Choosing the Right Realtor

home photoWhether you’re thinking of buying or selling a home, choosing the right realtor can make a huge difference. Although you don’t technically have to have a realtor to do either one of these things, it can be very beneficial to have the help of someone who is trained and educated in all the ins and outs of the buying and selling processes. With the tips listed below, you should have no trouble finding the perfect realtor for whichever stage of the home owning process you may be experiencing now.

Ask around:  If you know people in your area who have recently bought or sold a home, talk to them about the realtors they’ve worked with. Chances are good you’ll be able to get a solid referral from a friend or family member. On the other hand, if you’re new to the area or looking to move to a place where you don’t know anyone, check out reviews online. You can find a variety of different sites that offer reviews and “grades” for realtors in your area.

Understand the difference between a realtor and a real estate agent:  Just because someone is a real estate agent doesn’t necessarily mean that person is a realtor. A realtor is someone who is a member of the National Association of Realtors. This means that that person must stick to the rules and guidelines set out by this organization. It also means that the realtor you’re working with is likely to be ethical, fair, and willing to help you every step of the way.

Ask about your realtor’s price range:  Some realtors are better at finding homes in certain price ranges than others. If you’re looking for a home in the $200,000 price range, for example, you probably don’t want to work with a realtor who usually only shows million-dollar homes. That realtor simply isn’t going to have the expertise in the budget you’re looking for. The same is true, too, however; if you’re wanting to buy an expensive home, it’s a good idea to go with a realtor who has some experience selling homes with a higher price tag.

Don’t settle on the first realtor you meet:  You may not connect with the first realtor you talk to, and that’s okay. You might not like how pushy that particular realtor is, or you may just feel like he or she isn’t focused on the kind of must-haves you’re looking for in your home. For whatever reason, if your first realtor leaves you wanting a little more, don’t be afraid to try out some others and talk to several before you settle on someone to work with. You’ll be able to find the perfect realtor to help you locate the home of your dreams in no time.

I’ve been helping home buyer and sellers with their real estate needs in the west valley for over 12 years. As part of The Sibbach Team we pride ourselves on being a market leader.  We continue to learn and become educated thru extensive and on-going training, field research, open mindedness and client feedback to deliver a superior client experience.

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Buying A House You Can’t See In Person

There is a lot of risk involved in buying a home sight unseen, and the process isn’t for everyone. You never know when you might end up purchasing a complete mess, and you may end up out a lot of money for cleanup and renovation. However, there are several things you can do to save yourself a lot of trouble in the long run. With the tips listed below, you’ll be better prepared for your experience in buying a home sight unseen.

Don’t go this route unless you know what you’re doing:  The home of your dreams may be one you’re not going to be able to look at in person, but unless you know what your’e doing, you should try your best to go take a look at the space before you put in an offer. If you work with a realtor who is local to the home you’re interested in purchasing, you can talk to them about the opportunities you may have to schedule tours of the home and see if there’s a way to work around your obligations or your location.

Ask someone in the area to go look at the home for you on your behalf:  Once again, having a realtor on your side can help with this, but a realtor will be unable to provide you with the kind of information you’re really looking for when it comes to checking out a home you’re interested in buying. If possible, ask a friend or family member to stop by the home on your behalf and take a lot of pictures—or, even better, record a video as they walk through the home and notice anything they might want to point out to you.

Always get a home inspection:  Whether you have someone taking a look at the home on your behalf or not, a home inspection is going to turn up any potential problems you might want to keep in mind when you’re thinking about buying. If the inspection shows up too many problems, you may want to rethink purchasing a home without being able to see it first. Then again, if you’re willing to put in the work it takes to fix it, a sight-unseen home may be perfect for you in your situation.

Ask for contingencies in the home buying contract:  This is very important. If at all possible, ask for contingencies in the home buying contract. This means that, for example, if the home inspection returns with some sort of significant damage—such as major roof damage or foundation issues—you can withdraw your offer and move on to another home. Although some sellers won’t want to offer this option, for the most part, if the seller knows his or her home is in relatively good shape, you won’t have to worry about this request being denied.

I live and work in the West Valley.  I know this area like the back of my hand and will be happy to assist you in finding the right home in a neighborhood that fits your needs and lifestyle.  Contact me if you are moving or know of someone who is considering buying from out of town.

A Beginner’s Guide to Buying Rental Property

small home photoHave you ever thought about buying rental property? This can be a great investment if you know what you’re doing, but it can present a steep learning curve if you don’t. Although there’s a lot to learn about how to purchase the right rental property and how to make it work for you, there are several tips you can keep in mind when you’re first considering getting into this business. Check out our list below to help you decide if rental property is the right investment for you.

