Thinking about a short sale?

With sales up and standing inventory down, there seem to be a lot less short sale and foreclosure houses out there these days (thank goodness!), but I still hear some people say they just want to find "a great deal on a short sale." I've heard enough horror stories to know that finding a quality home and getting a good deal are two things that don't necessarily go along with finding a short sale. If you are considering putting yourself through this, please read through this letter we received from Dan Eerkes, a local Realtor. The letter is long, but the lesson is a good one if you're out looking for a new home.

In September of 2008, I took my clients, second time home buyers, out into a market saturated by short sales.  The clients were looking forward to taking advantage of many distressed properties on the market in Southern Salt Lake County and Northern Utah County.  The clients, after reading countless articles and ads about buying shorts, were looking to buy a lot of house for a big discount. As a Realtor of 5-years, I knew that making offers on short sales and actually having one accepted are two different things.  However, my clients were certain that given the amount of properties available, at least one of them would work out. 

We viewed over 40-properties in September alone.  Most were an immediate disappointment to the buyers, as they were in typical pre-foreclosure condition...basically trashed.   The looks on my buyer's faces told the story as we walked into home after home with dirty carpets, gaping holes in the drywall, broken cabinet doors, and all in need of updating.  Its very hard for a client to envision themselves living in someone else's abandoned and run-down property.

We continued into October of 2008, finding just enough homes that would work, to write several offers a week.  For an agent, it was the typical drill; Call the list agent, ask about the status of the short, possibly get a call back, write offer, submit offer, and get no response unless you bugged the listing agent over and over.  Usually you were routed to a processor who told you nothing of value.  This resulted in some pretty low spirits for my buyers.  They just couldn't see ever getting a home, especially one listed on a short. Unfortunately, the homes in their sub-$250k price range were mainly all listed as shorts.  During 2-months of looking, we wrote offers on 12 homes, and received one call back from an agent who instructed us to bring our highest and best offer in November.

Fortunately, I had seen a listing on the MLS for new builds in T.G. Meadows.  While waiting for a build job to be completed was not my client's first option, the continual letdowns and endless waiting for responses to offers opened the door of thought for them to consider building a home.  On the first visit to the McArthur model home, just the standard finishes and amenities in the home, immediately caught the eye of my clients. The thought of building a new home in their price range, in the area  they needed to live in was something I don't think they thought was possible!  Even better, the home would be theirs from the start, not someone else's failed attempt at home ownership.  It took only one more visit to look at the new subdivision and well-planned homes for my clients to lock in a lot, and write an offer to have McArthur build them a home.

The McArthur sales team made the process smooth, quick, and efficient. My clients went into the building phase, happy, and confident they were getting everything they wanted when they initially started on the home search.  I just wish we had walked into the McArthur model home before the short sale march of depression we endured for two months!!!

Best Regards,

Dan Eerkes

KE Capital Services

801-548-6116

Click here if you are interested in more information on the new McArthur homes mentioned in the letter.

What do the new FHA changes mean to you?

Have you heard about the upcoming FHA changes involving mortgage insurance premiums and required FICO scores? These changes could make it more difficult to qualify for a mortgage in the future. They could also cost you $1000 or more if you don't act quickly!

Click here for up-to-date information on these changes and other news regarding new homes.

If you are considering purchasing a new home, talk to your mortgage provider right away about what these changes mean to you.

If it's good enough for a rhino...

Although there are thousands of innovative products and fancy new dream home ideas at the International Builders Show 2010, my favorite thing so far has involved a Black Rhino named Ricko. If you are planning on building a new home or remodeling, I'd check Ricko out.

I guess I should explain a bit more. Mohawk launched an experiment involving their SmartStrand carpet. For 14 days Ricko the Rhino lived in a special new space outfitted with SmartStrand carpet. Check out the challenge page to see Ricko play, eat, stomp and yes, poop, all over the carpet.

