They say it is not a Real Estate Tax

Adult students working together in a libraryI wanted to get this notice we  received from the National Association of Realtors out to all our blog friends.   This is the information and examples about the new 3.8% tax and how it affects real estate sales.  This tax is a part of the Obama Healthcare Bill.  It will be interesting to see if and what the Supreme Court upholds.   They say it is not a Real Estate Tax, because it does not remove the $250k and $500k deductions on the profit from the sale of your home, but applies to the profits after those deductions are taken and applies only to individuals over a certain income. It will apply to certain other incomes and capital gains.   I suggest you discuss it with your accountant or tax advisor.    The National Association, the Arizona Association  and the local Realtors are opposed to this tax, but our disapproval went unheeded.

Exciting Changes


We want to take a moment to share some exciting news with you regarding our real estate business. Our brokerage, John Hall & Associates, has been acquired by one of the largest real estate agencies in the southwest; Realty ONE Group.

Realty ONE Group has experienced exceptional growth with their state-of-the-art technology and professional office facilities. They have retained the exceptional leadership from John Hall & Associates; combining innovation with experience! 

We have physically moved to an office around the corner from our homes. In doing so we have opted to get new phone numbers and fax number.   We will be turning off the old toll free number in a couple of weeks.  The home/office and cell numbers you currently have will remain the same.   We have also abbreviated our email addresses.   (The old ones will work indefinitely.)  Our main website is undergoing remodeling so please be patient while we make it even better.  (We already were on Google’s first page….which is quite an accomplishment in the geek world.)

Thank you for your patience and understanding of this change.  We think it is a really good one. John Hall & Associates has a reputation since 1974 for outstanding service, integrity and professionalism.  Realty ONE brings us the technology to maintain our standing in today’s high tech world.

If you have any questions about this change, please contact us!

Should I keep/extend my Home Warranty Service?

My favorite answer – Yes, No, Maybe

Yes – a home warranty service is another insurance policy on your home. If something breaks getting it repaired/replaced for a fixed cost is a ‘good thing’ . Not having an unexpected bill for getting your garage door fixed, AC repaired, hot water heater replaced… and it is nice to know you have someone to call when something quits on you.

No – You have a new home, just built and all of the appliances are warranted from the manufacturer, the house is still covered by the builders warranty.  Everything in the home is still covered, so no need to get an additional plan.   If this is you… a good idea is to contact the AC manufacturer to see if you can extend the purchase warranty.

Maybe – Your house is not brand new, but you realize the appliances/AC is older but you are going to upgrade and remodel.  If you are looking to put in a larger AC unit than is the minimum size requirement, or upgrade your appliances, then maybe getting/renewing your home warranty isn’t the best option.

So should you get/renew/keep your home warranty service… yes, no, maybe

Risks to living in a 55+ community…

Risks to living in a 55+ community are not as has been recently reported, the risk is not having a surviving spouse less than 55 years old having to sell, but grandchildren!

  • A recent article in the Arizona Republic “ Homebuilders pin hopes on retiring Baby Boomers” mistakenly wrote that “ …if the husband died before the wife turned 55, she would most likely be forced to sell the home and would not be allowed to remain there alone.”

The surviving spouse if under 55 is covered by the HUD regulation of 80/20.  Only 80% of the residents need be 55 or more.  The remaining 20% is designed to cover the heirs. That 80% is carefully monitored and checked every 2 years.  To drop under that 80% is a fearful thing in these communities and puts them at risk for losing their Fair Housing exemption and turning overnight into a multigenerational community.

The true risk in purchasing a home in a 55+ community is grandchildren!   Two scenarios create the risk.  The first is today’s economy and high unemployment rate.   Adult children are moving home to Mom and Dad and bringing the grandchildren with them.   The fine print in the 55+ communities HOA’s is that NO ONE under 18 years old can reside for more than a limited number of days.   So Mom and Dad may have to move out of their 55+ resort community and into a multigenerational one! The second risk factor is again Grandchildren.  Adult children move out of state for one reason or another and take those grandchildren with them.  Grandma & Grandpa do not want them to be so far away and choose to leave their 55+ lifestyle and follow the grandchildren.

Purchase and Remodel a home with only 3.5% cash out of your pocket

Today I attended a class on the FHA 203 K loan.  It has always been one of those things that sounds really good but is practically impossible to get done.   But I met a team of peeps all working together and getting the FHA 203k loans closed and people into their beautiful homes.

One of the challenges in todays market is that so many of the homes (foreclosures and short sales) are in poor condition.  Having items and issues that need repair in order to get a loan on the property; and with both short sale and foreclosure properties being “As Is” transactions, and no repairs being completed by the seller, getting a loan approved, funded and closed can be like pulling teeth without any Novocain.

In comes the FHA 203K team!

Together, a lender who will complete this type of loan; the home inspector, termite inspector, general contractor, HUD inspector, and a handful of other people that together know what is required, are working in unison to help people purchase these distressed properties, make the needed repairs and do some remodeling and updating at the same time.

How does it work?

