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Fraud Alert: Fake Checks Used for a Variety of Costly Scams

Despite what you might think, it isn’t easy to spot a counterfeit check. Fraudsters know how to make a fake check look completely legitimate — so good that even a bank teller can’t spot it.

That’s why fraudsters are using fake checks to commit all sorts of scams, including security deposits, phony prize awards, fake job offers, mystery shopper scams, and bogus online classified ad sales.

“This scam comes in many different variations” said John Breyault, who runs the National Consumers League’s Fraud.org website. “But the key thing that binds them all together is the use of a fake check. The consumer is instructed to deposit that check into their personal account and then send a portion of the proceeds to someone right away.”

Most victims are instructed to send the money via a wire transfer service, such as Western Union or MoneyGram. But some are told to buy prepaid debit cards or iTunes gift cards that they can use to buy things.

When the bank discovers the check is counterfeit — which could be days or weeks later — that deposit is removed from the victim’s checking account. The crooks already have their money and the poor consumer is left holding the bag.

Earlier this year, the Better Business Bureau released a list of the Top 10 Most Risky Scams based on an analysis of complaints collected through its online Scam Tracker. Fake check scams came in at number two, just behind home improvement scams. That ranking is based on how many people are targeted by the scam, how likely they are to fall for it and how much money the average victim loses.

“This is definitely a very, very serious concern right now,” said Emma Fletcher, director of scam and fraud initiatives at the BBB Institute for Marketplace Trust. “The typical loss to a scam that’s reported to us is about $275, but with fake check scams the median loss is almost $1,500. That’s a lot of money.”

While anyone can fall for a fake check scam, the BBB’s analysis shows that men between the ages of 18 and 24 are the most susceptible. This is also the top scam for students, and military families and veterans.

These Crooks Are Clever
Fake checks are commonly used to steal money from people who want to become mystery shoppers. Kathy, who lives in Dallas, Texas, got taken for $2,650 this way. She asked that we not use her last name.

“What these crooks are doing is disgusting, absolutely disgusting,” Kathy told NBC News. “They’re really clever and they need to be brought to justice.”

Kathy had done mystery shopping before, so she wasn’t surprised to get an email from a mystery shopping company asking her to do some work for them.

“The email seemed totally legit and everything on the website seemed on the up and up, so I didn’t question it. There were no warning signs,” she said.

Kathy’s first assignment as a “survey agent” was to rate money transfer companies. The mystery shopper scammers sent her a check for $2,850 and emailed her a list of questions to fill out about her experiences.

“It was a cashier’s check and it looked totally legit,” she said.

Kathy was told to deposit the check, take the cash and go to three different money transfer services and wire $900 from each. That left her with $100 for doing the job. She did as instructed.

About a week later, Kathy got a letter from her bank. It said the $2,850 check was counterfeit and couldn’t be cashed, so the money she had withdrawn would be debited from her checking account.

“The bank should have been able to determine immediately whether the check was legit or not and they didn’t. And that really disturbed me,” she said.

Kathy realizes she’ll never get that money back, but she hopes that by sharing her experience she can prevent others from becoming victims.

Why Fake Check Scams Work So Well
Few of us understand how the banking system works and the scammers use that confusion to trick us.

When we deposit a check, the financial institution is required by federal law to make the money available to us long before it can be certain the check is legitimate. We see the money show up in our account and assume the check is good and has cleared.

Fake check scam victims frequently report that their financial institutions decline to help them.
But that’s not what really happens. It may take a couple of days or a week or more for the check to work its way through the banking system and actually clear. During that time period, the bank gives us a short-term, no-interest loan using that check as collateral. If the check bounces, we have to pay back that loan in full.

“Unfortunately, you don’t realize you’ve been defrauded until you find that your bank account has a big negative balance,” said Fraud.org’s John Breyault. “And because of how our banking laws are written, it’s the consumer who’s on the hook for that — not the scammer and not the bank. It’s not like a fraudulent transaction on a credit card that you can dispute. It doesn’t work that way with personal checks.”

Victims Say the Bank Wouldn’t Help Them
People who’ve lost money to fake check fraudsters frequently complain that their bank teller did not warn them about the scam and their financial institution would not help them when the check turned out to be bogus.

Erika, a single mom in Oklahoma City who preferred not to be identified by her last name, was excited to be offered a work-at-home job this past spring. Her new employer sent her a check for $1,000 to buy office supplies and cover her first paycheck.

Erika was told to cash the check at her bank, take $979 to another bank in town and deposit it into the account of a corporate vendor who would ship the supplies she needed to get started.