I saw a piece of the carpet first hand and it looked pretty scary. The dirt and grime looked much worse than anything my two-year old could create. However, there was an adjacent part of the sample showing the carpet after it was cleaned with water. It looked brand new!

I'm not in any way paid my Mohawk, but I am so glad that I recently put SmartStrand carpet in my new home and glad we offer this awesome product to our new home buyers at McArthur Homes.

Maintenance Must-Dos for New Homeowners

Here are some great tips from Realtor.com to keep your new home in great condition.

Our maintenance checklist was compiled with the help of Lou Manfredini, Ace Hardware’s home improvement spokesperson and star of the “Mr. Fix-It” show on Chicago’s WGN-AM radio, and Frank Lesh, president of the American Society of Home Inspectors and head of his own home inspection company, Home Sweet Home Inspection Co., in Indian Head Park, Ill.

• Change your furnace filters monthly. “It’s so easy to do but so critical,” says Lesh. Clogged filters decrease furnace efficiency and can cause breakdowns.

• Drain your water heater at least once a year. Sediment will drain out along with the water from the water tank. Removing sediment can prolong the heater’s useful life.

• Clean the coils. If you have baseboard heating units that use hot water, clear dust from the coils inside the units to maximize heating efficiency. Clean dust whenever you see it accumulating. If you have a hot water boiler/furnace, you should also oil the pump inside the furnace twice a year, says Lesh. Look for the three spots on the pump designated for oiling.

• Check your circuits. Test the performance of the circuit breakers in your electrical circuit box twice a year by flipping them off and back on. If you have a circuit that keeps shutting off with normal daily electrical use, call an electrician. A faulty circuit breaker could indicate a short in the wiring inside your walls.

• Watch out for drips. Check under sinks periodically to look for leaks or water stains that might indicate leaks. Catching a small problem early can prevent water damage. Use a plunger to clean out sinks and tubs whenever water doesn’t drain normally.

• Be aware of life spans. Water heaters, furnaces, roofs, and other key components of your home should be replaced before they fail, based on their average useful lives. Here’s a general ballpark of the life span for key components:
• • Exterior house paint: 5-10 years
  • Furnace: 15-50 years
  • Roof: 13-15 years
  • Water heater: 7-15 years
  • Wood deck staining: 4-7 years

• Keep the wet out. Water is a major enemy of your house. Check each season for signs of water damage to your home. Flashing, the metal pieces used to seal the areas between roofs and chimneys and around doors and windows, are especially vulnerable to damage by wind or age. Loose flashing can let water seep under a roof or inside walls, which in turn can cause mold.

• Get to the bottom of things. Check your home’s foundation for cracks or gaps that could let in water or varmints. Also look at the ground around your house. As homes age, they often sink slightly below the surrounding ground. This settling lets water puddle against the foundation and possibly damage it, notes Manfredini. Doing major landscaping work also can cause changes to the ground’s pitch that let water flow toward the house.

• Look up. Chimneys take a great deal of weather abuse. Visually inspect them each year for signs of loose mortar or loose or missing bricks. Have the insides of chimneys cleaned every two to three years. Also check your roof for loose shingles or dangling gutters.

For more trouble shooting tips check out McArthur Homes Warranty Information.

Proposed Changes for FHA Loan Program

FHA has proposed several changes to their current loan requirements, which may make it more difficult for some borrowers to receive an FHA loan in the future. The good news is that now is an excellent time to move on a new home, before changes take effect and while you can also take advantage of generous Federal Tax Credits.

Proposed changes include:
Reducing the maximum permissible seller concessions from 6% to 3%
Raising the minimum FICO score (credit score) for new FHA borrowers
Increasing the amount of up-front cash that a borrower has to bring to closing

Details and public guidance for these changes should be available by the end of January.

Time Running Out for Grant & Tax Credit

The November 30th deadline for those looking to take advantage of the $8,000 Federal Tax Credit for new homeowners is quickly approaching. Only 44 days remain until the $8,000 disappear. For most this is not nearly enough time to negotiate and wait on a short sale listing, which can take up to 6 months!

