Posts Tagged ‘Buyers’

Tucson Active Adult Communities Run the Gamut…

Monday, December 14th, 2015

The Tucson area is home to a multitude of active adult communities which range in price and amenities available.
Some communities require that buyers be age 50 and others age 55. Some communities stipulate that the owner meet the age requirement. This means a child less than 50 or 55 cannot purchase a property for a parent who meets the age restriction.
Other communities have no restriction on who can purchase a property as long as the occupant meets the age requirement. Some developments ask for proof of age, others don’t. When purchasing a property in an active adult community, the Covenants, Codes and Restrictions (CC and R’s) will spell out the requirements.
Price points run the gamut from $60,000 to more than a million dollars. Popular manufactured home active adult communities offer lower cost options and yet have many of the bells and whistles of the more expensive communities. Most have pools and recreation centers and offer the camaraderie of like minded residents.

Active adult communities built by production builders such as Pulte and Robson sport a beginning price point of the high $100’s.   Add ten to twenty percent to the base price for new home construction upgrades. When considering new home construction, use a Realtor®.  Make sure you make your first visit to that community with the Realtor® since he/she can often save you money and guide you in terms of what upgrades you should consider for future resale value.  You want to have representation and not be represented by the builder’s site agent who is working for the builder, not you.

Your Realtor® should check the inventory in the community to make sure you are aware of what is available.  Pre owned homes will probably have landscaping completed as well as window coverings, fans, and other upgrades which make a house a home and will save you money in the long run.  He/she can help you compare and contrast various communities.

Understanding your wants and desires and trying to match communities throughout the Tucson area is the function and job of your Realtor®.  There are many smaller communities within town; condos, townhomes, patio homes, manufactured homes, in addition to single family homes which may meet your requirements.  Not all active adult communities are golf course communities with hundreds or thousands of homes.

Think about what you want in a home, how you want to live your retirement, and tell your Realtor® who can help you translate that into reality.









Condo? Town Home? What’s the Difference?

Tuesday, December 1st, 2015

golfing-620x412The blue skies of Tucson and the inviting warm climate beckon, especially during drizzly, cold and bone chilling December through March weather.  Thoughts drift to a condo or a town-home in warmer and more hospitable climate, where golf can be played year round, hiking and birding are within a few miles of the city, and dining al fresco at one of the many establishments may become more than just a dream.

Tucson, Oro Valley and Green Valley have many condo and town home communities, many of which are limited to active adults with a minimum age limit of 50 or 55.  Condos and town homes are legally and statutorily different animals.

The Arizona State Statutes define condominiums in Title 33 which is the section governing property.  Chapter 9 concerns condominiums and Charter 16 governs town homes.

Condos do not have to be physically contiguous.  Some condo units are free standing, but the legal description is what separates a town home from a condo.  The owner of a condo owns the unit, but anything exterior to the unit is common property and is governed by the rules and regulations of the Association, unless that exterior element services only that unit.

A town home on the other hand, is a unit whereby the owner owns the land in the front and the back of the property and is responsible for that land.  It is not considered common property.  However a town home complex can have common property such as a recreation center, walking trails, or open space, just like a single family home subdivision.

These types of properties are governed by an Association which is comprised of the owners of the units, each having a specified vote according to the declarations of the community.  That Association is controlled by a Board of Directors which is elected by the property owners.

Rules and regulations of the Association must comply with state law, but dues structure, what the Association offers, and the types of maintenance such as roofing, landscaping, building painting, are determined by the Board of Directors and voted on by the members of the Association.

Often an Association will vote to outsource the day to day maintenance and collection of dues to a Management Company.  Many Homeowner Associations (HOA) pay a management company and this also includes single family home subdivisions as well as town home and condo complexes.

The rules and regulations of the Association are in the documents called the CC and R’s, Covenants, Codes and Restrictions.  Purchasers of properties which have CC and R’s should read the restrictions carefully.  Restrictions regarding the length of time children under a specified age can state are the property are important considerations for people in an active adult community who may want their grandchildren to visit, the policy on pets and weight of pets may be of concern, as well as information on how and when the Association can place a lien on property for non-payment of dues.

