• The supply of existing homes on the market is at the second lowest level in 11 years.  New listings have dropped by 30,000 units from 2010
• The median price is lower than 2010.
• The number of units sold is the second highest in 11 years and second lowest in price.  Supply and demand are becoming more in balance.
• The average days on the market for homes dropped 13% in 2011.
• Foreclosures have slowed dramatically because the lenders are looking at short sales to resolve underwater properties.
• The most underwater owners have largely been through sale or foreclosure already.

All this, coupled with higher numbers of jobs creation, is signaling the bottom may have been reached. Arizona was 3^rd nationally in jobs creation for 2011. Many were hi-tech jobs.

Homes have become more affordable and the cost of homeownership is lower for every household after the market adjustment of the past 5 years. Costs have come more in line with income.

The Phoenix MLS reflects mainly Maricopa County. However, as Maricopa County goes, so goes the State of Arizona. Sales in the Valley will allow those sellers to relocate to the secondary markets in the state. Jobs will follow in those areas.

Another factor that is beginning to take effect is that homeowners who had to short sell, goes through foreclosure, or file bankruptcy during the Great Recession are beginning to have their credit healed by the passage of time. They will become a wave of buyers.

As we see a turn strengthen it is likely that interest rates will start to climb. Those who have been on the sidelines may decide to buy now rather than risk the market and interest rates rising out of their reach.  Now is the time to buy and lock in a low rate of interest.

This week the Arizona Corporation Commission voted in a 4-1 decision to reinstate free power-line extension to new customers within 500 feet of Tucson’s Electric Power Companies distribution system. This decision comes after much uproar from Arizona residents after the long standing “line extension” policy was eliminated for Tucson Electric Power (TEP) and UniSource Electric (UNS Electric) in 2008. To note, in 2007 the Arizona Corporation Commission eliminated a policy of more than 50 years that required Arizona Public Source (APS) to extend power lines at no cost to any development within 1,000 feet and up to $25,000. The reversal of all three of these policies left many landowners with unforeseen costs that reduced the value of their properties.  The Arizona Association of REALTORS® witnessed firsthand the negative impact the reversal of these policies had on our members and homeowners throughout the state. As a result, AAR has worked diligently with members of the public, stakeholders and Commissioners to revert to the pre-2007 line extension policies, for TEP, UNS Electric and APS. As many will recall, we were successful in our endeavors this past January when the Corporation Commission voted 3-2 to reinstate the line extension policy for UniSource Electric, which serves customers in Western Arizona. In regards to APS, we continue to inch closer to a resolution as it pertains to reinstating a line extension policy under a rate case filed last month.  The reversal of Tucson’s Electric Power Co. 500 feet free line extension policy should take full effect in 30 days and will allow those with uncompleted contracts to come back in and benefit from the new rules.  Look for additional Capitol Insider articles as progress is made on the Arizona Power Source line extension rate case.

At the same time sellers are having a tough time selling their homes because of tight lending.  They need buyers and the banks to get their house sold and be able to move on. Life goes on.  Seller financing is a good tool for them too.

Who are these buyers?

• Anyone who is sellf employed.
• Anyone trying to buy a second home.
• Anyone with another property to sell.
• Investors who own other rental properties.
• Someone who has a new job.
• Someone who has had a bankrupcy.
• Someone who was way upside down and left their prior home to get out from under it.
• Someone who has had credit issues because of medical problem.
• And, of course, anyone who can’t ontain financing because of poor credit and the mishandling of their lifestyle and finances in the past.

All but the last group may have good income, a solid job, financial resources, and a change in their health for the better that allows them to be the same solid citizens they were before getting ill.  They are capable of making their payments on time and for the length of their mortgage. These people are the buyers that are a fit for buying a home with seller financing. If you are one of these people we can definately help you buy a home.

Around half the bankrupcies in America are related to medical problems. It is not the fault of the injured or sick person. It is a fault of our broken health care system to a great extent. Not everyone is covered. Not everyone can get coverage. Pre-existing conditions may not have been covered under your policy. In the current economy a job loss may lead to an extended period of time without coverage. Isn’t that the time things always happen?

