Arizona Real Estate News» Buyer Information

Lenders Hate Double Escrows or Double Closes

Daniel Reynolds — Tue, 13 Oct 2009 21:45:45 +0000

Here’s what they’ve done to see to it, you’ll never have a chance at doing this.

1) Restricted the Title Companies with full disclosure to all parties.
2) Title Companies now require Full Disclosure to the Buyer and the price the first buyer bought the property for.
3) Fannie Mae properties have verbiage which require the first buyer to hold onto the home for 90 days or face lawsuit.
4) FHA and Conventional Lenders require two appraisals for properties owned less than 60 days.

If you’re planning on placing a cash offer on a home, with the hopes of a double close, please take into consideration all possible scenarios that could take place. First and foremost, before placing a cash offer on a home, you should research who the seller is and if they ( lender/bank ) allow for a double close. Then, you’ll need to contact the title company they are going through and find out if they know how to handle a double escrow. Not all Title companies do.

If you manage to get that far, you’ll need to be prepared for the possibility of the second buyer finding out what price you bought the home for and what price you’re trying to sell it for.

Even if, you manage to get this far, you’ll still need to confirm the new lender will allow for such a transaction. Disclose, Disclose and disclose is the only way you can get through a double close without having major issues. Or worse, lose the earnest money you placed down. And with cash offers, most lenders want to see 10% down on Earnest Money.

I can assure you one thing in a lender owned property and that is most lender addendum’s have double close clauses in their contracts.

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Lenders Hate Double Escrows or Double Closes was first posted on October 13, 2009 at 2:45 pm.

Designated Broker: Daniel Reynolds | Office:623-252-EXEC (3932)

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Owner Agent Homes

Daniel Reynolds — Thu, 09 Jul 2009 01:31:30 +0000

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Our legal department recently stated all owner agent homes must be in full disclosure. Meaning, full disclosure of an owner agent property must be shown on the MLS PLANO visible to all buyers and not under the “Realtor Remarks”. Also, the contract cannot be executed without first having the buyer’s understand the property is being sold by an owner agent. This can be easily avoided by an email to the buyer or something in writing having them acknowledge the home is being sold by an agent.
The main reason for this type of disclosure is to protect the buyer from an experienced seller in real estate. The seller has access to information the buyer doesn’t. For example, the agent can access MLS where the buyers cannot. Agents readily have access to tax records and history reports of the property where buyers do not.

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Owner Agent Homes was first posted on July 8, 2009 at 6:31 pm.

Designated Broker: Daniel Reynolds | Office:623-252-EXEC (3932)

Opening escrow at a title company with a bank owned property

Daniel Reynolds — Sat, 13 Jun 2009 22:35:17 +0000

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Escrow can be opened at any title company accept when the property is bank owned. Bank owned properties require the buyer to open escrow at a specified title company because of the volume being done by the lender. Most lenders will specify one title company to handle all their business to prevent fraud or liability in a sale. For example, a double close or double escrow that does not disclose buyer A’s purchase price could be grounds for buyer B to sue for nondisclosure. The title companies assigned to banks know this and are aware of other types of liabilities to the lender such as an assignee clause. Which allows the contract to be sold to another buyer for a price above what the bank agreed to sale the home. The title company the bank chooses are familiar with what is allowed under the banks terms which is why they do not prefer using other title companies.

When a bank forces a buyer to use their title company, the buyer has the right to request the lender to pay for all the title fee’s associated with the purchase. If the lender does not permit this, they could be found guilty of Anti Trust Laws.

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Opening escrow at a title company with a bank owned property was first posted on June 13, 2009 at 3:35 pm.

Designated Broker: Daniel Reynolds | Office:623-252-EXEC (3932)

3% down Non FHA Loan 550 Credit Score Minimum

Daniel Reynolds — Thu, 11 Jun 2009 19:36:09 +0000

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We recently had the mortgage lender, Southwest Mortgage Partners, offer our clients a hard money 2nd mortgage with only 3% down. This type of financing was once known as a nonconforming loan but has been unavailable for two years until now. We are finally in a position to assist borrowers with damaged credit scores and buyers that couldn’t qualify for regular Conventional/FHA financing.

This new program will allow buyers to purchase a home with 3% down, through hard money financing. The loan will be arranged as an 70/27. The first mortgage will be at a 70% ltv with rates averaging 10% interest only. The second mortgage will be a silent mortgage with no payments due until the home is refinanced or title is conveyed. For more information on this type of financing, please contact us. ( Down payment must be 3% or 5k which ever is greater. Funds must be seasoned for 2 months )

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3% down Non FHA Loan 550 Credit Score Minimum was first posted on June 11, 2009 at 12:36 pm.

