Minneapolis Real Estate Blog

The perfect storm is what the current market conditions with the addition of mortgage foreclosures. Today my preferred lender told me that one of their underwriters actually stopped accepting lock in agreements for the next few days. Clients that have already entered into a lock in agreement should not be effected by this sudden change. However if someone needs to extend a lock in that option may not be there!

 Lynn Frantzen

Today’s Fed Discount Rate cut signals good news for those looking to buy a house in Minneapolis. Home prices are down in the Twin Cities, making living here an affordable proposition again. There are opportunities to buy houses at 2005 prices and in some cases even 2004 prices. Foreclosures and short sales are increasing dramatically here in Minneapolis as the irrational exhuberance of the lending fiasco of the last few years bears its fruit.

 Smart home buyers are shopping diligently, looking at a lot of properties, talking to their realtors and finding out what kind of values are out there. One of the ways that your realtor can help you with getting the most out of your housing dollars is to tell you historical sales price data about the house. Historical sales price data is not available to the public and must be obtained by a licensed Realtor.

This past spring I showed a house (twice) to a client of mine. She had some interest in the house, but she needed a better job before she could put in an offer.  One of her concerns with the house was that there are all of these large trees near it, and she said “What if one of these trees falls on the house? We would need to discount the price to get the trees trimmed back.”

This house is in Bloomington, and I drove past the house this morning, and guess what? A tree fell on it from our storm Saturday morning! There is a large hole in the roof now. I called my client, and she laughed about it.  I guess you just never know what will happen. Sue Kaltinger Realtor

Virtually every person out there has heard about the subprime mortgage crisis and the possible spreading of the difficulties to higher rated mortgages. Couple that with the current downturn in housing prices and you have all the ingredients for panic. But wait, hold the phone, the sky is not falling yet.

Housing prices are not yet falling in the Minneapolis area, they are just flat. Which is actually a good thing if you are looking to buy a house. However, if you were hoping to buy more house than you could realistically afford, well those days are over. The time of ARMs, interest only loans and other dangerous mortgage practices has come to an end.

Right now real estate is trending back to a more conservative pricing and lending model, one which has served the US home owner well for many years. Just because you feel like you may have missed out on the latest real estate boom, it doesn’t mean that a home isn’t a great investment. Real estate is still the best investment for most people, for the simple reason that it is the only way to turn an expense into an asset. By shifting from paying rent to paying a mortgage one is actually taking an expense and converting it into an investment.

Right now a savvy home buyer can cash in on the chaos of the subprime crisis and buy a house at a distressed price, just make sure that you are not buying more house than you can realistically afford.

Increased traffic and commuters passing through neighborhoods in search of a faster commute in the Twin Cities isn’t just an esthetic problem or a property value issue, it is a safety concern.

 Usually when buying a house, one tries to ensure that the house is not located on a major thoroughfare with high traffic. The problem comes later on down the line as traffic patterns change and your home gets stuck in a higher traffic zone.

 Remaining active in your community and insisting on adequate speed limit signs and maybe even speed bumps can prevent your home from being stuck in a speed zone. Aggressive campaigns by a cohesive neighborhood will prevent your community from becoming a victim of increased traffic.

More and more people are finding mold in their homes and buyers are worried about what to do. People who are trying to sell a house with mold obviously have to disclose it, but then the chances of selling are reduced. The only answer is a certified mold abatement specialist. Though the process is expensive, mold abatement can work and increase the value of your home.

Mold is a serious issue not just for resale value and esthetics, but for health reasons too. Many people are super sensitive and allergic to mold. Mold infestation has caused diseases from asthma to chronic fatigue and death.

 Please contact a mold specialist before buying or selling a moldy house.

WOW - the number of properties for a buyer to choose from can become overwhelming. I try to have my buyer’s look at no more than about 6 properties at any one time or they really start to blend together when you go home and start thinking about each one. I always print out a MLS data sheet for each home that my clients can use for note taking as we walk thru. I think this helps clients narrow down what they liked and really didn’t like about each home. I suggest notes on anything from how the home felt, smelled, looked, traffic, parking, age of appliances and mechanicals. After a few homes it becomes easier to see what items are most important. I recently was showing to a couple that wanted a busy road as he ran a home business out of the garage, he never even mentioned this until he started commenting on too little traffic!

Lynn Frantzen - Realtor, GRI, ABR
763-742-8553

I attended a closing (the final stage in a real estate transaction, when the seller receives the purchase money, the buyer receives the deed, and the title is transferred) on Tuesday morning 7/10/07. The Seller, his real estate agent and closer from his Title company were there. I came as the real estate agent representing the Buyers, who were accompanied by the closer from their Title company. After reviewing and signing off on 30 to 40 minutes worth of paper work by both parties, the ritual of handing over the keys to the premises and garage door opener symbolically sealed the deal!

I never get over the excitement of helping someone finding their dream home by helping them work through the entire process. The Purchase Agreement was delivered on 6/5, followed by a counter offer to the price. The Buyers agreed to the price and asked the Seller to include the dining room table, chairs and two bar stools. Both parties agreed and signed, finalizing the new agreement on 6/8. The inspection took place on 6/13. Three issues came up that were negotiated; Two items were fixed by professionals and the other was taken care of by a $150 escrow fund paid by the Seller, which is set up by the Title company in order for the Buyer to make the purchase for the new item and receive a reimbursement. 

The Buyers plan on doing some painting and other decorating before they move in to their new, home sweet home.

Dave Heinrich

612-715-3300

This past weekend 7/6 – 7/8 of 2007, I had the opportunity to take out 3 different buyers. All three looked at one or more corporate or bank owned properties, also known as REO’s (Real Estate Owned). These properties can be a little more challenging to deal with, but the work has the potential of being well worth it. The following are some differences between purchasing from an individual home owner and a lending corporation who has foreclosed on a property:

1. With REOs, committees typically make the decisions rather than a person.
2. Turn around time for an REO can take 1 to 6 weeks to receive a response to an offer as compared to 1 to 4 days for an individually owned property.
3. A Special or Limited Warrant Deed is conveyed for an REO, rather than the standard General Warrant Deed.
4. Corporations will usually only accept their own Purchase Agreements written in favor of the entity rather than using a standard approved Purchase Agreement.
5. REO properties are usually sold “as is” meaning they will not fix or repair anything. Private home owners know that negotiation may be necessary to sell their properties.
6. A minimum of 1% to 2% nonrefundable* earnest money is usually asked for and must accompany the offer on any REO property. (*Nonrefundable only if the offer is accepted)

When making an offer on REO’s, make sure you have accounted for the cost of everything that will need repairs, updating and other work. You may want to hire a professional to advise you in this area, since spending a few hundred dollars now can save you thousands in the long run. With some focused effort on making sure the numbers work out well, it could mean arriving at an awesome deal!

Both REO’s and a regular purchase, verification of funds will be needed on cash offers, or an approval letter from a lender stating that you can afford the property.

Dave Heinrich

612-715-3300

I had a showing appointment for an organization of “green” people. They want to rehab an old, in need of repair, house, and use it to showcase their work, and to show people how they can “go green” in their own homes. I arrive at the first house, and notice that they are all on bikes, there is about 6 of them. They bike from house to house, while I drive. After I left the last house and was on my way home, it suddenly struck me, they are “green” by riding bikes, and I am driving an 8 cylinder, gas guzzling car! I sure hope they don’t notice the V8 on the truck of the car! Not very eco friendly of me. Maybe I should buy a hybrid for cases like this.

Sue Kaltinger
Minneapolis Real Estate Agent
612-290-4931