This is a wonderful short sale piece that was done by Kare 11, here in Minneapolis. It is a great resource! Happy home hunting!

October Monthly Skinny from MAAR! The monthly update of the market in the Minneapolis/St. Paul Real Estate Market!  Enjoy!

The housing slump appears to be affecting the Minneapolis-St. Paul

Metropolitan Area more than other parts of Minnesota, according to a
new report from the Minnesota State Demographic Center.

The study, based on data from the state Department of Revenue, shows
that both median sales price and the number of sales dropped more
within the Twin Cities area than elsewhere in the state between the
first three quarters of 2007 and 2008.

“The Department of Revenue data is a unique resource that
allows us to look at all parts of Minnesota, not just the Twin Cities
area,” said Martha McMurry, a research analyst with the State
Demographic Center. While real estate groups and other organizations
provide information that is more current, they generally provide data
only for large metropolitan areas.

Most regions of the state experienced a decline in the number of
sales, while median sale prices rose in 36 counties and fell in 49
counties between 2007 and 2008. Northwestern and west-central Minnesota
experienced stable or rising prices. By contrast, only Carver County in
the 11 counties of the Minneapolis-St. Paul area experienced rising
prices. Statewide, the median price dropped 5 percent, from $200,790 to
$190,000.

The report, “Minnesota Housing Prices, 2007-2008,” is available online at www.demography.state.mn.us.

Contact: Tom Gillaspy

State Demographer

tom.gillaspy (at) state.mn (dot) us

651/201-2461

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Flip Flop homes are houses that have been bought at supposed bargain prices.  These “great deals” are then polished and shined to sell and sell fast.  But do they?

I can’t tell you the countless number of homes out there that fall into this category.  There seems to be quite a few people out there that have watched all those inspiring remodeling and flipping home shows on television.  In today’s market and especially in the Twin Cities, it is hard to find that truly good deal that allows for a flip home to be successful.

Why?  Because the market is very different from the hay days of real estate.   The market is much slower.  There is not a frenzy or urgency to buy (unless you are buying homes under $150,000.)  People have time to look and take their time to decide.   Because of this, they are looking closer at homes, at the craftsmanship and quality of remodeling.

Many of the flip flops I have seen are great at first glance, but when you really start to look close the work is not up to par or is not consistent.  I have seen a trend to use cheap grades of carpeting or cheap laminate hardwood flooring that look good today, but will not wear well.  Another flooring disaster; tile or natural stone floors placed in kitchen sand baths without replacing worn out or uneven subfloor.  Can you say crack?

Another flip flop favorite is painted cupboards in the kitchen with new hardware that look good on the surface, but have not been painted and primed properly.  How about the popular granite or siltstone countertops on old cupboards?  What a waste of money.

One of the biggest problems I see with flip flops are that the flippers themselves are not buying the right house to flip.  Don’t buy the inherently undesirable home and try to make it desirable.  That bargain on a busy street is still on a busy street. The two bedrooms without space to expand no matter how well the flipper remodels the home, is still a two bedroom home.  Generally people want three plus bedrooms and preferably on one level.

My final point is that many times  a flip flop occurs because the flipper buys an older home, a home they may have bought for a good price, and but they  remodel  the home without really understanding the market.  They may have done an outstanding job at remodeling and updating the home.  The home is picture perfect.  But has the flipper really added a ton of value to the home or have they just made the home more sellable at a slightly higher price.

This market is brutal.  Ask any traditional seller.  Everyone’s home needs to be picture perfect to sell or the owner will be knocked down on the price.  In this market when you have home, it expected that you have maintained your home.  Part of this maintenance is replacing flooring when it is worn or dated, updating your kitchen and bath after a certain period of time, replacing appliances and mechanicals, painting or taking down dated wall paper,  replacing old dated window treatment, fixing what needs to be fixed and repairing or replacing what needs to be repaired or replaced.  This is home maintenance and this is part of home ownership and now more than ever it matters.  Unfortunately for the inexperienced flipper they may be doing what is expected in this buyer driven market.  They are not adding a ton of value to the home, but just making it more sellable to a buyer.

Now don’t get me wrong.  Not every flip is a flop.  There are plenty of great homes out there that investors buy, remodel and sell.  They are usually in highly desirable areas and they sell fast.  They may also be homes that are truly bought for a “deal” which allows the investor to update the home to make it on par with the other homes in the neighborhood.  In these scenarios:  Hurray! For the investor who makes a profit and saves a home.  Hurray! For the buyer who gets to buy an updated home.

Hot off the press from NAR

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

Previously, most buyers wouldn’t receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at “The Real Estate Summit: Advancing the U.S. Economy,” at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..

