Real Estate Agency Disclosure & Election

Phoenix Arizona Foreclosures. Phoenix Arizona Bank Owned Homes. Phoenix Arizona Real Estate.

Phoenix Arizona Foreclosures. Phoenix Arizona Bank Owned Homes. Phoenix Arizona Real Estate.

How to buy real estate (bank owned homes, foreclosures, pre-foreclosures, short sales), in Phoenix, Glendale, Peoria, Surprise, Buckeye, Avondale, Goodyear, Paradise Valley, Scottsdale Arizona. Or the Valley of the sun.

Provided by Daniel McCarthy 623-628-7372
View Bank owned homes at www.buy623.com or email: dan@buy623.com

I am writing this for you; the potential real estate buyer in Arizona; this is an explanation of what you can do working with me as your real estate agent or any of the other 50,000 real estate agents in Maricopa County Arizona. This is a guide for you the buyer, to get the best service and the best experience when you are buying a foreclosure or bank owned home in Maricopa county Arizona, Phoenix, Glendale, Peoria, Surprise, Buckeye, Avondale, Goodyear, Paradise Valley, Scottsdale Arizona. Or the Valley of the sun.

I think many people have dreamed about owning their own real estate business and I think that many people have dreamed of just owning a business period. At a young age I was very ambitious, I have always been very money driven. I remember shoveling driveways for money when most kids were having snow ball fights. I was cleaning out my father’s apartment complexes with gloves and mask on from the time I can remember. I remember helping my uncle john out with his construction business summer after summer, while working other jobs. I remember a time when my uncle said to me when I was 17 “you are the hardest working person I have ever worked with”. Well folks I am writing this to tell you I have worked just as hard in real estate and I have paid my dues. I have worked hard at learning the business. I have had my bumps and burses. I have spent/wasted a lot of stress trying to get ahead in real estate. That is why I feel like it is time for me to give a business update of who we are, and explain why I am so passionate, and relentless about mastering real estate. I am now to the point where 8 months has gone by since we have opened the only residential real estate office inside Wal-Mart, in Peoria Arizona. We made that move for many reasons that I will discuss later. We have sacrificed the church, the vacations, the family time, the wife and I alone time, the relaxation time, and I have done it all for you, the potential client. Now I am not taking this opportunity to say “oh poor me”, I am writing this for you to read and to understand what you can do to have the best experience buying a bank owned or a foreclosure home in Maricopa County Arizona (Phoenix, Peoria, Glendale, Surprise, Avondale, Buckeye, etc..). I promise I can help you get the best experience.

I just want to reiterate something; I am writing this for you the potential real estate buyer in Arizona, this is an explanation of what you can do working with me as your real estate agent or any other 50,000 real estate agents in Maricopa County Arizona. This is a guide for you the buyer, to get the best service and the best experience when you are buying a foreclosure or bank owned home in Maricopa county Arizona.

Sometimes when I am blogging I feel like I am in an abandoned house after a large nuclear attack and all that is left is a few real estate agents trying to pick up the pieces. Ok maybe the last statement was not the best analogy, but what I am trying to say is our real estate market was hit hard by many different problems. Bad lending practices, bad appraisal practices, bad real estate practices. If you were not aware of what happened in the real estate industry I will give you a short explanation. In 2004, 2005 the prices of real estate climbed so high because people were able to get into financing options that were very dangerous. When those loans became due, the homeowners could not get out of them.   Now the money is shifting back into the banks hands and the money is shifting to different banks completely. Lenders are closing the doors. Other lenders are growing and making money hand over fist. There is more to that story of the 2004-2005 real estate market but that is not what we are discussing today.

The last paragraph was very short and is meant for readers who have an idea of how bad our real estate market is and how are real estate market got in this position in the first place. Now I am going to move on for you readers out there that are trying to buy some of these homes. The first thing we need to do is evaluate how pre-educated you are as a home buyer.   I am going to list a series of questions and I want you to answer them honestly, and then continue to read.

Are you a first time home buyer? Have you ever purchased a home in Arizona? Have you ever purchased a bank owned home? Have you ever bought a bank owned home in 2008? Have you ever bought a short sale? Do you know what a short sale is? Do you know what your first step should be before thinking of looking at any homes? Do you know how real estate agents get paid? Do you know what the true benefits are of owning a home? Would you remove a cavity from your mouth? If somebody offered you 1 million dollars to design a bridge to support 100,000 cars a day would you do it with no prior knowledge of building a bridge?

Next I am going to explain the answers to these questions and I would like you as a potential home buyer to read them, I am spewing from my heart here (that was corny).

Are you a first time homebuyer?
If the answer to this question is yes, you have to understand what you are getting into. As a first time homebuyer, more than likely you are very nervous and see buying a home as a huge undertaking. You see this as a burden and your stress level is high from the things you have heard in the news and from co-workers. Buying your first home is important, it is important for your future, and it will give you the opportunity to invest in your future. Here is why. If you buy a home with a 30 year fixed mortgage, if you do not sell or re-finance you are going to own a piece of real estate in 30 years that could potentially be worth 2 to 3 times what you bought it for. But let’s just imagine that your home decreases in value after 30 years. Guess what? You own it free and clear, and can sell it for whatever it is worth. Don’t worry about owning a home, people do it all the time. Owning the home is not the problem it is what terms you own it for. Meaning that owning a home is amazing for your financial well being, but what you have to do to own your home could cripple you.

