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Is a distressed property the right deal for you?

For many buyers, the term "foreclosure" brings up images of run-down homes with no heat and rotting wood. While this is still the case for some homes, it’s no longer the standard. In fact, buyers are snatching up distressed deals in decent condition for great prices.

By definition, a distressed property is one that was purchased with a loan and the homeowner is no longer able to make their mortgage payment resulting in foreclosure – or if they’re lucky, a short sale – meaning they owe more on the home than it’s currently worth. With a 20% increase in foreclosures from 2009, distressed properties still remain a large portion of home sales and are going to continue well into 2010 as homeowners continue to feel the effects of an economy on the mend.

If you’re in the market for a home and are prepared for a unique transaction, a distressed property could be a great option. As always, due diligence is key. Here are a few things to remember before you decide to buy distressed:

1. Get pre-approved. Whether you’re buying a distressed property or a traditional home, knowing how much house you can afford is the first step. In the case of a distressed property there could be multiple offers on the table. Remember, banks want to get these properties off their hands quickly and typically don’t take buyer contingencies – such as needing to sell your home before you buy – into account. The buyer who can act fast will usually get the home.

2. Stay focused. If you’re prepared to buy a distressed property it's critical you understand that the process of purchasing the home could be very fast or very slow. There are many aspects of the transaction that are in the hands of banks and lenders. There is always a lot of paperwork, and there aren’t always definitive answers. While a professional will do everything they can to simplify the process, know that it can get complicated.

3. Be decisive. If you are specifically in the market for a great deal then distressed properties are your best bet. However, if the right property hits the market at the right price it's critical to act fast and decisively. Buyers who gamble by waiting for another price drop or take too long to make a decision could miss a good buy.

4. Be prepared. For anything. Not all distressed properties are falling apart. But some are. And as a serious buyer, you must be prepared to see the worst.

5. Due Diligence. It doesn’t hurt to say it again, and again: protect your investment. Have an inspector look at the property before you buy so that you know how much money you may have to put into fixing the home. Remember, because banks are already losing money, they don’t include allowances for costly repairs when selling the home. Also have an appraiser determine the home's worth in case you decide to sell the home down the road.

Your best ally when purchasing a distressed property is an expert. Always have a professional REALTOR® by your side to help you make informed decisions.

If you are in need of real estate services I would be honored if you gave me the opportunity to serve you.

Todd C. Menard, GRI, CNE, BROKER, REALTOR
todd@toddcmenard.com
602-410-2686 Cell

Keller Williams Integrity First
Serving The Greater Phoenix Metropolitan Market and Surrounding Suburbs
http://www.toddcmenard.com/

Recession is Over: Let Recovery Begin!

By Marshall J. Vest
Forecasting Project Director

Some six months have passed since the U.S. recession came to an end. Recent data show that the recession in Arizona came to an end as 2010 began. Employment is no longer falling, retail sales are increasing, personal income has stabilized, and housing markets are in the early stages of recovery. It will be several months before it feels like things are getting better, and it will take years to repair all the damage that's been done. But the business cycle has turned up once again - and that's the best news we've had for a long time. read more...

http://azeconomy.eller.arizona.edu/AZE10Q1/Recession_Is_Over.aspx

FHA Accepts Electronic Signatures

FHA TO ACCEPT ELECTRONIC SIGNATURES ON THIRD PARTY DOCUMENTS

Action begins broader effort to modernize FHA's application process

WASHINGTON - The Federal Housing Administration (FHA) today announced plans to modernize the application process for FHA mortgage insurance, making the process easier for borrowers and faster for lenders. FHA will begin accepting electronic signatures on third party documents originated and signed outside of the lender's control, such as real estate contracts. A Mortgagee Letter detailing FHA's new streamlined process is posted on the HUD website.

"This is just the beginning of FHA's commitment to use more electronic documents in our loan approval process," said FHA Commissioner David Stevens. "Over time, we will be expanding the number and types of documents with electronic signatures which will be acceptable to FHA."

"We applaud FHA's refreshing attitude toward modernization and making electronic signature capabilities acceptable for its mortgage transactions," said Vicki Cox Golder, National Association of Realtors president.

The FHA expects lenders to employ the same level of care and due diligence with electronically signed documents as for paper documents with "wet" or ink signatures. Lenders are reminded that the electronic signature and date should be clearly visible in the document; and that electronic documents will be subject to the same document retention requirements as paper documents.

This policy is in accordance with Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA), as applicable. It is effective immediately for FHA forward mortgages as well as Home Equity Conversion Mortgages (HECM) (reverse mortgages).

HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.

