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January 2016 Newsletter

by Toril Sells Houses Team

Credit DON'Ts

by Toril Sells Houses Team

Credit DON'Ts

To keep your credit rating as high as possible, DON'T do the following:

  1. Don't apply for several credit cards in a short period of time. Looking for new credit can indicate higher risk and lower your credit score (most often the FICO Score). However, if you're applying for a mortgage or an auto loan and multiple lenders ask for your score over a short period of time, it shouldn't be affected. These are seen as a single inquiry.
  2. Don't move your debt around. The best way to improve your credit score is to pay down your revolving credit instead of moving it around. Actually, owing the same amount on fewer accounts may lower your score.
  3. Don't close unused credit cards to raise your score. Closing an account doesn't make it go away. It still appears on your credit report and may be considered in the credit score.
  4. Don't open several new credit cards you don't need, to increase your available credit. This can backfire and wind up lowering your credit score.
  5. Don't quickly open lots of new accounts if you're starting out. New accounts lower your average account age, which isn't good. Rapidly adding accounts also looks risky for new credit users. Take it slow.
  6. Don't open new credit card accounts just to have a better mix. It won't raise your credit score and may even lower it. Only open new accounts as you need them.
  7. Don't think closing an account makes it go away. Closed accounts still show up on your credit report and may be factored into your score.

Please contact us about these topics or any other questions about your home financing. We want to put together the perfect mortgage solution for your special situation...and best wishes in this and all your endeavors!

Fannie Mae Purchases Their Own REO Mystery Buyer Snaps Up Foreclosure Homes

by Toril Sells Houses Team

A few days ago, 275 foreclosure houses across metro Phoenix were purchased through a very quiet $34 million cash deal. But it's not clear yet who the buyer is.

In February, Fannie Mae announced it would auction 2,490 foreclosure homes in Phoenix, Atlanta, Chicago, Florida, Los Angeles and Las Vegas. It was the first time the government-owned mortgage firm agreed to openly sell groups of foreclosure houses located in just one metro area. Since the crash, Fannie Mae and Freddie Mac usually have sold homes they get back from lenders one by one, or in bulk with houses located all over the country.

Several buyers were interested in the Phoenix houses Fannie Mae was selling. Originally, 341 in the region were to be sold to one buyer, according to the federal government.

The sale of the Fannie Mae foreclosure homes became apparent to data guru Tom Ruff of AZBidder on Wednesday night, when he tracked metro Phoenix's REO inventory -- homes taken back by banks that haven't been resold -- and realized it had dropped by 5 percent.

In the latest sales filings, he discovered that a group called SFR 2012-1 US West LLC, located at 135 N. Los Robles Ave., fourth floor, in Pasadena, Calif., purchased 275 foreclosure homes from Fannie Mae that day. Each deal was individually recorded. Fannie Mae's Dallas office is listed as the seller.

More research shows the buyer is an LLC created by Fannie Mae.

Fannie Mae declined to comment. But a source close to the deal said Fannie Mae is transferring the properties to an LLC that the winning buyer will invest in through a private placement deal.

That means the actual sales of these homes may not be recorded in Arizona.

The Federal Housing Finance Agency, Fannie Mae's overseer, announced earlier this month that winning bidders in the foreclosure auction had been chosen, with transactions expected to close early in the third quarter. But it didn't release names.

Before February, to get 10 foreclosure homes in Phoenix, an investor might have gotten a bundle of 30 in Detroit, five in Kansas City, two in Los Angeles and one in Boise, Idaho. Most of those are not foreclosure hot spots like Phoenix.

Now that foreclosures have slowed and metro Phoenix's median home price has climbed more than 30 percent in the past year, fewer deals are available for investors. To get 275 foreclosure homes without having to individually bid on each would be a coup if the houses are priced right.

Here are few examples of the 275 Fannie Mae foreclosure houses that sold individually on Wednesday: $265,000 for a Queen Creek house; $78,000 for a Scottsdale condominium; $59,000 for an El Mirage house; and $458,000 for a Peoria house.

Most of the 275 homes are leased.

The way the sales are being handled could be problematic for the Valley's housing market because the deals could be used as comps, and its not clear yet what the winning investor will actually pay for the houses. Ruff is pulling the sales from his data so they don't skew the area's median home price.