Have you ever purchased a home in Arizona?
If the answer is no to this question please read on, coming from New York, I can assure you owning real estate in Arizona is much different, especially in Maricopa County which is Phoenix, Glendale, Peoria, Surprise, Buckeye, Avondale, Goodyear, Paradise Valley, Scottsdale, etc… Arizona real estate puts a lot of responsibility on the real estate agents. Having a real estate agent in Arizona is imperative. In Arizona the use of an attorney is not mandatory. We use title companies and they act as the mutual third party in a transaction. Going off on a tangent for one second can I ask you the reader a question? If you were a company and a client came to you and said I am going to hand you so much work your head will spin, you are going to make more money now then you ever have. Would you feel loyal to that person or company? For example when buying a bank owned home, the bank decides what title company you have to use. The banks happen to use the same title company over and over. DO you think that Title Company wants to help you as the home buyer who they will never work with again, or do you think that Title Company would like to impress that bank that is bringing them deal after deal? I am not insinuating anything; I am just expressing my concern over the relationship I am starting to see between title companies and banks.
Now that I am done with that I am going to say one more time, consult a real estate agent when buying a home, bank owned or otherwise, in Arizona.

Have you ever bought a bank owned home?
Good question. Bank owned homes or cooperate owned homes make up a huge amount of inventory on the market. If you have never bought one before I can tell you that it is a different beast. When buying a bank owned home in Arizona, you are going to be playing by a different set of rules. I look over a bank contract every day. None are exactly the same. This is not like filling out a contract on your terms. The banks own the homes, they need them off their books, they price the homes to sell, and you have to play by their rules or they will find somebody else who will. I know the banks rules and I understand what they are trying to do. I understand that these banks are taking loses that are unfathomable. Bank owned homes have different contracts, different penalties. In closing, I am not suggesting that bank owned homes are a problem for you the home buyer. In many cases the banks have been much better to work with then the homeowners themselves, but I as a real estate agent I have paid my dues, I know what the banks want to see. I have built relationships with many of the bank real estate agents, and they know that when we are working with home buyers it is a good deal. I know how to help you buy a bank owned home in Arizona.

Have you ever bought a bank owned home in 2008?
Banks have a lot of inventory in 2008. They are having meetings everyday about how to handle selling these homes, while salvaging the most amount of money. Once again, this is not a bad thing it is just what is going on right now. These people know in 2008, home buyers are having a harder time getting financed. They now that oil prices are climbing so more foreclosures are coming. You have to understand that the real estate market is a complete mess that will not be figured out until it is cleaned up. In the future I will promise you that many people will be talking about the 2005-2010 real estate market.

Have you ever bought a short sale?
Buying a short sale is much different than buying a bank owned home. Short sales are tough to understand because you are working with the bank even though they do not own the home. If you have bought a short sale, and you wanted to buy another your experience, I can guarantee, would be much different. What I am trying to say is buying a short sale can be hard work, and no two short sales are the same. If you have not bought one, and want to know more about buying short sales call me please I can give you the run down.

Do you know what a short sale is?
So you like to read and you didn’t go looking for my phone number after that last paragraph, let me just tell you what a short sale is. A short sale is when a homeowner needs to sell due to foreclosure, or because they are in need of relocating, but owe more money against the home than what it is worth in today’s real estate market. For example let’s say you bought a house in 2005 for 200,000, and today it is worth 140,000. What are you going to do? Unless you have 60,000 dollars to give to the bank, you are going to want to short sale. Short sales are very complicated. Short sales involve a lot of paper work and patience. If you are looking to buy or sell short sales, please consult a real estate agent (preferably me).

Do you know what the first step should be before thinking of looking at any homes?
Let me make this easy for you. You are thinking of buying a home, the thought crosses your mind. First things first, you need to understand what the pros and cons are for buying a home for your short term and long term living standards. Are you trying to buy a home to life in for the rest of your life? Are you trying to buy a home to sell in a few years, in hopes of buying something bigger and better in the short future? Here is my suggestion, buy a home if it fits this criteria: If you had to you could life with that home for the rest of your life. Why I am suggesting this is because you do not want to buy a home with the intentions of selling it, you want to buy a home to life in and own as part of a long term financial wealth. If you own a home already, and you want to establish a portfolio of real estate that is a different concept. Buying an investment home is an undertaking. You have to be willing to roll with the punches and I still suggest no matter how sweet the deal is you determine if you could comfortably own that home for the rest of your life. Real estate is a long term agreement, unless you are buying the property cash. Unless that cash is being leveraged from another investment that you do not own, and then again buying real estate is a long term agreement (depending on where the cash is coming from). If I didn’t lose you there here are the steps: Determine short and long term goals. Determine what you are comfortable paying for a home month after month. Determine if you have enough money saved to cover that monthly payment in the event you got injured or something dramatic happened in your life. Talk to a bank, loan officer, or mortgage broker about the amount of money you qualify for and have that person or corporation determine if you are completely qualified for a home loan. Interview and contact multiple real estate agents. Discuss and really talk to your real estate agent about your goals and have that real estate agent give suggestions. Listen and discuss real estate agent suggestions. Have your real estate agent educate you on what to expect when buying a home, bank owned, short sales, everything. Discuss what the real estate agent has told you about the buying process. Go buy a home and have fun!

