I don't know if it was a commercial for cold cereal, or "Big-League Chew" or something else, but as a kid there was this commercial that ran during Saturday morning cartoons where the kid is playing outfield in a baseball game. The ball is hit and headed his way when he realizes it is actually about 50x the size of a regulation ball and he says, "I got it, I got it....YOU got it!"

That pretty much sums up just about every real estate transaction being handled by today's real estate Professional. It isn't any one person's fault, it is just the way it is. Several factors may account for last minute delays: Increasing "tight" lending standards for one and honestly, a current bottleneck due to heavy buyer activity may be the biggest culprit.

Just this last week we ran into a classic case of "close yet so far away" on a transaction.

Our Buyer was coming from Salt Lake City and had just closed on the sale of their personal residence the night before. They arrived on Tuesday and for whatever reason, their Lender didn't have loan documents ready to sign so they graciously put the Buyers up in a hotel for the night.

The next day their moving truck showed up with the crew saying "where do we put this stuff? We gotta' be in Las Vegas later this afternoon." At the same moment the Lender called and told us that FHA was asking for a termite inspection as a final condition for closing the loan!

WITH the moving company there, the Termite Inspector (Wade of Western Pest Control, a great guy), showed up to inspect. No problem, the home was only built in mid 1990's right, shouldn't be any critters, right? Wrong.

TERMITES! Nothing major, but had to be treated right then. This of course delayed closing, move-in, the works! Sheesh.

Fortunately the Buyers are tremendous people and were so excited about their new home purchase they were able to forgive all of the inconveniene of the day.

I don't know whether sharing this story will make me look stupid or experienced, but it happened and other agents, buyers and seller can and should learn from it.

Lesson? Just like in every facet of life there are going to be hiccups, snags, unexpected delays. When you are dealing with the purchase or sale of your home the stress is enhanced. Here are a few tips to create a little "insurance" against these types of incidents:

 1. Get a "thorough but basic" understanding of the Purchase Contract (REPC): The oxymoron in the heading for this point illustrates this key point: Don't waste your time becoming a real estate Attorney all of the sudden when you buy or sell, but DO get a very solid understanding of the contract deadlines, consequences of missing them, and methods to extend them if necessary.

A solid real estate agent should be able to make this all very clear. (toot my own horn moment coming up right....NOW!!) The Larkin Group prides itself on being able to take a complex, legally binding document and making it very plain and simple for the average Joe.

2. Turn in all necessary documentation YESTERDAY! This means items requested by Lenders, Title, Real Estate agents, etc. This could be pay stubs, employment verification, repair histories, HOA info, whatever. I have seen dozens of deals get delayed because buyer or seller procrastinated in delivering key information.

3. Hope for the best, plan for the worst: "Be optomistic and pessimistic all at once!" Meaning...certainly put all of your energy and faith into the process going smoothly and as planned, but always remember that it could get delayed and sometimes it is just noone's fault. I have had many clients put themselves in a bad situation by moving out of their current residence becuase the proposed closing was scheduled for say June 1st, then the deal was delayed until the 10th!

I've seen sellers have to move back in because buyers bailed at last minute, and buyers have to find immediate, emergency housing in the interim. Not fun.

Be prepared mentally and emotionally for this most exciting purchase or sale of your lifetime and you will have a great experience every time.

Until next time...

The tides are a turnin' in many parts of the St. George area real estate market this month! Friends and clients on my mailing list have been hearing about this for the past few months and the positive news keeps coming.

In an article from today's "Spectrum" newspaper titled "Local Economy Stabilizing", local & regional economist Lecia Langston said Washington County's economy is beginning to stabilize. Well it's about time!

For so long our area was "insulated" from the major ebbs and flows of the economy, feeling only a percentage of the cyclical changes that may have been felt in other major metropolitan areas. Why? Well if you live here you know the answer, and if you are moving here you also understand. Great location, weather, scenery, national parks, low crime, the works!