A few days after she did that, Erika got a call from her bank. The check was a fake and there would be a $979 debit to her account. Not only that, but the debit caused her account to be overdrawn, which meant in addition to the $979 stolen by the scammers, she now owed the bank overdraft fees.

“I’m looking for a job, so I can provide for my three year old son, and instead I get fleeced,” she said.

Erika told NBC News she asked the bank if they could help her with this, but she was told there was nothing they could do. That’s not uncommon. Fake check scam victims frequently report that their financial institutions decline to help them.

The nation’s bankers insist they take fake check fraud very seriously and are doing a better job of spotting it and stopping it. For example, the American Bankers Association said tellers are trained to say something and ask questions when they see a transaction that appears to be suspicious.

“These losses are not something that bankers ever want to see,” said Doug Johnson, ABA’s senior vice president of payments and cyber security. “We continually educate our customers about the frauds being perpetrated against them, but we can’t stop every crime.”

That’s why it’s up to you to protect yourself and understand how scammers use fake checks to steal your money.

The BBB’s Emma Fletcher told NBC News she cannot think of any legitimate business transaction where someone would send you a check, ask you to deposit it and wire back the money.

“Any time you’re asked to do something like that, an alarm should go off that this is a scam,” she said.

The Federal Trade Commission has information on Fake Check Scams and the Better Business Bureau provides 10 Steps to Avoid Scams.

5 Tenant Red Flags Landlords Should Look Out For

Landlords can sometimes get a bad rap for being ruthless, money-driven tyrants. The truth is, many landlords do a great job at keeping their tenants happy and, in return, reap the benefits of these people being taken care of. There is a downside for you as a landlord, though, and that occurs when you have not screened your tenants as well as you should have. Even with a proper screening, bad apples can occasionally sneak through, and that’s why it’s important to know the signs of a bad tenant. Read on for five red flags you need to look out for as a landlord.

1. Bad Landlord References
One of the most important things you can do is to call past landlords, as you want to know their history of payments, how they treated the rental property, etc. If the past landlord tells you there was an extensive history of late payments, damage done to the property, or, far worse, an eviction, this should be a giant “no” in your book. This is particularly true if these have been recent. If the bad behavior was far in the past and they have since had good reports, this is up to your discretion, but still be wary.

2. Bad Credit And/or a Tax Lien
Good Landlord 101 includes running a credit check, as knowing how (or if!) they pay their bills is key in deciding whether or not to let them live on your rental property. How landlords read credit reports is also crucial, so if you’re new to doing so, get some help from a company like TransUnion and do your research. Bad credit is a huge red flag and could indicate that they will have trouble paying their rent—tenant screening can save a huge headache. Of course, if the IRS can’t get money from them (hence the tax lien), how do you expect you will do the same? You definitely do not want a squatter!

As for the nitty gritty of credit numbers, be wary of anyone with a credit score of less than 620. As this GreenResidential.com article notes, “A low credit score can be indicative of many things: problems with budgeting, holding down a job, or taking on too much debt. Whatever the reasons, avoid these tenants at all costs.”

3. Criminal History
You are well within your rights to run a background check on your potential tenants. If your gut instinct tells you that this is a solid person and his or her credit check and references turn out okay, you might consider ignoring any minor offenses. However, someone with a major criminal history is obviously someone you don’t want living under your roof, especially if you have other renters in the vicinity.

4. Gaps in Employment And/or Low Income
Your application should include a pretty extensive list of their past employers and how much they have made at each job. Long gaps in history could be an indication of flakiness and low income. You also want to be wary if they make very little money at their current jobs, as you have to weigh the rent vs. this amount of money. If it doesn’t seem to add up, it’s a red flag. Of course, you could ask that someone co-sign for them so that you have someone to recoup the money from him if you need to. That’s something that’s left to your discretion and many landlords will go with their intuition on this.

5. Awkward Behavior During the Interview and Negotiation Attempts
Again, we can’t stress enough the importance of gut instinct. If the person seems overly nervous during the interview and can’t hold eye contact, it could be a red flag. What are they hiding? If there are gaps on their application and they can’t answer many questions during the interview, they could be hiding be a giant secret (or secrets!).

Attempts at negotiation of monthly rent and/or deposit amount don’t have to be huge red flags, but they’re not great signs either. If you know your rental property is fairly priced, stick to that number. Negotiation could be a sign that they are not able to pay this amount on a regular basis.

Position Realty
Office: 480-213-5251

The 5 Most Common Reasons Tenants Leave Your Rentals

Why are renters leaving your units? What can you do about it?

