Posts tagged foreclosures

New Year Update

It’s that time again.

Memberships to renew. Annual fees to be paid. Educational requirements to meet.

Time to take stock of this crazy business and ask whether or not it’s worth carrying on.

Unlike last year, when I gave serious consideration to packing it in, I have no reservations about continuing to sell real estate in the Twin Cities in 2010.

In fact, I’ve never been more confident in my my ability to grow under these challenging market conditions.

In 2009, I doubled the number of transactions I completed (granted, I had to work MUCH harder to get these deals to the table). I also increased my client  and experience base. I facilitated sales to investors, sold HUD homes, short sales, newly foreclosed properties and became something of an expert in communicating with banks in order to facilitate mortgage modifications.

2009 also saw banks tightening up their requirements, which means that buyers are buying less expensive homes. Appraisers have also cleaned up their act. Gone are the days when appraisers just walked around a prospective home and just told the lender what they wanted to hear to get the deal done.

First time home buyers (still the meat and potatoes of my business) are having a completely different experience then buyers had just a couple years ago; onerous lender requirements (sometimes changing on a daily basis), higher levels of disclosure, greater scrutiny of an individuals ability to pay back the loan…..

Is this bad?

Absolutely not!

Lending practices had gotten so free and loose, that it’s no surprise that the pendulum has swung far in the other direction.

I expect that we have another year or so of challenges ahead; foreclosures, short sales, lender mediated transactions and the like before we see the housing market stabilize.

But whatever the coming year may hold, you can trust that I’ll still be there to serve your real estate needs.

And perhaps more importantly, I’ll still be on my bike.

In fact, I’m on my way to show a few homes in Longfellow.

Thanks for the support.

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Another Happy Buyer

Another recipient of funds from the Minneapolis Advantage Program.

Sweet house.

Great Rate.

$10,000 toward downpayment and closing costs.

Life Is Good.

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Have We Hit The Bottom Yet?

This Article was in the Star-Tribune today:

North Side home sale clears nothing but the books

Last update: March 30, 2009 – 11:59 PM

The market for foreclosed and stripped houses has gotten so bad on the North Side of Minneapolis that lenders are walking away from some closings barely clearing any money when they unload a house.

Just ask real estate agent Scott Ficek. He represented investors at a closing Friday at which the lender walked away with a grand total of $69.60.

That’s because normal closing costs plus city assessments against the property at 1914 Russell Av. N. nearly ate up the entire $12,500 sales price.

Ficek said he’s seen banks walk away with as little as a couple thousand dollars before, but he found this closing so unusual that he featured it on his real estate blog. “This one happened to catch my eye,” he said.

Get ready for more, said neighborhood activist Roberta Englund, who tracks North Side real estate patterns. She said she knows of more than 30 houses in the two north Minneapolis ZIP codes listed for less than $30,000. “I think in many cases the banks are clearing nothing except their books,” she said.

The squeezed margins come after banks already have discounted sales prices heavily. The three-bedroom Russell Avenue house sold for $189,900 early in 2006. But after a year and half on the market, it had been stripped of its copper pipes and its radiators. It was listed for $35,300 when Ficek approached the agent representing owner Fannie Mae. He offered a mere $8,000.

Ficek had a powerful negotiating tool on his side. The city already had assessed $6,000 against the house, which represented an unpaid fee from 2008 that the city imposes on houses registered as vacant and boarded. With the same fee due to be imposed next month for 2009, Fannie Mae had a strong incentive to unload the house now.

There is a lot of this going on right now.

I’ve working with a few cash buyer/investors who are looking at homes at prices that would have been unimaginable just two years ago (think $25,000 for a “habitable” home), bidding lower then asking prices and getting it.

Banks can’t be clearing anything on these deals, just getting these properties off their books, and avoiding further fees from the city on boarded-up properties.

I’ve seen investors update these homes, which in the case of a boarded house means EVERYTHING has to be brought up to code (a  tall order in a century plus old home), and turning it for over a $100,000 more then what they bought it for.

Some of these homes are gorgeous, even before they are renovated, but the work involved in replacing all the plumbing and electrical can be daunting.

Tread cautiously.

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Another Happy Buyer

4109 Standish Ave.

This one went super smooth.

Unlike some other deals I have in the works right now.

There are really good deals out in the local market right now, but be careful. A great many of these homes are foreclosures and “short sales”. Although you may come to an agreement on price and terms of a sale with the owner of the property, in these cases it is all up to the bank who the seller owes money to approve the sale, which can take months.

Short sales are worse in many cases as there may be more then one lender owed, in which case they have to negotiate between each other as to who is going to take the hit. This takes forever. Neither of these corporate entities is going to be in a hurry to accept less then what is owed to them.

When entering into a deal like this it is nearly impossible to set a definite closing date, and the buyer has to wait in limbo for the lenders to accept the terms of the purchase agreement.

The lesson is: It’s always better to be dealing directly with the seller, but if it is “bank or corporate owned” be prepared to wait.

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