Reach the reporter at catherine.reagor@arizonarepublic.com.

Homeownership ~ The American Dream Part III

by Toril Sells Houses Team

In the last two posts, we've talked about the American dream and its benefits, but how ready are you to help people make their dreams come true? People contact you because they want something better, but you have to be able to get them through all the nervousness and fear created by the conflicting news in the media. You do this by effectively explaining everything they need to know about the market and the benefits of homeownership. Now, it's not about convincing them to buy, but giving them the knowledge to make an educated decision for themselves and their families.

If you go back to 2002, everyone wanted to buy a home, and we wanted everyone to be able to get a mortgage in order to buy a home. Unfortunately, we went too far in that direction and people who were not ready for homeownership entered into it. But there are times when we go too far in the other direction - when qualified people aren't entering into homeownership. It's up to you to give good advice so people don't get caught in either situation (wanting a home they can't afford or thinking they can't achieve homeownership). Be a counselor - educate them with the heart of a teacher. Explain to them that if prices are going up, they should buy before prices go up even more and if prices are falling, they shouldn't necessarily run away from the idea of owning a home.

NAR has a Home Affordability Index. This index measures whether or not a typical family could qualify for a mortgage loan on a typical home based on price, mortgage interest rate, down payment and ratios to debt. Know what the current numbers are and be able to explain them to others. You see, if prices are falling, affordability is getting better.

There's cost vs. price and you have to be able to look at the overall picture. Maybe the time to buy a home is in a difficult market. You shouldn't be worried about price; you should be worried about cost. Cost is determined by price and interest rates. If the price falls but the interest rates go up, then cost may be greater. The price may sound good, but interest rates impact the cost in different ways. Even if prices fall, they would have to fall 10% to make up for just a 1% increase in interest rates to get the same mortgage payment.

At times, people are afraid to buy and may think they're doing the right thing by renting. Let's take a look at the rent vs. buy situation. According to the Consumer Price Index, prices for rent of a primary residence have increased at an average rate of a little more than 3% per year for the last ten years. Experts are projecting rents to increase by 5% annually over the next few years. If you buy a home with a 30 year fixed mortgage and you don't refinance, you know what your payments will be for the next 30 years. There are no surprises. And, at least for now, homeowners enjoy significant tax savings if they are paying mortgage interest.

The reason people buy homes is the same generation after generation. It's what Americans do. They want the best education for their children, the safety, the sense of community, and all the other benefits surrounding home ownership. They don't need the studies and statistics, but you need them so you can prove to people that their gut feelings are already good and that they should consider homeownership if not now, in the future when it's the right choice and possible for them.

People have fear when it comes to buying. This fear comes from not understanding and it can cause paralysis. It's up to you to make sure they understand these concepts. You are the guardians of the American dream. Make sure everyone who wants to achieve this dream has a clear path and you have the lantern to light that path with knowledge.

Homeownership ~ The American Dream Part II

by Toril Sells Houses Team

A major benefit to homeownership is community. There is a greater sense of community among homeowners than there is with renters. Studies have shown that homeowners have a higher participation in local volunteer activities; participate more in local political activities and organizations; have higher voting rates; and are more involved in self-help activities (like the PTA and neighborhood crime watches) than those who rent. Homeowners do not move as frequently as renters, therefore providing more neighborhood stability. This helps reduce crime and support neighborhood upkeep and value.

Let's look at homeownership as an investment. In 1998 the average Homeowner's net worth exceeded that of renters by 31 times. In 2001 it was 36 times and eventually in 2007 it was all the way up to 46 times that of renters. Even in these toughest times, the wealth of the homeowner is still over 30 times that of renters. Now, homeownership isn't about a guaranteed financial short-term return - the market goes up, down and back up again. We have to be prepared for the long-term and a key component to wealth is homeownership.  In Pew Research Center's The Home as an Investment Survey, 81% of Americans agree that buying a home is still the best long-term investment a person can make.

There's also the aspect of an educational investment. United States Immigrants all talk about home ownership because they want a better education for their children. It's proven that children of homeowners achieve greater math and reading scores, they have lower high school dropout rates, and more years of schooling by the age of 25.

