Entries Tagged 'Consumer Resources' ↓

Since the real estate boom of 2003-2005 the Tucson real estate market has been flooded with homes going into foreclosure, short sale homes, and bank-owned homes. Many consumers aren’t completely clear on what a short sale is, but the easy explanation is this: Whenever you are trying to sell your home for less than what you owe on it (your mortgage), it is considered being short, or a short sale.

Why would a bank want to accept less than what you own on it? Well for the same reason that banks are in the banking industry: to make money! The average foreclosure process (notices, paperwork, court proceedings, publications in the local newspapers) costs a bank on average $50,000! That isn’t including the market value loss from the house, just the cost of actually processing a foreclosure.

You can understand why banks are much more receptive to a short sale than a foreclosure (in most cases).
In many cases banks will be more open to renegotiating terms of a loan (forbearance, principal reduction, loan modification) instead of accepting a short sale.

A homeowner in distress should always call the lender first if you are having trouble making payments, or foresee trouble making payments in the future. National foreclosure statistics indicate too many homeowners are not calling their lenders for assistance and are instead falling into foreclosure.

Believe me, the banks don’t want you to lose their home and they will try hard to keep in your house.

Stay tuned for:

• Tucson Short Sales - Part 2 - I’m Ready to Short Sale My Home.. What Are The Repercussions?
• Tucson Short Sales - Part 3 - The Offer Is In To The Bank
• Tucson Short Sales - Part 4 - End Game Short Sales

If you would like to search the Tucson MLS for Short Sale, Bank-Owned, or Foreclosure homes, search my Tucson MLS or contact me for a comprehensive list.

If you would like assistance in avoiding foreclosure I can help you also, feel free to contact me for a no-cost consultation.

Good Morning everyone, the Tucson Association of Realtors, (TAR), has released the Tucson Housing Market sales statistics for May 2008. Here is a summary of the important points:

Sales Analysis

Average and Median Sales Price Decreases
Average and median sales price both decreased in May 2008. Average sales price declined to $250,803- down 9.98% from May 2007 and down nearly $6,000 from last month! Median sales price also declined nearly 10% from May 2007, ending up at $201,000.

Active Listings Decline
Active listings were at 8,527 units in May, a decrease of over one thousand active listings from May 2007. With summer season in swing this decline is perfectly normal.

Days on Market Rises Again
Average time on market continues to float near our highest level in several years with 77 days the average DOM for May 2008. By comparison, the DOM in May of 2005 was only 29 days!

It appears that Tucson is over the worst of the housing slump for now, with active listings down from their high of over 10k in March/April of 2007. Pending contracts are up to their highest level since June of 2006 which indicates a rise in market activity. From what I’ve seen on the MLS the past few months, there aren’t nearly the same amount of foreclosures or bank-owned homes in Tucson as there were several months ago. I have no doubt short sales and foreclosures will be around for quite some time but it does not appear to be as prevalent as it was before.

So there you have it, Tucson real estate news for May 2008. If you have any questions or are in the market for a home in Tucson please feel free to contact me on my Tucson Real Estate website!

To view the past market statistics report visit my Tucson Real Estate Statistics Page.

In today’s Arizona Daily Star, there is an article about the final gasp of the De Anza Drive-In to make way for another big-box “Power Center”. A short excerpt:

A developer is finalizing a deal to buy the De Anza Drive-In, at 1401 S. Alvernon Way, and has already started marketing it as a retail complex.

Evergreen Development Co. is calling the project De Anza Crossings, a 20-acre retail “power center,” in marketing materials distributed by Picor Commercial Real Estate Services.

Gregg Alpert, Evergreen managing principal, declined to say when he expects the sale to be final, saying only that it would be “later this year.” As far as Alpert knows, De Anza Land and Leisure doesn’t have plans to keep running the theater after the sale, but “we would be open to it,” he said.