Do you know how a real estate agent gets paid?
Most real estate agents in Arizona work with a great system called ARMLS (Arizona regional Multiple listing service) otherwise referred to as MLS (Multiple listing service). Real estate agents that use MLS are referred to as Realtors because we are also guided by a higher set of rules, and follow the code of ethics. Realtors are granted access to MLS by following these rules. It is a privilege to be a realtor in Arizona, not a right that you have as a real estate agent. Realtors get paid like this.
John Doe wants to sell his home. He calls a realtor and signs an agreement for that realtor to sell his home. In the agreement John Doe signs and agrees to pay a percentage of the sales price to that realtor when the home sells. That realtor than typically as a service for John Doe would put his home on MLS (MLS is computer based) for the world to see. That realtor would include the amount of compensation for the realtor representing the buyer for that home. So if you are a home buyer, and you think you are going to save money by just calling a realtor who has the home for sale, I would suggest you understand that the realtor representing John Doe is trying to sell his house. If the agreement is signed for that realtor to sell john does home for a commission, it does not change. That realtor representing John Doe gets all the commission. Also it is dual agency, which is a different story all together. Do you think he has your best interest in mind? I suggest working with a buyer agent because most of the time it is free and most, not all, buyer agents can save you money when buying a home. For example: I had a young couple, first time home buyers who fell in love with a home I showed them. They wanted to buy it. We drafted up an offer and sent it to the home seller and real estate agent. We drafted the offer lower than the asking price. The home sellers counter offered us back and the buyers were ready to take the deal. But I smelt something funny; I could tell that the home owner would take less money. So I suggested that we send another counter offer. Guess what my intuition was right. The homeowner took our counter over and I saved the buyers a lot of money (thousands). Now you are a home buyer. You love a home. You want a realtor who knows how to play the game. I get my hands dirty with my home buyers. I love the negotiation. I will draft an offer where ever you feel comfortable (as long as you respect my opinion and take my advice). Tell your realtor if you love the home. Do not buy a home you do not love!

Do you know the true benefits of owning a home?
Owning a home has a lot of benefits, financial and mental. Buying a home can save you money on your taxes (please ask your tax advisor); you can actually invest every month into something you can sell much higher. What a great concept. Also it feels good to walk outside in your backyard, or clean your garage. Do not take offense to that if you do not own a home because trust me you can life without the feeling, but it does feel good. It is a great way to benefit from something you have to do. Meaning you have to life somewhere, you need a roof over your head; it feels good knowing it is an investment.

Would you remove a cavity from your own mouth?
Good question, no you would go to a dentist, so when you are buying a home remember it can be painful, find somebody that knows how to make buying a home a painless experience. Consult a professional.

If somebody offered you 1 million dollars to design a bridge to support 100,000 cars a day would you do it with no prior knowledge of building a bridge?
When buying a home you may not feel like you are building a bridge but you are. Buying a home is a bridge to your future and short term financial goals. Do you think you could build a bridge? Because you may not be supporting 100,000 cars, but you will be supporting your family, which can feel like more pressure than a few cars. Do not build a bridge, contact a professional to help.

If you have gotten this far you are tired, bored and hungry (or at least I am hungry) and you do not want to read any more. I do not blame you, I am tired of writing. Press on I am going to close this up and what I am about to write is important.

I have paid my dues.   Not just me though. My wife first of is also a realtor whom without her, none of this would have been possible. We have both sacrificed too much time and too much stress (which you can tell by me looking older than I am) in helping people buy and sell real estate in Arizona. She seen a vision and still pursues it every day. She (Lexi) is always there and works harder than anyone I know.    My brother who has tried, and succeeds at becoming something he is not which is a public servant (just kidding mike, I know you love this job). Also all of my team mates, broker, and friends who have watched us work all day every day, and helped beyond imagination.

We are ready for your business in 2008, we know who is selling, we know how to handle bank owned homes and foreclosures, and we do it every day. In addition we are building something the likes of which have never been seen before in real estate. For the last 8 months we have set our office inside Wal-Mart the largest retailer in the world. The reason for that move is to build a real estate team that will spread to other Wal-Marts with the purpose of convince and innovative marketing for our clients. When you decide you want us to sell your home, we are inside Wal-Mart (store #1533) 65 hours a week, and that is mandatory from Wal-Mart cooperate. We love this for our clients because you can see us and get us face to face practically anytime you want. Also there are thousands of people who can see your home for sale inside our office by just walking by. Take that Remax (just kidding Remax has some great qualities).   If you decide you want us to help you buy a home, once again we are there 65 hours a week, come in and see us, talk to us about the market, look at MLS with a actual real estate agents. If you buy a home with us come on in and talk to us about what is going on in your transaction anytime.

In closing the point of this blog was to help you as a potential home buyer or home seller make the transaction stress free, simple, easy, whatever. I cannot answer for every real estate agent, but I can tell you we are trying everyday to make your transaction better. We are ready for you to trust us as your real estate agent.

Long winded,
Daniel McCarthy

Daniel McCarthy
Branch Manager/Realtor
Metro North Realty
7975 W. Peoria Ave.
Peoria AZ, 85345

Office: (623)776-2353
Mobile: (623)628-7372
Fax: (623)321-1316

Website: www.buy623.com

Office Hours:
Monday - Saturday: 8:00 AM - 6:00 PM
Sunday: 12:00 AM - 5:00 PM

"Smart people know other smart people"

Blog Entry 02/23

REO Packages, bank compilers, and how it works. (Purchasing bank owned homes in compiled packets (buying in bulk) at an enormous discount).

Provided by Daniel McCarthy - 623-628-7372 dan@buy623.com
First things first, if you are reading this information below and you are interested in talking to a bank compiler about REO packages or if you represent a real estate investor looking for a REO packet give me a call. In this information I am discussing my experiences in Maricopa County Arizona.

Once again thank you readers for your emails and phone calls; it is what makes me continue to write. The subject I am discussing today is REO packets, or buying a package of REO homes for a substantial discount. Many people are talking about them. It really is a great concept. I would like to share my experiences excuse the spelling and grammar.

