Why do I need to be preapproved to buy a home?

I often read HGTV's articles Frontdoor and love looking at the house make-overs and such. Often wishing I had the time to repaint a bathroom and decorate more.



One of the most recent articles that I thought was informative was the "Top 10 Home Buying Mistakes That Can Cost You" highlighting blunders that homebuyers commonly make.

The very first mistake is "getting prequalified" I believe is often a misconception for customers who are shopping for a home in Arizona for the first time. "Why do I need to be prequalified" is the first response. I think that many people feel this is a realtor ruse to push the customer into becoming locked into house hunting.

My most recent customer said they had credit issues and once resolved they would speak to a local lender in Arizona. The problem with this is they are waiting until just prior to wanting loan approval to speak to the lender. What happens if there are issues that they are unaware of? What happens if someone has placed something on their credit that doesn't belong there but they didn't find out until the last month before shopping for their Arizona "Dream Home"?

Most likely, this customer will miss the opportunity to purchase and receive the tax incentive that is being offered for homes under contract by April 2010. My job as an Arizona Realtor, as I see it, is to offer the best advise and help customers become fully approved and know what options are available for their new home.

This includes finding a reliable lender, getting fully qualified by having their credit checked and taking financial documentation to the lender. Once this is complete getting a good faith estimate of total costs involved in the purchase will keep the new prospective home buyer in the know and also give plenty of time for questions regarding such things monthly payment and total loan costs.

As it says on Frontdoor.com

"Why get your hopes up looking at $500,000 homes, when you can really only afford a $300,000 home? Before you start house hunting, narrow down your price range by getting pre-approved. Shop for a lender or mortgage broker you can trust. The mortgage pro will review your credit, income, assets and debts, and recommend a mortgage with monthly payments that fit your budget"

Investment Properties in Phoenix, Laveen, Goodyear and Surprise

What's it take to find great deals on investment homes in the Metro Phoenix, Glendale, Laveen, Peoria, Surprise, Litchfield Park, Avondale and Goodyear areas? I believe it takes dedication and time. If you invest the time in learning the market in these areas, going to homes, viewing prices, square footage and condition you will find some real bargains.

The problem is that there are a lot of investors looking for the same deals. You will want to use patience when viewing properties. When you find a great deal, have all your paperwork completed quickly and sent to the seller (which in most cases is a bank selling the property).

We've spent the last 5 days doing just that - looking and looking, comparing and bargain shopping for just the right homes, with the right prices and amenities.
We were looking in Surprise, Litchfield Park, Goodyear, Avondale and Laveen primarily and some areas of southwest Phoenix.

We decided right off to focus our attention on Bank of America, HUD, and Fannie Mae properties in those cities and avoid the short sale listings. Some investors will want to view all the homes and make offers on short sale homes. However, we decided to avoid short sales because we did not want to wait for responses from the lenders.

We looked at 3 and 4 bedroom homes focusing mainly on homes that would make good rental properties and also appeal to familes with children. Some homes were in really rough condition, while others needed only basics such as carpet and paint. One thing we noticed was how quickly homes were selling and that even on holiday week-ends properties where getting scooped up by investors.

There are bargain homes and bargain prices you just need to be willing to do the work to find them and be ready to purchase them immediately.

Renovation Loans are they worth the time and effort?

Right now, we are hearing more about the FHA 203k renovation loans. What are these loans good for and why are they being used more and more?

We are finding that these are becoming more popular with buyers for fix up homes that will not meet the general standards of a typical home due to needing repairs. These repairs are usually items such as needing a new roof, air conditioner, plumbing issues or flooring.

The normal FHA loan would require all of the above to be in useable condition before approving a loan on the home but with a 203k fix up loan the buyer can get a loan that includes funds to fix the home to meet the FHA loan standards.

Why is this being type of loan being used? I believe it's the low prices we are seeing on homes across the "Valley of the Sun". Buyers are realizing that it's not just the investors that can get a good deal on a bank owned fix up home.

With careful planning of repair costs and matericals it's possible to get a good deal on a home and have it in newly remodeled condition upon move-in. If you need further information contact us and we'd be glad to help.

Daily Donut: Oh No - We lost our Trashout Guy!

We actually had a home that had trash almost piled to the ceiling with a couch balanced on top. Our poor trashout guy couldn't believe it.