Good Morning everyone, the Tucson Association of Realtors, (TAR), has released the Tucson Housing Market sales statistics for April 2008. Here is a summary of the important points:

Sales Analysis

Average and Median Sales Price Decreases
Average and median sales price both decreased in April 2008. Average sales price declined to $253,729 - down 8.91% from April 2007 and down nearly $6,000 from last month! Median sales price also declined nearly $30k from April 2007.

Active Listings Continue Declining
Active listings have declined since January and in April 2008 stood at 8,808 units. With the summer season coming up we should see a slight rise in inventory.

Days on Market Rises Again
Average time on market continues to float near our highest level in several years with 78 days the average DOM for April 2008.

Tucson is feeling the final repercussions of the housing market decline and credit crisis. All market indicator bearings are in the red and the sole statistic that is on the rise is the Days on Market! All of this points to the Tucson market finally coming to terms with the events of the past few years and sellers who are finally realistic about the value of their home.

As I wrote about last year (Tucson May 2007 Housing Report), a large part of the inflated market that seemed to exist in Tucson were the homeowners who still believed that they could fetch top dollar for their homes like they could back in 2004-2005. Once it became apparent this was not the case homes began to fall off the market and/or were priced more realistically.

Foreclosures and short sales continue to have a place in the Tucson market but it certainly seems that these two issues are not nearly as rampant as they were in the better part of last year. Perhaps a sign of things to come?

So there you have it, Tucson real estate news for April 2008. If you have any questions or are in the market for a home in Tucson please feel free to contact me on my Tucson Real Estate website!

Everyone is familiar with the term “paying points“, but do we really know what this is and the different effects it can have on a mortgage loan? Traditionally, this means paying 1 percent of the dollar of the loan amount in order to get a lower rate. This is commonly referred to as “buying down the rate“.

Here is an example. The Jones’ family purchases a home for $300,000 and puts 20% down. The loan balance is $240,000. The current rate on a 30 year fixed loan is 6.25%. Financing $240,000 for 30 years at a fixed rate of 6.25% makes a payment of $1,477 (principle and interest). Suppose the clients decide to “buy down the rate”. In this scenario, paying .00625 of the loan balance upfront ($1,500) will lower the interest rate by 1/8th of 1%. The payment is now $1,458, a decrease of $21. Quickly dividing the $1,500 by $21/month gives us a breakeven point of just under 6 years.

Translation: If you think you will stay in the house more than 6 years, it is worth paying points. This assumes you have the cash and are willing to spend it this way. Another option would be to pay 1.25% of the loan amount ($3,000) upfront to lower the rate by ¼%. This has the same payback period as the first option, but it requires twice the cash out of pocket as well as lowering your payment by twice the dollar amount on a monthly basis ($42).

The opposite of this is taking a slightly higher interest rate in order to pay your closing costs. In this scenario using the same $300,000 selling price, the client has just enough money to put 20 percent down but not the closing costs. (FYI, putting 20 percent down allows the client to avoid paying mortgage insurance. This insurance protects the lender in the case of foreclosure if the amount the lender receives from the sale of the property is less than the balance of the loan.) Anyhow, instead of 6.25% interest, the client elects to accept 6.5% interest.. In this scenario, this would allow the mortgage company to rebate roughly the amount of all of the closing costs and prepaid items to the seller as a credit on the settlement statement, thus saving precious “cash out of pocket”!

These are just a two examples of what can be done to save money or reduce the buyer’s cash investment when a home is purchased. Paying points can be a good way to reduce your monthly payments and for folks who have less cash to put into a transaction, getting the mortgage broker or the seller to pay closing costs can sometimes make the difference between making a deal or not. I recommend speaking with your mortgage professional in order to find out exactly what options are available and what makes the most sense for you.

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Patrick Randles is a guest contributor to Tucson REblog and gives an insider’s view on the mortgage industry. He is a Mortgage Loan Consultant with El Conquistador Mortgage in Tucson, Arizona. Patrick can be contacted by phone (520-850-7485) or email. Feel free to post any questions for Patrick!