He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

• $8,000 fast cash for first-time homebuyers (money.cnn.com)
• FHA plans to allow use of tax credit for down payments (seattlepi.com)
• $8K Tax Credit CAN Be Used As FHA Downpayment (hsh.com)
• 8-Point Overview of the $8,000 First-Time Homebuyer Credit (realtyresolve.com)

Calling all campers…come and join this fun and exciting class just for First Time Home Buyers and their guests.
Taught by two knowledgeable and experienced Realtors, Kristin Rial and Lisa Pearl as well as our Mortgage Specialist Robyn Kellogg, you’ll walk away with with the knowledge you’ll need to buy your first home. This is a no pressure class, taught with you in mind. We’re teaching what you want to hear and you’ll be surprised. It’s your time to buy!

Saturday-May 9, 2009
10:00 am to 11:30 am
Edina Realty Eden Prairie
11800 Singletree Lane #401
Eden Prairie, MN 55344

Please RSVP-
Kristin Rial 952-210-3121 KristinRial@edinarealty.com
Lisa Pearl 612- 226-4673 LisaPearl@edinarealty.com

For those who need to launch, but don’t know how to do it….

• Falling Home Prices Also Hurting Sales (hsh.com)
• Recovery (dealerdan.blogspot.com)
• Existing-Home Sales Rise for a Second Month (nytimes.com)

If you choose not to read the LONG call to action that was included in our last post (or just don’t want to read it!), here is a video thoroughly explaining the new changes. Check it out!

As usual, we are here to answer any questions!

Happy home owning!

We just got a “call to action” from the Minnesota Association of Realtors. Please read through the article in the link and consider telling your Representative “no!” This new law would eliminate the tax deductions that homeowners are entitled to. Three important write-offs being mortgage interest, relative homestead tax law (if you own the house but an immediate family member, not you, live there), and property taxes. This will definitely have a negative effect on the housing market, which is going the right direction currently.

Here is the link: www.mnrealtor.com

Happy home-owning!

There are a few things that I recently learned doing a Fannie Mae foreclosure transaction.  I was representing the buyers. 

Closing costs –The bank did agree to pay some closing costs.  We had this negotiated in the offer.  What the bank did not make clear was that they are not going to pay for their Title Company’s fees and closing costs associated with the transfer of the deed.    This was a little hard to swallow a week before closing.   What was even more frustrating was that we were working with a Title company proving to be unreliable, but were unable to choose another even though my buyers were footing the bill.

Title Company – You do not have to choose the banks Title Company for your side of the transaction.  They will say that it is easier to do both sides in one office.  Do not be lead to believe this is true.  Make sure that you are using a reliable Title company so that you are sure that there will be no issues with the deed later.

Gap Coverage – Make sure that your buyer is given gap coverage along with coverage from any future mechanics liens, assessments, etc., as there is a title company here in the metro area that has recently deleted this kind of coverage on ALL bank owned properties.

Escrow – Escrow money for the Proceedings Subsequent.  Properties are purchased at foreclosure auction and then listed by REO immediately; the name on the deed will still read the pre-foreclosed owner.  Proceedings subsequent are the actions taken to transfer the Torrens property into the new buyer’s name.  There are Lawyer fees associated with these proceedings.  $2500 was put in escrow by the bank to take care of the fees. 

 LOI Letter – You need a special letter from the foreclosure attorneys to close and have clear Title.  Make sure that the Bank’s Title Company is creating a letter from the foreclosure attorneys.  You need this letter to satisfy the proceeding subsequent for the closing.

48 hour HUD review – The bank will take 48 hours to review the HUD.

Sincerely,

Michelle Shirley – Lister Sister

HARP is designed to help borrowers whose loans are held by Fannie Mae or Freddie Mac refinance into a more affordable mortgage. You may be eligible if:

• You are the owner-occupant of a one-to-four unit home,
• The loan on your property is owned or securitized by either Fannie Mae or Freddie Mac
• You are current on your mortgage payments (if you are not current you may be eligible for the Home Affordable Modification program)
• You believe that the amount you owe on your first mortgage is about the same or slightly less than the current value of your house,
• You have income sufficient to support the new mortgage payments, and
• The refinance improves the long term affordability or stability of your loan.

To determine if your loan is owned or securitized by Fannie Mae or Freddie Mac, you can contact them directly at:

Fannie Mae
1-800-7FANNIE (8am to 8pm EST)
www.fanniemae.com/loanlookup

Freddie Mac
1-800-FREDDIE (8am to 8pm EST)
www.freddiemac.com/mymortgage