What is seller financing? It is the seller of a property acting as the bank at the time they sell their home.  That seller will earn little interest on the cash they get out of the sale just putting it in savings.  They may even want the monthly income and the deferred income for tax purposes.

How does it work?  The seller reviews the credit report of the buer to see why they need this type of loan. They have the right to refuse the loan just like a bank would. But they do not have the tight guidelines to follow and may elect to grant the loan to the buyer. If the buyer and seller agree on the loan, the escrow company acts as the account servicing agent for both parties and handles the payments. There is a small fee that the buyer pays. The buyer is assured that their payments are credited toward the purchase. The escrow company also can collect the taxes and insurance monthly just like a regular bank mortgage payment does. The down payment requirement is based on the credit and reason for the seller financing but will be at least 10% to 20%.

The buyer may just need tome to be able to fit in the box of a regular bank loan. Maybe they need more time in their job or need to get a bankrupcy further behind them.  Their money may be tied up in a certificate of deposit. They may be expecting a large inheritance or payoff in the future. They may need to sell their existing home. Seller financing can bridge that time frame. The payments may be make as though the loan was for 30 years but the balance may need to be paid off with a balloon payment in 3 or 5 or 7 years. At that time you, the buyer, should be in better position to get regular bank financing. You may be paying a higher interest rate. But anyone who is at all outside the box with a bank also pays more for their loan. But there are savings too; no big fees up front or rolled into the loan total and no required appraisal or related fee. Any you can buy a property that may not be able to fit a typical bank profile too such a land or a manufacture home.

See http://allofprescott.com/seller-financing-for-buyers-and-sellers/ for a blog post about seller financing from a seller prospective too.

So there is a solution for all those who are outside the box for obtaining a mortgage. Seller financing is the key. We are experienced at structuring these arrangements in Prescott Arizona. We have the team of agents, inspectors, escrow officers, and accountservicing departments to put all the pieces together for you. You can own a home and not have to pay rent and a landlord’s mortgage. we can help you rebuild your life.  Just give us a call.

Jerry Germansen and C’Ann Simpson,  Associate Brokers eXp Realty in Prescott Arizona

928 632 3906

Futurist Jacque Fresco presents his vision of the future. It includes not only his vision of houseing but social issues and the environment as well as energy, travel, education, and more.   http://www.youtube.com/watch?v=hc7x79kJ1S0  See the trailer.

I found his vision fascinating. This is a must see.

The system only requires a south facing roof area where to mount you panels. And it Looks Great too!

All the other equipment fits on about a  foot wide area of the grage wall. 

Why buy electricity generated by oil from the middle east when you can make it right at home from the sun for less that you are now paying? It feels great to see your meter spin backwards and know that you are doing your part to eliminate the use of fossil fuels for electricity.

The system is installed, guaranteed  and insured. It is monitored over the internet by the compny. They will know if any problem exists and call you to schedule a free repair visit.

For more info and ordering your free solar system while the rebates last, contact Jerry Germansen at 928-632-3906.

Dang birds! They just cost me $26 worth of pipe and netting. Bird netting specifically.  I attached a simple wood beam across the top of the garden boxes. Then I bent 3/4 inch conduit over the beam and slipped it over rebar into the corners of the box.

The netting is fix in place on the ends. I will not need to have access into the garden from the ends. The side sections lift to reveal my plantings. I have full access to each side for harvesting my veggies and berries. The dang birds don’t.

This should solve the problem  and was a very easy fix. Now I can have my beets and eat them too.

Gardening in Prescott Arizona with our mild weather allows me to plant early and often. I hope to get 5 crops from each square foot space and will plant seasonal plants as summer comes. The Prescott Country Club is an ideal setting. My garden overlooks the golf course’s 11 green and 12th tee. We are back far enough not to have to duck errant  shots.  That is unless I am approaching the 11the green.  But that is another story.

I have had to put a ball retreiver on the end of my putter so I don’t have to bend over to get my ball out of the cup. With so many shots to get it in there any assistance is appreciated. So I raised the garden up like a pool table. I can tend it without getting on my knees. Getting down there isn’t the problem. Getting back up is.