Arizona Short Sales -

Many Arizona homeowners have questions regarding short sales and what will happen during the process.

Do they need to quit making payments to qualify for a short sale?
How long is the short sale process?
What can I do if the home is not worth what I paid for it?
What if I am relocating for a job?
What if I have tenants in my home that I am short selling?
... and many other questions.

One of the main ingredients of a short sale is the hardship. Can you successfully document your families' hardship? Whether it's from job loss, sickness, cut-backs in wages, divorce or maybe you are being transferred to another job location making it so you have to sell your current home. You will need to explain any of these to your lender.

If prices have dropped in your neighborhood or Arizona subdivision you will need to have a realtor help you with values for the most recently sold homes to be able to present this information to your lender.

One of the problems with short sales in Arizona is that each bank is slightly different and every person you speak with at the bank will be different. There are no set rules and guidelines. Not all answers are cut and dried.

This leaves many people frustrated and many realtors feeling like they are banging their heads against the wall when they are trying to help a homeowner sell their home as a short sale. Make sure that if you choose to do a short sale the agent you are working with knows what paperwork you will need to present to the bank.

We can help to guide you through the typical answers to your questions and provide links for further information. Please be sure to talk to your tax representative or a lawyer when making critical decisions for your family.

Each situation is different for many reasons the lender, the loan terms (such as an 80/20 loan), do you have a second mortgage or a HELOC. Some second mortgagors will be more willing to negotiate while others will not want to settle for a large shortfall on their loan. This is especially true for a HELOC loan which is similar to credit card dept.

We want to help so please review some of the links and email us if we can answer questions for you. If you are considering loan modification or refinancing you can find information here.

Daily Donut:Watering the REO house

Arizona REO's - Finding a Good Deal.

How do you find a good deal on an Arizona Foreclosure Home?

This is one of the questions I am often asked because I list and sell bank owned homes in Glendale, Peoria, Goodyear, Phoenix, Surprise, Litchfield Park, Laveen and other Metro Phoenix cities. We even have bank owned homes in the outskirts such as Anthem, Chandler Heights, Rio Verde, Desert Ridge, Fountain Hills and Cavecreek.

After all, when you buy a home that has been foreclosure you do not get to talk to the former owner to find out about past problems like the leaking kitchen sink or termites that were treated last year. You have no information on the age of the appliances or if the heater barely works, and what about those cracked ceramic tiles? Are they serious?

So, how do you know you are buying a home that doesn't come with a lot of baggage? You really don't, but you can have the home inspected. Many of the banks that own foreclosure homes in Arizona will want you to take the time to have the home inspected properly.

Sometimes, there are short inspection time-frames and maybe you will want to do a pre-inspection on the home you are considering buying prior to writing an offer the the property. This can be especially true if there appears to be a lot of damage that could be very costly to repair, or a home that the bank states they will absolutely do - no repairs.

Once you have an initial inspection report completed, go over the report with both your inspector and your Arizona realtor. Ask them questions to help you determine what might be the problem areas with the home. Get further inspections as needed - such as an a/c inspection, or roof inspection. Check with local contractors and get an idea of the total cost of the repairs.

Crunch numbers on the repairs and if need be go back and re-negotiate the price of the home. We can help you work with the banks when presenting an offer on a bank owned foreclosure home or REO property.

If you have a realtor make sure the realtor who is representing you knows what they are doing and that they have the experience to work on selling fix up homes. Don't let your dream home become a nitemare home.

After all, living in Arizona you definately want your air conditioner working in top condition. The same is true of other systems with the home. If there is a gas heater have the gas company come out and check connects and do an initial inspection while they turn on the gas. Spending a little extra time inspecting a bank owned home could save you a lot of money in the long run and also help you to determine if you are getting a "Good Deal on an Arizona Foreclosure Home".

We have listed and sold bank owned, REO homes in the Metro Phoenix area and have overseen the repairs to homes in the Metro Phoenix, Goodyear, Scottsdale, Surprise, Peoria, Glendale, Gilbert, Fountain Hills, Litchfield Park, Tolleson, and Laveen areas.

As a first time buyer, the seller can help with down payment assistance and the renovation of the home can be built into your new home loan. This way you can get a "Great Deal" and a bargain price too.