Outside of all the economists' hard-to-understand charts and graphs, what we are seeing "on the ground" is this: Properties hitting the market and selling in a few days or less for list or even above list price, with the final price and terms being determined through a "bidding war." (see this WSJ article on just that: BIDDING WARS)

Here are some hard figures to consider:

1. "Pending" sales up nearly 40% since February. All of the major financial and housing experts use pending sales as a major indicator of housing market health.

2. "Active" listings down 12% in that same time frame. Real estate, just like handguns and hammers, is about supply and demand. Lower supply is what we want.

There is still a TON of foreclosure inventory coming, but I think this is a good thing. Why? Because every well-priced home that hits the market right now, especially under $300k, is selling in just a few days. This tells us the public is finally ready to pull the proverbial trigger and get into the housing market.

Housing has always driven the rest of the financial markets. When people are buying, sellers are getting paid and spending that $$ on other homes, goods and services. In that process, real estate agents, title and mortgage people also get paid. They in turn spend money, and the eternal sales cycle continues.

Please feel free to comment or ask questions on this page about the figures above, as well as your personal opinions about the market. Onward!

Some time back I posted an entry titled "If I Gave you $10,000  to Buy a House, would you do it?"  I was of course referring to the St. George / Washington County Home Buyer "grant" of $10,000. It was exciting news for sure.....at the time.

That news now pales in comparison of the combined incentives available for buyers in this current market, particlularly FIRST TIME home buyers (defined as anyone who has not owned a home in the past 3 years.)

Let's take a brief look at those options:

$8000.00 First-time home buyer tax credit - Detailed summary HERE.

You literally get either an $8000.00 check from the US Govt, or a credit in the same amount against your tax liability if you buy a home between Jan 1, 2009 and Dec 31, 2009. (Assume you owe nothing in taxes, you're getting $8k. Assume you owe say $4000.00, you're getting $4000.00)

Who gets it? First-time home buyers only. Does it have to be paid back? NO. The "old" tax credit (from way back in the pre-historic age of 2008 and President Bush) was $7500.00 and had to be paid back. Not this one, it is yours to fix your home up, go to Disneyland, stuff in a mattress, whatever.....forever. Income qualifications are broad and very few will make too much for this.

$10,000 Home buying grant in Washington County / St. George -Email us for Details

This is an income qualified "grant" and also depends on how many people in your household. If you are couple with no children, $32,000 is the cutoff. I believe it goes up $5000.00 per child thereafter. The key stipulation with this program is that is has to be paid back in full if you sell or refinance the home in the first 15 years after.

$6000.00 Utah "Home Run" New Homes Grant - Just signed into law LAST NIGHT by Governor Jon Hunstman. Detailed summary HERE.

There are only 1600 of these babies available and then the pot of gold is gone. The funding comes from President Obama's stimulus package and the $$ that was allotted to Utah. The premis is this: Offer a $6000.00 incentive to those who buy a vacant, never-been-lived-in home, so we can get some of this vacant inventory "mopped up.'

Unlike the Washington County incentive, this does NOT have to be paid back and income limits are HIGH: $75,000 for individuals and $150,000 for married couples.

Total Incentives to buy: $24,000

Kind of makes me wish I were buying....

Not only that, it has also upset alot of people who feel like their hard-earned tax dollars are being used to pay their neighbors an incentive to go buy a home. There is some truth to that I'm sure, but as a member of the industry who looks at vacant homes all day long I have to support these measures.

Additionally, we have actually arrived at a place where owning IS cheaper than renting for many people, and if not literally so, it is effectively the case based on all of the tax benefits of owning a home. (not to mention getting an $8000.00 check after closing!)

Sorry to sound like just another home-peddling realtor, but we are truly heading into the "Perfect Home-Buying Storm." I read a report this week that showed the following: Since they began tracking interest rates in 1971, obtaining a (legitimate) loan has never been more affordable....ever. Add to that (now) low pricing and these incentives and I can't see why a qualified individual would wait.....for what?!

In closing, let me illustrate how these incentives "hit home." I put a contract together on a foreclosed property with a young first-time buying family just yesterday. The home had been on the market JUST 1 day and will need several thousand in maintenance items to be really "livable" by most people's standards, (carpet, paint, some appliances, yard cleanup, etc).

