REO/Bank Owned

Most expensive bank-owned home in Phoenix

It's located at the Biltmore Estates golf course. Got a cool $7 million? All 18,000 square feet of this mansion can be yours. It's only the market for 6 months, too, which in the land of luxury real estate is about 1/10th of a second.

Last December (was that a mere 10months ago?) it was listed for $12,500,000. Talk about market decline! That's a drop of nearly 1/2 in 10months.

Here's some pictures of the compound...

Her closet

His closet. And, his library ... Clearly, the man who owns this home is A Very Serious Man who makes a lot of Very Serious Money.

The wine cellar (frankly, the way the photographer shot it, it looks more like an M.C. Escher drawing to me)

2 washers and 2 dryers. Because everyone knows the Very Wealthy have Very Dirty Clothes.

Apparently, the sheer weight of the former owners' wealth bent the space-time continuum in the ceiling of the master bedroom.... I'm a little dizzy looking at it.

Enjoyed these photos? See more foreclosed homes of the formerly Super Wealthy, elsewhere on our blog. And if you're actually shopping for a home in this exclusive price range, don't hesitate to call me. I actually do have regular experience helping buyers in the luxury markets in metro Phoenix, Arizona. I promise to keep my mild snarking to myself when we're home shopping.

Most expensive REO

Here it is, folks, the most expensive REO bank owned foreclosure home currently for sale in the metro Phoenix, Arizona MLS database. For a mere $18 million, this estate can be yours.

18mil EF

Seven bedrooms and 10 bathrooms, and over 17,000 square feet of living space. The home boasts two swimming pools, a billiard room, 3 family rooms, a theater room with actual movie-house projection system and seats that move with the movie action. Garage space for 21 cars. Home has an exercise room and a piano room, 2 libraries, and it’s own solar electric generating station.

The closets in this place will suit turn anyone into a clothes horse…

18mil closet218mil closet1

The house sits on 5 acres in Paradise Valley, on prestigious Mockingbird Lane.  Want to see it in person? Shown by appointment only; bank references required prior to showing. That’s Realtor-speak for “show me the money before I show you the house.”

18mil HALL18mil ENTRY

18mil POOL218mil POOL1

18mil LIBR

And, proving that even the excessively wealthy have sense of humor, at the entrance to this home’s theater room, Zoltar from the movie Big.


How to make an offer on a Fannie Mae home

This is a post about how to make an offer on a Fannie Mae-owned (foreclosure) home in metro Phoenix, Arizona where I’m a licensed Realtor. If you’re reading this from out of area, or long after Summer 2011, please consult a professional in your area.   Need a metro Phoenix-area Realtor? Contact me!

To make an offer on a Phoenix-area Fannie Mae home at present, you need at least the following forms, completely filled out:

  • REO coversheet
  • Owner Occupant Certification
  • Notification to Listing Agent
  • Fannie Mae Real Estate Purchase Addendum
  • AZ State Purchase Offer/ Contract
  • Agency form
  • Loan PQF

I submitted a Fannie Mae purchase offer this morning for one of our buyer clients -- it was 28 pages long!

Several of these forms you get from the Listing Agent (that’s the seller’s Realtor). The Loan PQF (Pre-Qualification Form) you have to get from the Buyer’s loan officer, and it must be dated within the past 1 to 8 weeks or so.

Currently, Fannie Mae is requiring that the Buyer complete their Fannie Mae Real Estate Purchase Addendum. That’s a fairly new requirement; it used to be buyers didn’t fill in that form at all but rather waited for Fannie Mae to send it once the buyer’s bid had been accepted. Be careful with this form! It has a couple really vital “trigger dates” in it, and the Buyer has to fill in those dates. A trigger date is my term for a date that other contract deadlines count from. For example, the inspection period counts from the Acknowledgement Date which is different from (but closely related to) the Effective Date. Fill in the wrong dates on these blank trigger date fields and you can seriously screw yourself up.

Another thing to be carful with on the Fannie Mae addendum – the form uses the terms Settlement Date and Expiration Date interchangeably, but never use the term Closing Date, which I find utterly stupid. The way the government’s attorneys wrote the form, if the closing doesn’t happen on the Settlement Date, the deal expires, per the Expiration Date. But the addendum doesn’t say what happens then! Does the buyer lose their Earnest Money? Does the deal just close on the next business day? Who knows! The Addendum doesn’t say.