Not to mention there's also a greater social network among homeowners than renters. You have a built in support system of neighbors and friends. You know the local merchants and they know you. You have that support system for you and your family - and it's there for life.

There you have it. You now know the benefits to homeownership and the American dream.

Homeownership ~ The American Dream Part I

by Toril Sells Houses Team

As a real estate professional, it's important to understand, and remind yourself, that homeownership really is the American Dream and your job is to be the guardian and guide to make that dream a reality. This is especially important in a market where some people may be misinformed about the benefits and possibilities of buying a home.

The good news is 96% of homeowners see homeownership as a positive experience and 88% of renters aspire to own a home. This is true in the United States more than any other country. Owning a part of our country has always been the American Dream and as an agent you are instrumental in this dream. It's your job to help guide people to their ultimate goal of homeownership.

The first thing you must realize is that homeownership is NOT about the money. In fact, if we look at Fannie Mae's quarterly National Home Survey, as far back as we can go, the top four reasons for buying a home are the same. The top four reasons people buy a home are:

1. It means having a good place to raise children and provide them with a good education

2. To have a physical structure where their family feels safe

3. It allows for more space for their family

4. It gives them control over what they do with their living space including renovations and updates.

Homeownership means something more to people and their families than just financial considerations. It's up to you to be ready to communicate ALL the advantages to homeownership, not just the financial ones.

In tomorrow's post, we will address more advantages of homeownership.

Sell Your Home FAST & Live LARGE outside!

by Donny Griffin

The real estate market is local. So if you want to sell your home fast, first find out how quickly homes at your price point are selling in your area. Then take these steps to speed up the process.

1. Ask Agents the Key Question. Ask prospective Realtors the average time their listings were on the market before they sold. Days on the market is influenced by the state of the market and the list price, but you still want to see who sold their homes the quickest.

2. Price It Right. If you want to sell fast, start off with an attractive price. Your home will stand out from homes that are listed unrealistically high. You’ll get more showings and more potential buyers.

3. Prep It Completely. Make your home look its best inside and out. Curb appeal counts. Paint the front door, pull weeds, plant bright flowers. Inside, put extra furniture in storage along with any clutter you can't throw out. Then clean the place thoroughly.

4. Shoot It Sharp. Once your home looks great, have your Realtor take lots of crystal clear pictures that show off the house and grounds. Keep cars, kids and pets out of the picture.

5. Stay on Top of the Marketing. Marketing is the agent's responsibility, but check up on the advertising and ask to be featured prominently.

6. Seriously Consider the First Offer. "The first offer is the best offer" – this is true more often than not. Unless the offer is preposterous, holding out may be just wasting time when you need to sell your home fast. Again, enlist the services of a professional and heed their advice!

LIVE LARGER OUTSIDE

Today, more people are upgrading their homes by creating outdoor living areas with more function, comfort and style. Here are four ideas gaining appeal around the country.

1: Outdoor Kitchens. Barbecuing is just the beginning. Outdoor kitchens can also include a stove, oven and small refrigerator so the cook has all ingredients at hand. Some layouts include sinks, storage cabinets and preparation areas.

2: Outdoor Dining Spaces. These can be covered with a weatherproof gazebo that can be hung with curtains and screens. Tables with durable glass or tile tops, along with matching chairs with removable cushions make an attractive patio. Fancy hammocks and "gravity" chairs are also popular. These living areas can come alive at night with special lighting, outdoor fireplaces, chimneys and gas-powered fire pits in a style to complement your home.

3: Waterworks. Fountains, self-contained waterfalls, small ponds and water gardens add the soothing sounds of water without costing a lot. But if pools are common in your neighborhood, adding one can enhance your outdoor living and might increase property value. But first find out about maintenance and other ongoing expenses.

4: Shade Trees. Outdoor living is always enhanced with the addition of a few large shade trees. They provide cool shade in summer and beautiful silhouettes in winter. Planted on the east side of the house, shade trees prevent morning heat and on the west and southwest sides, they stop heat buildup from the afternoon sun to cut cooling costs.

Displaying blog entries 1-7 of 7

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Toril Schoepfer
Toril Sells Houses Team
16150 64th St. E
Sumner WA 98390
1-253-826-7508
Fax: 866-743-3484