Jon Griffith, Certified Short Sale Negotiator

So you’ve been sitting on the fence because you think housing prices will continue to fall, right?  Bad idea, unless you can afford to pay cash for a home outright.  Why?  Because the amount of your payment is determined by the rate at which you borrow.  Here’s an example:

Buy a house today for $218,900 with 20% down and a 30-year fixed rate mortgage at current rates of roughly 5.5% and you’ll find yourself with a payment of about $994/month.

Let’s say you’d rather wait until the price of that home comes down to say, $197,000.  GREAT!  Right?  That’s $21,000 less today than it was a year ago.  But wait, the recession has ended and the fed has increased the rates to 6%,  a mere half percent higher.  Guess what your payment will be.  You got it, $994/month.

The home purchased at $218,000 today will cost you $182,000 in interest over 30 years for a total cost of ownership of $400,000.

If you wait one year and lose one half of one percent, that same home at $197,000 will cost you $182,000 in interest over 30 years for a total cost of ownership of $379,000.

$400,000 – $379,000 = $21,000.

$218,000 – $197,000 = $21,000.

So now that we see that the difference in the total cost of ownership is the same as the difference in sale price, what difference would it make to you whether or not you wait a year.

How much money are you going to waste this year on rent?  How much is a year worth to you?  How important is your time and how are you going to feel one year from today when you’re still stuck in a rental that you can’t truly make into your own home?

The bottom line is, waiting for the price of a home to fall may cost you more than you know.  Why wait?  Buy now.

Friends and Family, I am urging you to consider the demise of down payment assistance programs which will make it very difficult for new home buyers to own.  Currently the down payment assistance programs will be eliminated on October 1st, 2008.  This means that if you have not made an offer on a home and received approval for funding from your lender, you will lose the opportunity to purchase a home with nothing down.

Imagine you’re a first time home buyer with no money. You’re paying $1100 every month for rent, and you make your payments on time, all the time, but you have nothing in the bank with which to purchase a home. You know that renting is a waste of money and that you’re spending to make someone else wealthy but you just don’t know what to do.

Down payment assistance is your only hope. By purchasing a home that is approved for FHA Financing, which requires only 3% down, you can easily make an offer on a home with no money down by utilizing down payment assistance.

What is it?

It’s when you ask the seller to contribute a percentage of the sales price of your new home towards your down payment. The seller cannot legally contribute directly to your down payment, but they can make a donation to a non-profit organization which in turn can help you with your down payment.

It is still very possible for you to purchase a home with FHA insured financing, but you must move quickly and there couldn’t be a better time in history to purchase a home.

If you need help finding that perfect home, please call me (602) 312-3262 and we can get started before it’s too late.

What a buy!!! Just kiddin'...

It’s true!. We haven’t seen opportunities like this in years, and contrary to what the media is saying, this is one of the best real estate markets we have seen in a very long time. Why? Because sellers are desperate to get out of bad financial positions.

When mortgage companies began offering no interest loans with zero down and no proof of income required, a large portion of America decided it was time to buy a home they couldn’t afford on the hopes that it would continue to increase in value the way it had been doing in 2005. In order to get into those loans, they had to agree to outrageous lender terms and many of them went with adjustable rate mortgages without knowing it. Prepayment penalties, adjusted rates and higher monthly payments are what most of the distressed sellers are dealing with. Now that their rates have adjusted, they simply cannot afford the home that they really couldn’t afford in the first place.

With that in mind, the buyer has an advantage over the seller when negotiating a sale because the seller must get out, and short selling their home can be less damaging to their credit than foreclosure. There are a ton of properties on the market that you can get for a great bargain. Buy now, sit on your house for about 5 to 10 years, and you’ll probably experience a fantastic return on your investment. If you wait, you’ll miss out. Call me today to discuss your options. (602) 312-3262.

