In the last few years, Tucson home values went up. At the same time, interest rates dropped. If you purchased your property three or four years ago, you are probably sitting on a very nice bit of equity. First-time homebuyers tend to utilize an FHA loan because it allows you to buy with less than 20% down. But that also means paying PMI (private mortgage insurance). Now might be a good time for you to consider your Tucson home refinancing options. Like just about everything else, it comes with its pros and cons. Think about all of these before converting your FHA into a conventional loan.

Tucson Home Refinancing

Pros

First, refinancing from an FHA to a conventional loan allows you to drop the PMI. This could save you several thousand dollars a year in mortgage interest. As long as you refinance less than 80% of the value of your Tucson home, you no longer pay PMI. So, let's say that your property appraises at $300,000. You owe $200,000. You can finance up to $240,000 and still stay within that 80% window. With an FHA loan, PMI stays with you until you either pay it off or sell your home. 

Let's say you still want to refinance to take advantage of lower interest rates but you owe more than 80% of the value of your property. Even then, conventional loans charge a lower PMI than FHA loans. Then, once you reach a 78% loan-to-value ratio (owe 78% of the value of your house), the PMI drops off altogether.

Cons

Closing costs. You can't avoid them. Appraisal fees. Title insurance and fees. These fees range between 1.5% and 3% of the loan. It's just like buying a house but without a downpayment due.

When deciding whether or not Tucson home refinancing is for you, weigh your expenses against your gains. How long will it take to recoup your closing costs? How much are you saving each month? If you save $500 a month and you pay $7000 in closing costs for the refinance, you need to be in your home for at least 14 months before you break even on the refinancing. When the refinance saves you more per month, it takes less time than that to recoup. Talk to your Tucson REALTOR® or your lender to determine the best course of action to take.

Rebecca Schulte, Schulte Real Estate Group, Your Source for Tucson Real Estate

The past few months changed our world in many ways. Every business had to rethink how to navigate a pandemic in order to survive. Real estate was no exception. The closing process takes a little longer. Virtual tours replaced open houses. After a spike in COVID-19 cases, Governor Ducey again shut down gyms, bars, movie theaters, and water parks for at least the next 30 days. Mayor Romero implemented new face-covering requirements as well. How will this affect Tucson homebuying in the future?

Tucson Homebuying Post-COVID

Home Tours

For the foreseeable future, it looks like virtual tours may be the preferred method. If sellers feel comfortable enough to allow private tours, face masks with (optional) booties might be required. Still want to tour the property but feel unsure about entering it? Talk to your REALTOR® about setting up a Zoom or Facebook virtual tour. They act as your proxy and take you on a live tour of the property themselves through the internet. When you choose this option, it allows you to take as long as you need to and zero in on areas of specific interest. 

Loan Approval

Like so many things, loan approval takes a little bit longer. Many lenders tightened their requirements and increased the minimum credit score for approval. Make sure to ask what information a lender needs right away so that you can gather that together for them as soon as possible. Other important information you need to know is what their minimum credit score requirement is and if they allow you to put less than 20% down. When you can't put 20% down, ask about what your options are in terms of financing programs.

Furloughed Home Buyers

Were you in the process of buying a Tucson home right as the pandemic hit? Did your company furlough you? That might put a kink in your home buying plans. Some lenders will not approve a furloughed worker. Ask how a furlough affects your loan and if your employment history must start all over when you start back at work, especially if you found new employment in the meantime.

It's a whole new world right now. If you have any questions about Tuscon homebuying or need someone to show you what's available in the market right now, contact me. I'm always happy to help.

Rebecca Schulte, Schulte Real Estate Group, Your Source for Tucson Real Estate

Last month, Governor Ducey allowed his stay-at-home order to expire. Even so, Tucson Mayor Romero extended restrictions through June 8th as a precaution. It seems the mayor showed good judgment. Since reopening the bars and in-house dining at restaurants, Arizona experienced a spike in COVID-19 cases. Just last week, Governor Ducey announced new restrictions for all Arizona businesses to adhere to in order to continue operating. He also encouraged people to start wearing face masks when they must interact in public but are unable to maintain a six foot distance from others. Mayor Romero just implemented new Tucson face covering requirements as well. These requirements go into place right away.

Tucson Face Covering Requirements

As of right now, anyone aged five or older who goes out in public must wear a face covering if they cannot maintain a six foot distance between themselves and anyone else not currently living in their household. Also, any employee interacting with the public must wear a face mask. Anything that securely covers your mouth and nose (a bandana, scarf, cloth mask, etc.) is considered a "face covering". Make sure it fits snugly enough to allow no gaps. Place it on your face before you exit your vehicle and keep it on until you return inside.