Your Realtor® should help you decide whether a condo or town home or single family home is best for you, and should guide you through the paperwork and CC and R’s to make sure the property you are purchasing suits your lifestyle and needs.

For help with purchasing a property in the Tucson area which includes Marana, Oro Valley, Tucson, Green Valley, and Sahuarita, contact Terry Bishop Broker Owner of Terry Bishop Realty, 1802 West Grant Road, Tucson Arizona 85745-1232 – cell:  520-349-4785, office:  520-232-3911.  

What is the Loan Status Update? LSU?

Wednesday, November 11th, 2015

stock-photo-young-couple-meeting-financial-advisor-for-investment-254297140The Lender must issue Loan Status Updates, otherwise known as LSUs, when requested by either the seller’s agent or the buyer’s agent. The first page of the LSU is similar to the Pre-Qualification form but is issued after mutual acceptance of the contract.
The close of escrow date is specified, the name of the buyer, the name of the seller and property address as well as Assessor’s number, and the city.
It is page two however, which tracks the progress of the loan from the reception of the contract and all addenda from the buyer’s agent. Understanding these items which the lender must fill out with the date completed and his/her initials, marking each box a yes or a no, is a journey through the loan process.
Once again, the lender must assure that he/she has the buyer’s name, income, social security number and the address of the property, as well as the estimate of value of the property and the amount of loan requested. The lender verifies that the loan estimate has been sent and the buyer indicates his/her intent to proceed with the loan.
The lender receives a signed Form 1003 ( which is the loan application form as well as all of the lender disclosures.
CFPB regulations now have the appraisal being ordered almost immediately and usually prior to the home inspection. In the “olden days”, pre CFPB, the home inspection was done first and then the go ahead given to the lender to order the appraisal. Buyer’s agents should now order the home inspection upon mutual acceptance of the contract as soon as possible.
Down payment sources are identified and the lender must review the Title Commitment to make sure there is no clouded title on the property, then the lender can lock the loan program, interest rates, points, and specify when the lock expires. Once the lock expires, that interest rate is no longer guaranteed and the buyer may have to pay a higher rate which potentially could prohibit him/her from purchasing the property since the total loan amount would exceed the amount of pre-qualification.
The appraisal is received and the property must appraise for the loan amount requested. We will talk about low appraisals in another blog tomorrow. If the appraiser has requested any repairs, the list must be provided to the buyer and the buyer and buyer’s agent must acknowledge receipt. These repairs must be completed and the appraiser must go out again and ascertain that the repairs have been done as a condition before the lender can issue documents for signing. The second trip is an additional expense to the buyer. These repairs are called PTD, prior to documents conditions.

The lender package goes to the Underwriter, the silent but powerful person in the back office. It is the underwriter who makes sure the conditions of the loan have been met and issues the final decree that the buyer has loan approval without PTD conditions.
The lender now orders closing documents and completes the closing statement, formerly a task done by the closing agent. This was called the HUD-1 and is now called the Closing Disclosure Statement. The lender reviews all, making sure all prior to funding conditions have been met and then orders funds to be sent to the escrow company. The buyer and seller sign the loan documents and another property has transferred ownership.

To see the new documents, check this website:



What’s the Difference? Title? Escrow?

Monday, November 2nd, 2015

Arizona is not an attorney state and people purchasing property here who hail from the east coast are often baffled because the Realtor® does everything, there is no attorney involved. If the seller and/or buyer want legal representation, he/she can hire an attorney, but under Arizona statutes, the real estate agent has the power granted to attorneys in other states.