Now the average family buying their first home will do everything they can to come up wtih their downpayment, but as for making alot of repairs, which almost all foreclosures require, most people don't have it!

As a young family with 1 baby and consistent, but "limited" income, that $8000.00 will come in very handy for them.

What say you?

I love good news, don't you? In a period of NEVER-ENDING financial pain, death, destruction and just generally bad news once again my beloved Beehive State is a ray of light.

In second edition of a report called "Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index", Utah was just ranked #1 in terms of its' forecasted ability to recover economically.

Here are the top and bottom 5:

Sorry New York - things don't look bright for you. And they beat up on California of course for more over-spending, tax hiking and general stupidity in policy-making.

Full Article HERE.

The average US citizen looks at NAR (National Association of Realtors) as nothing more than another lobbying group that spends its' days and nights telling buyers that every day is the "right time to buy."

What people (this includes Realtors themselves) don't realize is that they are doing a CRITICAL work for the country in getting legistation passed that benefits us all. So what did they do this time? Nothing besides creating an opportunity for 1st-time home buyers to get $8000.00 of FREE MONEY from the government!

Yes, FREE, so long as you hold the home for at least 3 years. That is pretty easy since I am counseling ALL of my clients to buy for the long-term.

Many thanks to one of my lending partners, Blake Bench of Countrywide Home Loans, for this timely breakdown of how the latest ("latest implying one of MANY bailouts...) multi-GAZILLION dollar (gazillion with a "g") bailout legislation.

This sign is posted on the doors of Congress....

The information is not only timely, but downright critical to not only those of us either working in the industry, or trying to buy or sell real estate right, but the greater populiation at large. Until we get the real estate markets more healthy, there will be major financial pain worldwide.

The only thing most of us hear about the bailout package is that GM and others want taxpayers to pick up the tab on a few million transmissions.....good to know, but not relevant to real estate. Here it is:

• Tax Credit: The tax credit for first time home buyers has gone up from $7,500 to $8,000. I also understand that this new amount doesn't have to be repaid. I have been helping buyers see that they could use this money to repay a gift from a relative. Maybe then they can come up with a down payment. (I wish that they had passed the $15,000 credit for any homebuyer but sometimes when you wish upon a star your dreams don't come true.) I have to add the disclaimer for all buyers to talk to their accountant or tax advisor about this since I am not licensed to give that type of advice.  Here is a breakdown of the tax credit:

Still not making sense? Here is a step-by-step explanation: 2009 Tax Credit Explained

• Help for struggling home owners: Many borrowers from the last few years put nothing down or very little down toward the purchase of their home. With home values now lower many are upside down and can't refinance. New legislation may allow them to refinance with LTV's up to 105% of the homes current value if they have stayed current on their payments. I am going to call all of my database and see if I can help them lower their payments.
• Modifications: Billions of dollars are set aside to help people modify their loans without refinancing. They do not have to have missed payments to qualify for this.
• Keeping Interest Rates Low: Bear in mind that current interest rates are "artificial" in nature and WILL NOT stay this low for ever. (This subject merits its' own discussion) These "artificial" rates are part of the government's plan to "prop up" the ailing economy. Treasury and Federal Reserve will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities to ensure stability and liquidity. The Treasury will also provide up to $200 billion in capital to ensure that Fannie Mae and Freddie Mac can continue to stabilize markets and hold mortgage rates down

Departing from Blake's starter course on the bailout, let me add the following advice: Make sure you completely understand the rules, regulations and consequences (good and bad) of things like tax credits and local "grants" for home buyers.

In the meantime, chime in with any key information or ideas you have on this bailout business!

Hello real estate fans! Occasionally, (because I am too tired, or busy, or lazy or in this case - because this is a great piece), I will "borrow" content from colleagues in the business who bring a relevant point of view to the table.

This week I hope you will take the time to read a post on the UtahCeoMagazine.com blog written by local Broker and friend, Graig Griffin. He talks about the value that every sale of a foreclosed property brings the local real estate market.