Oh, and don’t forget to specifically ask for the Fannie Mae Incentive of 3.50% of the purchase price from the Seller to cover some of the buyer’s closing costs, by adding that request to your purchase offer. If you don’t ask, you won’t get the closing cost assistance! You also have to know when Fannie Mae’s offering that incentive; they don’t do it all the time.

Confused yet? You’re not alone. If you’re a buyer or potential buyer in the metro Phoenix are in Summer 2011 you’re bound to run into Fannie Mae homes. Fannie Mae’s got so many homes for sale these days, it’s like shooting fish in a barrel.  As the commercials say, “Don’t attempt this at home alone kids!”  

You really need an experienced Realtor working on your behalf when you’re trying to make an offer on a Fannie Mae home. The paperwork is just so confusing and Fannie Mae keeps changing the rules about which forms they want and how you have to fill them out.  Hire a Realtor!

Need a Realtor? Read all about Heather and Chris, authors of this site and experienced Buyers’ Agents.  Then contact us and hire us; we’re happy to help.

Do buyers of bank owned homes pay for back owed HOA dues?

Image ID 1279316 by StockExchange user Yello-dogGot this question from a current buyer client:
Hi Heather:

Silly question, we are not responsible for back HOA fees, are we?


This isn’t a silly question at all. The short answer is “no”. The longer answer is below. Keep in mind I’m talking about buying a bank owned foreclosure (“REO”) home in the metro Phoenix real estate market in April 2011. Consult a residential real estate professional in your area.

1) Whatever HOA dues the former owner of the home didn't pay are not the new buyers' responsibility. Those unpaid dues follow the former owner, and the former owner is financially liable for them. HOAs have the rights to sue former owners for those unpaid back dues, but in reality many times the HOA won't get that missing money back. (huge thank you to our colleague Dean Ouellette for catching my former error here by saying the old dues get wiped out by foreclosure).

2) The selling bank customarily pays all HOA dues owed from the date they took ownership until the date you close your purchase.

3) The dues for the month in which you close will be pro-rated with seller paying for days they owned the home, and buyer paying for days they will own the home. Note that closing day is allocated to the buyer, meaning the buyer pays for the HOA dues for that day.

4) Note though that HOAs usually require 1 to 3 months pre-paid HOA dues at close, and there are transfer fees as well (usually $100 to $500) and then there is sometimes another fee called "Capital Contribution" which is essentially a payment into the HOA's Reserve Fund (savings account) which is usually another 1 to 3 months.

Are 70% of Phoenix homes at risk of foreclosure?

Are 70% of Phoenix homes at risk of foreclosure? The Associated Press says so. But it’s not actually true.  Of homes sold in the Phoenix area recently, 70% were distressed. That means the homes were either bank owned or short sales.

See below for a press release just issued by the local MLS data provider, the Arizona Regional Multiple Listing Service (ARMLS)…

Yesterday, two writers from the  Associated Press put out a story that said that 70% of the homes in Phoenix are at risk of foreclosures. By the end of the day the story had gone viral on the Internet and was picked up by multiple large media, including the Wall Street Journal. 

Of course, the information is flat out wrong, and unfortunately, it was attributed to ARMLS. We are reaching out to the original writers and others who re-circulated it to get the information corrected.

The statement was a result of the writers’ misinterpretation of the correct information put out in the February issue of STAT.  In that issue we stated that distressed properties accounted for 70.2% of total sales.

ARMLS is reaching out to our Subscribers to make sure they understand the error, and do not inadvertently re-circulate the wrong information in their blogs and on their social media platforms.

67% of Phoenix-area sales are distressed

Image ID 1262615 by StockExchange user melissathr

Pulled some stats out of the Arizona Regional MLS database this morning, for a client who’s home shopping and wondering whether or not to bother looking at short sale homes.

According to MLS data as of today, December 17, 2010, 67% of all Metro Phoenix area homes sold in 2010 were in some state of financial distress.

Shortsales – 21% of all sales so far in 2010 in the Metro Phoenix region

Pre-foreclosures – 5%

REO – 41%

Are you a “regular” seller? You’ve got an uphill battle on your hands, fighting against the super-low prices of the bank owned and short sale homes. On the other hand, if your product property is in good shape and properly priced – and especially if it’s under about $200,000 – you might have buyers fighting to make offers on your home.