I would first like to explain how I stumbled across REO packages, then I am going to explain some of the terms involved with the process in my own words. In the past I have worked with really great real estate agents in Maricopa County Arizona. I have built relationships with some realtors during the transaction so good, that our friendship has lasted after the transaction was over. Well sure enough a very good friend of mine introduced me REO packages and explained the process and the people involved. I immediately recognized the potential in this opportunity. I also recognized the importance of good information to potential investors and/or realtors due to the nature of this investment. This type of investment in real estate does not come around to often. Imagine buying 100 homes at 63% value, or 200 homes at 50% value (just examples not exact). There are minimum dollar amounts involved; there are hurdles to jump in order to get your buyer in front of the bank compiler. However it is out there and it is done.
You have to imagine this from the banks prospective; at this point it doesn’t matter how or why they have all of these homes, they have to sell them. If you had 10 palm trees would you rather sell each palm tree one at a time for $1.00 over a 1 year time frame, or would you rather sell all the 10 palm trees at $0.60 cents in a few days. In addition you have a new shipment of palm trees every week that need to sell in order for you to get your pay. Maybe a bad analogy but I think you get the point. Time is of the essence for these banks. They have to get the money back in their hands.

A few terms involved with buying a REO packages are: compiler, packages, packets, BPO, appraisal, LTV, proofing up, NCND, REO, exit strategy, and the last term I would like to explain is chain of middle people involved (for lack of better terms). Before I explain these terms in my horrible grammar filled blog, please note that I am not implying that I am a bank complier I am just sharing my experiences in this area and also mentioning that I do have access to some more detailed information on this subject so I welcome your further questions.

Bank Compiler: A bank complier is the person who actually group’s a large number of bank owned homes in a package for an investor. The investor does work with the compiler to put a package together, after going through a series of obstacles. The bank compiler does not want to work with people who are not qualified and they need to show they are qualified to purchase a REO package. In many cases investors are looking for REO packages in Maricopa County Arizona, most compilers from what I understand can sell REO properties nationwide.

Packages or Packets:
A REO package or packet is exactly that; a group of REO homes, usually discounted for bulk purchase.

BPO:
BPO stands for broker’s price opinion. It is different from an appraisal because it is conducted by a real estate broker not a lenders appraiser. A BPO should give a realistic price of what a piece of real estate should sell for in that market. Due to the sharp increases and decreases in the real estate market, I would suggest a BPO is not good after about 30 days. When selling your home for example in many cases a bank appraisal is not the best way of determining what you should sell your home for. A BPO should give you a good estimate of what your home could sell for. For buying an investment home or in this case buying multiple investment homes in a packet, it is important to have a BPO conducted on the homes you plan on reselling to know the true value of the property.

Appraisal:
As mentioned in the last section an appraisal is conducted by an appraiser. I think this is where many consumers are confused. An appraiser typically just ensures to a bank that a potential home buyer or homeowner attempting to refinance has a property that is worth the amount of money the customer is going for. If you buy a home and you are planning on financing the home, your lender will conduct an appraisal. Buying a home for investment, or a package of homes you do not want to know what the bank will lend for that home, you want to know what the piece of property can sell for. Finding a good potential selling price for your investment would best be determined by a good BPO (by good BPO, I mean conducted by a cautious broker who knows that BPO means selling the home at that price). Both an appraisal and BPO are conducted to help determine the value of a piece of real estate. I do find however that due to increasing information on the internet your own research is important, sometimes your own insight is just as good as a professional.

LTV:
Loan to value. This term can be used in different instances. In my experiences I generally discuss LTV when making an offer for a home buyer. I would mention to the realtor that the buyer I am working with plans on having 80% LTV, which would mean my buyer is putting 20% down on the home. In Maricopa County as of Quarter 1 of 2008 must parts of our county is labeled as a declining market which means lenders need 95% LTV to approve the loan. Let me explain I am a realtor I am not a lender, I can help direct you with a lender but I do lend money myself.

Proofing up:
This is a term used when trying to work with a REO complier. In must cases the REO compiler would like to see you have the funds to actually purchase a bank owned package of homes. The complier does not want to work with a buyer who can not show they have the cash avaible to buy a REO Packet. Proofing up is when the buyer proofs to a third party attorney they do in fact have the money at their discretion. Think about it, if your job was to sell a bulk REO package at 35 million dollars would you want to spend your time with someone who can not perform.   Proofing up is one of the steps required by the compiler in order for the investor to actually talk directly to the compiler.

NCND:
Non Competition Non Disclosure. An agreement by all party’s involved leading from the investor to the complier. The NCND is designed for the chain of people involved getting the buyer and the seller together, intended to recognize that no one entering into the agreement will share or go around anyone on the NCND in the future. This is to protect the middle people involved, ensuring compensation for putting the deal together.
For a copy of an NCND you can email me at dan@buy623.com

REO:
Real estate owned. Jargon which represents cooperate or bank owned homes. When referring to bank owned homes many people use the terminology REO. For example when discussing bank owned packets you would have better luck researching REO packets, or REO packages.

Exit Strategy:
You just purchased 70 pieces of residential real estate and now what do you do. You have to sell the homes and make maximum profit. A good exit strategy would include working with a team of aggressive real estate agents, attorneys, and lender’s depending on the state you purchase your packet in. If you would like information on an exit strategy for investing in REO packages in Maricopa County Arizona (Maricopa county included Phoenix, Peoria, Scottsdale, Glendale, Surprise, Buckeye, Gilbert, Paradise Valley and much more) give me a call.