Arizona is often called a “title company” state. It is the title company which investigates the chain of title and provides “title insurance”. If the deed is faulty, it is the title company which must make restitution. In attorney states, it is the attorney who researches the chain of title and does the “closing” which would be the function of escrow companies here in Arizona.
We have talked about preparing the offer for the buyer, how it is going to be financed, when we are going to close escrow, and the appraisal contingency. When the seller’s agent receives an executable contract, that agent “opens escrow”. Evidence of earnest money is taken to the escrow company and “escrow is opened”.  A receipt for the earnest money is given to the agent who then should give a copy to the buyer and seller.  The escrow company begins the process of checking the documentation and orders title documents from the title company.
In Arizona, escrow company and title company are often used interchangeably. However, they can be different companies. Many of the large real estate companies have relationships with title companies and escrow companies; the information on the contract will read abc title company/xyz agency.  Sometimes this is more expensive for the buyer and seller.
The buyer must determine how to take title to the property.  There are several methods in Arizona in which to take title with legal and taxable ramifications to each method. Legal and/or tax information cannot be dispensed by the agent or the title company but the agent or title company can give you an informational sheet on methods.
The commitment for title insurance will be delivered to the agent and to the buyer and these documents should be read by both the buyer and the buyer’s agent to insure there is no “clouded title”. Problems with title must be resolved prior to close of escrow. A common problem is a living person who is on title, and the co title holder is deceased.  The estate of the deceased must be reconciled prior to transfer of title and any and all taxes paid.
Before listing a property, a good agent will make sure there are no title problems and may ask for a certified death certificate as well as trust documents.   When an offer is being negotiated, the horrible title problems will not rear their ugly heads. Sometimes it takes months to clear a title since people must be tracked down and documents must be notarized.
Any exceptions to title insurance must be listed. Title insurance generally covers anything which can be determined from public records. Items not recorded in public records are usually not covered. Deed restrictions, easements, covenants, codes and restrictions should all be public records.

The escrow company must provide the Homeowner’s Association (HOA) information about the buyer and must provide the HOA a closing protection letter indemnifying the buyer and seller from any losses or fraudulent acts by the escrow company. The purchase contract is the instructions to the title and escrow companies.

The buyer has five days from receipt of these documents to review them and disapprove of any item.  A buyer who has three 150 pound dogs may want to withdraw from the contract since the HOA regulations permit only one dog weighing no more than 50 pounds.  More commonly, a person has an RV or a large truck and will not be permitted to park the vehicle on the property. If in an active adult community, often young children are prohibited for more than an overnight. Grandparents who find themselves caring for grandchildren may have to move from an active adult community or give up caring for their grandchildren.  CC and R’s impact the way you can live in your property.  Pay attention to them!

The date of close of escrow is the date of proration for taxes, insurances, HOA dues, or other fees. The buyer should make sure all utilities are turned on at the close of escrow so a reconnect fee will not be charged.
If there is a dispute between the buyer and seller regarding any earnest money deposited with the escrow company, the final arbiter is the escrow company. This may arise because one or the other party fails to fulfill the terms of the contract. Each agent may petition the escrow officer on behalf of his/her client, but there is a hold harmless clause indemnifying the escrow company.
The contract provides for assessment liens to be split between buyer and seller, paid in full by either the buyer or seller, but any lien filed after the close of escrow is the responsibility of the buyer.
FIRPTA, the Foreign Investors in Real Property Act, must be complied with at the close of escrow and it is the responsibility of the BUYER to withhold a tax equal to 10% of the purchase price if the seller is a Foreign Person or non resident alien who does not have a tax number.

Realtors® who sell to foreign persons have an ethical responsibility to explain FIRPA and the need to obtain a tax number to these buyers when selling a property in the United States. Trying to comply with the federal mandate when selling a home in order to close escrow is difficult at best.

How Do I Pay for this House?

Thursday, October 29th, 2015

The buyer should have been pre-approved by a lender in order to purchase a property.  There is a difference between being pre-qualified and being pre-approved.    To be pre-qualified means that according to what you have told the lender, he believes you can purchase the property for whatever sum.  Being pre-approved means the lender has checked the assets and liabilities and feels that the buyer can afford to own this property…the buyer is “good to go”.  The buyer wants to be pre approved.

But a pre-qualification form should accompany every offer.   However all offers using the AAR Contract are contingent upon loan approval, if the buyer suddenly cannot qualify for any reason, he/she is out of the contract, and if the property does not appraise, the loan cannot usually  be granted and the buyer is out of the contract. Earnest money will be returned to the buyer.