Designated Broker: Daniel Reynolds | Office:623-252-EXEC (3932)

What does AS IS mean? Do AS IS properties qualify for FHA or Conventional?

Daniel Reynolds — Mon, 01 Jun 2009 04:54:16 +0000

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AS IS properties can be purchased FHA or Conventional; however, most AS IS homes are in need of minor to major repair. Any repair work that will deem the property non-livable will not go through FHA financing. Conventional financing is the same way, but are more lenient when it comes to smaller to minor repair work. FHA has an appraiser go out to the property and inspect it along with the FHA inspector. If anyone of the two inspectors note any missing or damaged AC units, broken windows, damaged carpet or an empty pool, they’ll deem the property as non livable conditions. “Chipping paint would not be a nonlivable flag, although bare siding wood would be.
Also, any safety or health concerns would have to be corrected prior to closing. FHA also requires everything be up to code.” – Sandra Dean-Mahoskey. This is the basic problem with AS IS properties. If you purchase a property AS IS and works needs to be done to “qualify the home” there’s no way of asking the lender to repair the items. The only option is for the buyer to come out of pocket for the work prior to the loan closing. This puts the buyer at great risk. AS IS properties are usually fine if built after 1990. Any properties prior to 1990, may be too old and may have much repair work to bring the property up to par. IS Properties include mostly bank owned homes, but can be short sales if the owner is no longer living in the home or has interest in the home.

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What does AS IS mean? Do AS IS properties qualify for FHA or Conventional? was first posted on May 31, 2009 at 9:54 pm.

Designated Broker: Daniel Reynolds | Office:623-252-EXEC (3932)

New home builders in Gilbert | William Lyon Homes AZ

Daniel Reynolds — Fri, 29 May 2009 02:28:37 +0000

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With the amount of resale homes contracting it’s becoming harder to find an ideal type of property for prospective buyers. Most homes on the market need several thousand dollars worth of repairs to make the property livable. We recently showed about 5 homes priced around 180k in Gilbert. These homes needed work and seemed to be priced with the market but wasn’t worth putting an offer on when you could drive up the street and buy a new home with less hassles.

William Lyon Homes in Arizona

The hard part is finding a new build that doesn’t require a huge earnest money down to contract a home. Most new builds in Gilbert, AZ require at least 10-20k down to contract. That’s a lot of money out of pocket. Most first time buyers barely have 5k saved up which is usually the only down an FHA buyer would need. There is hope for new home buyers in Gilbert. We recently showed a new home builder in South Gilbert priced around 220k for a 2400 sqft home, brand new.

William Lyon Homes offer first time home buyers an ideal chance to get into a home with as little as 1k down for an earnest deposit. Compare that with new home builders up the street that want more than 10k for earnest. As of Saturday, this complex will have only one spec home left. Meaning if you’re a first time home buyer looking for a brand new home, you may have to wait 5 months until the next home is built. If you are interested in buying a new home, please feel free to call our office or send us an email. We’ll be happy to email you new builds in the area of your choice.

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New home builders in Gilbert | William Lyon Homes AZ was first posted on May 28, 2009 at 7:28 pm.

Designated Broker: Daniel Reynolds | Office:623-252-EXEC (3932)

Legal Title vs. Equity Title or Equitable Title

Daniel Reynolds — Wed, 27 May 2009 00:17:24 +0000

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Equitable title is referred to a buyer that has contracted a property for sale but has not yet closed on the home. They’re said to have equitable title. When a buyer has equitable title, they have legal interest in the property because they have it contracted for sale. However, equitable title is not legal title. Legal title only comes when a property has been conveyed or sold. Once a property closes and title is conveyed to the buyer, they are said to have legal title. Equitable title occurs anytime a property is contracted for sale. Equitable title also occurs when a buyers contracts a home as a seller carryback under an agreement for sale. This type of equitable title is also referred to as a land contract. A land contract is where the owner holds title until the buyer pays the seller the complete purchase price of the home.

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Legal Title vs. Equity Title or Equitable Title was first posted on May 26, 2009 at 5:17 pm.

Designated Broker: Daniel Reynolds | Office:623-252-EXEC (3932)

Buying a house in AZ with no agent

Daniel Reynolds — Mon, 25 May 2009 22:23:35 +0000

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There are many ways to buy a home without the assistance of an agent. First and foremost to be affective at this you must have access to the MLS. Second, you must have an easy way to contact the listing agents to homes to verify the homes are still available and have no pending offers. Lastly, you need to verify whether the home is a short sale or a bank owned property. Depending on whether the home in bank owned or a short sale will give you an idea of how much time you could spend waiting on a counter offer.