Chain of people:
The chain of people I am referring to is the people that get the REO investor to the bank compiler in one piece. This is where it gets tricky, but don’t let it get confusing, if you know an investor looking to make a good return you should find them a compiler or someone who can get you and your buyer to a compiler. Compensation is involved for the chain of people coordinating the investor meeting the compiler, because there is some work involved and without the middle people there would be no transaction.

Ok so now that we know some of the terms involved with buying a REO package let’s talk about it. From my experiences most REO packets I see are a minimum of 10 million dollars. 10 million dollars can buy you a group of homes at close to the .63 cents on the dollar range. This means an investor would own a group of homes at 63% value which could then be resold at 75%-80% value to consumers fast. The typical CD yield is about 4% with an REO package you are discussing a 12%-15% return fast. Good opportunity to make money and provide homes at a good value to home buyers. There is a due diligence period involved to inspect each home, and that is part of the buying process for the investor. For more information email me at dan@buy623.com

Blog Entry 02/21/2008:

Buying a bank owned home in Maricopa County. (Peoria, Glendale, Phoenix, Scottsdale, Paradise Valley, and much more)
Provided by Daniel McCarthy 623-628-7372 dan@buy623.com

I feel compelled to write about my experiences because I hope someone could benefit from this information in “this market”. By the term “this market” I am discussing buying a home in Maricopa County in Quarter 1 of 2008. In case you are not aware of the changes that are taking place in our market I will explain in further detail throughout this blog. Maricopa County is in Arizona (Maricopa county holds Peoria, Glendale, Phoenix, Scottsdale, Gilbert, Surprise, Buckeye, El mirage, Anthem, Paradise Valley, and much more). Thank you for your emails and phone calls, if you would like to talk to me directly please call or email. Our website is www.buy623.com

Welcome to the valley of the sun; we have amazing weather and notable beauty all year round. I do believe however the real estate market is going through a very large transition. As you may know home prices have been dropping and there are many reasons why. Reasons for falling prices are: to much inventory, foreclosures, and financing cracking down (I am going to explain all three).

I promised earlier an explanation of “this market”, and what sums it up is a real estate cycle. We went up, up, up, and then we went down, down, well you get the point. Now we have to determine if in fact it is the right time on the real estate cycle to purchase a home?!? First and foremost do not take my word for it (that is my disclaimer). If you are not comfortable buying a home right now you would have good reason. You hear on the news: recession, depression, bank owned home, foreclosures, bond programs, first time home buyer programs, etc….it is confusing. This market is not as confusing as it is made out to be, but it is important at this point in time you listen and work with a licensed real estate agent. That last sentence sounds like a sales seminar but it is not. It is imperative you discuss your real estate goals with a realtor, and listen to their advice, trust me I am in “this market” everyday, I have good advice.

Too much inventory:
You have bank owned homes, short sale homes and many home owners just trying to sell. Nothing wrong with any of them but they all have different obstacles to overcome through the point of purchase offer, to COE (close of escrow). Due to the amount of properties that the banks must sell, the amount of pre-foreclosures, and homeowners looking to move; you have a lot of sellers.

Foreclosures:
Many people are facing foreclosure in Maricopa County. It is a terrible dilemma. Imagine you just bought a home and in 2006 and now in 2008 the home value has dropped 50% from when you purchased the home. By the way the adjustable rate mortgage you have is going to adjust soon. Why keep the home? There is no incentive. You are losing money every month. So many people have to give their home back to the bank due to many different circumstances. If you are reading this please understand many just bought a home at the wrong time in the market. Also I want to stick up for real estate agents; we didn’t know this was going to happen! We did not know house prices could drop this fast it is not in our job description. We have to protect you through the process we are not fortune tellers (for lack of better terms). I apologize for putting it to brash but we do not like this problem (can’t speak for everyone but I am sure some feel the same way). Not to point fingers but I would bet that the bank appraisers have had something to do with this rapid increase and decrease in home values, they do determine that.

Last financing crack down:
Where were the banks in 2004 and 2005? Home prices were peaking and it was happening in Maricopa County on a monthly basis. How can one justify a home appreciating 12% a month in some areas? In the banks defense, I did witness home buyers purchase homes regardless of appraisal. Getting back to the present market the banks have buckled down. They are getting their hands dirty with home buyers, making sure they can obtain and afford the home loan. Which is a good thing; unless you are a buyer hoping that buying a home is easy. They want more money down due to new regulations, and they are getting into peoples history to ensure they will not foreclose in the future.

So now we have a glimpse of why the market is the way it is, I would like to discuss buying some of these different kinds of homes on the market.

Bank owned homes:
Once again I am discussing Maricopa County, Arizona. Let me paint a picture for you. You have been looking for homes for a few days, you have been completely pre-qualified and you fall in love with a bank owned home. Good price and great home. The key is to only look at homes you can buy. You do not want to look at bank owned homes that have contracts on them. Also many bank owned homes are priced low, so you have to be ready to go through some hurdles to actually get it under contract because many home buyers are going to be looking at it fast when it is priced low. Many homebuyers for one home could increase the actual sales price of the home, which means it could sell for more then asking price. Next many banks are not willing to fix any repairs no matter the extent of the property damage. So you are buying a home as-is in most cases. So knowing all of this (must be ready to buy, must make sure it is available, buying it as-is) you must be ready to move. To summarize you should not even look at bank owned homes unless you are ready to buy and are fully capable of going all the way through it. You have deposits, fees, and most importantly time at risk. Take your time, find a lender of your choice, have them explain their fees and have them get you fully qualified. You have to be fully capable of obtaining a loan and comfortable with the payments prior to trying to buy a home.

