Archive for July 6th, 2007

AZ Republic – Growing ciites lack Scottsdale’s cachet

Jun. 29, 2007 02:47 PM

Chandler crowed this week that it is finally, officially larger than Scottsdale. Excuse us while we yawn.

Bigger isn’t always better So the Census Bureau says Chandler is bigger than Scottsdale. Gilbert is closing fast. Big deal.

Sure, dropping to the state’s sixth (and within a few years, seventh) largest city may be a blow to the ego. It may slightly reduce Scottsdale’s share of shared state revenue. We might as well get used to it. Other Valley cities have a lot more room in which to grow.

But ultimately, size isn’t all that matters. Scottsdale has something Chandler, Gilbert and other rapidly growing Valley towns do not. When was the last time you heard someone say, “Hey, let’s go check out that famous chef’s restaurant in Gilbert” or “Let’s hike the desert preserve in Chandler”?

Never, you say?

Mesa, Glendale, Chandler and Gilbert are fine cities. But none of them has Scottsdale’s panache or a name recognized nationwide. None of them set aside one-third of their land area for preservation. None of them seek to balance an urban core with an expanse of semi-rural land where homes are restricted to one to five acres. Gawkers do not seek the rich and famous within their boundaries.

What those towns have to brag about are rapidly rising populations.

Congratulations. That’s an affirmation they are nice places to live. Just like the rest of the Valley.

But it doesn’t make them Scottsdale. That takes a lot more work, which the Census Bureau doesn’t measure. It doesn’t need to. When a city reaches this level, it knows it – because everyone else wants to emulate the place. New Heard Museum North open The new Heard Museum North opens today, putting another feather in Scottsdale’s cap.Heard opened its first branch, at the el Pedregal Festival Marketplace, in the mid-1990s. It’s been so popular it outgrew that original location, necessitating the move to the Summit at Scottsdale, 32633 N. Scottsdale Road.

It will gain enough space to have two exhibit halls, one long term and the other changing regularly. Pieces that otherwise would be stored at the main Heard Museum will have a place to be shown. For supporters of Indian art, this is a tremendous development.

The first long-term exhibit features jewelry, baskets, kachinas and pottery, some of which dates to the 1860s. The inaugural changing exhibit will feature 12 Navajo weavings.

The museum could soon have company north of Loop 101. Bill DeWalt is negotiating a site in Desert Ridge for the Museum of the Musical Instrument. The museum is the brainchild of Target Corp. CEO Bob Ulrich, who has donated much of the $100 million for startup costs.

The museum hopes to house 3,000 instruments, most from disappearing cultures, with video showing them being played. For a “wow” factor, there could be a room devoted to instruments used by well-known performers.

Both museums capture important aspects of culture – giving the Northeast Valley a new definition as a place to see and be seen.Finally, door opens for Ftn. Hills The Sonoran desert is its own attraction. Fountain Hills, like Scottsdale, has been foresighted in preserving portions of the McDowell Mountains. But unlike Scottsdale, Fountain Hills has had no easily accessible entrance into its preserve.Finally, that will change. The Town Council agreed to complete an agreement with MCO Properties that will establish a public trailhead at the end of Eagle Ridge Drive. Hikers will be able to walk through MCO’s property without prior notice.

It shouldn’t have taken this long. Preserving pristine desert isn’t an end in itself. The point of preservation is to make gorgeous land available to all residents. This trailhead, at last, will do this.   

www.theholmgroupaz.com

Short Sale Check List

Here are just a few items you should know with regards to a short sale the right way..
• Homeowners must be able to show a lender why they are behind on payments and can’t catch up.

• A real estate agent must find a buyer for a short sale and negotiate with the lender for a price.

• A homeowner can’t walk away with any of a house’s equity from a short sale.

• A short sale is still a mark against a homeowner’s credit, but it’s a smaller hit than a foreclosure.

• Homeowners must be prepared to pay taxes on the amount forgiven.

• An owner shouldn’t sign the home over to any group before a sale. A short sale closes like a regular sale between a buyer and seller.

AZ Republic – Troubled homeowners are finding a way to get out of debt

Catherine Reagor
The Arizona Republic
Jul. 6, 2007 12:00 AM
 A growing number of homeowners behind on their mortgage and facing foreclosure are finding a way to sell despite the glut of Valley homes for sale.

They are turning to “short sales,” which are similar to regular home sales except a deal is worked out in which the lender accepts what the house is appraised for or what it will currently sell for instead of what is owed on it.

So a homeowner would sell the house to a buyer willing to pay the current market value of the home, and the lender takes a loss on the rest.


Short sales are the latest trend for metro Phoenix’s slowing real estate market, and housing advocates are advising struggling homeowners to contact their lender about a sale before falling into foreclosure.

As foreclosures rise, lenders are more motivated to do the sales because they at least get most of what they are owed.

Homeowners don’t get any equity from the sale, but they also don’t get a nasty foreclosure mark on their credit record. And although lenders lose out on money they’re owed, a short sale lets them avoid a costly foreclosure on the home.

“Short sales are the buzz in the market now,” said Tom Ruff of Information Market, a research data firm based in Glendale. “With foreclosures climbing and homes prices falling, short sales are bound to climb.”

There is no way to track the exact number of short sales closing in the Valley because they show up on public records as a regular sale between a buyer and a seller. But real estate market watchers say they are seeing an uptick.