Realty Executives of Southern Arizona becomes Keller Williams Southern Arizona

Today Keller Williams Realty International and the KW Southwest Region announced that Realty Executives of Southern Arizona has become Keller Williams Southern Arizona Realty.

If you are interested in learning more about what Keller Williams can offer you as a successful real estate professional please contact me immediately for a confidential interview.

Todd C. Menard
Director of Professional Development and Productivity Coach
Keller Williams Integrity First Market Centers
(480) 854-2400 Corporate Office
todd@toddcmenard.comServing the Greater Phoenix Metropolitan and Suburban Markets
***************************************************
March 9, 2010 4:30 PM EST

AUSTIN, Texas--(BUSINESS WIRE)-- Keller Williams(R) Realty Inc. announced today the launch of Keller Williams Southern Arizona. The new operation, formerly with Realty Executives(R), includes seven offices, with more than 375 top-producing real estate agents and staff.

"We felt it was our responsibility to be the stewards of our agents' careers and, based on our research and what we have seen, it is obvious that Keller Williams Realty is the right choice for a positive future," said Anthony Azar, operating principal of Keller Williams Southern Arizona. "We absolutely have the best agents in the city, and that is statistically supported by their rankings and their designations. We are thrilled to be a part of a company that is as serious about growth and success as we are."

Sue Cartun, operations manager of the new organization, added, "KW's philosophy of putting agents and ownership on the same side of the table was an incredibly important part of our decision to join Keller Williams Realty."

This comes on the heels of a year of positive growth for Keller Williams Realty throughout the U.S. and Canada. The company outpaced the downward trend in the real estate market and grew in every category - opening 30 new franchises, ending the year with a 16 percent year-over-year increase in the number of contracts closed per agent, more than 76,879 associates across North America (up three percent). In addition, the company gave back more than $32.2 million in profit share to its agents.

"We make it our business to get in business with the best - and Anthony and his associates are proven leaders in the Southern Arizona marketplace," said Mark Willis, CEO of Keller Williams Realty. "It's our honor to welcome them to the Keller Williams family."

In 2009, in addition to becoming the 3rd largest real estate company in the U.S., surpassing Re/Max(R), Keller Williams Realty received the highest overall satisfaction ratings from home buyers among the largest full-service real estate firms from J.D. Power and Associates for the second year in a row, and was ranked as the No. 1 real estate franchise on the 31st Annual Franchise 500 list by Entrepreneur magazine.

"I am so thrilled to be a part of the Keller Williams family," said Nancy Colvin, operations manager for the new Kolb La Playa office. "Joining forces with Keller Williams Realty is a huge benefit for our agents and was the best decision for our team as a whole."

"We are confident that with this change, Tucson-area residents will think of us when they think of real estate," added David Jones, senior team leader in the new operation's Joesler Village location. "We're proud to be one of the leading real estate companies in the state."

About Keller Williams Realty, Inc.

Founded in 1983, Keller Williams Realty Inc. is the third-largest real estate franchise operation in the United States, with 668 offices and more than 76,000 associates in the United States and Canada. The company, which began franchising in 1990, has an agent-centric culture that emphasizes access to leading-edge education and promotes an economic model that rewards associates as stakeholders and partners. The company also provides specialized agents in luxury homes and commercial real estate properties. For more information, or to search for homes for sale visit Keller Williams Realty online at (www.kw.com).

FANNIE MAE / FREDDIE MAC / NAR Protecting Your Sales Commission

The following Policy Changes prevent modification of sales commissions as a condition of approval on pre-foreclosure sales (Short Sales). The FREDDIE MAC Bulletin of August 22, 2009 establishes guidelines similar to those established in the earlier FANNIE MAE Servicing Guide Announcement of February 24, 2009. Furthermore, The National Association of REALTORS® Code of Ethics and Standards of Practice has been revised January 1, 2010 including changes to Article 3.

To protect your compensation please take two mintues to familiarize yourself with the following changes provided below!

FANNIE MAE - Servicing Guide(Announcement 09-03 February 24, 2009), Part VII, Section 504.02: Contacting Selected Borrowers, Effective March 1, 2009, closing of pre-foreclosure sales may not be conditioned upon a reduction of the total commission to be paid to real estate agents to a level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales price of the property in aggregate. Servicers are reminded that they must continue to obtain any approvals that may be required by interested third parties in connection with pre-foreclosure sales.