Tenants are on the move. What are the most common reasons they may leave your rentals? How can landlords prevent these moves to keep good tenants, maintain consistent cash flow, and maximize cash flow?

The 5 Most Common Reasons Tenants Leave Your Rentals

1. They want to move somewhere cheaper.
Housing costs, especially rents, have been rising for the last five years. Some are just at the point where it makes sense to move somewhere cheaper where renters can get a lot more for their money. It could be that local rents have just gotten too high—or maybe your rents, in particular, are too high.

Market rents change over time. Be sure you stay tuned into local trends, even when you aren’t actively looking for tenants. If neighboring properties are leasing for 30% less than yours, that could become an issue. Price your properties right. Invest in stable and upcoming locations with more room for growth.

2. They’re afraid of changes in the rental situation.
Sometimes tenants leave just because they are afraid. They may be afraid of how much they think you are going to raise the rent when it comes time to renew. They could be afraid you are going to evict them because they’ve fallen a few days behind on rent a couple times. Or it could be that a tough new property manager you’ve brought in is causing panic in the renters.

Set clear expectations. Get feedback from loyal, long-term renters you trust when you bring in new management, connect with them about renewing leases early, and maintain property upkeep to show tenants you’re a caring landlord, not a slumlord.

3. They need more space.
Between a growing number of multigenerational households and Millennials’ growing families, many simply need more space today. A lot of people jumped on the minimalist lifestyle after 2008, but now, years later, they are tired of living so tightly and cramped. In fact, a Realtor.com survey shows that this is driving far more Millennials and Boomers to choose single family homes in the suburbs over homes in dense urban centers or condos.

4. They want to buy a home.
With rents more expensive than mortgage costs in many areas, interest rates low, and credit scores recovering, many are making the leap to buy homes while it is still so attractive. If you can’t stop it, make the best of it. Ensure a good exit service. Return deposits and ask for a review on the spot. Still, if you can, get them to buy their home from you.

5. They don’t like the neighbors.
No one likes scary or abusive neighbors—and they are out there. This is something to keep in mind when searching and screening rental properties. It is also important to keep lines of communication open and to listen to these complaints. If there are problem tenants in your own neighboring units, you probably won’t renew their leases. If they belong to another landlord, you may want to preempt issues by contacting the other landlord.

Summary
There are a number of reasons good tenants can leave, even if they like the units they are in. Smart landlords will get out in front of these issues and find ways to keep those tenants in their property to avoid turnover costs.

Position Realty
Office: 480-213-5251

Nine Sneaky Fees to Watch for When Hiring a Property Manager

To many landlords, property management services are superfluous, cutting their profit margins to a minimum in exchange for basic services. But the reality is that property managers can make your life extraordinarily easier—and most charge a reasonable enough rate that you can draw a monthly profit from your properties (headache-free).

However, when you’re searching for a property manager to handle your landlord responsibilities, it’s important to note that not all fee structures are the same. If you don’t understand how a manager’s fees work, you won’t be able to compare apples to apples, and you might end up shaving your profit more than necessary if you aren’t prepared for those fees when they come up.

9 Fees to Watch For
These are some of the most common “hidden” fees, extra fees, and differences in fee structure to watch for when comparing providers or finalizing a contract:

1. Rent Due and Rent Collected
Many property managers will charge fees as a percentage of rent, but watch how this is worded—there’s a difference between charging as a percentage of rent due and a percentage of rent collected. A percentage of rent due means your company will charge you based on how much money a tenant owes you; a percentage of rent collected means your company will charge you based on how much money a tenant actually pays you—and is generally more favorable. If you’re charged based on rent due, you’ll end up paying for property management even when your property is vacant and you have no money coming in.

2. Early Cancellation
You may also be charged an early cancellation fee should you break the contract with your property manager before the end of its outlined term. For example, if you agree to work with them for a year and you want out after eight months, you might pay an additional few hundred dollars. Be especially wary of this fee with untested property managers.

3. A La Carte Management Fees
“A la carte” management fees refer to a suite of extra fees a property manager may charge you in addition to basic services. Usually, a property manager will either charge a higher price (and no additional fees) or a lower price, with multiple additional fees, somewhat evening out. Accordingly, it pays to know what fees are applicable and what they might run you. The remaining items in this list could all be classified as a la carte management fees.

4. Vacancy
If a company isn’t charging you the full cost of management while your property is vacant, there may still be an additional vacancy fee. Rather than collecting a percentage of rent due, they may collect a smaller amount from you as a kind of retainer.