Research Neighborhoods: When it comes down to it, purchasing a rental property in a better neighborhood is sure to be a sound investment. If you buy property in a neighborhood that’s a little uncertain, you run the risk of losing money over time, especially if the area doesn’t improve or build up over the years. Choose a neighborhood that has a lot of great schools and you’re sure to have no trouble keeping your property rented. For example, rental properties around the popular Notre Dame Preparatory private high school are sure to stay rented at all times, as families hope for their children to attend this well-known school.

Research Rent:  Keep an eye on how much comparable properties rent for in the area you’re interested in. You can’t expect to rent a two-bedroom apartment for the same price as a four-bedroom house, for example, if both are in the same part of town. Always be sure you’re keeping your prices reasonable and competitive without going too far over what’s common for your area or so far under that you’re not making any money.

Look for Areas with Lots of Benefits:  Although the neighborhood and its schools are a good place to get started picking your rental property, you may also want to consider the other benefits in the area. Rental properties that are close to some of the most popular restaurants in and around Scottsdale, like Café Monarch or the popular locally-sourced restaurant, FnB, are sure to rent faster than those that have fewer popular eateries nearby. Properties that are close to Old Town or downtown Scottsdale may also rent faster too, since they may be within walking or biking distance to some of the most popular area attractions.

Keep your Budget in Mind:  You can’t buy a rental property you don’t have the money or financing available for, so always keep your budget in mind when you’re getting started in this endeavor. Think about how much you have to spend up front and how much you need to make over a given amount of time to make sure this investment is well worth it. Pay attention to the housing market in Scottsdale to keep up with your competition, too.

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Are Home Warranties Worth It?

As a home buyer or home seller, you may have wondered whether a home warranty is worth the cost?  Homeowners insurance protects your home against unforeseen accidents or damage.  A home warranty, on the other hand, is a supplement to this insurance.  Simply put, a home warranty is a convenience program that covers normal wear and tear on the major electrical and mechanical systems in a home, typically for a one-year period.

Glendale Real Esatate photoSo, your home’s ventilation, heating and air-conditioning, plumbing, water heater and kitchen appliances are typically covered by a home warranty.  Home warranties have become more popular in the past decade or so, with the advent of foreclosures and short sales, as these properties often haven’t been well-maintained.  However, be sure to read the fine print on any home warranty.  Be sure to note what exactly is covered and what isn’t.

Another wrinkle with home warranty plans is that they don’t offer quick fixes to any problems that are discovered within the home.  Home warranties are not the same as emergency home service contracts, where the homeowner can make a phone call and have the problem diagnosed and fixed within the same day.  Instead, with a home warranty, the homeowner will have to file a claim, and the home warranty company will choose a local service contractor to diagnose the problem for a service fee, which isn’t covered by the warranty.  Then, the claim must be approved by the company.

While a home warranty can be a nice back-up plan, it’s critical that any homeowner identify any necessary repairs during the home inspection period.  The home inspection will typically uncover any major issues with the maintenance of the home, and will set a precedent for regular service of the major mechanical services.  For example, some home warranty companies won’t cover an air-conditioner that hasn’t been serviced in a past set number of months.  Therefore, having this done during the home inspection negotiation period will help to set up a seamless transition to the home warranty service period.   Home warranties in Arizona average around $400-500 depending on the type of home (condos/townhomes typically are on the lower end of this spectrum).

2017 is going to be an amazing year!  Click here to get your home value estimate.

Different Types of Title 

One of the many decisions you must make at the time of closing your home is how you will hold title to the home.  While most buyers don’t spend a lot of time thinking about this, how the deed to your home is titled could have a lot of impact on the biggest financial investment you are making.  Therefore, it’s critical to do some research on this issue and consult with a tax advisor (or legal advisor) before determining which way you need to proceed.

TGated Community photoo help you get started, here are some common ways your home can be titled.  First, is community property.  Arizona is a community property state, one of nine in this country.  What this means is that anything that is earned in a marriage is owned equally by each partner in the marriage.  Property acquired in this state is presumed to be community property unless otherwise specified by the parties.  Both people own one half of the community property, separately but unified.  However, this way to hold title does require a probate hearing in the event of death of one of the spouses.

If you are unmarried when you purchase property, this is typically titled as sole ownership.  Therefore, the buyer is the only person with interest in the property, and the property is included in his/her estate if he/she dies.  A married person can purchase separate property only if their spouse signs the deed stating that they are not interested in owning that property as community property.

If two people are not married but wish to purchase property, they can own it via joint tenancy.  This type of deed does not require the individuals to be married but they must have equal ownership in the property.  More than two people can own a property in joint tenancy, so long as all shares of ownership are equal.  A tax benefit of joint tenancy is that the estate will be passed on automatically to the surviving joint tenant(s) without the need for probate (ie, court).

