford, Chrysler and General Motors to compete in a changing economy, are moving to Arizona. But these people are against the unions as they have had to move because the unions destroyed what they had for jobs. If passed, Arizona residents will pay astronomical increases for new homes as labor cost will spike. Do yourself a favor and Vote NO on Nov. 4. One last thing, the Arizona AFL-CIO is also in support for a real estate transfer tax, meaning when you sell your home you will pay a tax to transfer to the new owner, nothing like lossing more equity in a market where most people are already upside down on what they owe.

 Okay, to make this arugument clear, he is the actual Prop and key points are highlighted.

http://stoplawsuitabuseaz.com/images/comments.pdf

While, Arizona currently does not have a real estate transfer tax, there is nothing that prevents a tax from being enacted at any time.

With our current slow economy and budget crisis, it won't be long before cities, counties, and the state start looking for new sources of revenue.

Enacting a real estate transfer tax is gaining momentum in Arizona. Just last year a bill was introduced in the state legislature proposing such a tax. Countless citizens' commissions and county reports mention a transfer tax as a possible source of revenue for the state.

With the momentum for a real estate transfer tax growing, we must act now to put an end to this debate before it is too late!

Join us in passing a constitutional protection that will stop real estate transfer taxes. Click here to get involved today.

Vote YES to PROTECT YOUR HOME on November 4^th!

Well, the Wall Street may have found bottom, or at least that is what is in the news nowadays. So why are interest rates on the rise?

The answer is simple, mortgages for the most part are not tied to stocks but bonds. Since investors believe that Wall Street has lost enough and there are so many bargain investments out there, Lenders are predicting a decline in the bond market and raising the rates. Today in Arizona, (which has a slightly higher rate than most of the country due to having one of the highest foreclosure rates) the interest rate fluctuate between 6.75% and 6.85%. It is expected to reach 7% by the end of the week.

So what does that mean if you are looking to buy a house? Well, your buying power is greatly reduced. Regardless of declining home values, it is better to buy now while interest rates are still historically low but time is running out and with more and more investors buying up bargain stocks, we can still expect to see mortgage rates rise.