5. Advertising
When it comes time to seek a new tenant, some property managers may charge you an additional advertising fee. This would cover the cost of creating media (such as taking photos) and placing it on sources like online listings or paper publications.

6. Leasing
A leasing fee may apply when you find a new tenant for your property. This covers the cost of drafting and securing a new lease agreement and is generally low in cost. If the cost here is high, it should raise a red flag, especially if your resulting tenant turnover seems to increase.

7. Lease Renewal
Lease renewal is even simpler than initial leasing, but it may still require a fee. You may need to draw up new paperwork or renegotiate terms with a tenant, and that means your property managers will be doing a bit of extra work. Expect minimal fees here as well.

8. Maintenance
Property management fees should cover basic instances of maintenance and repair, but some companies may charge extra for big jobs, or for an inspection between tenants.

9. Eviction
Eviction can be a messy process, and if you ever need to evict, you’ll be grateful you have a property management service in your corner. Most property managers will handle the eviction completely on your behalf, but some will charge you an extra fee for the extra work involved. Expect to pay at least a few hundred dollars for this process.

Apples to Apples
Different companies might charge money in different ways, but if they’re offering similar services, you’ll likely find the bottom-line price of each to be competitive with one another. The big difference here is how you plan on using your property management company; for example, if you’re looking for long-term arrangements, an early cancellation fee shouldn’t factor much into your decision. Try to consider all these factors and all price points when comparing providers and making your decision.

The Critical First Two Weeks of Marketing Your Home For Sale

Brokers share their listings with other brokers in the multiple listing service (MLS) under certain rules of cooperation and compensation. One of the rules of cooperation is that each broker and agent make a new listing available to other MLS members within 24 or 48 hours of signing the listing agreement with the seller.

This is to give you, the seller, the greatest chance of selling your home during the first two weeks of marketing. This critical two-week period is your best opportunity to sell your home.

Several key events happen quickly:

1. Your home will be entered into the MLS showing system with your showing instructions, so that other agents can bring their buyers to see your home. While your listing is being prepared for marketing, your agent will contact his or her buyers and inform colleagues of the new listing.

2. Other data such as mapping, satellite image, neighborhood information, tax roll data, school information and other data will be added to your listing so that buyers can get the full picture of what it’s like to live in your home.

3. Your agent will either take photos, or schedule a videographer to help market your home with photos and video. This enables buyers to walk through your home and property virtually, so they can choose or eliminate your home when deciding which home to buy.

4. Your agent may create virtual or printed “feature” sheets that showcase your home’s features to advantage, so buyers can remember it was your home they liked best when it’s time to do side-by-side comparisons.

5. Your agent will schedule your home on the MLS tour for other agents to see, and ask for feedback. The agents who see your home in person are important, as they will be able to report your home’s features and condition to their buyers. Homes in top move-in-ready condition sell faster and for more money.

6. Your agent will distribute your listing data to his or her website or blog, accounts such as Twitter or Instagram, the broker’s website, and third-party sites like Realtor.com, Zillow, or Trulia.

7. Your agent will put a sign in your yard announcing your home is for sale.

8. Your agent may advertise your home in a number of places, including the local newspaper and homes magazines. Your agent may also put your home in their personal marketing tools such as e-magazines, newsletters, or email alerts to prospective buyers.

Anyone who is interested in homes in your price range and area will know your home is available for sale within the first two weeks of marketing.

If you don’t get many showings or offers, chances are good that your home may be facing stiff competition from other homes on the market. They are in a better location, or superior condition or they’re priced more aggressively.

If you don’t have showings within two weeks of listing your home, consult your agent. Perhaps you can do a little more to spruce up your home’s curb appeal, or perhaps stage the interior to better advantage.

Give your home a little more time before you adjust the price. You may be in a buyer’s market with many homes for sale. If so, buyers need more time to sort through the homes on the market.

You don’t want to take chances when marketing your home. Your best chance of selling your home is when it’s new to the market and exciting to buyers. Don’t lose your advantage by overpricing or underpreparing your home for market.

Position Realty
Office: 480-213-5251

Best New Security Tips To Keep Your Home Safe While You’re On Vacation

Nothing kills your vacation buzz like getting a call from the police back home letting you know your home has been burglarized. Basic home security tips are great, but safety measures are continually evolving, with new and more refined ways to keep you and your home safe.

