This program is heavily used in the boonies  the sticks Greater Minnesota. This is a big change for Rural America and likely to cause some short-term issues for both buyers and sellers.

When a 2nd mortgage holder can only recover 3% of the loan or $3000, whichever is LESS, and they have to release the seller from all future liability, I can see why they will not be quick to take the deal.  In Minnesota, a foreclosure does not wipe out the 2nd lienholder’s rights and therefore it’s quite possible that they will seek future payments via collections – I could imagine them getting far more than 3% back that way.

While some 2nd mortgage companies have already been taking payments around this amount, many will not and I don’t see that changing – HAFA will help, but it will help far more on homes where there is only one mortgage vs two.

Office of Energy Security, Minnesota Department of Commerce
ENERGY STIMULUS UPDATE
Monday, March 1, 2010
Rebate Web Site Unavailable
 
We are aware that Appliance Rebate website is currently unavailable.

We are working with the vendor providing this service to identify and repair the problems.

The 1-877-230-9119 hotline is available but may be busy because of high call volume.

In the mentime, you can call the Energy Information Center if you need information:

1-800-657-3710 (MN only)
651-296-5175 (Metro area)

The Info Center CANNOT process your request for a voucher.

For more information, contact us at energy.info@state.mn.us or 800-657-3710.

Countdown timer above shows what little time is remaining for home buyers and sellers to take advantage of the tax credits!  To review:

• 1st time home buyers or those that have not been a homeowner for 3+ years may be eligible for an $8000 tax credit.
• Current homeowners who have lived in their home for 5 of the past 8 years may be eligible for a $6500 if they sign a purchase agreement for a new primary residence prior to May 1, regardless of if/when they sell their current home.

Everyone looking to take advantage of one of these tax credits needs to have an accepted purchase agreement no later than April 30th, 2010 and that sale must close by June 30th, 2010.

If you are a buyer looking at foreclosures, make sure you leave time for the bank to sign the paperwork.

If you are a buyer looking at short sales, it looks like you just need to have agreement with the seller (subject to approval from the seller’s lender) by April 30th, though you still need to close by June 30th and should also speak to your tax advisor about the situation prior to making a decision to sign a purchase agreement.

If you are a seller or potential seller, now is the time to get your house in tip-top shape, list it for sale, market the house heavily and price it to sell – it takes 23 showings on average to sell a home and those showings take time to happen!

What I’m wondering is at what point do commissions get so lucrative that it can severely influence an agent’s actions in representing their buyer?  Since discussing “usual” or “typical” commissions in a public forum can lead to antitrust issues, I won’t discuss numbers but I will say that 5% is above any buyer cooperative commission (buy-side only) that I’ve ever received.

For as long as I’ve been in the business (on my 8th year now!) I’ve heard grumblings of suspicion that some agents working with buyers put a bias towards listings that pay them higher commissions.  In many ways it makes sense – most agents are paid on commission only so selling a higher-priced listing or one with a higher payout does directly affect what they earn.  While it may make sense, steering a client based off of compensation reasons is unethical and violates Agency laws in Minnesota (and likely most other states too).  Needless to say, the influence is there and I have no doubt that some agents practice this, though I truly believe that most agents are true to their clients and don’t let a fatter commission check affect their representation of their client.

What concerns me here is that at some point the commission dollars get to be big enough that it becomes a much bigger enticement and therefore the chances of agent influence become higher.  Even if there is no true influence, the mere appearance of a conflict of interest becomes apparent.

On the flip side, this is a great marketing tool by DR Horton – they attract lots of interested agents to see if DR Horton has a house that fits their buyer’s needs since it would be a big fat payout for the agent.  DR Horton only has to pay that commission on closed sales that meet their rules, so a penney isn’t spent unless there is a result.  Also, since this is only for inventory/spec homes, what they’re doing is putting them on a kind of clearance sales so that they don’t have to keep paying the carrying costs for a vacant completed home.  Smart.

There are two sides to this – I’m curious on what anyone else may think about this.  Please comment!

As Chris Snowbeck from the Pioneer Press notes in a recent article, the HousingLink data is good news but can’t be considered a sign that the foreclosure problem is waning – there are many efforts being made to reduce foreclosures and they’ve had an impact temporarily but not all these efforts will be successful and there are still a lot of in-default homeowners that will need to be addressed one way or another in the coming quarters.

The Pioneer Press also has a great writeup on the MBA data in our local market - while an amazing 6.9% home loans 90+ days delinquent or in foreclosure, the percentage of loans 30-59 days delinquent has remained very flat for over a year and is showing signs of a downtrend in recent quarters - a good sign that locally borrowers current on their mortgages are having an easier time doing so.   I’d love to pour over more info in their report but they want a princely sum of money to see it and I’m not paying.

4 Bdrm 4 bath 4,400 sq./ft. hillside home on 4 plus acres, 7 min. from Middleton. Master suite with whirlpool and deck. Fieldstone fireplace, wraparound porch, storm/wine cellar, spectacular room to grow marijuana, open floor plan, elevator and handicap accessible with in-law suite. 2 1/2 car garage with lower level shop. Separate 40′ x 60′ commercial grade shop with loft, office and 3/4 bath. Perfect for toys or animals. Middleton-Cross Plains schools. $675,000

So say the MLS remarks of this listing.  Don’t believe me?  Here it is on the MLS itself, along with the contact info for the listing agent and the seller, who appears to be representing himself.