The $4,000 Utah Home Purchase Grant 2 is also running out quickly. As of today only 876 grants remain. The funds will continue until all grant funds are committed or November 30, 2009 WHICHEVER COMES FIRST. This means that up to $12,000 in free money for the purchase of a new home in Utah will disappear after November 30th.

McArthur Homes has 10 beautiful brand new homes that will be completed in time for the November 30th deadline. On most you can even choose your own carpet and appliances! Contact kristi@mcarthurhomes.com for more information.

Home Run 2 Grant Announced, $4000 for Purchase of New Home!

Fantastic news! Governor Herbert has just announced the Home Run Grant 2 Program. Similar to the original Home Run Grant, this program will offer $4,000 grants to those purchasing a new home. The even better news is that this grant can be used for homes that are under construction or for a new contract on a home to be constructed.

Here are some facts about the new grant:

What is the $4,000 Home Run 2 Grant?
The Home Run 2 Grant is a mortgage assistance program that grants $4,000 to home buyers who wish to: (A) have a new home constructed, (B) have a partially-constructed home completed, or (C) purchase a newly-constructed home. It must be the primary residence of the home buyer. Homes that have been previously occupied do not qualify.

How is Home Run 2 different from the first Home Run program?
The first Home Run program, which ended in June 2009, provided a $6,000 grant to eligible home buyers. Home Run 2 provides a $4,000 grant. The first program required that homes be ready for occupancy upon closing. Home Run 2 buyers have two additional options. They can purchase a home that is contracted for construction or partially finished and contracted for completion. Homes that have been previously occupied do not qualify.
When a Home Run 2 Grant Commitment is issued, if the Eligible Home is fully constructed, the Commitment expires 10 calendar days after the date of issuance (unless that day falls on a weekend or holiday and then it is the following business day). If the Eligible Home is somewhere in the construction process, the Commitment expires on June 30, 2010.
All other aspects of the program are materially the same as the first Home Run program, as summarized below.

Who is eligible to receive a $4,000 Home Run 2 Grant?
•Home buyers who did not receive a $6,000 grant under the previous $6,000 Home Run Grant Program.
•Home buyers (any person taking title) must meet the following income restrictions:
Single person, maximum income, $75,000
Married couple, maximum income, $150,000
If more than one unmarried person is taking title to the Eligible Home, each such single person is subject to the $75,000 income limit.
Income calculations will be determined by the Adjusted Gross Income as verified by the Approved Lender using the 2008 IRS Federal Income Tax transcript obtained directly from IRS or from an authorized third-party vendor.
•Home buyers must occupy the purchased home as a primary, permanent residence.
•If home buyers need a mortgage loan to purchase the home, the loan must be a fixed interest rate, amortizing mortgage loan with a term of 30 years or less.
•The Home Run 2 Grant Program is effective only for home purchases closed after a Home Run 2 Grant Commitment has been issued for that specific transaction. The grant funds may not be issued for homes purchased prior to obtaining the Home Run 2 Grant Commitment.

For more information, contact an approved lender or check the McArthur Homes website for updates.

Realtor VIP Club

Tips for Building Your 1st ( or 2nd or 3rd) New Home

My friend Adele is about to start the exciting process of building her 1st brand new home. Like most people, she is thrilled and also a little nervous. Actually, in her own words she is "seriously nervous to make all those decisions" and "freaking out about building!!!" She asked for a little advice and this got me thinking. With all the experience I've had working with new home buyers at the McArthur Homes Design Studio and building two homes for myself, what advice would I give to Adele and others who are building a new home? Here's what I came up with...

#1 The best thing you can do is to start with a great builder. Check customer reviews and make sure that current home owners are happy with their home and the design process. The builder you're looking at should have an in-house Design Studio so that you don't have to drive all over town picking up samples and comparing items. Most builders will let you visit the Design Studio before even signing a contract so that you can see the quality of the products that they offer. McArthur Homes, the builder I work for, offers an award-winning Design Studio. We have many full-sized kitchens and baths so that you can actually see how different combinations would look in your home. We also brought in large samples of every product so that you can really feel confidant in the selections that you have made. You can click here to check out more on the McArthur Homes Design Studio.