Why Must We Wear Masks?

While not a guarantee that you will not contract COVID-19, face coverings greatly reduce the risk of exposure. COVID-19 transfers from person to person through droplets on your breath. If you walk near an infected person and they sneeze, cough, laugh or even breathe in your direction, the virus can spread to you through the air. When you wear a mask, the chances of this happening go down. If the person who is infected (and might not even know it) wears a mask as well, this reduces your chance of exposure even more. You still need to wash your hands often and for at least 20 seconds at a time to help reduce the spread of COVID-19.

Face Mask Care

Surgical masks are one-time use only. Throw them in the trash when done with them. If at home, throw them in a plastic bag in your exterior trash bin, not the one inside of your house. Wash your hands (or sanitize if out of the house) when you take off your mask. Cloth masks should be washed after every use with hot water and detergent.  Keep them in a secure location away from other items to avoid cross-contamination. Experts recommend keeping several cloth masks available in order to always be sure to have one handy when needed.

Rebecca Schulte, Schulte Real Estate Group, Your Source for Tucson Real Estate

A community thrives when its residents take care of both it and each other. When you take care of your home, you show pride of ownership. The same can be said about your community. To show your love for living here, join your friends, family, and neighbors in the Tucson Team Up Clean Up 2020 between June 24th and June 27th.

Tucson Team Up Clean Up 2020

What Is It?

As the state begins to ease COVID-19 restrictions, we see more and more businesses opening back up. That includes City buildings. The Tucson Team Up to Clean Up event helps give our city a nice fresh start. Officials ask City employees and local residents to go outside and help clean up areas around town. Start with your own front yard. Then, expand your reach to public areas. Get your kids involved to instill a sense of pride in where they live. It's a great community service opportunity for clubs and organizations as well.

How You Can Help

Officials narrowed their clean up locations to three specific areas: a City worksite, a local neighborhood or just clean up wherever you are...even if you don't happen to physically be in the city at the time. Headed to the beach for a family vacation? Going camping in the desert? Pick up trash around your beach or campsite and snap a pic. Then, share the photo on your social media using #TEAMPUPtoCLEANUP to tag it.

Staying home next week? Sign up for a worksite or neighborhood clean up. Choose from one of 67 various worksites (parks, washes, right-of-ways, etc). The City provides all of the supplies necessary to complete the tasks for each site. You can help make these places more beautiful by picking up trash, clearing out weeds, trimming trees, or painting where needed. If you wish to participate in the worksite cleanup, you'll need to register by June 22nd. 

Not quite ready to join a group setting? Then stick closer to home. Walk around your neighborhood, walking paths, and local park area to see where you can be of the most help. Pick up trash. Clear out weeds. Trim trees where necessary. Visit the Team Up to Clean Up website to sign up your neighborhood for clean up. If you register before June 19th, the City can provide supplies and coordinate trash pick-up. Take photos of your progress, post them on social media, and tag each pic with #TEAMUPtoCLEANUP.

Tips Before You Start

With COVID-19 concerns still on the minds of many, the City offers these safety tips when you join the clean-up effort:

• Stay six feet away from anyone you don't live with.
• Wear a face mask. If you don't have one, the City will provide one for you when you volunteer at a City worksite.
• Wash and sanitize your hands often. Supplies will be available at all City worksite locations.
• Drink lots of water. Make sure you bring extra with you while performing your clean-up.
• Wear sunscreen. Re-apply throughout the day.
• Hats, sunglasses, work gloves, and closed-toe shoes are highly recommended.
• Keep an eye out for snakes when out in undeveloped areas.

Thank you for helping keep Tucson beautiful!

Rebecca Schulte, Schulte Real Estate Group, Your Source for Tucson Real Estate

Congratulations! You accepted an offer and entered escrow on your Tucson home. One of the steps that must be taken during escrow is a home inspection. One reason a home may fall out of escrow comes from something discovered during the inspection. To avoid surprises, you should perform your own inspection before the official inspection commences. That gives you time to fix any potential problems right away...and possibly save your home sale in the process.

What to Inspect Before Your Home Inspection

HVAC System

HVAC systems usually last between 12 and 15 years before they need replacing. Sometimes, they begin to experience problems before that, though. If the air feels "stuffy" whenever the HVAC kicks on, notice vast temperature fluctuations or feel drafts coming from your HVAC system, it might be time to have it inspected. This could indicate a problem with your insulation, ductwork, or even the equipment itself.