For the Valley’s housing market, a short sale means one less foreclosure at a time when the number of people defaulting on their mortgages has tripled from a year ago.

It also is one fewer hit to Valley neighborhoods, where foreclosures are pulling down housing values.

Short sales lower an area’s “comps,” or comparable sales prices, too, but not as badly.

For some homeowners, they are the best option.

A brother and sister from California recently approached Phoenix real estate agent Brett Barry about their house here in the Valley. The pair paid $597,000 for the investment home in Tatum Ranch at the height of the housing market in 2005. Now, they can no longer afford to keep it. And with a record number of Valley homes for sale, their chances of selling the home for what they paid are slim.

“I ran the numbers, and the house won’t sell for more than $495,000 now,” said Barry, of Realty Executives. “They didn’t put any money into it. They have an interest-only loan. They could only rent it for about $1,800 and month, but their payment is $3,500.”

He told them they could do one of two things: Work out a short sale or call the lender and hand over their keys. Lenders can benefit Most lenders prefer short sales because foreclosures cost them time and anywhere from $30,000 to $50,000 per house in legal, appraisal, marketing and servings fees. A short sale gets a home off their books and typically costs a lender less than a foreclosure.

At a recent foreclosure-prevention town hall meeting in Phoenix, the director of National Initiatives for mortgage giant Freddie Mac encouraged housing advocacy groups and lenders to steer people toward short sales if their only other option is foreclosure.

“We have an investment to protect as well as a moral responsibility to help people avoid foreclosure,” Christina Diaz-Malones said.

A few years ago, most Valley homes to go to the foreclosure auction block enticed multiple bids from investors. But now, lenders are taking back 80 percent of the homes they are foreclosing on. Investors have stopped bidding on many houses because they can’t make money on a resale.

To be eligible for a short sale, homeowners must prove they can’t pay their mortgage because of some type of hardship such as a job loss, medical expenses, death of a spouse or, sometimes, too much debt.

But homeowners should be careful about confusing a short-sale plan with a foreclosure rescue scheme.

Once a homeowner misses a payment or two, a lender files a notice with the Maricopa County Recorder’s Office to start foreclosing.

Many groups track those filings to try to buy foreclosure properties. But recently, some groups have begun preying on people about to lose their homes.

Many of the offers of help are thinly veiled schemes to get homeowners to sign over their house to groups that strip away any equity. Often, the homeowners then are required to pay rent until they can refinance and get their house back. But the rent is usually more than their old mortgage payment, and they wind up getting evicted.

Joann Hauger of Community Housing Resources of Arizona said groups that really want to help homeowners don’t typically solicit them. More housing advocates such as Hauger are advising people to seek a short sale now instead of losing their home to foreclosure.

“Almost everyone we are seeing now for default counseling owe more than their house is worth,” she said.

The hit homeowners take on their credit score is much less on a short sale than on a foreclosure.

A homeowner involved in a short sale will see an 80- to 100-point drop on his or her credit score. A foreclosure is a 250- to 280-point hit, said Randy Kutz of Phoenix Heritage Real Estate Group, HomeSmart. About 70 percent of his business now is short sales.

“Banks don’t advertise they are open to short sales, but banks don’t want to take the homes back,” he said.

People who are able to do short sales will have a tax hit.

The difference between what a homeowner owes and what the bank gets for the house is typically treated as income for the seller. That’s taxable income for the homeowner that will show up on a 1099 form from the lender.

The lower sales price from a short sale won’t please too many of the homeowner’s neighbors. It will show up like any sale and often will be a considered a comp for the area that other buyers and sellers use as a benchmark for home prices.

But housing market watchers say a lower comp or short sale is much better for a neighborhood than a home repossessed by the bank at a foreclosure auction.

“Foreclosed homes can quickly turn into empty eyesores with green pools, yards full of weeds and debris when lenders take them over,” Barry said. “A short sale means a new owner for the home and one less foreclosure black mark for the neighborhood.”  

www.theholmgroupaz.com

AZ Republic – Arizona give go-ahead to Zillow

Peter Corbett
The Arizona Republic
Jul. 6, 2007 12:00 AM

 Zillow.com, the popular real estate Web site, is in the clear for offering its home-value estimates in Arizona.

Earlier this week, Gov. Janet Napolitano signed into law Senate Bill 1291, with an amendment that allows Zillow to operate in the state.

The Arizona Board of Appraisal a year ago ordered Seattle-based Zillow to stop offering its property estimates because it does not have an Arizona appraiser’s license.

Zillow President Lloyd Frink praised Reps. Michele Reagan and Barbara Leff for pushing the amendment that allows Zillow and other firms that offer automated valuation models to continue operating in Arizona.

“We believe attempts to limit or restrict access to this information are not in the best interest of consumers anywhere,” Frink wrote in his Zillow blog.

Zillow, which was launched in February 2006, warns users that its estimates are not an appraisal but a starting point to determine a home’s value.

Charles Havranek, Board of Appraisal vice chairman, said the board at its June 21 meeting voted 6-1 to rescind its two previous letters ordering Zillow to cease and desist.

“What Zillow does is give consumers a basic idea of where to start if they need to know what their house is worth,” said Havranek, an Arizona appraiser since 1975.

He was not on the board a year ago when it took action against Zillow.

The legislation that the governor signed Monday updated statutes affecting the Board of Appraisal that have not been revised since 1991.

 

www.theholmgroupaz.com

 


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