Are you a buyer? You should be prepared to see a lot of homes that need some “TLC” as the Realtors so charmingly put it in their MLS listing descriptions. Expect most of the homes you could potentially buy will need paint and carpet, at a minimum. Almost all of them will need a thorough professional cleaning. Many will need all new appliances. Lots of them will need a major landscaping cleanup.

Are you on the fence, wondering if you should get into the market, either to sell or to buy? Contact us. We practice low pressure real estate. Frankly Chris and Heather are not very good at giving sales pitches. We’re very good at listening, empathizing and giving advice that’s based on our clients’ needs, not on our own expectations of commissions.

Need some help finding your way? We’ve been selling Metro Phoenix real estate since before the boom & bust happened, and we plan to be here for a long time to come. Read what our clients say about us here, and then give us a call, text or email.

photo credit: Image ID 1262615 by StockExchange user melissathr

How long do banks take to reply to an offer on an REO foreclosure home?

I wanted to use the title “when banks hold up their own closings”.  I also considered titling this “I hate banks.”

The short answer is “banks reply whenever they feel like it.” The longer answer is: usually, in Metro Phoenix, in Fall/Winter 2010, banks take about 2-3 business days to reply to an offer. Once you’re under contract and in escrow the bank’s reply time often slows down considerably. Try 2-3 weeks.

This is an email trail between myself and the Realtor representing a bank on an actual transaction currently in progress.

Me, on Nov 29 at 5:55pm:
The buyer's underwriter is ready to issue final approval but needs seller's signature on Amendment changing price. Still don't have that and it could hold us up. Otherwise, we're aiming to close on Mon, Dec 6 as planned.

Bank’s Realtor, on Nov 30 at 1:03am:
This addendum was submitted to seller on 11/17/10 when I received it. All we can do is wait for it to go through Fannie. It is reviewed by 4 people each of whom can take up to 3 days, not including weekends and holidays.

I will send the seller signed copy just as soon as I have it.

(note that Realtor was working at 1 o’clock in the morning! Being a Realtor is not all sweetness and light and easy money)

Me, on Nov 30 at 6:24am:
Ok, understood.  Just as long as seller knows that Buyer's lender is at a stand-still and Seller is holding up closing. I'm sure you know, but wanted to put it in black and white for seller's 4 people who have to review. thanks.

again, note the timestamp. Don’t go into real estate unless you consider yourself a workaholic. Tags: ,

Fannie Mae is cost cutting

Just got a newsflash via my email subscription to, a real estate industry news source.

Fannie Mae has launched a pilot program in three markets in which it's only accepting offers on properties in its real estate owned (REO) inventory when they are first submitted online by agents representing buyers.

Test markets are Orlando, Detroit and San Diego.

According to Fannie’s press release, their goal is to “provide increased transparency and efficiency in the REO bidding process by providing buyer's agents with offer confirmations and allowing them to track the status of submitted offers.”

Fannie also says the move is an attempt to stamp out "property flopping" -- a fraudulent practice in which listing agents receive multiple offers but withhold one or more of those offers in order to help an investor purchase the home at a lower price.

Frankly, I think Fannie’s stated goals are complete B.S.

When I place an offer on a Fannie Mae property for a buyer client, I already get an email or verbal confirmation the offer was received. It’s true that tracking the offer status isn’t transparent. But the buyer & I either get a “yes” or get no answer. That’s not ideal, but it is simple. I don’t know about flopping. I suppose it could be a problem.

I think Fannie Mae is trying to do one thing, and one thing only: cut their operating costs. By cutting out the listing Realtor they’re lowering their cost to sell by at least 2% or 3% per home. With Republicans marching into Washington in January to take control of the House, the clamor to dismantle Fannie and Freddie will get louder than ever. I think this is a preemptive move to help The Two F’s claim they’re not as fiscally troubled as conservatives think they are, and perhaps bolster the Obama administration’s call to replace Fannie/Freddie with another type of government backed mortgage entity.

Time will tell!

If you hate the idea of government-backed mortgage programs, it’s interesting to note this: now that Fannie & Freddie are essentially government-owned, they’re free of the profit motive. That means they don’t have to chase market share and profits, which is what got them into trouble in the first place. If they were operating in the black but not keeping up with the rest of the mortgage market, wouldn’t that be acceptable?

If you’re a conservative, answer me this:

Why shouldn’t low-income people have the chance to own a small home? Do some people not “deserve” a home? Are only the middle class and above worthy of owning a home?