Electrical System

Do your lights flicker or dim while in use? If you use two different outlets at one time, does it flip a breaker? That will come up during an inspection. And it could signify a problem with the electrical system. Older houses weren't originally built to handle the kind of electronics we use today. So, you may need to update your circuit breaker panel to accommodate modern living. One thing you definitely should consider is to exchange regular outlets located within six feet of a water source (in your kitchen and bathrooms) to ground fault circuit interrupter outlets for safety. These outlets automatically shut off power to them in less than a second when they detect that a ground fault takes place.

Windows & Doors

Inspectors look at how well your windows and doors operate. Do they open and close with ease? Are there any cracks? Do they seal properly? If you can see sunlight through your exterior doors, you need to add weatherstripping to seal these gaps. Replace or add caulking around windows to seal them up as well.

Roofing

Yes, a home inspector also looks at the roof when conducting their home inspection. Make sure you clear your gutters of any debris and make sure downspouts allow water to run freely through them. Cracks, leaks, or missing shingles raises red flags to inspectors and could delay or cancel your Tucson home sale.

Mold

Finally, no one likes mold. It could be indicative of a much bigger problem and could completely turn off a home buyer altogether. Visually inspect all areas of your home for mold, including the usual suspects (under sinks, around tubs, in showers, etc). If possible, hire a mold inspector to check out your property before your buyer's inspection takes place. 

Rebecca Schulte, Schulte Real Estate Group, Your Source for Tucson Real Estate

The COVID-19 restrictions have affected us all in one way or another. Some people lost their jobs. Others lost loved ones. Yet others lost their businesses. Even through these tough times, people still need homes. Do you need to downsize? Have you had a recent job change? Do you just want to cash in on equity to find a new place to live? Before you start shopping for a new Tucson home, you need to check your credit. 

Check Your Credit Before You Buy

Why?

First of all, it's always good to know where you stand credit-wise before you apply for a mortgage loan. A higher credit score means that you might qualify for better interest rates. Lenders check your credit utilization to help them determine your creditworthiness. The lower your balances, the lower your utilization. In turn, the lower your utilization, the more attractive you look to lenders. Unfortunately, lately, creditors have been lowering limits on credit accounts seemingly out of the blue.

We've been seeing people with perfectly good credit who pay on time, never miss a payment, and keep their balances low find out that their creditor decided to lower their limit. Yet another side effect of COVID-19. Lenders facing an uncertain economy tighten their purse strings where they can. This could increase your credit utilization without you ever charging another cent. How? Let's say you owe $1250 spread out over three credit accounts. The total limit of all three cards combined comes to $5,000. In that case, you operate at 20% credit utilization. Creditors like to see that. But, what happens when a creditor lowers one of your cards by $1000? Then, your credit utilization bumps up to 31.3%. While still a decent utilization score, it could lower your FICO score by a few points. If you already teeter on the edge of a good credit rating, that could drop you to the next lower rung, increasing what you pay in interest.

Another reason to check your credit score before you buy is that errors happen. If you check your score before you buy, you have the opportunity to fix any errors before you apply for a loan. By fixing these errors, you boost your chances of increasing your score. If that happens, you might qualify for a better interest rate when it comes time to apply for your mortgage loan.

How?

Visit AnnuaCreditReport.com. This site allows you to view your FICO scores from all three credit reporting agencies for free. Once you receive your report, view it for errors. If you find any, contact the reporting agency you found it on (Experian, TransUnion, Equifax) to make them aware of the error. Each company has its own way of handling errors. Visit that company's website to find out how they want you to report the error. This takes time. So, you should tackle this as soon as possible.

Unfortunately, when it comes to the lowering of your limit, you're at the mercy of the creditor. Sure, you can appeal to them directly. Then, they might decide to reinstate your former limit. However, this might not happen. Creditors have the legal right to change your credit limit at any time as they see fit. All you can do is continue to pay your accounts on time and pay down as much debt as possible.

Rebecca Schulte, Schulte Real Estate Group, Your Source for Tucson Real Estate

Governor Ducey's Stay-at-Home Order expired last weekend. While the Grand Canyon remains closed for now, other businesses started opening up around the state. Restaurants, bars, gyms, and retail stores opened their doors again. However, Tucson Mayor Romero decided to take a more reserved stance. She extended her emergency declaration for the city. This keeps Tucson COVID-19 restrictions in place until at least June 8th.