Short Sales:
Many people do not understand the term short sale. Short Sale is when a home owner prior to foreclosing is trying to sell the home with the bank, the bank agreeing to take less money than what the home owner owes against the house (that is a mouth full). It helps the seller for credit history and allows them not to go through a foreclosure. The hard part is getting the banks to agree on a price and get them to agree to a contract, which is getting better because banks are getting use to this issue of short sales. Banks have to conduct their own BPO (broker’s price opinion) by a hired real estate broker and ensure they are not selling a home in a short sale to low. Which leads to a vicious cycle; banks trying to get the most money for their homes while trying to make sure the home buyers are not borrowing to much money for a home. Moving forward buying a short sale once again is important to be finance ready, and ready to compete with other home buyers. Make sure the home is not sold or pending before looking at it. If you want it get ready to be aggressive to buy the home. Once again in many instances short sales are priced really low to get an offer fast, so be ready to compete with other home buyers.

Home sellers trying to sell (not short sale or bank owned homes):
Home sellers are scared they are losing equity and they wish they could have sold at the height of the market. Many now have to lower prices to compete with bank owned homes and short sales trying to sell fast. This leads to frustrated sellers, and they are not happy about money they have lost. Make sure you purchase the home at the price you feel comfortable with. It is fair to say that if you are completely qualified, and you want the house; you are a strong offer, regardless if you think the home value is less than what the sellers want. Just be careful if you do not play your cards right you can be out bided by another home buyer. It is important once again to make sure the home is available before you look at it.

To summarize real estate in Maricopa County is complex. Case in point, in the past month I have had home buyers completely qualified have issues such as: appraisal coming in to low, mortgage insurance turn down after full bank approval, being out bided on dream homes, dealing with escrow company’s with too many bank owned homes in escrow, etc…. I could go on. If you want to buy a bank owned home in Peoria, Glendale, Phoenix, Surprise, Buckeye, Scottsdale, or anywhere else in Maricopa County call me so I can vent and I promise you will gather some good information.

Daniel McCarthy
Branch Manager/Realtor
Metro North Realty
7975 W. Peoria Ave.
Peoria AZ, 85345

Office: (623)776-2353
Mobile: (623)628-7372
Fax: (623)321-1316

Website: www.buy623.com

Office Hours:
Monday - Saturday: 8:00 AM - 6:00 PM
Sunday: 12:00 AM - 5:00 PM

"Smart people know other smart people"

Daily Blog 02/12/2008:

Thank you everyone for reading my blogs, also thank you everyone for your great emails and questions. Once again if you are reading this and you have any questions about Arizona real estate, bank owned homes, short sales or selling your home give me a call or an email any time. What I would like to discuss today is bank owned homes (REO homes in Peoria, Surprise, Glendale, Phoenix, or anywhere in the valley). Many homes on the market are bank owned homes. Which in all reality is a very miserable situation; these people have lost their home for one reason or another. I feel it is important to help people understand why there are bank owned homes, and how we can avoid this in the future. Starting in about 2003 in the Phoenix area we saw a steady increase in population, employment and overall economic growth. Also during that time other parts of the country were experiencing rising house prices. Phoenix just happened to be the next great thing to investors who had made a killing in other parts of the country. With investors buying at a record rate, homebuyers started to qualify for more of a home with new mortgage programs (such as interest only loans, adjustable mortgages that adjust in 2 or 3 years). Supply and demand, house prices started to increase rapidly and at the height (2005) over 100,000 homes sold in the valley. Then as some experts say the bubble busted and home buyers started to dwindle. At this time many home owners wanted to cash out and sell at the height in the market which made the market turn to more supply and less demand. House prices fell faster then they climbed.

Next problem is the bank now have millions of adjustable rate mortgages out there and people can not refinance because the market value of their home has dropped tremendously. Why you cannot refinance is because the appraisal that is required by the bank will not allow the home to appraise for what the home owner owes on the home.

So people are stuck with a rising mortgage payment and no incentive to keep the home. That is when people started to give their homes back to the bank. REO homes have flooded the market and there are more to come. You can even buy REO packages of ten million dollars or more and buy the homes at massive discounts. So is it a buyers market? Will house prices continue to fall? I am going to attempt to answer those questions, but here is my disclaimer. I can not tell the future, so do not take my word as fact.

Is it a buyers market?

Yes and no.
It is a good time to buy because of the selection of homes on the market. On the other hand bank owned homes are not fun to buy. Banks sell their homes on their contracts and also in as-in condition. What that means to you is you’re buying a home as it is no repairs coming from the bank. Also banks are a lot more demanding. They will ask for more escrow money, less of an inspection period, no contingencies, etc…. I know the natural reaction when you read that is to say “well why not just negotiate a better deal for the buyers?” Well they price the homes so low, they know people will do whatever it takes to get them. What I tell all of my clients is if you want to buy a bank owned home, you better be ready to buy a home. Once you are in their contracts is hard to get out. Is it a good time to buy, sure but you better have a realtor, I promise you can get hurt without one in this market.

Are house prices going to continue to fall?

I do not want to answer this question. I would suggest that we look at the market history. If on average we gain a 3% a year in home appreciation, right now we are close to where we would have been if we do not experience what we experienced with the market boom. So I do not see us losing to much more value, but you never know. At some point you have house prices so affordable with a combination of fewer homes on the market it could clean up quick.

Once again do not take my speculation for more then what it is worth. I suggest this, if you want to buy a bank owned home, if you want to buy in a big REO market then make sure you buy a home you can afford and purchase the home with a mortgage you are comfortable with.