For most Americans, their home is the most valuable thing they own and is the way they provide retirement income for themselves. If nobody helps low income families buy homes and build wealth, aren’t we just going to support them on the taxpayers’ dime when they’re old?

What if Fannie & Freddie morphed into a small government-owned program, that provided budgeting & home ownership classes to low-income folks and gave them a chance to become responsible homeowners someday? What if the entity providing these mortgages was a charity? Or a church? Would that change your mind? 

What if the entity providing these mortgages was a for-profit business? Would you buy stock in that business to make their business model viable? Low income folks are usually also less educated, and more easily taken advantage of. So who should decide how much profit this fictional future mortgage company can make off of the low-income housing sector? Should it be unlimited?

I’m not trying to start an argument. (altho that might be kinda cool since we never feel we have enough blog traffic)  I’m seriously trying to get conservatives to talk to me in something more detailed than talking points. I’m sick up to my eyeballs of conservative talking points.  Chime in!


Image ID 1152432 by Stock Exchange user macaruba (image credit, StockExchange user macaruba)

We’ve all learned a new word recently: robo-signing.

The Big 5 Banks* are holding off on foreclosure proceedings in lots of US states because the employees in charge of signing off on the foreclosure documents have admitted to robo-signing up to 8,000 documents per month without reading each.

Robo-signing and the moratorium on foreclosures, so far as I can tell, doesn’t apply in Arizona. Foreclosures continue in Arizona at their usual pace. Why?

All the states so far affected by the robo-signing scandal are judicial foreclosure states. Arizona is not. In a judicial foreclosure state, the lender must file a lawsuit in court against the homeowner to begin the foreclosure proceedings. Those filing documents are the docs that were robo-signed.

In Arizona, homeowners don’t sign a Mortgage so there is no need for the lender to file a lawsuit to begin a foreclosure proceeding. Arizona homeowners sign a similar but slightly different document called a Deed of Trust. It’s the same idea as a Mortgage, just with an extra party inserted into the process. It’s a threesome: there’s a borrower (homeowner), a lender and a Trustee. The Deed of Trust system works just like a mortgage except in the cases of foreclosure.

The Deed of Trust that Arizona homeowners sign allows the lender to skip filing a foreclosure lawsuit if the homeowner gets behind in their mortgage. The lender simply mails or delivers to the homeowner a document called a Notice of Trustee’s Sale (a “NOTS” or “NoTS”, i.e. a foreclosure). Usually the lenders issue a NOTS after 3-4 missed mortgage payments.

The NOTS is the only notice of their intent to foreclose that Arizona lenders are legally required to provide. It states that the homeowner has 90 days in which to bring the mortgage payments 100% current – including any fees, fines or legal costs – or the Trustee will sell the home at foreclosure auction. On Day 91, the home is auctioned off, unless the homeowner contacted the lender and made other, mutually agreeable arrangements.

Trustees are often attorneys and sometimes the auction takes place in their offices rather than “on the courthouse steps” as in some other states. At least in Arizona, lenders are frequently unable to sell the home to anyone at the foreclosure auction. In that case the lender takes the house “back” and usually lists it for sale in the MLS through a Realtor as an REO property.

We at The Phoenix Agents track REO listings to help us visualize the overall health of the local real estate market. Want to see our stats? Click on over, to <here>.

The Big 5 Banks are: Bank of America, GMAC, JPMorgan Chase, Citi and Wells Fargo. The Big 5 is just what I call them; it’s not a real thing. That I know of.

The Highs and the Lows, some more

A periodic series about the highest and lowest priced homes in the local MLS. Properties must be:

  • single family, detached homes

  • bank owned

  • currently Active in the ARMLS (Ariz. Regional Multiple Listing Service)

  • located in the Greater Phoenix area (Wickenburg, Florence, Coolidge, etc are excluded; Surprise, Buckeye, Queen Creek, etc are included)

1 House, 2 Lots, $14,840

low, 1 home 2 lots, EF

Property is a 624 sq.ft. home with 2 bedrooms, 1 bathroom, a family room and a kitchen. House sits on 2 lots in the Valencia subdivision of Buckeye with a total of 13,500 sq.ft. Owned by Fannie Mae and Fannie's Realtor says the property is eligible for Fannie Mae HomePath Renovation Financing.

low, 1 home 2 lots, map(click to enlarge map)

See it there on the far West side, in Buckeye . . . that little black & white star? That’s the location. I sold a home next door to this subdivision, in 2006. I say from personal experience that the surrounding homes are mid-1990s and newer with stucco exteriors and tile roofs. This home is probably the sore thumb in the neighborhood, and almost certainly needs to be just knocked down.

