Opportunity knocks for buyers in our beautiful Scottsdale AZ real estate market.  Until December 1, 2009, the U.S. government is offering an $8,000 tax credit to first-time homebuyers and to buyers of principal homes in Scottsdale and Phoenix, who have not owned primary homes in the last 3 years.  The tax credit applies to taxpayers throughout the nation.

It is truly a buyers’ market trumping the last eight years.  First-time buyers have the opportunity to buy Scottsdale real estate on scenic golf courses and homes in other neighborhoods that were previously out of reach.  Alternately, they may desire to purchase larger Scottsdale AZ homes in medium-priced neighborhoods, homes with more space such as an extra bedroom or office or garage.

Families looking for real estate in Scottsdale are also highly motivated by great prices for homes and loans.  With reduced sales prices, flexible sellers, and increased inventory, now is the time to buy.  Interest rates are still quite low and FHA loan products are enticing.  In February, the FHA Loan Limits in Maricopa County (Scottsdale, Phoenix and Mesa) increased to $346,250.  FHA conforming loan limits are $417,000.

Buyers with steady employment and reasonable credit scores can buy a home with as little as 3-percent down payment through the FHA.  In addition, the FHA opened up bridge vehicles that enable first-time buyers to borrow from tax-credit monies for down payments.  The tax credit also applies to purchasers who use revenue bond financing.

All principal residences are eligible.  That includes single-family homes, condominiums, townhouses, co-ops, and houseboats, which we do not see much of in the desert.

A tax credit is not a tax deduction. It is a dollar-for-dollar reduction in taxes.  If the homebuyers do not owe taxes, they will receive a refund after filing 2009 taxes.  Unlike other recent incentives, homebuyers who buy between January 1 and December 1, 2009 do not pay back this money unless they sell the qualifying homes within three years.

The tax credit starts phasing out for homebuyers with modified gross incomes above $75,000 ($150,000 joint), according to a formula.  Please consult your tax advisor for specific information.

For more information about the estate homes and luxury real estate in the area, contact the LUXE Real Estate Group at 1-888-900-LUXE.

Take note if you are or plan to be a real estate investor in Scottsdale, Phoenix, or any other part of Arizona.  On July 10, 2009, Arizona Governor Brewer signed legislation that as of September 30 changes the Arizona anti-deficiency law contained in the Arizona Revised Statutes – Section 33-814(G), the trustee’s sale statute.

Investors in trust property in Scottsdale or Arizona real estate need to find out how this ruling affects their situations, if at all, with regards to plans for foreclosures and short sales.  We strongly advise consultation with qualified tax professionals before deciding to do a short sale or foreclosure.  There are possible derogatory tax consequences resulting from Arizona  foreclosures, shorts sales, and loan modifications.

The current Arizona anti-deficiency rule keeps lenders from seeking a deficiency, or suing directly on the note, following a foreclosure or short sale of investment real estate in Arizona that meets certain criteria.  It is advisable for real estate investors to seek professional help analyzing each foreclosure or short sale to determine their rights and obligations.  The lender’s remedies under the Promissory Note and other loan documents spell out the terms.

Designed to limit the type of borrowers that will qualify for anti-deficiency treatment, the new Arizona law changes the criteria.   Criteria under the current laws are simple:  the anti-deficiency rules apply only if the foreclosed property is under 2 ½ acres and utilized as a single one-family or single two-family dwelling.

The current law goes something like this:  In Arizona, if a borrower fails to pay its loan, a lender can foreclose its Deed of Trust lien either judicially per A.R.S. 33-721 et. seq., or non-judicially by conducting a trustee’s sale per A.R.S. 33-801 et. seq.  If the foreclosure price does not pay a lender what it is owed, the lender may generally seek a deficiency against the borrower for the difference.  Arizona has anti-deficiency laws that bar a lender from seeking a deficiency in certain situations.  In both judicial foreclosures and trustee’s sales, anti-deficiency rules apply only if the property being foreclosed meets the criteria.

However, after September 29, 2009, there are additional criteria:  The trustor must have lived in the property for at least six consecutive months and must have a Certificate of Occupancy.  Investment properties sold at a trustee’s sale will not qualify for anti-deficiency treatment if the trustor has not lived in the property for the six consecutive months.  There are more details in the fine print.  Be aware.

For more information about the estate homes and luxury real estate in the area, contact the LUXE Real Estate Group at 1-888-900-LUXE.

New HERA regulations designed to improve mortgage disclosure take effect on July 30, 2009.  Through this legislation, buyers in the Scottsdale and Phoenix Arizona real estate markets will be better informed about the mortgage process in the future than in the past.