I celebrate(that is a joke) my 63rd birthday in just 2 weeks. The back is not that of a 20 year old any more. So laugh at my raised bed square foot garden if you have to. Your turn will be coming very soon.

www.allofprescott.com  For Property info in Prescott

www.prescottcountryclubsite.com For country club homes

Jerry Germansen 928 632 3906

I spent the last week building a Square Foot Garden raised to a height so I will not need to bend over. It has a 3/4 inch plywood bottom with drainage holes every foot or so.

I will be putting in the soil materials today and dividing the 4 foot by 8 foot areas into 1 foot squares.   I started composting a few weeks ago. It was at the time I was pruning the roses and ornamental grasses in the yard. I added kitchen scraps too. Only add scraps of fruits and veggies plus coffee grounds and their paper filters. And add all the yard waste organic materials too. It is amazing how much of that material can be composted for the garden. It saves landfill space and makes a great soil. It gets me off the couch and active too.

The Square Foot Garden is an interesting concept. It was developed by Mel Bartholomwe  years ago. He has written a couple of books about it and even had a Public TV show featuring his efforts and results. This garden is expected to produce 5 times what a regular single row garden will do because of the design, layout, and soil.

The soil is the real key. The garden is only 6 inches deep ( I made mine 8 inches for good luck).  It is a mix of 1/3 compost, 1/3 peet moss, and 1/3 vermiculite. You will never have to fertilize it or till it. It will remain loose and moist. I do have an irrigation line right in the garden area that I will hook up in a week or 2. Until then I’ll water with a hose. This soil mix will take much less water too. It is built from water retaining parts.

I can start planting now.  Beets, cabbage, spinach, radish, potato,  mint, and onion will take any remaining morning  frost rather well. I’ll start some now and then again in 2 weeks so I have a continuous supply for an extended time.

Trips to the grocery store will be ,much less expensive and fewer. I’ll have organic daily fresh veggies and fruits all the time. It’s a great way to have a healthy diet and a fulfilling pass-time too.

I’ll post more as the garden takes shape and make some observations and suggestions. Until then, keep composting!

Loans are getting very difficult to obtain. They also require much more time and documentation before the loan is approved and funded.

On March 1, 2011 the Arizona Residential Purchase Contract was revised for all Realtors to use. There any many changes but the most significant changes are about financing.

Effective immediately, all contract offers must be accompanied by a Pre-Qualification Form filled out by the Loan Originator. The purpose of requiring a pre-qualification is to protect the Seller, Buyer, and the agents from contracts that fall apart because of the inability of the Buyer to obtain financing. It also places a very strict timing on the Buyer to provide the lender with the complete package of documentation during the inspection period which generally is the first ten days after a contract is accepted. That documentation includes:

Tax Returns

W-2s

Pay Stubs

Credit and Liability Account Info

Gift Documentation if any

And Proof of your Down Payment and Reserve funds

Any other documentation the loan officer or processor or underwriter see as needed in your purchase.

Anyone thinking of buying a home needs to first think about their loan. No longer will we be able to write contract and wait for the buyer to get a loan started. No longer will the seller be praying that the buyer can get the loan to buy their house. The loan must be well along before the buyer can make the offer.

This is even good news for the buyer. There is nothing worse than not knowing how much house or if any house can be purchased. Sooner or later buyers all face the facts. This now puts the facts forefront.  The thought of making an offer on a home for your family and squirming until your get “the word” is very unsettling. Now that is resolved.

Your Arizona Realtor will be taking more upfront time with you and preparing you to buy a home under safer conditions now. These changes, although adding time and stress up-front, are better for everyone involved in the purchase. Your Realtor is here to make purchasing a home a pleasant process. This is a step in the right direction for us all.

 So start the process today. Your Realtor agent will get you in contact with a qualified loan professional that will put the first step into action with you. We are just a call or eMail away.

Jerry Germansen, Real Estate Concierge Maniac

928 632 3906  Jerry.Germansen@SearchonPrescott.com

The government allows us to put money aside for old age in Investment Retirement Accounts. Did you know you can do more than keep it in a mutual fund, bank account, or in individual stocks? Most people think that those are the only investment vehicles allowed. Not so. The IRS says that you can place you IRA in any investment except collectables or life insurance.

I am not talking about closing your IRA and taking an early withdrawal penalty. The key is changing to a Self Directed IRA where you control where the money goes.