Vary your inside lights

“There are differing opinions on whether or not you should leave your lights on the entire time you’re on vacation,” said A Secure Life. “If you leave your lights on the whole time you’re gone, it wastes a lot of electricity and raises your electric bill. Also, having lights on 24/7 can look just as suspicious as having them off. Electronic timers may be helpful. The danger here is that if someone was really intent on robbing you, they will likely be watching the house for a period of time. If they notice that the lights go on at exactly 7:05pm and off at exactly 10:35pm each night, it would not take a genius to figure out they are on a timer.”

The answer: A project like Caséta. “Scheduling lights to turn on at varying times is a great way to deter burglars, and the Caséta Wireless kit lets you control the lights in your home from anywhere through the Lutron Electronics app,” said USA Today 10 Best. “Its new Smart Away feature randomly turns lights on and off between 6pm and 11pm to make your home look lived in – even when you’re on vacation. Caséta Wireless also ensures you never have to walk into a dark house again – or get out of bed to turn off the lights.”

Hold your mail – even if you’re only going away for a weekend

Mail theft is up, and consequently, so is identity theft. “According to a US Postal Service official, mail theft is on the rise, with the objective of getting access to financial information to exploit for personal gain,” said ABC 10. Asking your neighbors to get your mail is great, but what if they don’t get to it right away? You don’t want thieves putting a plan of credit card fraud into action while you’re getting a massage.

Hire a dog sitter

You may think you have thought of everything when it comes to protecting your home on vacation. But if your dogs are also taking a little vacation at your fave boarding spot while you’re away, you might be removing one of the top obstacles to home break-ins: a barking dog. Nextdoor and Rover are great places to find a qualified dog sitter who can stay with your pooches and watch your house at the same time, and, often, it will cost you less than boarding, especially if you have more than one dog.

Watch the doggy door

If you do board your dogs, be sure to lock up your doggy door while you’re gone. Depending on the size of your dogs, humans might be able to enter your home while slithering through. If the doggy door is in plain sight and can be viewed from the street, even with the cover on (which may keep your dog from going in and out but may not keep a thief out), you may want to consider placing a chair or large plant in front of it.

Get rid of spare keys

Have a key hidden under the mat or in the planter next to the front door? Security experts will advise you this is dangerous on any given day with thieves looking for an easy way in. But, especially, when you’re out of town, a poorly hidden key is an invitation for unlawful entry. Instead, leave a house key with a trusted neighbor for emergencies.

Lock your gates

If someone can get into your backyard, they have an easier entry into your home since they’re more likely to be out of sight. If you regularly keep the gate unlocked to give access to gardeners or other family members, consider locking it while you’re away. Forgoing landscaping in your back yard for a week won’t hurt, and the extra security measure will help you feel at ease.

Cancel automatic deliveries

You may think about your mail, and even halting your newspaper delivery, while you’re enjoying your relaxing beach getaway, but have you forgotten anything? If you get regular deliveries – coffee, office supplies, diapers – be sure to call and cancel for the the time you’re gone. Packages piling up at your front door can invite theft – of your home, and the stuff you ordered.

Wipe away your fingerprints

Have a front door lock that uses a code instead of a key? They’re great for minimizing the likelihood that someone will be locked out. But, there have been recent cases in which crooks used fingerprint patterns on the touchpad to determine the code and break in. Get into a habit of wiping the keypad down every day to minimize the risk.

Get a security system

Nothing new about this, but a security system continues to be the No. 1 deterrent to break-ins, so it bears mentioning. PC Mag’s featured smart security system is Vivint Smart Home, which costs just $49. “Bottom Line: The Vivint Smart Home system offers 24/7 security monitoring and remote control of your door locks, cameras, heating system, and features the best video doorbell solution we’ve tested,” they said.

Get a security camera

In lieu of, or in addition to, a security system. Security cameras can give you piece of mind. PC Mag recommends two starter models: The iControl Networks Piper nv or the Nest Cam Outdoor. “These cameras have built-in sensors that track motion, and will send push notifications when movement is detected (the Piper nv will also send notifications when humidity and temperature thresholds are exceeded),” they said. “Both are solid, cost-saving alternatives to full-on security systems.”

Increase your protection against disasters

Protection from thieves isn’t all you have to worry about when you’re away. Nest Protect helps ward off potentially catastrophic fires and toxins. “This smoke and carbon monoxide alarm looks for fast-burning fires, smoldering fires and invisible-but-deadly carbon monoxide,” said USA Today 10 Best. “It speaks to you, letting you know what and where the danger is, and will message your phone if you’re not home. It can also be silenced from your smartphone so if you simply overcooked your dinner, you don’t have to go climbing to turn it off. Nest Protect tests its sensors and batteries 400 times a day and will notify you when the battery is running low rather than beep all night until you can get a ladder to replace it.”