6 Flat Acres in Paradise Valley, $4,850,000

high, pitch and putt SAT close

  • 7,595 square foot house

  • 4 bedrooms, 4-1/2 bathrooms, 4 car garage, pool

  • originally built in 1972

  • a self-contained 500 square foot guest house with full kitchen

  • located on 5.75 acres (250,266 sf)

  • property taxes are $23,616 annually for tax year 2009

The grounds have a pitch & putt golf course, tennis court and gazebo. Located near Lincoln Drive and Invergordon Road.

High, pitch and putt MAP

The former owners tried to sell this home & land for over 3 years before the bank finally took it back via foreclosure. Originally listed for sale at $14,000,000 in January 2006. Later the owners tried to rent it out for Super Bowl Week January 30th to February 4th, 2008 for $100,000. A hundred grand for a week. Mind blowing! Finally in July 2009 the home was foreclosed on. In September 2009 the bank listed it for sale at $5,250,000.

As near as I can tell by zooming in on the satellite photo and Google maps, the house is round. Well, not round round, but built around this central courtyard.

high, pitch and putt COURT

In all the time it’s spent on the local MLS, there are only 3 interior photos of the home, which one Realtor described as “the most romantic estate in Arizona” and another described as “magical.” Magical? One hopes the bank removed the fairies and elves before listing the home for sale. Or at least got rid of the orcs. Nasty, those orcs.

high, pitch and putt KIT Kitchen

high, pitch and putt LIV Living/Family (?) Room

high, pitch and putt DIN Dining Room

At first I thought, “I can’t believe that’s not sold; 6 flat acres in Paradise Valley is easily worth more than the asking price.” But jumbo loans are wicked hard to get these days, and the tax assessor has the property valued at only $3,610,800. Plus the buyer would have to love the ‘look’ of the home, which I call Old Spanish Trail House in my head. I’ve seen this type of decor done extremely well, and it’s beautiful when well executed. But it’s undeniably not popular these days, and it's difficult to change the look & feel of this decor to anything else without investing huge bucketloads of cash.

That’s it for today’s Highs and Lows. View other posts in this series. Thanks for reading! Call, email or text us if you’d like help finding your bank-owned bargain.

Heather, 602.999.8831
Chris, 623.570.9940

The Highs and the Lows #4

Wherein I periodically post about the highest and lowest priced homes in the local MLS. Properties must be:

  • single family, detached homes

  • bank owned

  • currently Active in the ARMLS (AZ Regional Multiple Listing Service)

  • located in the general metro Phoenix region (Wickenburg, Florence, Coolidge, etc are excluded but Surprise, Buckeye, Queen Creek, etc are included)

$4,100 – No, that’s not a typo

4 bedroom, 2 bath, 1738 square feet built in 2002. Located in the West Valley near the intersection of Glendale & Dysart roads.

4100 EF

4100 map (click to enlarge any image here)

Listing Realtor’s notes state: “Please View property before making offer. Home has many cracks inside and out.” I’ll say. . . .

4100 BR

4100 ceiling

4100 EF crack

4100 fence

The seller’s Realtor’s notes go on to say “15+ offers received we will submit all offers Friday 7pm expect seller response mid-week.”

I’m no builder and I haven’t seen this house in person but it looks in pictures like the home is shifting right off it’s foundation. Or maybe it’s on top of expansive soil. Regardless, this has got to be a case of either major repairs or tear the whole thing down and rebuild it. It’s located in a neighborhood with a Homeowners Association (HOA) so you’d have to comply with their rules for either project. I’m astounded that anybody would want to pay anything for this home.

What do y’all think??

Buddy, can you spare $5 . . . .million?

Nearly 12,000 square feet under roof, on 4.7 acres near Pima & Happy Valley roads. Originally listed in November 2006 for $10,000,000!

5M EF click to enlarge any photo here


5M bath

5M shower

Venturing out on a limb here, my personal opinion: this is bad taste on an epic scale. That bathroom makes me feel like Las Vegas, and not in a good way. What do y’all say? Luxurious beauty? Or Liberace’s hideaway?

Oh by the way, last episode’s $6.5 million dollar luxury estate in Silverleaf is still for sale. View other posts in this series.