How on earth is this possible?  Well, based on what I can see, this broker seems to allow sellers to enter their own listings into the MLS, a horrifying thought.  The other option is that this was input by the listing agent… which seems more horrifying than the seller doing it.  In case the property details have been changed by the time you read this, here is a PDF of the marijuana house (2).

I occasionally see comments from the public saying things like: REALTORS are worthless, the MLS is a monopoly that needs to be forced to allow anyone to publish to it, MLS data should be public, and that Google/Trulia/Zillow/Craigslist make the MLS a thing of the past.  My counter to those comments is now clearer than ever: just look at this listing.

However this listing was posted to the MLS, the content of it is not permitted.  Because the MLS is controlled by a professional organization (the REALTORS), there will most certainly be a correction made and it is highly likely (hopefully) that some kind of penalty will be issued to the agent.  When it comes to accurate information about homes for sale or those that have sold, the MLS is in a field of its own.  While there are problems that do arise occasionally (this is an extreme example) this data is far more consistent and accurate than public options because it is a controlled system.

REALTORS are no longer the gatekeepers to the listings of homes for sale, but when it comes to ensuring the data is reliable, we still play the key role.  Most of the sites consumers use online to find homes for sale use data that originally came from the REALTOR and/or MLS.  I spend a lot of time helping buyers find the right house and helping sellers find a buyer, but I’d spend a whole lot more time if I didn’t have a reliable resource to use.

Because I have reliable information, even though finding the right house may take a lot of time, it is by far the easiest part of my job – its everything that happens after the right house is found that takes all of my skill, experience and knowledge.  Every day this job takes more to do right, something that runs counter to what you’d expect in an industry in the midst of a technology shift.  The problem is that no matter what new gadgets, software and web sites may be made, real estate is very complex and variable.  Though there are certainly both good and bad agents, this job would be practically impossible without the systems we REALTORS have in place.

If you need to get an even more detailed image than what you can get by clicking on the image above, see page 16 of the report.

Why do I find this graphic so interesting?  First of all, the trend this year is very similar to last year’s, which shows that portions of the inner-city, suburbs and exurbs are all experiencing both some of the best and worst of our market.  The common thread with all of them is that communities that have high levels of foreclosure and short sale activity also saw high sales volume when the market was at its frothiest.  While the news portrayed by this graphic is not good, it makes it very clear that this is a regional issue that affects us all.

There have been many steps forward made in the last 12 months to help address the issues surrounding our current housing crisis but there is still much work to be done.  This graphic didn’t change much from 2008 to 2009 and I don’t expect much change from 2009 to 2010.  The difference will be that we are better equipped than ever before to deal with these issues since we’ve been there already.

One thing that gets missed in all the reporting on foreclosures and short sales is that the neighborhoods that have suffered from the highest rate of lender-mediated sales are also the areas that have quite suddenly become affordable-housing havens – there is a great opportunity here for buyers to purchase homes at rock-bottom prices, near record-low interest rates, and with mortgages and qualification requirements that make them far less likely to default in the future.  Many households have been destroyed in the last few years but we do have an opportunity to create many new ones too.

Foreclosures and Short Sales in the Twin Cities (updated monthly – co-created by me!)
Twin Cities Housing Market Activity Report (updated weekly)
City-Level Housing Market Data (updated monthly)
Twin Cities Monthly Market Activity (updated monthly)
Twin Cities Housing Supply Outlook (updated monthly)
Residential Real Estate Activity Report (RREAR) (updated yearly)
‘The Skinny’ Blog (updated weekly or more)
‘The Skinny’ Stats Video (updated monthly)

All of these reports done by 10k Research and Marketing.

There is an informational session coming up for those that are interested:
http://www.dot.state.mn.us/metro/projects/169/

As is typical for them, the Minnesota Home Ownership Center has just put together a great post describing how sellers that lose their house through foreclosure (or even via short sale) can be sued by the lien holder (bank) after everything is done.

It comes down to this: if you are having troubles making your mortgage payments or are considering foreclosure or a short sale, you need to do some research and speak with an expert.  The sooner you reach out for assistance the more options you have available to you.

On March 1 @ 8am the website and a phone number will launch with a rebate reservation system – residents will have to pre-register for the rebate and receive a specific reservation code.  There are only approximately 24,500 rebates for the entire state so they are likely to go VERY FAST.

More info: http://www.mnappliancerebate.com/

March 1 Update – as of 11am the site still seems to be down – likely due to high demand.  You may also try to call the program’s toll-free number to apply for the rebate: 1-877-230-9119.

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream. If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.

Who Qualifies for the Extended Credit?

• First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
• Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

If you purchased a home between January 1, 2009 and November 6, 2009, please see: 2009 First-Time Home Buyer Tax Credit.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum allowable credit for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by two additional factors:

1. The price of the home.
2. The buyer’s income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009,  single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you  purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.