Position Realty
Office: 480-213-5251

3 Types Of Loans To Go For If You’re Credit Challenged

The latest numbers from mortgage analysts Ellie Mae show that the average FICO score of approved conventional mortgages is 732. If a borrower has low credit scores (650 and under), then that average FICO score could seem like a chasm between them and the home they want to buy. But just because the average credit scores for a conventional mortgage are above 732 doesn’t mean low-credit borrowers are shut out of homes.

There are a good amount of options, and the federal and state level for mortgages can help even low-credit borrowers get the home of their dreams. Here are three types of loans you may want to explore.

1. USDA Loans

USDA loans are a great option for borrowers with low credit scores, because the minimum score for approval is 640. Not only that, but you won’t have to make a down payment for this mortgage. It sounds like an incredible deal and, for the consumer with bad credit, it is a legitimate option.

However, borrowers need to know the very clear limits the USDA places on where homes can be bought. Because the program was initially started to provide economic stimulation in rural areas, only homes outside of urban areas are eligible for the USDA mortgage program.

As far as the hard numbers go, several sources indicate that the borrowers’ mortgage can’t be more than 29 percent of their income, and the overall DTI is 41 percent. Both home prices and borrower income are capped, and that cap depends on the area in which the borrower wants to buy.

To understand exactly where the urban limits are for the city in which you live, the USDA’s website has a straightforward mapping app that shows clear boundaries between urban and rural.

2. State Bond Programs

While the USDA program is available in all states, bond programs tend to be specific to certain states. For example, Florida’s first-time homebuyer bond program offers up to $15,000 toward down payment and closing costs. The product is treated as a second mortgage.

Like the USDA mortgage, the credit scores needed for this loan are pretty low: 660. Also, there are income limits and limits on the purchase price of the home. The down payment assistance is “free” – you don’t have to pay it back as long as the home is your primary residence for five years after closing.

The catch here is that the interest rates are higher because they’re set by the state. So, while the borrower is getting up-front free money, they end up paying for it on the back end over the life of the loan.

3. FHA Loans

Ellie Mae estimates that 689 was the average credit score for borrowers who were accepted for an FHA loan. These loans require a 3.5 percent down payment if the borrower’s credit is 580 or higher, Zillow says, while scores between 500 and 579 require a down payment of 10 percent. The standard for the total mortgage payment is 31 percent of income, and DTI needs to be less than 43 percent. Mortgage insurance applies to the life of the loan.

A cursory view of the numbers makes the FHA loan a good bet for borrowers with average to bad credit scores who have the ability to make a 3.5 percent down payment. However, there can be some problems.

The FHA has their own criteria for the condition of the home the borrower is buying—if certain things need to be fixed, those fixes have to happen before closing and paid for out-of-pocket by the seller. However, if the borrower can find a home in good condition with only minor repairs noted during inspection, closing should proceed with the normal aches and pains.

Some Final Thoughts About Mortgages for Bad Credit Scores

It’s important to remember that borrowers have bad credit scores for a variety of reasons. One of those reasons could be that the borrower has high utilization – their credit card balances are more than 60-70 percent of their credit limits.

While most of us see this as a credit score issue – high utilization leads to lower scores – the more important area of concern is debt-to-income ratio. Having multiple credit cards with high balances leads to high minimum payments, which can cut into a borrower’s DTI and push them past 45 percent.

While a high DTI isn’t a mortgage death sentence, it is, according to the Federal Reserve, the number one reason why borrowers are rejected for a mortgage.

Position Realty
Office: 480-213-5251

Drone Technology Beneficial To The Real Estate Game

Real estate agents and home inspectors are always looking for innovative ways to keep their clients informed. One of the latest tools in the home buying and selling process is drones. Drones are remote-controlled pilotless aircraft that allow aerial shots and different views of the property and can provide an added benefit to real estate transactions.

Here are three key ways drone technology is enhancing the real estate industry:

Additional Images and Video

Before drones became accessible to real estate professionals, aerial photos and videography were limited to grainy satellite images or expensive photography sessions. Drones provide a cost effective and visually stunning alternative — and can be used as a buzz worthy mention to move the sale along. Drones also provide a way for prospective home buyers to experience a video or photo tour in an online home listing before taking the time to physically visit the house. Using this technology can help to diminish the extensive time it takes to tour available homes and can speed along the home transaction.

