Frank Hanson’s Blog

With the real estate market heating up we are facing a time when appraisals haven’t caught up with the market.  It seems we go through this once in a while with rapid market changes.  We saw it happen in 2005 when prices were rapidly rising.   Buyers were willing to pay more for a home than comparable properties had sold for just the month before, however, appraisers did not have enough facts to justify the new price and we ended up with low appraisals.  

When this happens there isn’t a lot you can do other than just work through it.  Some appraisers will start adjusting for the current market conditions, appraisals will rise slowly, facts will change, and the appraisers will have new data to work from to justify increased prices.

It seems the Federal Housing Administration can’t make up its mind on the use of the $8,000 first time home buyer tax credit as a down payment.  First it could not be used for down payment purposes, then they devised a plan where a buyer could access the money and use it before receiving it by executing a loan, then they withdrew that plan saying it was not acceptable.  Well, now there is word that the $8,000 may be able to be used for loan costs and other fees.  At this point lenders don’t seem to have a firm grip on what exactly can or can’t be done.  Stay tuned for future development. 

The Phoenix area, affectionately known as “The Valley Of The Sun”, is a great place for those from colder climates to escape to in the winter.  Market conditions in the Valley are great right now and summer is an excellent time to search for a bargain price on a second home to use for that winter residence.  Condominiums, townhomes and patio homes are very popular among those who come to the Valley in the winter because the exterior of the property is often cared for by a homeowner’s association.  Also, for a minimal fee you can usually have someone care for the interior of the property during the off season by entering the home, running the dishwasher, the garbage disposal, flushing the toilets, and just generally checking on the home.  Condominiums in Scottsdale, as an example, that sold new for $250,000 to $350,000 in 2005 are now selling for the bargain price of $90,000 to $120,000.  For more information on properties for sale visit my website at http://www.frankhansonrealestate.com .

The active listings in Phoenix and the surrounding communities continues to dwindle.  Since the first of the year the number of active listings has dropped by about 20,000 units.  There are currently 34,340 properties for sale on the Arizona Regional Multiple Listing Service.  The number of closed sales each month has been averaging in excess of 9,000 units.  That means it would take a little over 3 months to sell the inventory we now have.  That absorption rate at the first of the year was above 10 months.  Prices continue to remain steady for now but increased demand could cause prices to rise slightly in the near future.  If you are in the market for a home visit my website at http://www.frankhansonrealestate.com .   

With interest rates at their lowest level in the last 30 or 40 years there is a rush to refinance as well as to purchase a home.  Meanwhile, lenders have cut staff in order to cut costs.  This combination has made for slow loan processing.  Also, underwriters, the people who make the decision to lend or not to lend, are scrutinizing each loan more closely.  They are asking for more and more documentation after the loan has been submitted to underwriting, therby delaying the loan approval process.  The last 5 closings I’ve had have been delayed because the lenders were unable to get the loan approved and closed on time.  It seems we have delays no matter which lender the buyer uses. 

If you are purchasing a home make sure to allow extra time for your lender to process your loan when you are writing the possession date in to your purchase contract.  Also, make sure you get all your documents to your loan person in a timely fashion.  If you are selling a home be aware that you may have to extend the closing to accomodate the buyer.   For more information or to find that perfect home visit my web site at http://www.frankhansonrealestate.com

The real estate market is heating up in the Phoenix area.  We are experiencing multiple offers on properties.  In the case of multipe offers sellers are countering buyers by asking them to submit their “highest and best” offer.  Buyers are given one chance to make their final “best” offer.  Whoever submits the best offer on the second go around gets the property.  When put in that situation buyers often are not sure what to do.  As a buyer you want to make your best offer but you don’t want to offer any more than necessary to exceed the highest offer on the table. 

In a “highest and best” situation consider using an escalation clause in your offer.  In other words, offer $1,000 more than any other offer up to a certain amount.  That way you won’t offer too much and you still have the best chance of getting the property.  Make sure to have a provision in your offer that requires the seller to show you the other offer you are beating so you can document the price they offered.  Also, specify that the other offer must be an arms-length transaction.    

The latest word on the $8,000 federal tax credit is that officials at the Federal Housing Administration have reversed their decision to allow a loan against the tax credit to be used as a down payment.  The tax credit is still available to qualifying first time home buyers, they just can’t use it as part of their down payment. 

It never ceases to amaze me when I call an owner whose home is listed for sale to schedule a showing and they give me a hard time.  Also, there are those listings that say you must make an appointment with the seller to show the property and then you can’t reach the seller.  Accessibility is the most important factor in selling your property.  Yes, price is very important but it doesn’t matter how well the property is priced if no one can see it.  It could be in pristine condition, staged perfectly, in the best location, but if a buyer can’t get in to see the property chances are they won’t buy it.  The ideal situation would be to have a lock box on the door so agents can call and if you’re not home use the lock box to gain entry.  I understand there may be extenuating circumstances where it may not be possible to show the home but the general rule of thumb - make it available! 

For most of my adult life I have had the habit of letting the hot water run in the shower for a few minutes before entering to give it a chance to warm up.  However, I have always felt a little guilty for waisting the water.  About a year ago a friend told me about a hot water recirculating pump that was easily installed in the water line at the hot water heater.  The system requires electricity so you have to have access to an outlet near the water heater.  The other part of the installation requires a loop in the piping that circulates water back to the water heater.  The materials to install the loop are provided with the pump.  I installed mine in about 30 minutes and didn’t find it that difficult.  I feel better now that I am not waisting the water and I like the convenience of having instant hot water at all my faucets. You can purchase the hot water recirculating pumps at your local home improvement store or on line for about $185.00.  To find a great home to purchase check out my web site http://www.frankhansonrealestate.com 

The latest figures from the Arizona Regional Multiple Listing System have shown that the Valley’s real estate market continues to heat up with the temperatures.  The number of active listings has dropped 15% over the last month while the number of closed sales has increased by nearly 30%.  The number of pending sales (those properties under contract and just waiting for closing) has also remained strong at about 14,000.  This would suggest that the closed sales figures should continue to increase in the future.  We are seeing multiple offers on properties while buyers scramble to take advantage of bargain prices, low interest rates, and the first time home buyer $8,000.00 tax credit.  If this activity continues it could soon begin to have an upward influence on prices.  Our supply of homes has dropped from an eleven month supply at the beginning of the year to below a four months supply.  It’s a great time to buy a home in the Phoenix area.  To search for great properties visit my web site at http://www.frankhansonrealestate.com