RooPho Realty, LLC

610 E. Roosevelt St. #140 Phone: 602-224-0554

Chris F. Campbell, Urban Real Estate Specialist

Serving the Phoenix, Arizona Metro Area
Located in the Roosevelt/Phoenix Art District

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RooPho Realty FAQ: Real Estate

Does A Bank Owned Or Short Sale Affect The Market Value?

In a word, yes. Before the recession of 2008 there weren’t very many Short Sales and there were less Foreclosures. At that time, appraisers probably didn’t use the sale price of a distressed property because there were only a few in each neighborhood. Since the housing market decline of 2008, there are so many Short Sales and Bank Owned properties the appraiser has to use them in an appraisal for any property in the neighborhood because there are more properties in distress then not. Therefore, unfortunately for the seller’s that are not distressed their values are hurt also.

If you think about it from the buyer’s position, why should they pay 25% to 50% higher just because your property isn’t distressed? In some cases the distressed property has been damaged by the previous owner but that damage probably would cost much less to repair then to pay a higher price for a non-distressed property.

How Do Home Inspections Work?

Let’s start with a so called “normal” sale and then I’ll discuss an “as-is” sale.

With a normal sale, once the Buyer and the Seller have negotiated on a price and terms of the sale, Arizona has a standard 10 day inspection period. This is 10 calendar days including weekends and holidays. Make sure extra days are requested during the negotiations if a holiday falls during the inspection period. During the 10 day inspection period, the Buyer has the right to inspect everything and anything. That includes the electrical, plumbing, structural, roofing, water heater, AC and heat. The Buyer can also check for mold and other environmental issues.

One thing many people don’t think of is they also have a right to inspect the neighborhood. I always suggest to my Buyer’s to drive around the neighborhood as many times as they can during the inspection period. I suggest they drive the area at different times of the day also. You can cancel the contract “at Buyer’s sole discretion”. That means if there is a neighbor that parks their car on their yard, or you hear a barking dog, you can cancel the contract but ONLY DURING THE INSPCECTION PERIOD. If you don’t discover that during the inspection period you can’t cancel the contract for that reason.

Before midnight of the last day of the inspection period, the Buyer must deliver (normally via their agent) a notice to the Seller to either Cancel the agreement, offer the Seller to make some repairs or accept the property as-is and move forward to close. The Seller has 5 days to get quotes, check out the repairs and decide what, if any, repairs they want to make. If the Seller refuses to make the repairs. requested, the Buyer has 3 days to decide if they want to move forward without the repairs or cancel the contract.

In an As-Is Contract, the Buyer agrees during negotiations to buy the property without any repairs. The Buyer still has the right to the 10 day home inspection and they can cancel the contract in the same way, but the Seller has already said they will not do any repairs so the home inspection is more for the Buyer’s information so they are aware of the condition of the property. If the inspection shows the property or the neighborhood is not acceptable to the Buyer, they have a right to cancel the contract and get their earnest money back.

What Is A Short Sale?

When a property owner owes more on the property then it’s worth they have the option of talking to their Lender and listing the house as a Short Sale. The words “Short Sale” are describing that the owner Lender is going to be “Shorted” on the money they leant on the house. If the owner paid $200,000 for their property and because of the recession it is now worth only $125,000, they will be shorting the bank $75,000. The bank has to agree to this and if there is a second loan on the property they will have to agree too.

What Is The Process For Buying A Property?

This is a very short description of the standard steps to buying a property. Many different things can come up during the process that RooPho Realty is very experienced in and can help you through them all.

I think it’s always best to start with looking at your budget and determine how much you want to spend per month on your mortgage. Using your current monthly expense will help. Then, talk to a lender, I recommend talking to a couple to three lenders so you have something to compare. Then talk to up to three lenders. Talking to too many lenders gets confusing. They will ask you questions and determine how much you are qualified for. Make sure they include PITI or Principle, Interest, Taxes and Insurance. Some lenders only quote you Principle and Interest.

Once you have the amount you want to spend, contact RooPho Realty. Let us know what area of town, how many bedrooms, bathrooms and square footage. Also, mention other things that are important to you such as a pool, garage space and so on. We will send you all the listings on the market that fit your needs. We then normally will ask you to join us in our office so we can go over the properties and discuss other things that may be important to you. After that, we start looking at the properties and the communities you have in mind.

Once you find the right property, we’ll right up an offer and send it over to the Listing Agent. It may take a few days to negotiate with the Seller via their Agent but once we have an agreement, the 10 day inspection period starts. See “How do Home Inspections Work” for that process.

During the home inspection period, you will be working with your lender to continue the loan process. This is also a good time to check on Home Owners Insurance. Once the Home Inspection is completed, it’s really just waiting for the loan to be completed and Close Escrow. See “How does Close of Escrow work”?

How Does My Credit Score Work?

Your credit score, also called your FICO score, is a little complicated but very important. Basically, when you have a credit card, car payment, electric bill and yes, even your cell phone bill, you are creating a credit history. Many lenders and even the electric company and cell phone company’s look at your credit score to determine what interest rates they will charge you or if they want to do business with you at all.

The highest credit score possible is 850 and almost no one has that. Many people get over 800 a bit. A normal Credit Score is over 700. If you’re score is 680 or higher that’s not bad, however, even if your score is in the lower 600’s you can still get credit, however, the interest rate charged will probably be higher.

You probably heard in the news lately (Jan 2012) that interest rates are in the 3% range. That’s true, but most people won’t get that rate because you need to have a credit score in the high 700’s or more. Many people are getting an interest rate in the 4% range which is still a very good rate.