Catch Potential Property Problem Areas

While home inspectors are trained to uncover potential problems of a home, drones can offer another layer of enhancement to the inspections. They may be useful when inspecting steep/high roofs, chimneys and areas that might otherwise be inaccessible. With the recent changes by the FAA allowing commercial use of drones after going through a licensing process, this technology helps a qualified home inspector to reduce the unknown and potentially save homeowners the cost of previously undiscovered issues.

A Clear View of the Land

Drones have the capability to show an entire property, which is especially beneficial when the area is expansive and includes additional features like stables, acreage, farmland or even a second dwelling. This also benefits home inspectors when looking for things that can sometimes be challenging to identify when conducting inspections on foot.

The industry continues to explore ways to leverage drone-collected data to better assist real estate professionals. This includes increased use of infrared scanning, site modeling and property analysis.

While drones are providing a competitive advantage, it is important they are always used properly. Operating a drone takes extensive practice as misuse can lead to unexpected injuries to people and property. It is critical that the drone operator, whether the real estate or home inspection professional, is properly licensed by the FAA, has a commercially registered drone, understands any local or state guidelines and is properly covered by insurance. As drones are new to the insurance world as well, not all polices automatically cover their use in commercial applications. With the use of real estate technology on the rise, the industry will continue to evolve and become more competitive than ever.

Position Realty
Office: 480-213-5251

Phoenix Real Estate Market Report ~ June 2017

The current real time market profile shows there were approximately 10,179 new listings (down 692 listings from last month) on the market in June 2017 and 9,623 sold transactions (down 239 listings from last month). The overall inventory of homes on the market in June 2017 is 21,239 homes (up 9 listing from last month) which is down -22.8% as compared to the number of home on the marker in June 2014. In June 2015 there were 22,475 homes, in June 2014 there were 27,494 homes and in April 2013 there were 19,005 homes for sale on the market. Due to the large spike in the number of sold transactions and the decline in average days on market this shows buyer’s demand is strong where inventories may continue to be low and drive up prices.

Since November 2016 after our new president took office the average sales price has increased from approximately $281,000 to $304,678 or an appreciation rate of 8.2% and the number of sold transactions has increased from approximately 6,898 to 9,623 transactions or an increase of 39.5%. In 2014 real estate prices only appreciated 4.5%, in 2015 5.5% and in 2016 4.2% but in 2017 we may reach a double digit appreciation rate. The number of sold transactions usually starts to decrease in July due to summer vacations but we will have to see next month if buyer demand will continue to follow the usual trend. Since July 2016 (12 months ago), the average sold price has increased +11.7% (up from last month), the average days on market has decreased approximately -6.9% (up from last month) and the number of sold transactions has decreased approximately +23.9% (down from last month).

The volume of foreclosure purchases since July 2017 (12 months ago) has decreased approximately -33.9% and the volume of short sales decreased of approximately -36.1%. The current percentage of foreclosure sales and short sales sold is only 2% of the market which indicates a healthy market. Unfortunately, there are still some homeowners who bought between 2005 and 2007 that are still up-side-down as shown in the yearly average sold price chart above.

Since July 2016 (12 months ago), the number of homes for sale on the market have decreased approximately -5.6% or 22,504 homes for sale on the market to a gradual decrease of 21,239 homes (Down 9 homes from last month). The total number of listings is low as compared to 29,308 listings in August 2014. This decrease in the number of homes for sale indicates we are currently in a seller’s market (low supply and increased demand).

Real estate prices will continue to increase and interest rates are planned to increase in 2017 so if you are thinking about buyer a home this year will be the time to buy before you get priced out of the market. Give us a call to discuss your best buying or selling strategy, TODAY!!

Position Realty
Office: 480-213-5251

What You Need To Know Before You Buy In A Planned Community

A particularly active spring storm season left pockmarked roofs and tumbled fences throughout North Texas this year, including many in my master-planned community, thanks to an EF0 tornado that blew its way through the neighborhood (thankfully missing my house – this time). The process of repairs and replacements was as fickle as the tornado itself. Some homeowners received immediate or at least prompt approval from the community Homeowners’ Association (HOA) and its Architectural Review Committee (ARC), while others were forced to wait and wait and wait – which would be frustrating, even if this weren’t the wettest June in 13 years. In one case, a homeowner’s approval was inexplicably delayed so long, even though she was only looking to replace her damaged roof with the exact same roof, that she suffered leaks and damage to the interior of her home.

That’s one of the rubs of living in a community that is governed by an HOA: You need approval to do stuff to your house, even if that stuff is going to be an improvement over what it currently looks like. It’s not the only potential downside, but there are also plenty of advantages associated with an HOA. And with more than 40 million U.S. households “or 53% of the owner-occupied households in the America” living with an HOA, according to HOA-USA – a number that’s on the rise with new construction, of which more than 60% have an HOA – it’s something you might have to deal with. Get to know the pros and cons so there won’t be any surprises.