HERA stands for the Housing and Economic Recovery Act.  It assists borrowers by mandating full transparency.  The new rules encourage consistent lending practices among Scottsdale lenders and include controls to prevent deceptive and abusive lending practices.  Hoping to promote fair regulation of the Arizona real estate industry, all parties should benefit from the regulations.

All mortgage lenders and mortgage brokers in Scottsdale must comply with the regulation requirements.  One of them has to do with Truth in Lending (TIL).  Truth in Lending is a form mandated by federal law that specifies information that must be provided to borrowers on different types of loans.

The idea is that lenders provide one uniform set of price disclosures that are consistent from loan to loan and from lender to lender.  In theory, this would enable Scottsdale home buyers  to make apples-to-apples price comparisons across loan types and across lenders.

Mortgage companies in Arizona are looking positively about several changes heralded by HERA.

1. Saturdays will be counted as business days for all disclosure wait periods.
2. With the exception of the credit-report fee, upfront fees cannot be charged until the borrower receives the initial TIL from the lender.
3. Initial TIL is required on purchases and refinancing of primary residences and second homes and not for investment properties.
4. Initial TIL must be provided at least seven business days before the closing and signing date.
5. If the APR in increased by more than .125 percent, at least three business days before closing the TIL must be revised and reissued to the Scottsdale home buyer.

The appraisal cannot be requested until the Arizona home buyer  receives the initial TIL from the lender.  Lenders may not collect the appraisal fee until four business days after the lender issues the initial disclosure packet.  A copy of the appraisal must be provided to the borrower, although they may eliminate the three-business-day wait period by waiving their right to review it.

In today’s real estate market, escrows no longer close in 30 days.  Loans are more difficult to close and when all goes well, they take about 40-45 days.

For more information about the estate homes and luxury real estate in the area, contact the LUXE Real Estate Group at 1-888-900-LUXE.

Short sales are the best option for many owners of resort and vacation real estate in Scottsdale Arizona.  However, this alternative to foreclosure will not work for sellers who expect to make a profit from the sale of their Scottsdale AZ homes.  Those sellers are best off seeking loan modifications.

Sellers of Greater Phoenix real estate are at the mercy of their lenders during the negotiations for short sales.  Caught in difficult situations, they are usually behind on house payments with no end of challenges in sight.  Distressed sellers need to remain humbly aware that for short sales to work, the lenders must agree to accept a loss of funds.  Consequently, sellers who want to be successful in their proposals to do short sales had better follow their lenders’ guidelines to the T.

The first step to a short sale is calling the lender.  It is important to speak with the person capable of making decisions about short sales.  Sellers should be aware that requirements for short sales vary from lender to lender.

Listed below are some commonly requested documents:

• Letter of Authorization sent to the lender allows the lender to communicate with the real estate agent, lawyer, and the title company.  It should include the property address, loan reference number, seller’s name, date, and name and contact information for real estate agent.
• Closing sheet, prepared by closing agent or lawyer, to illustrate estimated sales figures.
• Hardship letter to explain circumstances and causes of financial problems.
• Proof of Income & Assets document that discloses resources, assets, and accounts.
• Comparative Market Analysis (CMA) prepared by your real-estate agent to describe market and property value declines that are affecting sale of the property.
• Purchasing Agreement
• Listing Agreement
• Copies of bank statements and an accounting for each deposit along with evidence assuring continuing deposits.

It is highly recommended for sellers to confer with professionals such as real estate agents, real estate lawyers, and CPAs before proceeding with short sales.  Some states allow lenders to pursue borrowers for the difference between the amount owned and the amount paid.  In some instances, the shorted amount is taxable income.  Unforeseen details dampen the short-sale transactions.

Most states require credit reporting by lenders.  However, sellers may ask lenders not to report the short sale.  Occasionally, lenders will oblige but normally a short sale registers on the FICO score the same as a foreclosure.

For more information about luxury real estate in the area, contact LUXE Real Estate Group at 1-888-900-LUXE.

With the fallout of the sub-prime market, lenders have been forced to tighten credit standards and many low down payment or no down payment loan programs have disappeared. In response to the credit crisis, FHA has increased loan limits in Maricopa County to $346,250 for a single family residence. In addition, the FHA Ameridream program offers low to moderate income buyers the chance to own a home with a down payment grant that does not have to be paid back!

Lending guidelines have definitely become more strict, but there is hope for buyers. Now, more than ever, it is vitally important to work with an experienced lender/mortgage broker. If you are ready to buy and would like to get approved for a home loan, contact a Luxe real estate professional today and we will connect you to a top notch lender and then we’ll help you find your dream home!