Tucson COVID-19 Restrictions

What does this mean? City parks and municipal buildings (with the exception of the courthouse) remain closed to the public for now. Limited public attendance at mayoral and council meetings will be allowed. The mayor strongly suggests that employers allow employees to telecommute for business wherever possible. For those workers who must work on-site, the mayor suggests providing face masks for additional protection against the spread of COVID-19 among worker. When out-and-about in public, the wearing of face masks and maintaining a six foot distance between you and others is strongly recommended.

Why the continued restrictions when Governor Ducey allowed his order to expire? Mayor Romero said that Tucson's stats weren't satisfactory enough to allow for a phased re-opening at this time. Therefore, she decided to extend the limitations in place for her stay-at-home order for a few more weeks. On June 9th, she'll review the most recent data and determine whether or not to lift the restrictions currently in place.

New Pima County Regulations for Hotels/Resorts and Attractions

The Pima County Board of Supervisors met last week to discuss ways in which they could open their hotels, resorts, and attractions with the public's health in mind. All employees must pass a wellness and temperature check before beginning their shift at local attractions. When possible, the board would like any vendor, contractor or delivery person to also receive the same wellness/temperature check before entering. While recommended, the board won't require patron wellness checks. All employees and volunteers must wear cloth masks and wash their hands regularly.

You may start to see new signs up at local attractions as well that prohibit anyone exhibiting symptoms of COVID-19 from entering the premises. Social distancing rules apply indoors as well. Many facilities may only allow 50% capacity at a time to maintain that six foot invisible barrier between patrons. Look for hand sanitizing stations near the entrances and restrooms. Welcome to the "new normal" folks. It's going to be this way for a while.

Rebecca Schulte, Schulte Real Estate Group, Your Source for Tucson Real Estate

Your home's exterior offers buyers their first impression of your Tucson house. If it looks unappealing, buyers might think twice before entering inside to check out the rest of your property. So, you need to make sure your curb appeal is on point. That doesn't mean you need to break the bank to do it either. Here are a few easy ways you can give your home a makeover and capture the attention of potential buyers.

Curb Appeal Projects That Capture Buyers' Attention

Landscaping

Tucson yards tend to stick to the low maintenance rock variety. Even still, you need to trim your shrubs and keep the weeds at bay. Add flowering succulents or native desert flowers like rich red Garnet Delosperma (Jewel of the Desert), orange Butterfly Weed, or purple May Night Perennial Salvia for a pop of color. Plant them in beautiful pots around the exterior of and/or entryway to your Tucson home.

Driveway/Walkway

How do you make concrete look good? First, get rid of any weeds or grass growing in between the expansion joints (the "step on a crack, break your momma's back" lines). Then, clean up any stains or spills. Finally, use a power sprayer to make each area as good as new. Also, trim back your shrubs along the walkway to the front door. You want buyers to easily find their way in without fighting through a jungle to get there.

Garage Door

For many homes, the garage door takes up a large chunk of your front elevation. You need it to look good, too. Ramp up your curb appeal with a new garage door. A new garage door actually offers the best return on investment. of any home improvement projects you can do. Look for doors with window panels to add more natural light inside the garage. If that's not in your budget, paint the door the same color as the trim of your house.

Front Door

Another easy yet great way to increase curb appeal is to update your front door. The simple act of replacing your front door with a new one completely transforms your entryway. However, that easily runs about $1000.  If that's out of your price range, paint it instead. Add a surprising pop of color with a bright red, turquoise, or yellow paint. Replace the old dingy hardware with shiny new ones. Even placing a pretty door knocker on it helps elevate the look of your entry when buyers come to call.

Lighting

Finally, don't forget to dress your Tucson home up for nighttime. You never know when buyers might be driving by. Update exterior light fixtures. Add pretty solar lights to illuminate the driveway and walkways. Some experts suggest a nice 60-watt bulb inside clear glass light fixtures to lighten up the exterior of your property in the most appealing way. Whatever wattage you end up using, keep it the same all the way around for continuity's sake.

Rebecca Schulte, Schulte Real Estate Group, Your Source for Tucson Real Estate

Even during a pandemic like COVID-19, buyers still look for Tucson homes to purchase. Governor Ducey announced yesterday that he is moving up the timeline of his phased reopening of businesses in Arizona. Barbershops and salons can open to the public on May 8th. Restaurants can open their doors for dining in again on May 11th. Even so, social distancing guidelines remain in effect. This also affects the closing process when buying a Tucson house. So, be aware that things may take longer and safety precautions could mean a change to how inspections, appraisals, walk-throughs, and even signing the final paperwork take place.

