• 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.

A Short Sale occurs when the seller owes more to the bank than they will receive from the sale of the property. The Seller will not receive any funds from the sale. The bank that is the current mortgage holder must approve the sale and on THEIR terms. Our Short Sale Purchase Contract will be discarded if they accept your offer. It will be replaced with their contract and addendums that only protect the bank. That banks will choose the title policy they offer and the escrow office that will handle the sale. We see sales in Arizona closing escrow in Texas. Can you imagine that?

In order for a short sale to be accepted by the bank, the Seller must have a real hardship such as a job loss, death in the family, or divorce. They must fill out financial documents more extensive then if they were buying a home and taking out a loan. They must have no assets to use to pay the bank for the shortage. They may be required to liquidate any assets of value and pay the proceeds to the bank. They may also be required to sign a promissory note to pay back some or all of the shortage. Under these conditions many Sellers find it difficult to deal with all the paperwork that is required and they either don’t send it in or are just not able to complete it. They stop caring for their home and hold off making any repairs and doing any maintenance. We have seen landscape die because of lack of watering, dishwashers inoperable at close, ruined carpeting, even missing appliances and cabinets.

If you are a Buyer you must be prepared for a long wait to even get an answer from the Sellers. And when the Seller accepts your offer it is subject to their bank’s approval of the sale at the price offered and with a substantial loss. You must be prepared for the bank to reject your offer or come back with a price even higher than the asking price. This could be 4 or more months after your offer was accepted by the Sellers. You must be prepared to have your dreams stolen from you. You must be prepared to close the sale if and when the bank says you will. The banks will not respond to our inquiries. They totally disregard your wishes, and in many cases they disregard the law and common decency. Often the person we were dealing with is no longer at the bank or transferred to a different department during all this negotiation.

As soon as ALL of the paperwork required from the Seller is gathered it will be submitted to lender immediately — they will typically acknowledge receipt in 4-6 weeks. If the paperwork is incomplete or they forgot to send you a form, it starts all over again. In another 4-6 weeks after that they’ll order an appraisal — they will typically acknowledge receipt of the appraisal in another 4-6 weeks after that. The appraisal may be totally off from the amount they priced the home at. The initial price is set by the bank paying a minuscule amount to a real estate agent to give them their opinion of value. That agent could be from over 100 miles away and not familiar with the local market. Within 4-6 weeks of acknowledging the appraisal they will begin negotiating — they will typically come to the table with their final offer in 4-6 weeks after that. Once we have the final offer, the closing will take place in 4-6 weeks:

        4-6

        4-6

        4-6

        4-6

        4-6

    +  4-6

    = 24-36 weeks (6-9 months) at best

There is a possibility that even with an approval in 6-9 months they will reject the sale at the last minute. They often LOSE the paperwork repeatedly. This often occurs because of the high percentage of turnarounds of employees at the lender’s short sale department.

If the bank asks for additional documentation from you/your wife, or the Sellers, you will need to respond and provide the documentation– the quicker you can get it to them the better.

Typically the collections department has no clue that the negotiations are in process with the short sale department and they may continue to call the seller weekly. When the Sellers tell them that a short sale is being negotiated they will say that they have no record of a short sale negotiation and the Seller should send them the paperwork. They will be telling you the truth — the collections department will have no clue that a short sale negotiation is in process and no matter how many times you tell them they will not put it into their system and they will continue to act as if nothing is in process — the bank departments rarely talk to each other. This is typical. The departments are likely in different states. They do not have a clue what another department is doing.

Do not expect to hear anything for 2-3 months at a time because there will be absolutely nothing to report for 2-3 months at a time — the banks are that slow.

Basically, sit back, and in 6-9 months from now or more we’ll know if the bank is willing to do the short sale. Sickening, maddening, and crazy I know, but that’s the way these banks operate. I’m prepared to close on these deals in 2-weeks, but the banks keep the process to a crawl. For your own sanity, just put it out of your mind and rest assured we’re working on it. If anything important happens we’ll let you know. Nothing important will happen for months.

Most of all your need to be prepared for your offer to fail. Even if the bank accepts your offer, there is a high probability that the Seller will have stopped making payments and the bank will foreclose before the short sale is completed. The process then starts all over with a new price, a new listing when the bank decides to release the property for sale, a property that has been neglected or purposely damaged by the Seller, and a new asset manager for the property.

One of the main reasons that the banks will reject your offer is that in a Short Sale the bank VOLUNTARILY accepts the loss. If they wait and foreclose their loss is INVOLUNTARY. In an involuntary loss they then can go to the government and receive the loss difference because of the government loan guarantee.

Short Sales lead to heartbreak. They are not for the average buyer. You may have a difficult time obtaining your own loan. The seller’s bank will not accept a sale contingent upon you selling your home. So, sell before you buy. You will need a plan “B” in case the close is delayed by the Seller’s lender reviewing the file one last time.

Unless you are willing to go through all this and still have your home purchase fall apart at the last minute, you should be looking at homes that are traditional sales or have already been foreclosed. They are the best homes with the sellers motivated and in control of the sale.

Jerry.Germansen@SearchonPrescott.com

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.

What does that mean? If you own a property free and clear (no mortgage lien on it) you have a distinct advantage in selling it compared to other homes that are on the market and that are your direct competition. That includes all price ranges too.