If the lender has “Prior to Document” conditions on the loan, then the specified conditions must be met prior to documents being issued by the lender.  For example, a termite treatment may be required by a lender for a VA loan.  Documents cannot be issued and therefore the loan documents will not be issued, nor the loan funded without this condition being met.  (A loan cannot fund without the signatures of the buyers.)

If the buyer had been offered an interest rate but failed to lock the rate because he/she thought the rate would go down, this is not sufficient reason for the contract to be cancelled.  Failure to have the necessary funds to close escrow is likewise, not a reason for the contract to be cancelled.

The buyer must provide the lender the name  of the buyer, social security number, address of the property to be purchased, buyer’s income , estimated value of the property, and the amount of the loan requested.  The buyer grants the lender permission to obtain a tri-merged credit report.

The Loan Status Update must be delivered to the seller with appropriate information describing the current status of the loan.  The update must be provided by the lender when requested by the seller.

The buyer will sign all loan documents no later than three days prior to the Close of Escrow date.

The financing portion of the contract indicates the type of loan, and if there is a change, all parties and the escrow company must be notified.  The buyer pays all loan costs unless otherwise indicated, and if concession from the seller to the buyer are a part of the contract, this must be spelled out.  If the loan is a VA loan, certain fees cannot be paid by the veteran and must be paid by the seller.   The appraisal fees which are to be paid, is designated either paid by the seller or by the buyer.

These provisions also act as instructions to the lender and the title company and permit the seller to know the details of the loan.  Both the buyer’s agent and the seller’s agent will monitor the loan process to make sure all time frames are being met.



Wednesday, October 28th, 2015

The Arizona Residential Purchase Contract identifies both the buyer(s) and the seller(s) of the property and indicates the buyer’s desires to purchase the property identified in section 1 b. This identifies the address of the property, the tax identification number, and the legal description. Three methods insures all identifications point to the same property.

The next section details the offering price of the property, the amount of earnest money, and the method of payment for the property. Earnest money shows that the buyer is serious about purchasing the property and certain conditions can cause the buyer to lose his earnest money.

Additional funds at the close of escrow are indicated, and the amount of loan and type of loan is spelled out. For instance, a property is $200,000 with 20% conventional loan and $2,000 earnest money.

The financing portion of the contract is further enumerated in Section 2. We know the offer is for $200,000 with $2,000 earnest money, $38,000 additional funds at close of escrow, and a conventional first loan of $160,000.

Close of Escrow is defined as recordation, not when the signing takes place. Often close of escrow is close to the last day of the month because the buyer can bring less funds to the closing table.

Interest is paid on a per diem basis and if our interest is 3.875%, our interest would be about $6200 or about $16.99 a day. If we close on the 15th of the month, we have 15 days of interest or $254.85 to bring to the closing table, but if we close the 30th of the month, we only have $16.99 in interest.

Possession is at the close of escrow, or when the property transfer is recorded with the Pima County Recorder’s office.

Any addenda which is made a part of this contract; an “AS IS” addendum, a HOA (homeowners association) addendum, short sale addendum, lead based paint disclosure, water well or septic system addendum, a loan assumption, or seller financing, or an additional clause addendum are listed.

All items attached to the property stay with the property, including landscaping.  And if the buyer wants the washer, dryer, refrigerator, or other appliances with the exception of the stove, they must be listed. Pool and spa equipment, fireplace equipment, water system and security systems transfer with the property.  Furniture and personal items should be conveyed with a bill of sale.


Tuesday, October 27th, 2015

IMG_7914The cover page of the Residential Resale Real Estate Purchase Contract has boldfaced capital letters ending with an exclamation point, ATTENTION BUYER!

And underneath the exclamatory phrase is “You are entering into a legally binding agreement” in large letters.

The Arizona Association of Realtors® is nearly screaming at you to pay attention to what you are about to sign.

There are eight caveats:  Read the entire contract before you sign it.  If you don’t understand something, ask!