Pro: An HOA protects your investment. “HOA rules and regulations help ensure homeowners keep their homes well maintained and in compliance with overall appearance standards,” said Signature Homes. “Combined with proper care of amenities and common areas, the value of your home is more protected than one that does not have HOA oversight.”

Con: Limits your creativity and individuality. HOAs may offer limited options when it comes to updates. Older neighborhoods may have a small color palette available to owners and may be reluctant to expand it to current trends.

Pro: You won’t have to deal with neighbors painting their house pink or letting their grass grow to armpit height. “Homes within an HOA must meet the standards set by the association or face a fine, so you’re less likely to see unkempt lawns, peeling paint or a garishly painted house,” said Realtor.com. “Some HOAs have a design review board with the power to approve any changes to your home’s exterior.”

Con: Those restrictions can be Confining. An HOA demands that you ask permission before making any changes to your home – even if you’re just talking about staining your fence the very same color. Depending on how finicky your HOA is, you might also get fined because your landscaper took the week off or because the basketball net in your driveway is torn (true story).

Pro: File this under the umbrella of “protecting your investment.” Many HOAs have stipulations about how many cars, or what type, can be parked on your property, or even where they can be parked. That can help ensure that the neighbor down the street doesn’t turn his lawn into an auto body shop with multiple non-functioning cars up on blocks.

Con: Looking to park your RV or boat in your driveway? An HOA may nix that idea. Be sure you check ahead of time to make sure this is allowed.

Pro: An HOA decision may not be final. Get a rejection from the HOA on your submitted request to make changes to your landscaping? You can always appeal and state your case.

Con: Deciding to “ask for forgiveness instead of permission” rarely goes well, so, if you decide to go ahead with changes despite not receiving an approval from the HOA, beware: You might be fined.

Pro: Some HOAs take care of things like your front-yard landscaping and trash removal, which means you don’t have to pay for it or worry about it.

Con: That also may mean strict restrictions about what you can and can’t plant in your front yard. You may have to reconsider those rose bushes.

Pro: You might not have to put in a pool because there’s one in the community that you’re helping to pay for through your HOA dues, but don’t have to maintain.

Con: When the pool needs to be redone, it’ll be you and all your neighbors that are on the hook to pay for it – even if you never use it.

Pro: A pool is just the beginning. Planned communities with an HOA can have golf courses, tennis courts, clubhouses, playgrounds, and even private lakes for fishing and recreation.

Con: The more amenities you have, the more you’re likely to pay in HOA dues. In a large masterplan with a couple of pools, a playground, and a tennis court, you can pay as little as $50 per month. The more homes that are added, the more the overall cost is spread out. A more “typical range” is $200–400 per month, said Investopedia, adding that, “The more upscale the building and the more amenities it has, the higher the homeowners’ association fees are likely to be.” In some condos, the fees may be higher if parking and security are considerations, and, especially, in a luxury building with amenities including a fitness center and concierge. “Hollywood’s fancy Sierra Towers condo building, which is filled to the brim with amenities like 24-hour concierge service and valet parking. They charge residents of a 3,400-square-foot condo about $4,000 per month in HOA fees,” said Realtor.com.

Pro: You’ve got a built-in mediator. “Involved in a tiff with your neighbor over that big oak tree that’s losing limbs? You can settle some confrontations with your neighbors by taking your grievances to the HOA’s board or management company,” said RISMedia.

Con: Maybe you’re the type that wants to “handle” grievances in your own way?

Pro: Some HOAs allow you to pay monthly, quarterly, or annually.

Con: Falling behind on HOA dues can lead to foreclosure. “This is another reason you’ll want to make sure those HOA fees are in your budget,” said Credit.com. “An HOA can move to foreclose on your property if you fail to pay its dues and/or associated late fees. Laws can vary by state. A few, for instance, place limits on when an HOA can move to foreclose. So if you’ve fallen behind on payments, you may want to consult a local attorney about your best recourse.”

Pro: Part of what you’ll pay to the HOA every month goes to a reserve fund, which can be used for neighborhood repairs and emergency needs.

Con: The reserves may not be enough to cover large expenses. “In addition to monthly fees, if a major expense such as a new roof or a new elevator comes up and there aren’t enough funds in the HOA’s reserves to pay for it, the association may charge an extra assessment that can run into thousands of dollars,” said Investopedia.

Position Realty
Office: 480-213-5251

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