For years and years the real estate market has been up and down, up and down, a cycle that repeats itself every 7 to 14 years on average.  SEVEN TO FOURTEEN YEARS!!!  That’s long enough to start a family and have kids in elementary school AND high school.  Remember how long 4 years was when you were young?

Are you renting?  Are you living at home, just out of college?  Consider your options now because time is running out.  You don’t want to be someone who’s looking back

What is the market condition?

Today, the market is in distress.  We experienced unnatural gains in 2005 and as a result, we had our second bubble of the new millennium.  The first bubble was the outlandish condition of the stock market, a market where people invested in ideas, not in solid products.  The second bubble was the same but with homes.  People investing in ideas.  The idea that you could purchase a home for $100,000 and sell it for $200,000.  Some people were lucky enough to buy at the right time and sell at the right time, but nobody knew it was going to go down the way it has.

What do I mean when I say that the market is in distress?  In 2003, people were buying homes on adjustable rate mortgages because the interest rates were so low.  In 2005 as people saw the prices of real estate skyrocket, they did one of two things.  They either sold their property, or they pulled money out on interest only loans with adjustable rates to buy cars, boats, other homes (bad timing,) you name it.  A remodeling and new builds went nuts.  Those who sold probably had a legitimate reason to sell and weren’t doing it because they were fearful of a market bubble bursting.  Most of us asked the same question: “If I sell now, where am I going to go?”

Here’s why there is so much distress.  Those adjustable rate mortgages were typically 5 years fixed, then adjustable after that.  If you purchased your home in 2003 on an adjustable rate mortgage, then you pulled money out of your house for who knows what, you are probably experiencing hard times now because your mortgage has expired and has adjusted by around 2 points, and now you can’t afford your payment.  To top it off, your home is worth less than you owe the bank and you can’t pay.  Foreclosure is imminent, you must sell short.

Think of Owning as a Long Term Proposition

Before you own, understand that you need to come to terms with the way the market swings.  If you play the stock market and you have been successful trading short term trades, then perhaps you’ll do well managing real estate the same way, but if you cannot handle the swings, don’t buy real estate.  Buying today means owning for a longer time.

Owning a home builds long term wealth.  As you pay your mortgage, every month a little more of that house becomes yours.  Every year, on average, the value of your investment increases.  History shows that the market always increases over time, barring natural disaster or other completely unexpected anomalies.  Scottsdale is quite solid in its growth history.

What Does the Future Hold?

Nobody knows.  Isn’t that comforting.  The only thing we see are patterns, and right now, the patterns of the past tell us that even though our circumstances are unique compared to other times the market has been in distress, we are not spiraling towards our doom.  In 2008, the number of homes sold has increased.  In 2008, the number of foreclosed properties has increased.  By the end of 2009, when we have a new president in office, and people have cooled down, and interest rates have begun to climb, consumers will be more confident about spending, and more money will be invested in long term real estate holdings.

If you find yourself watching this come true and you haven’t purchased your first home by then, it will be too late.

Start looking today.  Downpayment Assistance is going away.  Think about ownership rather than preference.  Buy something! Find a home that might not be ideal and start building ownership so you can look back in 10 years and say, “Thank you…I am so glad you helped me begin building my wealth when you did, because I would have missed out.”

The world of Real Estate in Arizona is about shift.  July is a big month for the technically savvy agent because our property listing system is being completely overhauled.  But more importantly, it’s a big month for you because the system that you rely on to view property searches is being vastly improved.

Client Gateway is a clunky online system that allows you to see various properties based on searches that I have created for you.  Client Gateway will soon be a think of the past.  The new Flex MLS system enables you to login to a free online “Portal” to your property information.  Through this portal, you have far more information that Client Gateway could ever provide, and the system is much more efficient and responsive.  It’s also fun to use.

Rather than attempt to describe how it works or outline all of the features, I’ve included a link to a video tutorial that you can watch before you get started.

If you’re ready to begin searching for a home and you’d like to have your own personal portal login please complete the form below and I’ll set you up.

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