It will tell you to review the Residential Seller’s Property Disclosure Statement, otherwise known as the SPDS.    This will be given to you after mutual acceptance of the contract, if not before.  The seller discloses all that he knows about the house to the best of his ability.  With your agent, you should review all information to ascertain if there is additional information you may want to investigate during the ten day inspection period.  On the basis of information in the SPDS, you may decide not to proceed with the contract.  This is an important document.

The third item has to do with Inspections.  The buyer can inspect for anything that is important to the buyer.  This will include the Covenants, Codes and Restrictions (item 7) and other governing documents.  If you have three 150 pound dogs, it is important to read the CC and R’s to make sure they are allowed in the community.  But you may inspect for mold, have a roof inspection, a pest inspection, a pool inspection, and an HVAC inspection or anything else the buyer deems important.

During the inspection period, confirm that you can obtain insurance on the property.  And you should have verified you can obtain a home loan.  Any information requested by the lender should be provided immediately.

Your agent will review the title commitment with you and if there are problems with the title, they will be have to be resolved prior to close of escrow.

And finally, the buyer should conduct a final walk through to make sure the property is in the same condition as when originally seen and if repairs were requested, they were done in a workman like manner.

The cover page is explicit:  “Verify anything important to you.”

Tucson Retirement Home…The Choice is Yours…

Wednesday, September 22nd, 2010

There are plenty of active adult community properties for sale in Tucson less than $200,000. This is the time to look at your southwest sunbelt home. Check properties now while you still have the best pickings…before the majority of winter visitors arrive.   Enjoy January through April here in beautiful Tucson while your neighbors shovel snow, dig out their car, and bundle up in winter gear just to go to the store.

The price of property in Tucson is at 2003 levels and interest rates are at a historical low. This equation equals an opportunistic time for people who always coveted a retirement home or second home in the southwest sunbelt to purchase that dream.

Tucson and the surrounding area is home to several active adult communities and homes in these areas have decreased in price.   Prices are down 15 to 25% from three years ago.

In the entire Tucson Multiple Listing Service, 91 properties sold during the past three months (since June 22, 2010) in active adult communities at an average list price of $262,873 and an average sale price of $248,302.

That is an approximate 5.5% discount to list price. The median asking price is $249,000 and the sale price was $230,000 or a 7.6% discount to list. And the low price was $92,800 with the sale price of $92,000 or a .08% discount to list. The high end property which sold during the past three months, had an asking price of $599,000 with a sale price of $569,000 or a 5.0% discount to list.

Currently, as of this morning, there are 460 properties in active adult communities on the market, four of which are more than $1,000,000. The average price of those properties is $297,942 but of this total, 45 properties are $500,000 or above skewing the average prices upwards. The median price is $249,700, the low price is $52,500 and the high price is $2,800,000.

Most people seeking an active adult community will be purchasing property below $500,000 and the 415 properties on the market have an average price of $251,827, with a median price of $239,000, a low price of $52,500, and the high price of $499,900. These are asking prices.

Using the discount to list price during the past three months of 5.5%, one may be able to purchase an average active adult community property for about $237,000 if we use the entire domain of properties to $500,000.

To use an old cliché, “the early bird catches the worm”. For more information about Tucson active adult communities, contact me, for more information and a relocation package.

Choose a Certified Residential Specialist Real Estate Agent…

Sunday, September 19th, 2010

Why choose a Certified Residential Specialist (CRS) to represent you when buying or selling property?

You are getting ready to put your home on the market, or you are looking for a home in another area.  How do you go about choosing a Realtor®?  And why should you choose a CRS? 

Less than 4% of Realtors®  nationwide have earned their Certified Residential Specialist (CRS) designation, but account for more than 25% of the real estate transactions. CRS agents must combine knowledge with production in order to earn the designation.

CRS agents have invested both time and money in classes far beyond those required as a Realtor®.  They are on the cutting edge of technology which can help you in marketing your home worldwide, they understand various types of marketing and can target audience your home, they listen to your concerns and try and put your wishes into action plans.  They understand negotiating and practice good negotiating skills which can save you both time and money. 

If your are moving to another part of the country, CRS agents have a network of other CRS agents worldwide upon whom they can rely.  Your local CRS agent can refer you to your new CRS Realtor® who will work with you with the skill and knowledge you are accustomed. 