Changes to the Closing Process During a Pandemic

Expect to Wait a Little Longer

In the past, 30 day closing times were pretty normal. However, nowadays, the time between accepting an offer and signing your final paperwork may take 60 days or even longer. With unemployed numbers swelling, the real estate industry experienced a swell in the number of refinances. Inspectors, appraisers, and even walk-throughs require practicing social distancing, too. Sometimes, this means conducting business virtually instead of in-person sometimes. All of these steps take a bit more time to complete than they did before.

How Home Inspections Changed

Home inspectors still come to the home they need to inspect as long as the seller says it's OK. However, they might ask for the seller to vacate the premises while they conduct their inspection as a precaution against COVID-19 exposure. When they conduct their inspection, they wear personal protective equipment as well as gloves and booties (sometimes). Before they leave, they wipe down anything they touch with a sanitizer. Some buyers opt to conduct a videoconference with the inspector after they complete their inspection to discuss their findings.

New Appraisal Procedures

Like home inspectors, an appraiser may request to be the only person on-site during their appraisal. For areas where a physical appraisal is not allowed, the appraiser might conduct an exterior inspection via a "drive-by". They also might review any virtual tours available to help them assess the value of the property. Or they might investigate public records and look at MLS data to help them determine an appraised value for the home.

Potential Changes to Final Walk-Throughs

In the past, buyers took a final physical walk-through of the home they purchased to make sure the property is in the condition agreed upon in the sales contract. Today, though, they might have to conduct a virtual walk-through instead. It depends on local restrictions in place at the time of the walk-through. Even so, the seller needs to make sure that the property has been thoroughly cleaned and emptied out at the time of the walk-through.

Signing Final Paperwork Changed, Too

Finally, even signing the final paperwork has changed. The buyer and seller may not ever meet face-to-face. In fact, they might not even sign papers in the same building. Some companies set up different times for the separate parties to come sign the final closing paperwork. Others allow each party to drive up and sign from their own vehicles. Still others send out the paperwork to the respective parties and conduct a video conference to oversee the signings virtually. Talk to your real estate agent to see how their office currently handles signing paperwork so you know what to expect.

Rebecca Schulte, Schulte Real Estate Group, Your Source for Tucson Real Estate

As far back as mid-March, Governor Doug Ducey began closing down bars, movie theaters, and gyms in an effort to curb the spread of COVID-19. By the end of March, he issued his "Stay Home, Stay Healthy, Stay Connected" Executive Order. This encouraged the practice of social distancing and limiting any excursions outside of the home to essential travel only, such as grocery shopping, picking up prescriptions, and work. Many non-essential businesses closed their office doors and either furloughed employees or sent them home to work. With so many people out of work, we hear talk of a recession looming. This might frighten anyone trying to sell their Tucson home right now. But rest assured. Even if we do hit a recession in the upcoming months, that does not mean that a housing crisis in the Tucson real estate market is sure to follow.

Tucson Real Estate Market During/After a Pandemic

Recession

First of all, a recession and a housing crisis do not necessarily go hand in hand. Health experts say it could take anywhere from 12 to 18 months to find a vaccine to fight COVID-19. Until then, social distancing and self-isolation (especially for those most vulnerable to the deadly effects of the virus) are strongly encouraged. But we have already begun to see these stay-at-home orders begin to lift in other parts of the country. Governor Ducey has not yet announced any definitive answers to whether he will lift his "stay at home" order, extend it past the April 30th deadline or begin his own tiered reopening of non-essential businesses in the states. Whichever way this all plays out here in Arizona, eventually, we will get back to "normal"...even if that is a "new normal". Our country has made it through other economic hard times before and we'll make it through this one, too.

The Housing Market During a Recession

Even if we do find ourselves in a recession (and nobody knows for sure that will happen), keep in mind that people still need a home. Buyers need to buy. Sellers need to sell. The housing market itself isn't the driving factor in a recession. If you own a Tucson home and need to move to another city for work, you still need to your house. And if you sold your house right as the pandemic took hold here in Arizona, you still need to find another home to live in. However, you might not necessarily need to buy or sell right now. And that's fine, too. You need to make the best decision for you and your family. If you do want to buy a Tucson home, now's a great time to get a loan. Interest rates are at their lowest levels ever. So, borrowing money to buy a home has never been cheaper than it is right now.

Just a Bump in the Road

Eventually, the pandemic will end. It may be a few weeks from now. It might take a few months. But, it eventually will end. Our economy will rebound. So, take a breath. Talk to your REALTOR® about the best course of action to take for your needs right now. If that means buy/sell right now, great. If it means to wait a bit, that's fine, too. As long as we work together, we'll get through this.

Rebecca Schulte, Schulte Real Estate Group, Your Source for Tucson Real Estate