That’s it for today’s Highs and Lows. Thanks for reading! Call, email or text us if you’d like helping your bank-owned bargain.

Heather, 602.999.8831
Chris, 623.570.9940

Update: Home Buyer Tax Credit

It looks like the fat cats in Washington, D.C. will pull it together and extend the home buyer tax credit. But it's really anybody's guess. Here's a Facebook message I sent just a few minutes ago to a friend who asked.

Q: Will the tax credit be extended?

A:  My gut says probably. Handing out money during a recession is ultimately good politics, no matter what the Tea Baggers say. But it's getting awfully slowed down in Congressional Committee. There's so much political noise about healthcare legislation and (today) noise about the local elections in VA and NY.

If they extend it, I just hope those old fat white men in DC are smart enough to make it retroactive so there's no gap between the old credit ending Nov 30 and the new credit beginning. It would suck HARD to close on Dec 3 if the old credit ends 11-30 and the new one begins 1-1-2010.

There are actually 2 different bills, both stuck in Committee. HR 3760 and S1230. You can track progress at - do a search for "Home buyer tax credit" and you'll see them both.

Links: Bloomberg News, November 2 ;

ZipRealty Says “Phoenix is Hot”

ZipRealty released it’s Third Quarter Home Hunter Report a few days ago and according to them… wait for it… Phoenix is hot.


We’ve been working 60 to 80 hour weeks (each) since about June. So this isn’t news to us. But sometimes folks don’t believe it till they see it in print with a big corporate name behind the data. So here it is. A big corporate name to back us up.

The 10 ZIP codes with the highest sales-price-to-list-price ratio were:

  • Rancho Bernardo, Calif., 92127 (124.9 percent sales-to-list ratio)

  • Davie, Fla., 33328 (123.2 percent)

  • Grand Prairie, Texas, 75050 (120.1 percent)

  • Commerce (Los Angeles), Calif., 90022 (118.5 percent)

  • Everett, Wash., 98205 (109.3 percent)

  • Whitestone (Queens), N.Y., 11357 (108.5 percent)

  • Glendale, Ariz., 85307 (107.6 percent)

  • Phoenix, Ariz., 85035 (106.3 percent)

  • Oakland, Calif., 94608 (105.6 percent)

  • Arleta (Los Angeles), Calif., 91331 (105.3 percent)

Note: Data for home sales in the 4th quarter, in the 33 markets tracked by ZipRealty

What’s it mean to you? If you’re shopping bank owned foreclosure (a.k.a. REOs) in the metro Phoenix/Glendale market, don’t be surprised if your Realtor advises you offer more than list price. The closer your shopping takes you to the under-$100,000 price range, the higher above list you should expect to see sales prices.  The closer you get to the $400,000 range, the less you should expect to be paying over list price.

Want more specific than that? Contact us for a personalized look at your price range in the neighborhoods you’re shopping.

Metro Phoenix Utility Companies

This might be helpful info to newcomers moving to our Valley or to first time buyers moving into a new home who never had to think about utility companies before.

APS, Arizona Public Service, provides electric to much of the Valley. You can contact them at 602.371.7171 or

SRP, Salt River Project provides electric services to a good deal of the East Valley too. You can contact them at 602.236.8888 or

Southwest Gas provides (shockingly!) gas services to the metro Phoenix area. They're at 602.861.1999 or The City of Mesa handles gas services to parts of Queen Creek; reach them at 480.644.2221 or

Note that if you're buying a bank owned home, the utilities will almost always be off. To properly do a home inspection, the buyer must turn on the utilities in their own name. You're dealing with government and quasi-government entities so expect unhlepful customer service people, long waits, bad Muzak and general disappointment and frustration.

Personally, I can tell you that the City of Mesa's gas service policies and customer service are the worst. APS is just about as good as it gets in utility land and most of the customer service folks who work for Southwest Gas are really friendly, happy people.

Stop the Insanity!

Image ID 698532 by PinkDragon image courtesy of Stock Exchange user PinkDragon

We made an offer yesterday for our first time buyer client on an adorable little starter home in Glendale.  It’s bank owned. It’s listed for $109,900. All the appliances are there, seem to be in working order and the house is move-in ready.

We looked at the comps, shared them with our buyer client, and she decided to offer $130,000.

I just hung up the phone with the listing (i.e. seller’s) Realtor. She sounded completed unimpressed by an offer of $130,000 on a $109,900 listing. Unimpressed!