Here are some things you can do with your self directed retirement account:

• Invest in Real Estate by paying cash from the account.
• Your IRA can take a loan out as a mortgage
• Your IRA can become a partner with another IRA or another person
• You can make a secured or unsecured loan to someone or a company
• You can invest in a company or partnership
• You can invest in a retirement property now and rent it out. Convert it to your retirement home in the future.
• Buy stocks or bonds like with any other IRA account
• Buy a commercial building or business anywhere
• Buy a rental property in a college town

Here are some things you are not allowed to do under IRA rules:

• Make loans to close family members
• Own IRA property and rent to family members
• Buy a collection of antique cars or art work
• Buy a second home for your own current use (may be converted to personal use at retirement)
• Buy life insurance

Why am I writing this? Because your stock broker is not going to tell you about it. He makes money every time you make a trade. Since you can still buy and sell stock in a Self-Directed IRA with a phone call to the trustee.

What is the real advantage to holding your retirement funds in a Self Directed IRA? You can invest in things that are more tangible than stocks. You can tough and feel land. You can walk into your rental property. You can control a business you are directly invested in.

A Self-Directed IRA trustee will have guidelines to lessen the risk and make sure you have the funds to do what you want to do. They have CPA’s ready to answer your questions and assist you.

Jerry Germansen, Associate Broker, eXp Realty Arizona

www.AllofPrescott.com 928 632 3906

When a buyer has purchased property using financing, the lender has the buyer sign a Deed of Trust and Promissory Note to secure the property and guarantee the note payments. This is true of most financing arrangements including seller carryback financing.

With the decline of the market and the inability of most buyers to obtain financing from banks for land today it may be tempting for the buyer to “let the property go” back to the lender rather than continue to make payments or pay off a balloon payment. The buyer may feel it is better to cut their losses. There is a great risk in not fulfilling the obligation of the purchase contract and financing.

The lender has the right to expect full payment of the note and provided the financing in good faith at the time of purchase. The lender receives interest for providing that financing and is guaranteed payback by the Promissory Note. The buyer/borrower intends to make an unknown profit based on the market at the time of purchase and assumes the risk of loss if the market conditions change. The Deed of Trust secures the land with a lien recorded in the county. The Promissory Note is recorded and guarantees the payback.

In the event of a buyer’s default on the regular payments or a balloon payment, the lender has the right to demand payment plus all associated costs of collection. Most loans even have an interest acceleration if payments are more than 30 to 60 days late.

If the buyer refuses or is unable to make the payments the best remedy is to contact the lender to make arrangements to either extend any balloon that may be due or work out a time for the missed payments to be made up.

If the lender does not agree to negotiate a reset of the terms, they may foreclose on the property. The buyer will be out all monies paid on the property. Most importantly, the lender may require the borrower to pay for any losses incurred. Specifically, if the lender sells the property after foreclosure and does not net enough to pay off the promissory note, the lender will likely take legal action and obtain a Deficiency Judgment against the borrower based on the guarantee of the Promissory Note.

The borrower must pay the judgment plus interest and court costs. This further increases the total payoff mount. Failing to pay the judgment may force a bankruptcy of the borrower.

Any late payment, foreclosure, or deficiency and judgment may be reported to the credit bureaus damaging the borrower further.

Don’t Flush Your Money Away

Given these terms and conditions and the potential ramifications it is best to make the payments as originally agreed. It will be much cheaper in the long run and protect the borrower’s credit. The borrower will remain the owner and will reap the potential benefit of a profit when the market returns. The owner also has the right to sell at a loss and maintain their credit and take any loss for tax purposes.

Arizona has an anti-deficiency law that protects the borrower from a Deficiency Judgment. This only protects the borrower if the loan was for a primary residence on less the 2.5 acres and the loan is the original purchase money loan. It does not protect the borrower if the property was refinanced or if it is an investment property.

It is imperative to seek legal advice before getting into such a difficult financial decision.

Keep in mind that the public does not need a stock certificate to live. They do need a place to live. Real estate will return to a reasonable value in the short or long term.

Jerry Germansen, Associate Broker, eXp Realty Arizona 928 632 3906