#2 Take the time to identify your own personal style. Most people just don't know where to start. At the McArthur Homes Design Studio I've noticed that people can easily get overwhelmed by the details when they don't have a vision of what they want their home to look like when all is said and done. I strongly recommend taking pictures of model homes, homes of friends or family that you like, finding pictures online and in magazines (I love checking out HGTV's Rate My Space for inspiration). I have a personal file at home for "dream home" ideas. I also recommend taking little notes on what you liked about each picture. Is it the color on the walls? A piece of furniture? Maybe you just like the overall cozy feeling of the room. Whatever it is, identify it and save it. Then go back through and pick out your very favorite things until you have a good idea of what you want your new home to look like. You might be surprised to find that most of the pictures you like have dark wood floors, or maybe you gravitate to lighting and plumbing with a sleek look and a brushed nickel finish.

#3 Spend money where it counts! The number one problem I have seen with new home buyers is that they often spend too much on the unimportant details and not enough where it will really make an impact. Don't be afraid to invest in your cabinets. A beautiful glazed alder cabinet will go a long way in a kitchen, even if the countertops are just a laminate. (WilsonArt has some gorgeous laminate countertop options available if you want to do something great on a budget!) Cabinets are also great for resale because no one looking at buying a home wants to have to rip out and replace cabinets. It is just too expensive to do it later. Another good place to invest in your home is on the flooring, especially in high traffic areas like entrys, kitchens and family rooms. Spend a little money to do it right the first time and you won't have to worry about ripping up and replacing things later on. I personally recommend natural hardwood floors because they can are cozy and can be refinished for years to come. I also love the new Mohawk SmartStrand carpet. In the picture below, my friend Dixie chose knotted alder cabinets with a black glaze for a rich look. An affordable laminate countertop and bright backsplash contrast nicely with the deep alder cabinets.

#4 Use contrast to your advantage. Not everyone likes a harsh contrast of black and white, but an all beige room is boring. Add some interest with one or two items that are a darker or lighter than everything else, like a bright backsplash, a deep hardwood floor or an ebony countertop. Neutral can still be exciting if there is variation in light and dark. Remember that you can always bring in color with your paint, furniture, art and accessories so you don't need to worry about creating too much color variety in your home selections. I love the combination of light countertop and flooring with deep cabinets in the pic below.


#5 Details, details, details. Drawing from your "dream home" file, take note of details that can make your home more functional, or more custom-feeling. Here are a few of my favorites:

Roll-out trays in lower kitchen cabinetry & a built-in spice rack for easy storage

Christmas light outlet in the soffit of your home (mine has a digital timer switch so that I can easily control when the Christmas lights turn off and on)

A few glass cabinets in the kitchen to showcase your fav dishware

Built-in bench at the master shower to give you that spa feel

Cabinetry built-ins, recessed niches or anything else that makes your home more functional for you

#6 Move-in and make it your own. Once you've moved into your brand new home you can really personalize it to your taste. Adding interest & texture with accent paint, draperies, wood, metal and upholstered furniture, rugs and other accesories will bring your home to life. Don't forget to refer to your "dream home" file for inspiration but also make it yours with personal touches like family photos and mementos. Then invite over your closest famiy and friends and enjoy...

If you have any questions or would like additional tips. Feel free to contact me at kristi@mcarthurhomes.com.

Additional Home Run Grants???

I have heard several reports that additional Home Run Grant funds will be announced by next Monday to correspond with the Salt Lake County Parade of Homes. Supposedly, there will be about 2,500 additional grants of $4,000 which will be available to Utahns purchasing new homes. Nothing has been confirmed, but you can check our news updates at www.mcarthurhomes.com for the latest information.