Bankers, c’mon! You’re killing us! Stop listing your REO properties at 20% under the market values. You’re just making us all crazy. Bidding wars aren’t fun and they’re making our buyers (and us) feel like the yarn doll in the picture. We’re all gonna go postal soon, and we know where your headquarters buildings are located.

REOs Rule, But Not Everywhere

Image ID 1150734 by svilen001 Image courtesy of Stock Exchange user svilen001

Just a little blurb from one of our favorite title/escrow officers, Maggie Clark of Equity Title. This gives a good picture of just how much the REO (“real estate owned”, i.e. bank owned foreclosure) properties are driving the market lately.

Southwest Valley - REO active listings represent 16% of the total listings, and 50% of the sales for the last month.

Peoria and Glendale - REO active listings represent 17% of the total listings, and 54% of the sales for the last month.

Scottsdale - REO active listing represent 6% of the total listings, 29% of the sales for the last month.

We still get calls on a regular basis from buyers seeking second homes and winter vacation homes. They often ask for Scottsdale, and expect prices to have nose-dived there just like everywhere else. Not the case! Scottsdale hasn’t been hit with the tsunami of foreclosure much of the rest of the Valley of Sun has. Not as many bank owned homes on the market at bargain bazaar pricing equals prices have not nose-dived. Not in Scottsdale anyway.

You want bargain basement, clearance sale pricing? Go to the older neighborhoods in Phoenix, and to the West side neighborhoods of Peoria, Goodyear, Avondale, Tolleson, Maryvale, Buckeye, Peoria, etc. The far Southeast has seen plummeting prices too: think Queen Creek, Florence and Apache Junction.

How Much for Closing Costs?

I asked one of our favorite lenders the question many, many buyers are asking their Realtors: “How much do I need to cover closing costs?” Here’s his answer.

Purchase PriceAmount to Cover Closing Costs
$75,000 - $100,0006.00%
$105,000 - $145,0005.00%
$150,000 - $185,0004.00%
$190,000 - $255,0003.00%
$260,000 - $305,0002.50%
$310,000 - $359,0002.00%

Chart courtesy of Andrew Schmidt of WJ Bradley Mortgage Capital Corp.
You can reach Andrew and his team by phone at 480-621-4300 or 4324.

Here’s a slight hitch in  your giddyup: most banks will flat out refuse to contribute more than 3.00% towards the buyers’ closing costs. Which is a shame because a lot of cash-strapped first time homebuyers are shopping for homes in the under-$150,000 range.

We know a few tricks to soften ‘em up though.

If you’re a homebuyer who’s Realtor shopping, give us a call. We’ll tell you how we work, and you can decide whether you’d like us to represent you, or if you’d like to use other Realtors. Not ready to commit to a phone call? Read on, click around, you’ll get a feeling for how we work & who we are. When you’re ready, we’ll still be here.

The Highs and the Lows 2

Wherein I periodically post about the highest and lowest priced homes in the local MLS. Properties must be:

  • single family, detached homes

  • bank owned

  • currently Active in the ARMLS (AZ Regional Multiple Listing Service)

  • located in the general metro Phoenix region (Wickenburg, Florence, Coolidge, etc are excluded but Surprise, Buckeye, Queen Creek, etc are included)

$20,00 Fire Damaged Tear Down

Fancy yourself a handy person? You’ll need to be. This 4 bedroom, 2 bathroom house in Maryvale Terrace was torched.

The Low 09 06 09 damage

The exterior might be salvageable though and it seems like a nice big yard.

The Low 09 06 09 EF

The Low 09 06 09 BACK

Recently, same-sized homes in the area that are move-in ready and remodeled have topped out at $80,000 to $90,000. I’m no contractor but it seems like you could rebuild this poor fire damaged little casa for $60,000. Again, I’m not a contractor but I’m not sure there’s room here to rehab it and sell at a profit.

Paradise Valley Acre Plus, Rebuilt in 2007 - $4,085,000

The High 09 06 09 EF

Check out that view of Camelback Mountain in the upper left of this picture! That’s worth a million right there. The lot is 1.14 acres, so there’s another $900,000 or million in value.

The house itself is 8,422 square feet, 5 bedrooms, 6.5 baths, with a 4 car garage. It was completely rebuilt in 2007. Pictures seem to show it was 100% torn down and rebuilt, not just remodeled.