A title holding trust is where ownership of the property is divided into any number of interests, and is often used by groups of people or corporations.  Because a trust can’t hold title on its own, once the loan is closed, a deed can be drafted to put the property in the trust.  The title holding trust gives the owner of the trust more specific ways he/she can detail the estate.

Finally, a final type of title to consider is also the most common way to title a home, and that is community property with right of survivorship.  This type of title retains all the benefits of community property but does not require a probate hearing in the event of a death of a spouse.  No court action will be required to clear the title.

Again, this is just a primer on the most common types of title here in Arizona.  If you have special tax consequences or financial concerns, please consider consulting with a tax advisor or attorney to make an informed decision about this exciting purchase.

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How to Downsize

Is it time to downsize? There are many reasons for downsizing: financial, environmental, transitioning to an empty nester lifestyle, or simply a desire to simplify one’s life. Whether it’s a home post-retirement or a vacation home or even a home to create a simpler lifestyle, making the move from a larger home to a home with a smaller footprint will take some planning.

condoThe first step to downsizing is to take inventory of your things, as your possessions that currently fit into your larger home simply will not fit in your smaller home. There are dozens of resources which address this process, but deciding what to keep and what to get rid of is the most critical part of this process. Try the Kondo Marie method of focusing on what items you love and what items bring you joy. By process of elimination, the remaining items that do not, should be thrown away, sold or donated. An exciting part of downsizing is letting go of things that you don’t absolutely need, which helps you to focus on what is important.

Grouping like items together is another way to visualize what items you need to get rid of. For example, putting all of your baking and cooking items into groups can help you identify whether you have duplicates of items as well as items that you’ve never used at all. You may not have space in your new downsized home to house small kitchen appliances such as pasta makers or bread makers, especially considering these items may not be used sufficiently to justify taking up precious storage space.

Finally, map out your new space to determine where you are putting the items you are keeping in your new space. Larger furniture items may not be appropriate for the scale of your new home, so winnowing down the larger pieces to one or two favorite pieces will make the transition much easier. Recognize that storage will not be as plentiful for your smaller items, and this will drive your decision-making processes.

While your current large scale house may not be in your future, a home which provides more freedom (financial and otherwise) will be, and that’s something to look forward to! I’m happy to assist you with this major life decision.

Northeast Valley Map of Neighborhoods

Black Friday and the Mortgage Quiet Period

One of the biggest shopping days of the year is almost here AND you’ve also made the decision to purchase a home.  Deciding where you want to live, and what you want your home to look like are the fun part.  But, figuring out the technical aspects obtaining a mortgage is the not-so-fun part.   After you’ve gone through the loan process and have been approved for a loan, it’s easy sailing, and time to celebrate!  Not so fast . . .

Barnes & Noble store photoThe time between the original check of your credit which led to your loan being approved to the loan closing is called the mortgage quiet period.  This time is even more critical nowadays in this tighter economic climate, with loan writers being more vigilant about financial activities that may affect your original credit score.   From the loan writers’ point of view, financial activity during the quiet period in the mortgage origination process can sometimes be a warning sign of fraud, particularly when an unscrupulous borrower attempts to take out more than one loan on a property in a scam known as “shot gunning.”

Unfortunately, then, even if you’re not a borrower who has had issues in the past, ANY financial activities you undertake during this quiet period will be subject to scrutiny.  Borrowers who take on any type of installment debt may adversely affect their credit score at closing, as these debts will affect borrowers’ debt-to-income (DTI) ratio.  Therefore, signing up for a store credit card as part of a Black Friday promotional offer, or financing new furniture or a vacation on a credit card may jeopardize your pending loan.

Other actions subject to a red flag by the loan officer may include withdrawing cash from any accounts that were used to verify funds for the loans, or changing jobs may be considered signs of financial instability, and are strongly discouraged during the mortgage quiet period.  Even making large deposits into these same accounts could cause issues as lenders are required to source all funds in a transaction.  This means they need to prove the sale of items and verify financial gifts, which can delay the loan process significantly.

Bottom line, be sure to notify your loan officer if you need to make any changes to accounts or if you need to make a large purchase, so they can be properly documented, and the loan officer can be assured of your good faith.  I’m also available to answer any questions you may have about this process.  I look forward to working with you in your home search!

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How Important is Your Credit Score?

Gated Community photoThe information we receive about what is important when applying for mortgages seems to change daily.  One of the more confusing aspects of this process is how important your credit score actually is.  According to www.lendingtree.com, there are both “official” and “unofficial” credit scores that are used when you apply for a mortgage to buy a home.