One last thing, the reason bank owned homes are so popular is their price. The banks usually put their homes on the market grossly discounted to avoid a long period of time on the market. This is why REO homes are driving the prices of our market down. My final thought for you is this: what is next? After the banks sell a majority of their homes and sellers owe more on their home then what it is worth, what are we going to do then?

I am excited to find out. No more coffee for me this morning. If you need to buy or sell a home please give us a call we can help.

Daniel McCarthy
Branch Manager/Realtor
Metro North Realty
7975 W. Peoria Ave.
Peoria AZ, 85345

Office: (623)776-2353
Mobile: (623)628-7372
Fax: (623)321-1316

Website: www.buy623.com

Office Hours:
Monday - Saturday: 8:00 AM - 6:00 PM
Sunday: 12:00 AM - 5:00 PM
"Smart people know other smart people"

Daily Blog 12/17/2007:

Unfortunately as of late we have been really busy, which has led to a shortage of blog postings. Recently as many of you know we have been featured in the Arizona Republic, and on many news stations, we are very thank-full to have this type of publicity. I will tell you that it has been very unexpected. I want to take this opportunity and explain our business move and why we decided that Wal-Mart should be our new home for our Peoria Arizona real estate office. I must say first I love Wal-Mart I really do, I always have. What a great concept force low prices to please consumers and have everything (and I mean everything) in one store. Basically Wal-Mart is doing so well because the consumers asked for it. Many people have a personal grudge against Wal-Mart for many different reasons, which is none of my concern. Wal-Mart practices business under the laws of our land, if you do not like the way businesses are ran, take the issues to your local lawmaker.

We decided that we wanted a Real estate office in a Wal-Mart in early 2007. What a great idea. We get to show our listings for sale to more people, we get to attract more buyers, and all of our potential clients can come talk to a licensed agent 65 hours a week. We are trying to design a business model that will provide a corporate structure in a very convenient location. If you are reading this; we did this for you, we will try to expand if the numbers reflect that our business is growing and we are wanted in more locations. As you know there are many real estate agents, we are just a little different. Our new Real Estate office is located in the new Peoria Wal-mart supercenter 7975 W. Peoria Rd, Peoria Arizona 85345.

Daniel McCarthy
Branch Manager/Realtor
Metro North Realty
7975 W. Peoria Ave.
Peoria AZ, 85345

Office: (623)776-2353
Mobile: (623)628-7372
Fax: (623)321-1316

Website: www.buy623.com

Office Hours:
Monday - Saturday: 8:00 AM - 6:00 PM
Sunday: 12:00 AM - 5:00 PM
"Smart people know other smart people"

Daily Blog 12/04/2007:

In today’s blog, which I am going to try and make short and sweet, I am going to go over a interesting topic that I feel is very important. In addition to this very interesting topic; I will be adding a new daily routine, the new daily segment will be called I fought the law and the law won. In the new, I fought the law section of my blog I will take an Arizona real estate law or contract segment and explain it in simple terms and to the best of my ability.

As I stated, the main topic for today is very interesting and it should be noted that many people have taken the opportunity to talk about this subject before. I will do my best not to turn it into a sales pitch. Picking your Arizona real estate agent is extremely important . I will be the first to tell you that I am not the most experienced real estate agent, I am not the oldest and I have not been in the business the longest….In addition to that I work for a small real estate firm. I always have. Metro North Realty is very small and we do not have a million real estate agents. The reason that I choose to hang my real estate license with Metro North Realty is not very complicated. I am a control freak. I have learned some lessons the hard way. The point of today’s blog is to justify why readers should not just pick a real estate agent based upon the firm that they work for. I have all the respect in the world for large real estate firms, I think it is also important to note that some of the best real estate agents I have ever worked with have worked with large real estate firms. Unfortunately, I have also worked with many real estate agents that worked for large firms that were….. not so great. Before I continue it is extremely important to understand I am not discussing the legal and contractual duties a real estate agent shares with a client, you must take the time and talk to your real estate agent about contracts, things to expect during escrow and what kind of knowledge they have. How does your real estate agent work with other real estate agents and how the real estate agent represents you while you’re buying a house or your home while he/she is trying to sell that home. For example: You are interviewing john doe and he is extremely smart, he knows every word of every contract….but as you are interviewing with john you hear him take a phone call from another real estate agent. Here is a transcript of this example phone call:

John Doe (who is a the sellers real estate agent): Hello this is John
Jan Doe (potential buyers agent): Hi john my name is Jan with Jan doe real estate I would like to show your listing on Elm Street

John Doe: Great if you would…… call the sellers on the MLS listing and let them know you would like to see the house.
Jan Doe: Ok Thank you

John Doe: Great Thanks
Jan Doe: Thank you bye.

Now that is a sure sign of a problem. The day that your house hits the real estate market starts a race to get you the best offer in the least amount of time. I do not know the exact percentage, but a majority of homes that are bought involve two real estate agents…. right. A real estate agent for the buyer and one representing the seller. Well that would make that other real estate agent a co-worker. Thus leading to an important part of your home selling (drum roll) good working relations with your co-workers. If I were the buyer’s agent in that phone call I would have taken nothing away from that conversation with John. John sounds very cold and maybe even a little busy. Even though you are busy it is still your job to represent that home to the best of your abilities. Those little phone calls are what separate the good agents from the busy agents. Ok went on a little tangent. So when you are shopping for your agent keep it simple. Try these steps:

1.) Talk to your potential real estate agent about his/her experience in today’s market (what are you doing now, not 5 years ago).
2.) You may not like this type of personality to hang out with……….. but he/she cheerful, full of life and happy to be an agent.
3.) Talk to your potential real estate agent about the worst things that can happen during a sale and what they do to avoid them and or fix them.