Most people are under the impression that they can save money by not using an agent. The fact remains, each home contracted on the MLS are listed with Realtors. Sooner or later, you’ll have to deal with an agent when writing an offer. The listing agent representing the seller would usually be paid 3% of the sales price if you were being represented by an agent, but if you’re not they’re then entitled to 6%. The listing agent should help you write the contract, but what you need to understand is Dual Agency. Anytime you are not being represented by a Realtor in a transaction, you’re in dual agency. Dual Agency means you’re signing a waiver acknowledging the listing agent has a fiduciary duty to the seller and to you. It’s very difficult to represent two people in the same transaction.
On one side, the buyer wants the best deal possible and on the other side, the seller wants the highest price. I’ve seen many occurrences where the listing agent discloses to the seller, ” these buyers are motivated. They want your home so bad. I just know they can pay more.” The best way to protect yourself in a transaction is to ensure you have proper representation. Another good metaphor is showing up to court only to have the plaintiff’s attorney represent you. You wouldn’t do that in court, so why would you do this a real estate transaction?

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Buying a house in AZ with no agent was first posted on May 25, 2009 at 3:23 pm.

Designated Broker: Daniel Reynolds | Office:623-252-EXEC (3932)

Broker vs. a Realtor | What are the differences?

Daniel Reynolds — Mon, 25 May 2009 02:02:48 +0000

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A broker is real estate agent that has passed the state license requirements to receive a broker’s license. A normal agent is a considered a Sales Person by definition of the Arizona State Law. We’ll refer to a sales person as an agent in this article. Once an agent obtains their license, they must join a local association to receive access to the MLS and the electronic key to open properties. Once they join a local association, their given the title, Realtor. In the southeast valley of Arizona, we have the South East Valley Association of Realtors. Any members of this group, are able to use the title, Realtor. A Broker can also be a Realtor. A Broker is a higher designation of a sales person. It’s equivalent to a salesperson having an associates degree and broker having a bachelors degree. That many not be the best metaphor but the difference of experience by state definition says the following:

You must have at least 3 years of actual experience as a salesperson or broker during the 5 years preceding your application. Each broker who employed you in the previous 5 year period must complete a Broker Candidate Experience Verification Form (LI-226) (included in the informational brochure). Submit the completed forms to the Department to establish the date through which your experience is valid (your “valid through” date)If applying for a real estate broker’s license, you must complete 90 hours of pre-licensing education and pass the examination at a Department approved real estate school, college or university. The completed Certification Questionnaire and disclosure and documentation concerning your background are required Each active-status designated* broker must attend a broker management clinic once every Continuing Education period (every 24 months).* A self-employed broker is a designated broker pursuant to A.R.S. § 32-2101(20).** See A.R.S. § 32-2136(C).

To clarify, there are two types of Brokers. Associate Brokers and Designated Brokers. Designated Brokers are in charge of supervising Associate Brokers and Sales Persons to a Real Estate Company. Each Real Estate company is required to have a Designated Broker. Only one Designated Broker can be assigned per company. Any agent that has a broker license that is not a designated broker is considered an associate broker. An associate broker if they choose, can start their own real estate company but are considered Associate Brokers as long as they are under the supervision of a Designated Broker.

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Broker vs. a Realtor | What are the differences? was first posted on May 24, 2009 at 7:02 pm.

Designated Broker: Daniel Reynolds | Office:623-252-EXEC (3932)

Search Maricopa Homes

Daniel Reynolds — Sun, 24 May 2009 03:20:33 +0000

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Maricopa, which is located not too far from Casa Grande offer great prices and an ideal investment opportunity.Many clients are asking us whether Maricopa is a good place to buy or not. What we tell buyers and investors, are the facts. Most homes in Maricopa take longer to sell or rent than other homes in Metro Phoenix area. However, Maricopa offers great prices than other cities cannot. Most homes in Maricopa are well below the average selling price in Arizona. Most rentals are below the medium as well, but what makes Maricopa such a great buy is the potential for a solid long term investment. In today’s market, most bank owned properties can be located in Maricopa are priced well below 75k. Some new homes can be contracted between 50k-75k without having to compete or bid up on the price to contract the home. However, if you plan to work in Metro Phoenix, Maricopa will be a hard commute unless you plan on working from home or are retired.

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Search Maricopa Homes was first posted on May 23, 2009 at 8:20 pm.

Designated Broker: Daniel Reynolds | Office:623-252-EXEC (3932)