The High 09 06 09 POOL

The High 09 06 09 PAT

The high 09 06 09 KIT

Based on this picture, the home has everything you’d expect in a home in this price range: built in island and cabinetry that can pass for being hand carved in the mythical Old Country, miles of slab granite and travertine, stainless steel double stoves (probably Viking), high ceilings and crown molding … just enough to make your neighbors jealous.

The High 09 06 09 DIN

Personally, I say “so much for the idea that bank-owned homes are screaming great bargains.”  I think this house is probably worth about what they’re asking for it, maybe even less.

What do you think?

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Technorati tags:  Phoenix real estate

FHA Game Changer

Aug 5, 2009, 11:56 am. This just in, from one of our favorite lenders – mortgage broker Kevin Reiser of AmeriFirst Lending:

The FHA loan game is going to change completely. Mortgage giant Taylor, Bean & Whitaker just lost their FHA funding accreditation. They are:

  • the 3rd largest FHA lender in the US

  • the nation’s largest FHA 203k lender

  • the largest FHA funding source for mortgage brokers in the country

So what?  This is big setback for mortgage brokers and will change the game completely for buyers seeking FHA funding. Now those buyers must increasingly turn to bankers (rather than brokers) for their FHA mortgage funding. Brokers won’t be able to fund your FHA mortgage anymore, unless they get a different funding source than the biggest Big Boy out there.

Updated 7:05pm, Wed Aug 5:

How Big Is TBW? -- "Taylor Bean was the 12th largest U.S. mortgage lender in the first six months of this year, according to Inside Mortgage Finance, a trade publication. Among originators of FHA loans, Taylor Bean was the third largest in May, with a market share of 4%, according to the publication. Only Bank of America Corp. and Wells Fargo & Co. were larger." (quoted from Calculated, link below)

Calculated Risk reports on TBW - (excerpt/quote) the suspension was put in place because "TBW failed to submit a required annual financial report and misrepresented that there were no unresolved issues with its independent auditor even though the auditor ceased its financial examination after discovering certain irregular transactions that raised concerns of fraud."

Mortgage News Daily reports on the TBW situation - The snippet that caught my eye was this, "Regrettably, TBW will not be able to close or fund any mortgage loans currently pending in its pipeline." Yikers! If you're a home buyer using an FHA loan to purchase, and you're in escrow right now, and you used a mortgage broker to get your loan, call him or her immediately to find out if TBW was the broker's funding source! Your escrow might get very wonky, very quickly.

NPR reports on TBW - (excerpt/quote) "HUD wants the executives barred from conducting business with the government for 18 months."

TBW is a Florida based company. Local paper The Orlando Sentinel's report on Taylor Bean Whitaker -  They named Bank of America and Wells Fargo as financing alternatives, as did several other sources.

The Highs and The Lows

Wherein I periodically post about the highest and lowest priced homes in the local MLS. Properties must be:

  • single family, detached homes

  • bank owned

  • currently Active in the ARMLS (AZ Regional Multiple Listing Service)

  • located in the general metro Phoenix region (Wickenburg, Florence, Coolidge, etc are excluded but Surprise, Buckeye, Queen Creek, etc are included)

$12,500  Handyman Special

The Low, 08 02 09

Built in 1963 with 3 bedrooms and 1.75 bathrooms. It’s 1,374 square feet with a 1-car carport and no pool on a lot of 6,312 square feet. It’s located about 1,200 feet from the campus of Grand Canyon University, so it might make a fabulous little student rental for some lucky investor.  At this price, it’s almost 100% guaranteed that lenders won’t touch the deal, so bring your checkbook. Recently homes nearby & similarly sized, with most or all of the remodeling work done have sold in the mid $50,000s. Rents in the area seem to run about $850/month.

$4,250,000 Old World Villa on 1.5 Acres

The High EF 08 02 09

The High KIT 08 02 09

The High MLS 08 02 09

Built in 2003, this 7,998 square foot beauty boasts 5 bedrooms, 5-1/2 bathrooms, a large rectangular pool, a 4-car garage and an 800 square foot guest house.  It sold in April of 2002 for $4,300,000 according to the MLS data. Interestingly, the tax records show a transaction at that time with a sales price of only $2,850,000. Don’t know what kind of shim-sham was going on there. Looking for a little something for your sweetie? Contact Mid First Private Bank. Or us. Heck, go with us.

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Technorati Tags: Phoenix Real Estate Statistics