The “official” credit score is the score that is determined by various government-backed mortgage lenders. For example, FHA minimum guidelines require a minimum FICO score of 500 to be eligible for an FHA mortgage. If your score ranges between 500-579, you are required to make a down payment of 10%, but if you have a higher score, you only need to put 3.5% down. Fannie Mae/Freddie Mac require that borrowers’ credit scores be at least 620.

However, these scores often don’t matter as much in the “real world” of lending, per www.lendingtree.com. This is because lenders also have to look at the reason for a lower credit score before underwriting the loan. So if the lower score is caused by late payments or collections, the lenders will likely require a higher credit score than FHA or Fannie Mae, to protect their loans. For example, while Wells Fargo recently dropped its minimum credit score requirement to 620, it’s still higher than the FHA official minimum credit score requirement.

One of the most illuminating statistics is that over 97 percent of all FHA loan approvals went to applicants with scores above 620. (www.lendingtree.com) There are mitigating circumstances, however, that can be considered by the lenders. Options for navigating this sometimes-complex process include contacting multiple lenders, or of course, using a loan explorer or marketplace, such as those offered by www.lendingtree.com.

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How to Find a Good Contractor

Whether you are considering listing your home for sale, and making much needed updates to maximize your ROI (return on investment), or whether you’d like to update your existing home, you are probably going to be enlisting the services of a contractor.  Like most fields, the contractor field is very wide and deep, and finding a good, reputable contractor may seem like a bit of a Herculean task.  To that end, here are some suggestions on how to find the best person to help you undertake any remodeling task.

Interior Updates
First, ask your friends and family if they’ve used a contracor in the past. A second source of recommendations to consid
r is your neighbors.  While you can ask them in person if they’ve got a contractor they’d recommend, another source of information is through the website www.nextdoor.com.  This is a fantastic, free resource for anything neighborhood-related, and members are very willing to share their experiences with contractors, good and bad.  A third source of recommendations to consider is your local tile store, flooring store and hardware store.  Chatting with the store manager or employees will often yield several names of reputable contractors in your area.

When you’ve got a list of 3-4 names, it’s time to check these individuals out, to make sure they are reputable and legitimate.   In Arizona, the Registrar of Contractors maintains a list of all registered, licensed contractors in a handy database available to the public: http://www.azroc.gov/forms/contractorsearch.html.  This database maintains a comprehensive record of the status of the contractor’s license, any complaints that have been filed against the contractor, the amount of bond they maintain, as well as how long they’ve maintained a license in this state.

Next, contact the contractor and conduct an interview of them (by phone or email).  Some questions to ask include:  Do they take on projects of your size?
Can they give you a list of previous clients?  How many other projects would they have going at the same time?  How long have they worked with their subcontractors?  Would they be personally supervising the project?   The next step would be a face to face meeting, in which they can see the project you’ve got in mind, and so you can ascertain their personality and see if it’s a good fit.  Follow up this in person meeting with phone calls to 2 or 3 of their references.  Ask how their remodels went, and ask if you can see photos of the final product.

The final step is to collect bids (always ask for itemized bids in writing) as well as payment schedules.  Typically, with larger remodeling projects, contractors require 10% at the time of signing the contract, with 3 payments of 25% evenly spaced throughout, and then the final 15% once the remodel has been completed.   Then, it’s off to the races with a remodel that’s sure to increase the value of your home, or of your continued enjoyment of your home.   As always, I’d be happy to share with you who I have had success working with on home remodels.

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What is Title Insurance?

glendale homeWhat exactly is title insurance?  And, why is it necessary when purchasing a home?  The simplest explanation is that title insurance is another form of insurance for your home.  Just as homeowner’s and flood insurance protect against loss from theft or fire or floods, title insurance protects the title to your home from financial loss.  When you purchase a home, you’re not purchasing the actual land or the building, you are actually purchasing the title to the property (ie, the right to use and occupy the property).

The title to the home you intend to purchase may be affected by claims or rights filed by others, and these claims may limit your use of the property and may even cause financial loss.   Therefore, by purchasing title insurance you are authorizing a search of public land records surrounding the property you intend to purchase.  A title agency typically will conduct this search, and will look for any evidence of issues surrounding the title.  For example, there may be a lien against the property due to the seller’s unpaid taxes, pending legal action against the property, or an unknown heir of a previous owner who claims ownership of the property.   Being aware of these issues will enable you to require these issues be addressed before you take title to the property.

Title insurance is purchased just one time, not annually like other insurances.  This one-time purchase will protect your title against any hazards and defects that may exist in the title. While this is just a quick summary of title insurance, I hope this has illuminated a common part of a real estate transaction.  Every transaction is different, and I look forward to helping you navigate your own process as expediently as possible.

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