I share his sentiments. The quicker we can "mop up" these homes, get them "off the books" so to speak, the better. The challenge that all of that vacant inventory creates affects every one of our lives whether we own a home, rent one, or simply live in a distressed housing market - which we ALL do.

One of my favorite comments in this piece is about the changes in the 2009 St. George Parade of Homes brought on by the challenges in the housing market:

"Most of the Parade homes are what I would consider “normal” houses, meaning that the odds of prospective purchasers arriving on planes without propellers is pretty low. Any plane, really."

As a related side-note, there is actually a home on tour for $259,900 this year. If that doesn't sound very cheap to you, remember that a few years ago there were almost NO homes on tour under $750k.

Here is the link, enjoy and be sure to comment on that blog site if you like it, don't like it or just want to share your opinion!

http://www.utahceomagazine.com/blog.php

It's always great to get some free press, and we had a super tour today! The following was taken directly from the KCSG website. Story and VIDEO CLIP here: http://www.kcsg.com/news/local/39603417.html

Real Estate Agent Organizes Fun Bus for Foreclosures

By Chance Walser

I’m sure I’m going to take some heat from my peers for this, but I’ll take that risk to present the following long-range views on the subject.

There’s a lot of “buzz” in the St. George real estate market right now about the upcoming “Utah Real Estate Auction”, (www.UtahREA.com). I’m not sure what that buzz looks or sounds like outside of my professional peer group, but it seems that every time I turn around this week another agent is talking about it. 

The concept behind the auction is quite simple, and on the surface, makes complete sense: Put together a huge list of properties that are (supposedly) distressed and ripe for deal-seekers. Compile them all into a big online database, roll out the direct mail and billboards announcing “deals of the century”, and set the “contract room” up for hungry Buyers and elated Sellers.

In theory, everyone wins. Sellers get what they want, Buyers the same, and any involved Realtors pick up a quick, albeit reduced, commission.  So what’s wrong with the program?

Nothing, perhaps, but if you take a long-term view of the market and the perceptions that get created when things like “auctions” take place, there are some potential pitfalls. Here are a few to chew on:

Potential Pitfall #1: Buyers’ perception of possible savings become distorted.  For months and months now, the average home in Washington County has sold for 85-100% of the list price. Now hold on for the next part: many homes, almost all bank foreclosures, are selling for 100% of the list price or MORE! I am hearing weekly of “bidding wars” being created on homes priced so aggressively that multiple buyers are trying to get in on the action.

With the hype of an auction, buyers, especially out of town buyers, get the idea that they can come to town and “name their price” when the reality just isn’t so. This creates disappointed buyers and lots of wasted time.

Potential Pitfall #2:  3^rd-Party lender and lien-holder buy-off. Many of these homes are “short-sales” and lack the required 3^rd party approvals at their current prices….what happens when bidders come in and offer another 25% lower?

What happens is more disappointment. We saw this happen in the past 90 days in Northern Utah. It was all over local and state news. Would-be deal seekers showed up an a similar commercial auction, made their bids and had them “accepted” at the auction…only to find out later that the banks and 3^rd-party lien holders wouldn’t buy off on the high bids. I saw some ANGRY people on the news that day……whoops.

Potential Pitfall #3: The “perception” of a good deal does not a good deal make. I am always reminded of the story my Keller Williams Sales manager told me about his first iPod purchase on eBay. The poor guy stayed up ½ the night to ensure a winning bid, only to find out later he had paid higher than retail price!

In a KSL piece dated August 6, 2008, Paul Nielson wrote about the fact that real estate auctions are not always a good investment. This goes back pitfall #1. Read the following excerpt from that article: “As for those great deals where people can buy a home at auction for less than half it's worth, some attorneys say that's not really happening in Utah right now. Sometimes at foreclosure auctions, the bank will charge what it is owed, even if it's more than what the house is worth.”

Well that’s interesting. Unfortunately, just as there is always a dummy who will respond to an email from the “Princess of an African King” to make a few million dollars, there will always be people who will show up to a real estate auction and over-pay for a property due to the inherent “perception” of a good deal.