The home buyer finds out what they will qualify to purchase.  Working backwards from there, if you qualify for 200,000 and you are going to put 20-35,000 into repairs and remodeling; look for homes priced around 160,000.  At the same time you have the home inspection, also bring in the general contractor and maybe the HUD inspector too.  Find out the cost for what is needed to be repaired and what you would like to have remodeled.  The cost of repairs and remodeling are rolled into the final loan amount. At closing the general contractor gets in the house and makes the repairs and remodeling, a few weeks later the home owner gets to move into their beautiful newly re-done home.

This takes an experienced team, a well oiled machine and fantastic communication.  I am glad to know the players! and to have been invited to join the team and help a few more buyers get into their dream home.

Desert Botanical Gardens

I love our gardens. Love being a member, even if I don’t get there as often as I would like. Last year the Desert Botanical Gardens had the Dale Chihuly: Nature of Glass exhibition. Because of the exhibit, the gardens increased their revenue last year by 45%.

With so many of the museums, parks and other community facilities facing closure due to the economy and lack of funds, I am glad The Desert Botanical Gardens is doing so well.

Connect with them on Facebook, Flickr, YouTube, and Twitter

Phoenix area market condition

The numbers are starting to look a bit more encouraging. After months and months of sales prices falling the home sales prices seem to have stabilized. For the past 10 months the average home sales price has bounced between $170,000 and $180,000. Up a bit one month, then down a bit the next, I think is an indication of multi-million dollar home sales added into the mix.

As you can see from the Arizona Multiple Listing Service chart, the prices dipped as low as $159,000 and are seeming to hold steady.

This is a broad picture, looking at all of Maricopa County. Things may be different neighborhood to neighborhood and community to community. Depending on the number of foreclosures, short sales and total sales, the outlook can be different for the area you are considering purchasing a home.

To see this chart full sized, head over to the ARMLS Sold Chart


It is time for a talk about Air Conditioners and what you need to know!

It is time to think about your air conditioner, and not because summer is around the corner. There are new laws governing air conditioners. Freon systems (R22) can no longer be installed. This is due to the Clean Air Act of 1990. As of January 1, 2010 air conditioning systems that use Freon (R22) are no longer allowed to be manufactured. All new systems must be Puron (410A).

The challenge is the two cooling chemicals don’t work together. They are like oil and water; like putting regular gas in a diesel vehicle. It just won’t work. So if your compressor goes bad, you could have to replace the compressor and air handler! And that is a huge cost.

What does this mean to you? Well I had a chat with Tara Carter from Old Republic Home Protection and learned a few things. She said that there is no specific time frame for parts to be available. Depending on your AC unit, and what needs to be replaced on your unit, there could be a shortage of parts, starting right now. Parts could be found out of state, and across the country. So understand that repair times could be longer than desired. If a part is not available anywhere in the country, you will have to have the whole unit replaced. That could be a cost of 6 or 8 grand and up.

That is why if there was ever a good reason to have a home warranty, it would be now. A few things to check before you choose a Home Warranty company make sure they will cover the full replacement of your AC both the air handler and the compressor. (like Old Republic) If one or the other goes, both will have to be replaced.

If you have a newer unit, you may not need to worry. Be sure to get your unit serviced annually and keep it in good working order for as long as possible.

Why isn’t the bank doing a short sale?

I had a great question asked this week. The person asked me about a house in their neighborhood. It had been vacant for a while and they were interested in the stats and possibly purchasing it. I looked up the house and found out the property was scheduled for foreclosure in less than a month.

The question: “Why isn’t the bank doing a short sale?”

The consideration for a short sale is requested by the owner of the home. It may be in the owner’s best interest to do a Bankruptcy, and let the property foreclose. If the owners had consulted with a tax attorney, they may have been advised to move forward in the manner they were.

Doing a short sale is not the choice of the bank. They (the bank) cannot opt to sell the property, as they do not own it. The current owner could at the last minute pay the bank the fees owed, renegotiate their loan and get out of default. The foreclosure process allows the owner to get out of trouble if they can.

The bank is not at liberty to do anything until they have ownership of the property.

Foreclosures in the Active Adult Communities

With today days real estate market I get asked about foreclosures all the time. Specifically about foreclosures in the adult communities. As people are looking thru the listings from our website (Active Adult Communities in Arizona) they don’t see many foreclosures. I am not hiding them, or keeping them from the selection available, I promise.

It is the nature of the buyer in Adult Communities. They are much more conservative. Many if not most, purchase with cash. If they require a loan, the amount down is usually greater than 10 or even 20% and the loans are all fixed rate loans. Only investors in those communities purchased with interest only, adjustable loans. And most new build communities did not sell to investors.

So we don’t see many home foreclosures in the adult communities. When they do come on the market, many times was an investor that got in over their heads, or some major personal issue, or the property passed on to the family and they couldn’t handle paying the additional mortgage.

The result, the housing prices in the adult communities have not been affected by foreclosures like the all aged communities. Instead, the conservativeness of the buyers, and the balance of retirement accounts has kept the buyers away, bringing the prices down in those communities.

In conclusion, the adult communities see far fewer foreclosures, and though the prices have come down with the real estate crisis, they prices have not come down as much as the all aged communities.