Now those three are just a start, I have worked with people for 6 months before they fully committed their business to me, I respect that. Word of advice do not just go with John Doe because his name tag says Remax, C21, or Coldwell banker….That is like not picking Steve Nash because he doesn’t work for the Lakers (You get my point).

I fought the Law and the Law Won

Yeah, ok I get it, your perfect you never make mistakes at your job, your perfect and never screw up….When practicing real estate as an Arizona real estate agent if you make a mistake it could be very costly to the agent, the client and anyone else involved. I have started this new section of my blog, I will taken portion of the Arizona real estate law book, AAR contracts or anything I feel important to Arizona law and explain it to the best of my ability.

Arizona Association of Realtors: Form RPC 5/05
Residential Purchase Contract
Section 1g: Line 28 – 48

Fixtures and Personal Property:
This is the section of the contract that tells you what is staying and what is going. Refrigerator, washer and dryer for example are items which may not be including in the sale of the home. When this part of the contract is being filled out it is important to understand that if you see something that is in the house that is attached to the house, make sure if you want it, you have it in writing in the contract. Last time I checked there are many different types of refrigerators and if you have the word refrigerator in black and white does that legally mean the refrigerator you are in love with or the old one they replace it with last minute.

Spotlight Subdivision

I have a good one for you today, in phoenix you have many suburbs, surprise Arizona is a big one. Surprise reached 100,000 people faster then I eat a big mac.
One subdivision in surprise Arizona is West point. West point has a wonderful feature and it called location. WestPoint subdivision is in Surprise Arizona and was built between 1995-2000 (Or close to it) . If you would like the details of who the builders were in West Point give me a call. If you would like information on School districts in Surprise Arizona give me a call. This is a big subdivision and is too much to type about.

Daily Blog 12/03/2007:

I have a feeling that this blogging concept is not going anywhere, so I would like to formally throw my hat in the ring (for lack of better terms). From this day forward I will blog every day, once a day, on my feelings on the phoenix real estate market, provide insight on what I am reading about the phoenix real estate market, I will also provide a daily special on a valley subdivision and give detailed information about that subdivision and lastly I will provide you with my personal experiences. I will try to keep it real estate related and legible, no promises I am not known for grammar.

First let me start with a disclaimer, I like home ownership and I think that it is a great opportunity for everyone. The reason I believe that is peer logic. If you purchased your first home at the age of 30, paid the home off with a 30 year mortgage, at the age of 60 years old you would own a piece of property and owe nothing on that home. Now let’s say at 30 years old you purchased the home for 200,000 and you experienced an annual appreciate rate of just 1%.
1% a year (which is below yearly average appreciation) you would gain over 60,000 dollars equity after 30 years (which is a conservative estimate). At 60 years old you have no mortgage on a piece of property that is worth 260,000; pretty good nest egg for just paying for a roof over your head.

Lets move on; Phoenix Real estate is like no other because Phoenix is paradise. The weather is great, the culture is wonderful and our football team is…well we have a great basketball team. It is unfortunate however the recent turn of events in our country and local real estate market. At the end of 2004 and the beginning of 2005 (January, February, March) there was a dark cloud over the Phoenix Real estate market. A dark cloud of investors and a flood of home buyers that had better then ever interest rates and amazing new mortgage programs. It was a frenzy and because of supply and demand and market rumors during the following months home prices in some phoenix and surrounding area subdivisions increased dramatically. Plain in simple people were buying homes at inflated prices. It was no one’s fault that this happened it is very hard to predict the future. Three years later we have a struggling market, remember those new mortgage programs, well they should have been banned. Remember house prices jumping in some places 75% over 6 months time, yeah those bank appraisers should be banned. So here we the investors are gone, those banks with great new programs are starting to feel the pain of giving someone a payment of 1,500 dollars one month and adjusting it 2 years later (great idea). So what is the forecast? My answer is who knows!! I think everyone needs a place to live and If you live there long enough in a comfortable mortgage you can do alright in this market. I would warn when buying a house; it’s like marriage, except it cost a lot more to get rid of (doing some homework on your new home loan is important).

SPOTLIGHT SUBDIVISION:
So….on to our daily spot light subdivision. A very close subdivision to our new office, oh yeah which by the way is INSIDE the new Peoria Wal-Mart (we like to be different and exposing your home to lots of people on foot is a good way of doing that), a very nice subdivision located in wonderful Peoria: Bridlewood.

Bridlewood:
Improved Lots: 339
With Pool: 119 (35.1%)
Year Built Range: 1995 to 1999
1 story: 289
2 story: 50
Elem School: Cheyene Elementary
Jr High School: Cheyene Elementary
High School: Peoria

Summary: I must admit that I do enjoy Fulton homes, who was the builder in bridlewood. The homes were built in the mid to late 90’s and they still have a great exterior appeal in my opinion. As of 12/03/2007 12:00 PM there are 8 homes for sale in bridlewood ranging from the low 200’s to the high 300’s. Great location and great pricing. If you would like more detailed information on bridlewood or any other greater phoenix Arizona subdivisions give me a call.

Daniel McCarthy
Branch Manager/Realtor
Metro North Realty
7975 W. Peoria Ave.
Peoria AZ, 85345

Office: (623)776-2353
Mobile: (623)628-7372
Fax: (623)321-1316

Website: www.buy623.com

Office Hours:
Monday - Saturday: 8:00 AM - 6:00 PM
Sunday: 12:00 AM - 5:00 PM

"Smart people know other smart people"

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