It also means that you will not get paid off at the close of the sale. You will receive monthly payments from the buyer with interest. Consider it cash flow income. If you do not need the cash out of the sale, you can earn a lot more interest than if you were put the money into a savings account or certificate of deposit. Banks are paying 1-2% interest. These financing arrangements pay an average of 7%. On a $100,000 bank deposit you would receive $166.67 per month interest. With Seller Financing at 7% you would receive $665.30 per month for 30 years. Sometimes a buyer may only need some time to repair their credit or have a job position long enough to qualify for a loan. In those cases we can have the entire loan balance payable as a balloon payment in 3 or 5 years.

The Seller Financing is accomplished using the Account Servicing Department of the title company. They receive the monthly payments from the Buyer and send you a check. They take care of the accounting and provide monthly statements to you and the buyer. We have the Buyer pay the set-up fee of about $200 for the servicing. They also pay a small fee every month as part of their payment.

You no longer own the property so you have no responsibility for the taxes or the other liabilities of ownership. The taxes and insurance can be collected by the Account Servicing Department monthly. They would then pay the tax bills and insurance premiums on behalf of the Buyer.

What is the risk? If the Buyer pays late there is a late fee added. If they default on the loan, you can foreclose and get the property back and sell it again. You even get to keep all the money they paid in before defaulting. The downside is some risk of damage to the property if you had to foreclose and take it back. The other risk is taking it back after a value decline. We minimize the risk by having the Buyer provide the Seller with a copy of their credit report. The Seller can deny the loan or accept it based on that credit report. Yes there are risks. However, the risk is usually outweighed by the return.

We recently sold 2 homes and have three contracts on another property by offering Seller Financing. All have found a buyer within 2 days! The phones are ringing. Seller Financing does not require an appraisal. They are sold “As IS”. One sold for over the asking price because of competition to get the deal by solid buyers who did not fit within the criteria required by a lender for a bank loan.

If you own a property “Free and Clear” you definitely should consider offering Seller Financing. It could quickly get you more for the property, more return on the money you have in equity, and provide a home for someone who is able to make the payments but can’t get traditional financing. There are a lot of those people out there that would love to buy your home.

If you have a loan on the property you cannot provide Seller Financing. Some agents structure a “Contract for Sale”. Those contracts give equity to the buyer and will cause your lender to call the loan immediately due.

Just make sure you are working with a Real Estate Agent who is knowledgeable in Seller Financing and can guide you through the process. We are experienced and knowledgeable. I have written many Seller Financing deals over the years. Be sure that the down payment is sufficient to cover all the closing costs of commission, title and escrow, so you come away with some cash. It may be the only way for you to dispose of the property in this economic time.

Jerry Germansen, Associate Broker

eXp Realty Arizona

928 632 3906

www.AllofPrescott.com

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

Oh No! Here comes the plow again!

reshoveling what the wind blows back, then reshoveling what the plow puts back. Car stuck. Car hit by plow. Car hits your other car. Car buried. Broken leg falling while shoveling. Where is the car. Driving through snow tunnels called streets. Can’t get warm without a warm bath. Frozen hot water pipes. Frozen boogers stuck in mustache. Beer frozen in garage.  Frozen water pipes, can’t thaw beer. Glasses fogged over. More snow tomorrow.
Are we having fun yet? Chicago Blizzard…Think Prescott Arizona.
Think Prescott. It is in your future. Seed planted!

Jerry.Germansen@SeearchonPrescott.com eXp Realty 928 632 3906 Start Now!

Why do the maps change? development upstream from an area can cause more rain and snow melt to flow into an area. Every parking lot and roof and road changes drainage. FEMA is charged with keeping the maps up to date.

I live in the Prescott Country Club and back to a golf course. The Clipper wash seperates the property from the 12th tee. It provides a nice buffer and keeps golf balls from attacking us. FEMA just upped the flood status of the Clipper Wash. I am expecting the mortgage company to require flood insurance or a waiver of the need for flood insurance by a licensed surveyor. One of the owners in the Prescott Country Club received a letter from their mortgage holder stating that unless they provided flood insurance, The mortgage company would purchase it and charge them $350 per month for coverage on a home worth $189,000. The bill for that insurance should cost about $50 per month.  He owner also has the right to dispute the requirement by certifying that the property is not in the flood zone. A surveyor charges about $500 for the certification and you pay regardless of his findings.

If you receive a notice from your mortgage company you had better attend to the business. Good agents in the real estate business check the status of the flood maps with their local county at the time a property is listed for sale. A seller has the ob ligation to disclose a flood zone if they know about it. However, as you can see, the maps change. What once was considered out of the flood may now be in the zone and require flood insurance.

Here is a link to FEMA for your use.

Jerry Germansen

eXp Realty Arizona

Since Money Magazine found and promoted Prescott as one of the best retirement areasin the 1990s we have been in the top retirement places many times.  Here is just another example.

Come to Prescott and check out a great lifestyle. Living here is much more than owning a home. It truly represents  way of life with the perfect 4 mild seasons.  Here in the Bradshaw Mountains, just an hour from Phoenix, is the original territorial capital of Arizona. We are known as America’s Christmas Town for our holiday friendly atmosphere year round. The original town square is the home to the county courthouse usually found in eastern states. Prescott is located in the Prescott National Forest comprised of 1.25 million acres with hundreds of miles of trails for hiking, horses, quad rides, or just a pleasant get-a-way drive.

Our website AllOfPrescott.com is an excellent resource to check out property values and choices. There has never been a better time to stake your claim.  Or just give us a call at 928-632-3906 for more info on our area and an chance for us to brag about it!

Jerry