6/22/2009 9:45:00 AM Great time to buy a home in Verde Valley Foreclosures, short sales still impacting market
Camp Verde's Beth Adams, president of the Verde Valley Association of Realtors, says foreclosure sales are priced at market value and the lenders want them off their inventory.
"The inventory is incredible," said Carol Anne Warren of Adobe Group Realty in Old Town Cottonwood. "We have so many houses for a buyer to choose from."
Warren says interest rates are at a 30-year low and homes are priced right. "The sellers are very, very negotiable," she said. "It's totally a buyers' market.
"We have three kinds of houses for sale," she said. The first is the normal type sale that everyone has been used to for years. The second is a foreclosure sale in which the lender owns the home being sold. The third is a short sale.
"A short sale," Warren explained, "is when you owe more on your house than we can sell it for today."
She said short sales can be a nightmare, for two reasons. For one thing, the seller is upset and may feel betrayed. But going through a short sale will likely be better for the seller's credit. The second possible problem is that the lender must agree to allow the seller to walk without paying the gap between what is owed on the house and what it's sold for.
"The seller has to qualify for a short sale the same as when they bought the house," Warren said. "They must prove that they can't afford to pay the gap."
She said banks are not equipped to deal with short sales. "Their advantage (to a short sale) is that it costs, on average, $50,000 to foreclose on a house."
Warren thinks the real estate market in the Verde Valley is showing signs of improving. "People want to live here," she said.
"Every realtor in the Verde Valley has a list of 100 buyers," Warren said. "But those people must sell a house somewhere else. Once that starts to move, then the dam will break."
Warren said the federal stimulus package has down payment assistance included that doesn't have to be paid back, and it includes an $8,000 legitimate tax credit.
"It's not just first-time homebuyers right now, it's anybody," Warren said. "I took my youngest son by the ear and told him 'you're buying a house.'"
Warren warns that for people who are waiting for home prices to go lower, the current interest rate of about 5.25 percent may be as important as the price of the house.
"If they've ever thought about buying a house, now is the time," Warren said.
Beth Adams, president of the Verde Valley Association of Realtors, and associate broker with her husband, James, of Desert 2 Mountain Realty in Camp Verde, says foreclosures are an important factor in home sales now in the Verde Valley. "They are a large percentage of the sales that are happening now," she said. She says foreclosure sales are priced at market value and the lenders want them off their inventory.
Adams said that during the past six months in the Verde Valley, 395 homes have sold, including condominiums, single-family dwellings and manufactured homes. Of that total, 169 were foreclosures.
Foreclosure sales are not necessarily more complicated than a regular home sale. "What is complicated is getting through what the bank requires," Adams said. Sometimes mortgage companies want a separate contract. "But you can close on a foreclosure property in 30 days."
Although sales of foreclosures and short-sale homes have had a big impact on the Verde Valley home market, Adams feels that influence, if not lessening, is at least leveling out.
"I haven't seen a big decrease or a big influx," she said.
One of the big advantages of buying a foreclosure property, according to Adams, is that the "potential for a really good deal" is there.
"But there are quite a few pitfalls," she said. The buyer must take the property as is, and there likely won't be any disclosure from the mortgage company. "You can get a good deal, but you must exercise due diligence.
"You really have to be careful," Adams said, " but there are some really nice properties out there.
"It's not scary," she said. "If you're in a position to purchase, it's a really good time to go out there and buy."
The perspective from the lending side of the real estate business seems also to be positive on the current home buying market.
Shelly Collier, a loan agent for Northern Arizona Mortgage Corp. in Cottonwood says the market is pretty active. "I'm very busy right now," she said.
She thinks she is actually seeing signs of a rebound in the housing market because the choices in the inventory are staring to narrow. She said the market needs to get the foreclosures out of the way. "I see a lot more people getting off the fence."
Collier said that unless the lender makes a special stipulation, foreclosures don't really affect the mortgage company. Short sales, she says, can take longer to get approved. But once a foreclosure or short sale gets to the mortgage company those loans are processed in the same time as a normal sale.
"The buyer will typically come to me to get pre-qualified," Collier said. That's true whether they are looking to buy a home through a normal sale, foreclosure or short sale.
"These days it's imperative that buyers have a loan-status report," she said. That's true for all types of home purchases but especially for a foreclosure or short sale purchase. The loan-status report shows that the buyer has been pre-qualified with an application and credit report.
The current reality Collier says is that there are loans available. "There are just a lot of programs out there," she said. There are conventional loans with 10 percent down, FHA loans with 3.5 percent down, and VA loans with various requirements.
"There's a great deal of options out there for buyers," she said.
The federal stimulus package includes the $8,000 tax credit on first-time homebuyers, for anyone who hasn't owned a home during the last three years.
The Verde Valley qualifies for the United States Department of Agriculture's Guaranteed Rural Housing program. Collier explained that that program mirrors the first-time buyers' program in that the buyer must intend to reside in the home. The program has mortgages with 100 percent financing available.
The program is based on the median income within the county where the transaction will occur. In Yavapai County a family of up to four could earn a combined income of $73,600 and qualify for the USDA loan.
Collier says that interest rates are hovering around 5.25 percent on a 30-year, fixed-rate mortgage. "There are good deals to be had out there."
She said financing is available for most people.
Contact Warren at Adobe Group Realtors in Cottonwood, (928) 634-1099 or (928) 300-9031.
Contact Beth Adams at Desert 2 Mountain Realty in Camp Verde, (928) 567-6990 or (928) 821-3289.
Contact Collier at Northern Arizona Mortgage Corp. in Cottonwood, (928) 634-4251 or (928) 300-0166.
Reader Comments
Posted: Wednesday, June 24, 2009
Article comment by:
No name provided
Why do reporter keep quoting a realtor??? They are sales man/woman. What do you expect from them?? The truth?? How many times have your hear them say: "Now, is the best time to buy a house"??
Why do you think they are always pushing people to buy a house? Because they care about your well being?
Hint: (6%)
Posted: Tuesday, June 23, 2009
Article comment by:
Ria Rhodes
"(She said) the market needs to get the foreclosures out of the way."
The ten thousandth time this has been repeated.
"(Shelly Collier, a loan agent for Northern Arizona Mortgage Corp. in Cottonwood says) the market is pretty active. "I'm very busy right now.."
Really? How many residential mortgages have you taken to completion in the past four months?
In the immortal words of the NRA's Mr.Yum, "It's a great time to buy!"
ha ha