Now can I be completely frank with the following? When you go to the auction website you will see the "Estimated Value" vs. the "Opening Bid." There are very "Estimated Values" that I can comfortably say are the "Actual Values." From my personal observation, many of those estimated values seem high to the tune of 5-15%. In many cases the "Opening Bid" is just about the actual current market value. DO YOUR HOMEWORK!

And don't forget that they are tacking a 6% "premium fee" on top of the winning bid price!

Here is a link to the auction inventory which stands at 72 properties at this writing: http://www.utahrea.com/auctions/properties.php?auctionid=14

So why go?

Lots of reasons. Sheer Curiosity and the fact that you really might find a sweet deal are two really great reasons. Another is that you will just learn a lot in the process as a bystander.

The Utah REA people and their local contacts are doing a super job promoting the even and all of the potential pitfalls aside, it is great exposure for our local market.

The other thing I really like is that in a market of "bystanders," these people are actually out making it happen. There is also the potential to move a large volume of inventory in a very short period of time....very cool.

Here are some useful tips to make sure you don’t end up as one of the “dummies” I described above:

1. Do your homework first. This means contacting a good local Realtor who has solid contacts with people like home inspectors. Get out and physically view the properties in advance, ask questions, and have your agent run some “comps” (comparable sales data) to determine what would be a good price for the home.

If you’re concerned about how your agent, as well as “listing” agents get paid (cause you don’t want to pay more than you have to, right?), contact me directly for a copy of the auction company’s rules, forms, etc.

2. Pre-determine your absolute max asking price in advance. This will also ensure that you don’t get caught up in the wave of emotions that can come along with an auction-type setting.
3. Be sure about your big “why” before bidding. Do you need a home or are you just someone who buys 5 pallets of Diet Coke at Costco because it’s “on sale?” Real estate investment may be the greatest long-term wealth building tool in the world, but buying and “flipping” homes like the masses did in 2005 is a dangerous game nowadays, so but be sure you have a solid game plan put together before bidding at an auction.

Auction Date: Thursday February 13th - 7:00 PM.

Location: The Dixie Convention Center - 1835 S. Covention Center Dr., St. George.

I will be there. We will be driving the SoUtahForeclosureTour.com shuttle…you can’t miss us! Please chime in with your thoughts and opinions about the auction process. Good? Bad? Indifferent?

If you are a Buyer or Seller, or intend on sometime being a Buyer or Seller, or simply enjoy staying up on the Real Estate market, you will find the following information extremely intriguing.

I am going to take a very brief moment to share with you some information that may seem a bit like "bragging", but it.........ok, it is.

Yes, my sentiments exactly (get it? Holy.....Cow...?)

Wow, a hint of positive news....at least for Utah's Dixie. In an article released this morning by the Associated Press, St. George, Utah, Ithaca, N.Yand Fairbanks, Alaska are among the handful of the nation's 363 metropolitan areas expected to see employment remain flat or increase slightly.

New York, Los Angeles and Miami are forecast to get hit hard.

If this holds true, it confirms a conversation I had Saturday while out with a couple from SLC searching for a 2nd home (which will eventulally become their primary). The question was posed, "what do you think is going to happen with the market?........I am personally surprised that this area hasn't been hit harder."

First, I agree and I, too am suprised at the resiliancy of Southern Utah. That said, my answer to "why" this is has everything to do with qualify of life. Yes, people are losing jobs here and moving elsewhere, but it is pretty easy to pick up and leave many of the so-called cities (a.k.a."hellholes) when things get ugly.

But Dixie, on the other hand, is just a wonderful place to be, live, visit, drive, BREATHE, etc. (see: "Wasatch Front Inversions...")

"Escape to St. George".....

We have not stopped growing in this economic downturn - people keep coming (for better or worse). Why? Quality........Of............Life. And now that real estate values are coming back into line with reality it just makes this area that much more appealing.

Eat your heart out big city folks.....and we don't even have to pay to park!

Full article here:

http://news.yahoo.com/s/ap/20090119/ap_on_bi_ge/city_job_declines_1