FREDDIE MAC(Bulletin 2009.22 August 29, 2009) - Chapter B65, Workout Options Effective, August 29,2009, has been updated to provide Servicers further guidance regarding the negotiation of broker real estate commissions on a short payoff. Unless a real estate broker's sales commission exceeds 6% of the property sales price, Servicers must not, as a condition of the Servicer's acceptance of an offer, renegotiate the real estate broker's sales commission to an amount that is lower than the amount that was originally agreed upon between the broker and the Borrower. In the event the sales commission exceeds 6%, the Servicer must renegotiate the commission to limit it to 6% of the property sales price. Servicers must continue obtaining all applicable third party approvals and ensuring that the transaction is arms-length in accordance with the requirements specified in Section B65.37. Section B65.37 has been revised to reflect this change.

This is great news for REALTOR’s® who provide high-fiduciary services to their clients and have been victim of the lender’s compensation reduction. This move is expected to reduce NAR Code of Ethics and Professional Standards complaints citing Article 3, Dispute Resolution Services (DRS) such as Mediation and Commission Arbitration complaints, and assist in enforcement of  Multiple Listing Services Rules and Regulations.

Should you encounter a compensation negotiation in the pre-foreclosure negotiation process on a Fannie Mae or Freddie Mac loan, provide the bank contact with a copy of these revisions (link provided below), and request they cease from further compensation modification attempts.

Click on the appropriate Name to be directed to the site:  Fannie Mae      Freddie Mac

Should you encounter a REALTOR® who requests that you modify your compensation after you have submitted an offer to purchase/lease a property, provide the REALTOR® or Broker with a copy of the NAR Code of Ethics (link provided below), specifically Article 3.
2010 National Association of REALTORS® Code of Ethics, Article 3, Standard of Practice 3-2 states "To be effective, any change in compensation offered for cooperative services must be communicated to the other REALTOR® prior to the time that REALTOR® submits an offer to purchase/lease the property. (Amended 1/10)"

"Standard of Practice 3-2 does not preclude the listing broker and cooperating broker from entering into an agreement to change cooperative compensation. (Adopted 1/94)". (See Article 3, S.O.P. 3-3)

Article 3 states "REALTORS® shall cooperate with other brokers except when cooperation is not in the client’s best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker. (Amended 1/95)"

"REALTORS®, acting as exclusive agents or brokers of sellers/ landlords, establish the terms and conditions of offers to cooperate. Unless expressly indicated in offers to cooperate, cooperating brokers may not assume that the offer of cooperation includes an offer of compensation. Terms of compensation, if any, shall be ascertained by cooperating brokers before beginning efforts to accept the offer of cooperation. (Amended 1/99)"

Finally, the question as to whether a property listed in the multiple listing system (MLS) actually contains an "offer" of compensation and to whom is a MLS membership issue. Review your local Multiple Listing System (MLS) Rules and Regulations for important details.
In the Greater Phoenix AZ market, The Arizona Regional Multiple Listing System (ARMLS) Rules & Regulations, effective May 2009 states in Sections 12-1, Division of Commissions states - "Listing Participant shall specify, on each Listing that is FWA, the compensation being offered to Participants for their services in the sale/lease of such Listing. The compensation amount shall be either a percentage of the gross selling/lease price or a definite dollar (non-zero) amount. Compensation amounts that are not based on the gross sales/lease price (e. g., compensation is based on the base price of a new home) must be shown as a fixed dollar (non-zero) amount. ARMLS shall not accept or publish any Listing that does not include an offer of compensation...","Such offers of compensation are unconditional except that entitlement to compensation is determined by the Cooperating Participant’s performance as the procuring cause of the sale/lease".

I hope this has been helpful. As you know, I am not a real estate attorney therefore this is not intended to be legal advice, rather, this is to be considered real estate information that any experienced REALTOR® should be able to provide. If you feel you have been a victim of such commission modification, please contact your local association and ask to speak with the Professional Standards Coordinator or the like.

“Waxman Bill Forces Environmental Inspection Before You Can Sell Your Home!"

ARE YOU ONE OF THE FEW WHO MISTAKINGLY PROVIDE MIS-INFORMATION?

The bill in question is referred to as the Waxman(D-CA) Markey (D-MA) Bill. The actual name is the American Clean Energy and Security Act and this bill did recently pass the House of Representatives.

The inaccuracy is that the version of the Bill that passed the House exempted resale homes and buildings from impact due to the Bills Energy Labeling, although did not exempt 'new homes'.

The original bill required new and existing homes and buildings to undergo an energy evaluation inspection at the time of transfer (sale). It also provided provision for a private right of action so that citizens could sue over minor climate risks undr the Clean Air Act. It was feared that the expense and labeling of properties under this Bill could stigmatize a property and significantly impact future sales and risk.

The National Association of REALTORS summary of climate issues, which summarizes NAR policy, may be accessed on realtor.org