Why not hire from the top agents in the industry.  It costs the same to be represented by the crème de la crème, as it does to be represented by the mediocre. Select from the top 4% of the real estate industry. 

The next time you have a real estate transaction or have friend or family who has a real estate transaction, refer that person to a CRS agent, or refer that person here. 

CRS agents are knowledgeable, have a worldwide network of other CRS agents, and can help keep you from pitfalls when buying and or selling property.

MDIA Not Much Change For Ethical Lenders…

Wednesday, August 5th, 2009

   The new Mortgage Disclosure Improvement Act (MDIA) promulgated by the federal government is not much of a change for lenders who were ethical and disclosed costs initially;  but for those unscrupulous lenders who performed “bait and switch” during the home buying heyday, lamentations are rampant.

   “The purpose of the new Mortgage Disclosure Improvement Act is to insure buyers are fully aware of closing costs and interest rates which they will be charged on their mortgage loan,” said Courtney Walker, Vice President of Nova Home Loans.  “They don’t get to the closing table and are surprised by the numbers”, Walker continued.

   Within three days of applying for a loan, a full cost disclosure must be given to the applicant.  The cost disclosure must be given before any fees are collected, with the exception of any fee charged for pulling the consumer’s credit report, according to the amendment to Regulation Z, Truth in Lending.  Closing cannot take place for seven days unless specifically requested for an emergency.

   In the heyday, reputable lenders provided cost estimate sheets for their clients with the closing costs and loan costs spelled out, including the interest rate.  Good Realtors helped clients by providing clients with names of honest lenders and kept an eye on closing costs, making sure there were no pre payment penalties or other charges unless the client understood the terms of the loan. 

   This legislation comes as a result of the numbers of people who said they did not understand the terms of their loan and the loan costs, such as the option arm loans or the first 80% fixed rate loan with an adjustable rate for the second loan. 

    “The point of the MDIA is that whenever closing costs or interest rates change, the APR reflects these changes in the closing costs and interest rate.”  Walker gave the following example:  A person is offered a fixed rate and the APR is stated, and then offered a 2% rate with a $10,000 up front charge.  How does that person know which loan to choose?  “How are they going to compare an apple with an orange?  The APR will help do that”, Walker said.

   Under the new legislation, if the APR moves 1/8 of a point either up or down, the lender must redisclose to the client “to insure that the buyer is fully aware”.  The borrower must be given a reasonable amount of time to review the new numbers.   “The buyer must receive, review and acknowledge in writing the new disclosure”  and if the new numbers are not approved, then the buyer must change courses. 

    Escrow fees are included in the APR so it is important that the Title Company named in the buyer contract documents is not changed.  Title companies in the Phoenix area charge different rates than the title companies here in Tucson.  For people purchasing foreclosure or short sale properties, any costs the buyer pays, such as allowable seller closing costs, must be included in the APR. 

    If the market moves tremendously, and interest rates go down, redisclosure is mandated, even if to the borrower’s advantage.  Lenders cannot collect upfront fees from borrowers at the time of application.   These include appraisal fees and lock in fees. 

    Lock in fees are relatively new and are similar to earnest money, Walker said.  The purpose of up front lock in fees is because investors (of the loans which the borrower is applying) are beginning to penalize lenders for not delivering on loans for which borrowers apply.  This is often due to borrowers shopping rates.  “Time, money, and effort is put into getting a loan approved” Walker said, and the lock in fee shows good faith on the part of the borrower.  The fee is remitted at the close of escrow as a credit on the closing statement.

    The new requirements do not add time to the loan process, Walker said.  “Nova underwrites locally, draws the docs locally, and funds from its own money,” she added.  “Even with FHA and VA loans, we have basically a 30 day turn around time”.

    Some lenders are recommending a 45 day closing time, so that if a contract is written August 1, closing should be stated September 15.    A Realtor who works closely with the lender is your best advisor, knowing the turn around times of lenders is even more important, and it underscores the need to use local lenders.


Nova Home Loans

Federal Reserve Board Press Release

Federal Register: