Star Tribune article announces: Re/Max Advantage Plus number one for most transactions in the U.S.

Why they selling more homes year after year?

1. Hard work
2. Expertise
3. We have people working with us that really know what they are doing.
4. For short sales we have a group of attorneys that we work with.

When is the best time to refinance your home?

If it is 1 percent lower than what you are paying now is the rule of thumb.  Easier to refinance a conventional loan then it is a FHA loan.

Urban Landworks

Fall is coming shortly. Mike talks about the new drain exchange system which is a 300 gallon tank that fills up with the water from the rain and sump pump from your home. Then you can reuse it to water your grass through your irrigation system.

Things to get done now!

Japanese Beatles are in season Urban landoworks has a spray to get rid of them. Once they are active they will eat all your plants. It is also the perfect time to seed your yard, which needs to be watered 3 times a day.Great time to aerate your yard as well.

For this winter they do snow removal per time price and they have seasonal contracts. They can help you out with your landscaping, pond needs, irrigation systems, recycling rain water.

Home Rescue Team

Craig Nester 100 families he has helped in the last 18 months. What Minnesota Home Rescue team does is gives people real advice on what to do if falling behind.

What is true?

You know a person that went through a foreclosure; you found some information about it on the internet.  It must be true. Not the case…

Here is the truth… We have had 9 million families lose their homes through foreclosure. If it were something else such as 9 million ducks were covered with oil this issue would be a worldwide issue. These social programs are well meaning but they don’t do much for the average person. Most people want to know if the can just lower their mortgage payment and stay in their house. People need to know there are many options out there. Families will do anything they can to stay in their house. Home rescue team has the backup plan if the loan modifications does work they will be aggressive and find another solution. No one cares more about their house then you.

Investing in Real Estate

Buying a Foreclosure home only offered a limited warranty deed what does this mean?

Limited Warranty Deed is fine as long as you have a title company representing you. It is this way since the lender never lived there. When selling the property in the future you would probably want to do a limited warranty deed as well. Banks only offer limited warranty deed so just make sure you are working with a good title company and you should have no issues. Make sure you get the owners title insurance policy also. It is usually judgments that would cause a problem.

When in debit it is not how much debit you are in that matters it is the type of debit?

If there was such a thing a good debit you would want it to be mortgage debit.

What is the difference between IRA and ROTH? And which one should you choose.

IRA is money that has never been taxed but will be taxed in the future. ROTH has been taxed and comes out tax free in the future. When we are talking about retirees the ROTH is a better option because anything in your pocket you have already paid tax on.  You can put in 5,000 dollars a year when under the age 50 and 6000 dollars if you are over 50 years old. This is assuming you make the income limits you can’t make more than 100,000 per year.  Best to time to start is now you need to start early so if you haven’t already now is a great time to start.

Student just finishing college is it better for them to put money towards paying off debit student loans, car payment etc. Or putting money towards an IRA, ROTH 401K?

Better to slower pay off the loan make minimum payment since student loans usually have a very low interest rate. Don’t go crazy and do both if you loss a job and run out of money then you are going to take the money out of the retirement fund. Knock off high interest debit first but keep student loans, and mortgages for last. Because of the lower interest rate and you also get tax deductions on them as well.

In business the key to success is having a positive attitude, and outlook. This very true in Minnesota Real Estate.  Now more than ever, having a “Positive attitude Outlook” is key to having a successful short sale deal. In order to have a proper” Positive attitude Outlook” we need to ask ourselves a few things:

What are the parties involved thought process?

Throughout a countrywide learning conference concerning the short sale method, we have found the following outlooks of the parties involved in the process:

• Listing Agents- The short sale method is too drawn-out. It is difficult to have transactions with the short selling banks.
• Buyers- The short sale method takes too much time. Buyers want an response from the bank as soon as possible. Why should I have to wait to buy a short sale when I can buy something else that is non-distressed?
• Sellers- What is the point of going through this long short sale method? I will just let the bank foreclosure on my house.
• Banks- Change their outlook all the time!

4 Key’s to a Successful Short Sale

Below are the following remarks in order to change their outlooks.

1.) Listing Agents- However the short sale method is slower than a traditional deal. On average the short sale method take about 72 days.  If the Minnesota agents are well prepared to negotiate with the bank, through a law firm that has knowledge in the short sale method, their outlook, and attitude will change. Taking weight of the negotiate off agent will allow them to correctly market the home and help the distraught seller that is about to go into foreclosure.

2.) Buyers- Recognize that the short sale method is drawn-out and not every buyer is going to be a short sale buyer subject to their specific conditions.  Though, according to an Article about Foreclosures dated 8/23/2011, a buyer who does get involved in a short sale will usually buy the home at a 21% discounted to the current Minnesota market. That means IMMEDIATE EQUITY for the possible buyer. In many circumstances this will transformation the outlook of the buyer.

3.) Sellers-In just about every situation a short sale is a much better alternative then a foreclosure.

4.) Banks- Change their outlook every day. Though, through effectively negotiating 2000 short sale transactions and more counting, we found out one thing. Banks are more and more open to the short sale method. When a bank approves a short sale they are pricing it at 79% of the current Minnesota market value.  If it is a short sale they will sell if for 60% of the current market value.

By changing the banks mind and having more properties got into short sales instead of foreclosing we are helping the community and the Minnesota Real Estate market.

Minnesota Home Talk  1500 ESPN Twin Cities

8/28/11

Time to buy

If you have ability to buy property now is the time to do it.  What does it cost me to go up to the next level?  You have a 175,000 dollar town home at a 5.  Percent interest rate, and you want to buy a 325,000 new place and you’re going to get a 4 percent interest rate. You town house months payment is a 1035 dollars, for the new place you want you are at 1551 dollars a month.  This is a different of 516 dollars. Then after the tax benefit you are only at a 400 dollar difference.  Once you factor in your month costs after principal reduction 108 dollars more is the difference to buy the new house at 325,000.  If you factor in appreciation it is at about 3% over the next 30 years, it will be 267 less than your current mortgage.  Town house also has association payment which doesn’t go toward your mortgage. The math says move up right now.

Many people don’t think they can get refinanced but the truth is that you can, not in all cases but in the majority of the people there are options out there.  Things have loosened up a lot in the past 2 years things are not a strict.

Cleaning up your credit is a good option. If you have been through a short sale or foreclosure or you have some dings on your credit you can increase your score up to 150 points in as little as 60 to 90 days. Waterstone mortgage will get you on the right track to buy a home on the path to buy. While you are fixing your credit there are step you can take in other to get there faster, for example if you have 5,000 dollars on the credit cards, then will help you work on getting it down to 3,000.

The Hamp program is for people that are having trouble paying their mortgage, Hamp program is in shambles it has less that 5% success rate.  The hamp program allows a 2% interest rate for the first 5 years; it allows lower payment so you can stay in your home.  It stretches out our mortgage for 40 years the burden doesn’t go away it just delays it until the end of the mortgage. The issue is its low success rate. People are putting a lot of faith is a program that has less than a 5% success rate. If staying in your home is the goal it is a deal for today, it allows you to sleep at night. You need to go through a trial payment to qualify for the program. Say your payment now is 2200$ and the hamp program at first will bring your payment down to 1500$ they will try for 3 months and see if you can make your payments. It could be 3 months, 18 months, or 24 months, but the thing is that you don’t know that money that you are short is actually being held against you. 700 dollar a month savings and we have gone a year and a half, you will get a thing in the mail saying you have been declined for a loan mode and you owe us 24,00 dollars or we are moving into the foreclosure process.  Modification process is very complicated, very belittling to people, and most people that they speak with have no idea what they are getting into. This economy is not coming back unless we settle down the home loan crisis.

August 14, 2011

Selling in Today’s Market

Price depends on your neighborhood. Rates are in the low 4% tile right now which is incredible.

Selling tips for today’s market. Guest on today’s show is Zach; he sells more homes on the team than anyone.

3 Tips to selling your home quickly

Tip 1 Fresh Paint- get in there and paint the property it is amazing what a fresh coat of paint will do. Especially if you have wild, bright, bold colors, it can be very distracting for a buyer. They can’t focus on the home. You want to make the buyer envision themselves living there and putting their belongings I the home. Relatively inexpensive and can do on your own as well. If you’re not a good painter hire someone to do it for you. You’re wasting your time if it looks crappy in the end.

Tip 2 Clean the carpets and the floors- If the carpet can’t be shampooed clean it is worth it to re-carpet. Two most important things are Paint, and clean/new carpet. You want it to smell new when you first walk in. If it doesn’t smell good that’s all the buyers will be thinking about when they walk through the house.

Tip 3 Landscaping- Inexpensive way to really change the look of the home. Simply trim over grown brushes or trees. Brushes can be removed very easily as well. Add some inexpensive mulch and really dress up the front of the home.

When getting an agent make sure they call you back right away, not 2 days later. You also want an agent that is full time. Re/Max works with 60 agents so they will be able to get you into a house that you want to see the day of. They will work around people’s schedules even nights and weekends. Make sure your agent will; be there, be ready, and be available. So you don’t miss out on the opportunity of a great deal.

4 mistakes to avoid when selling your home

Mistake 4- Avoid getting emotionally involved – it can be very hard when it is your personal home, but you need to treat it like a business decision; it is all about the numbers. Some buyers think they can come in with a screaming low offer. Sellers can’t get upset about this, you have to look at your mortgage; this is what I owe and go from there. Seller’s think a lot of the time that there home is defiantly worth more than their neighbors’ home, and it may be almost the exact same house. Having an emotionally attachment is completely understandable. If you take the emotion out of it you will be a lot better in the long run.

Mistake 3- Restricting viewing hours. It is tough we all have different work hours, and schedules. For example a buyer is looking at a home and on their way out of the neighborhood they see your home for sale and want to see it, if you have restrictions and the potential buyer can’t see your home. You might have just cost yourself a deal. It just hurts you so much you need to be flexible. A lot of times buyers won’t come back. Plus you are competing with bank owned properties which you can view 24/7.  Always have you home ready to show. You never know when a buyer will drive by and want to see inside it. You will sell it faster if you home is ready to show, and you don’t have restricted hours.

Mistake 2- Accumulating clutter. Make sure you de-clutter your home. Remove as much stuff as you can. When you live there and see it every day you don’t notice the papers getting stacked up, pictures, and stuff stuff stuff. It can be very distracting. You may have a beautiful home that lots of buyers’ desire but all the buyer see is your stuff. You need to show the buyers good uses for the space. The buyers are going to go to the next home that was staged and set up, and that’s the home that will stick in their mind. You should strive to live in a newly remolded home look. 30 to 40% of the sale can be directly related to staging. You want your buyer to feel warm and comfortable when they walk in.

Number 1 mistake most important- avoid pricing your home to high- Price drives the sale more than anything else. Minnesota people tend to start higher on their list price, and then work their way down. 9 times out of 10 you will get so sick of showing your house you will just want to price it right to sell right away. The first 30 to 60 days are the most important. Even though you do a price reduction most buyers won’t come back. Agents are going to give you an accurate price right away because they know how important it is to have it priced right.

For every 1 buyer there are about 6 homes available. Average is about 90 days to sell your home. And about 24 showings before getting an offer.

8.21.11

Avoiding foreclosure options

Now is the time to refinance rates are at the lowest ever. We wonder why people are not buying since rates are as low as they are. It is a little bit tougher now to get finance then it was in the past. FHA for example; in the past you only needed a 580 credit score now you need a 640 not that tough to achieve, but will still take some people out of the market place. Right now sometimes it is cheaper to own than it is to rent. A study showed that 78% of cities in the United States it is cheaper to buy then rent. Lower interest rates and low cost of housing has never happened at the same time before.

A lot of people out there have the income but loss of job situations came up. There are private money sources that can help you out in troubled cases. Another example would be a guy that just started his own business doing very well making 100K a year but just started so doesn’t show the job history yet.

There are programs out there to get you on the right path. If credit is bad or you don’t have enough job history yet, Waterstone Mortgage will get you on the right track in order to get you approved to buy. Some people will be ready in 30 days some may take 2 years but Waterstone will stay with you until you are ready.

Most of the time a foreclosure can be avoid if you take the right steps. If you are having trouble making your monthly payments there is help out there for you. First red flag is if you are using your savings to help pay for your mortgage. Lots of people think they can just muscle though it and make ends meet eventually. This is not true; you need to ask for help when there are early signs not when it is almost too late.

If you are at 6.5% and you get it lower to 4.5% you will save about 400 dollars a month at no cost to you, all you need to do is refinance. If there is no cost to you why wouldn’t you lower your rate even a ½ of a percent.

People call for help when they can only make 1 or 2 more payments. It is now hitting people that haven’t ever asked for help before and didn’t think they would ever need to, is why they wait till the last minute. Even if you miss a payment you are not too late. The goal is not to have your house in a sheriff’s sale. Rule in Minnesota is that you can delay your sheriffs’ sale up to 5 months. Most people do not know this.

You are either in a crisis, current or underwater (which is most people), or you are doing fine. There are opportunities out there to get help. There are only 2 options spend less and make more, and Jason Walgrave will show you how to do both.

Topic this week Investing in Real Estate.

Hiring a management company for your investing property is a great idea. Fewer headaches if something happens to the property. Having the opportunity to make money on your property is great. Playing landlord can be very stressful. You can eliminate background check, collecting rent every month, screening, for a cheap 75 dollars a month a management company takes care of the property. Rent gets in your bank account once a month and you didn’t have to get the call when the air conditioner went out. Management Companies wants to know your goals. If you goal to make wealth? Is it just for a change? This is what you want to fine for a property; a home over 1,500 sq. ft., 2 car garage, multi-level and at least 3 bedrooms, you can most likely get one for 105,000 dollars, you may need to do some work for example upgrading the appliances. Your mortgage for this property is about 950 and that is including the association fees. You can rent it for about 1,450 a month right now. Cash flow is there which is really great.

Current market condition in the Minneapolis metro area. Inventory of homes for sale right now is 24,879 a year ago 29,967 this is about 17% down from last year. 12,419 sales were pending in the last 3 months. 9,982 homes were pending at this time last year. Compared to last year sale are up 24%. Property is moving. Affordability index is currently 230 where last year it was 206 that’s up 11%. Average sale price right now is 165,000 a year ago we were at 177,000 that’s down about 6%. Homes per buyer are about 6.25 right now a year ago we were at 7.62. Average days on market right now is very important if you are a seller is about 140 days last year we were at 116 days so it is taking about 17% longer to sell. Average sale price is at 91.4%. A year ago we were at 93.4%. Statistics are good, and things are moving along it has been a very busy summer. Sharper Management has brought on 35 properties in the last 2 months.

On an FHA loan right now you can get a rate of 3.99 on a 30 year mortgage. Home prices are 30, 40, even 50% down from what you would pay 5 years ago. When thinking about buying an investment property you will need about 20% down. Before renting make sure you get RDP rental dwelling protection insurance. If you’re planning on managing it yourself think of a really good screening process. When being your own landlord you do need to take into consideration landlord tenant laws. What can Sharper Management Company do to determine what the cash flow is going to be? They will do a market analysis on the rental. They do mostly all single family homes. Average lease is about 2 years.

8 tips in investing in real estate

• Tip 1 Do you research- before buying a house, or townhouse, take a look at the historical data on the neighborhood.
• Tip 2 Consider buying a Cheaper property- not as great of a need for more expensive rentals they are out there but a lot harder to find a renter as well.
• Tip 3 Add up all the cost-don’t just look at wow what a great deal. Look at are there going to be repairs needed. Do we need to do rehab on the property to bring it up to what renters are looking for. And don’t forget property insurance, taxes, etc.
• Tip 4 Know your market- important to do research on your neighborhood know what rents are going for. Take a look at are there new developments in the area? What is nearby such as businesses and schools.
• Tip 5 Consider growth capital-is the neighborhood putting in some new businesses. Are things closing? Are new highways or road going in?
• Tip 6 Inspect the property- analysis inspection the numbers the utility costs. Then have a property inspection. And inspect it at different times; day, night, after school really get to know the property.
• Tip 7 Do not purchase beyond you means- just because you qualify to buy a 300,000 $ duplex doesn’t mean you should buy it. You should start lower with a property that’s 100,000 $ instead. Make sure you have cash reserves in case an emergency comes up.
• Tip 8 Is think long term- Real estate should be a quick flip it should be long term investment.

When lenders assess mortgage borrowers, they look at four things: income (the ability to repay), credit (the willingness to repay), collateral (appraised value and property condition) and assets (cash in the deal and cash reserves after closing, mostly). Of the “four legs of the table”, assets are the least discussed, and yet may be the most important.

What do we mean when we talk about assets?

Monies needed for the down payment (the difference between the purchase price and the loan amount which may or may not be the same as the money deposit at contract signing)

Monies needed for closing costs (fees to the lender and third parties for things like appraisals, title insurance, settlement services, and so on)

Monies needed for Pre-Paid’s (homeowners insurance, flood insurance, real estate taxes, etc.) and establishing escrow accounts for upcoming payments

Monies for Reserves- the money you still have left after closing. Monies that would be available, if a problem were to come about.

Why do we care about covering your assets?

Assets may be the correct reflection of a borrower’s financial strength. Their ability to save and properly budget could be a significant indicator to their future paying habits.

The source of the assets is important. Savings? Gift or inheritance? Lottery victory? Insurance settlement? Sale of a baseball card collection? Each reflects differently on the borrower.

Many people don’t show all their income on their tax returns. Undocumented income can’t be used to qualify; however, often assets become a correct representation of a borrower ability to pay than their 1040s.

Reserves are a concern. A Minnesota buyer with $50 in the bank after closing is riskier than one with $50,000. Also, clients who have money in the bank but have some irregular late payments on their credit are looked at differently than those who didn’t have the money to make the payments.

Common Asset Problems in Mortgage Packages:

Large deposits (defined as those which are excessive for the income level) raise an financier’s eyebrows. Where did the money come from? Maybe the borrower took a loan that doesn’t yet show up on their credit report.

Cash deposits are another red flag. In this day and age, people keep their money in the bank, not under their mattress. Where did the cash come from?

Gift monies and seller’s concessions, while considered as borrowers assets when doing calculations, will give an underwriter pause when assessing the borrower’s real ability to repay.

Guidelines have stiffened. When borrowers are paying off credit cards to get their ratios in line, lenders are asking where that money came from now. That act has nothing to do with the home purchase, but may be a sign of something delicate in the borrower’s financial make up.

The best advice is to consult a Minnesota loan professional to discuss the proper way to position your assets and the timing of it that will put you in the most promising light.

When talking to people in Minnesota about buying or selling a home these days, most people react with the same way by saying, “Only a fool would get involved in Minnesota Real Estate right now.” Since we are in the middle of a national recession right now, and we have an enormously large number of foreclosures happening.

If you know a Minnesota Real Estate investor, ask them about the market. Most Minnesota Realtors will say the market is fabulous. This is the best time to buy! You can find deals half off compared to housing prices in Minnesota just a few years ago!

In fact your Minnesota Real Estate investor friend is 100% correct. We are in the middle of a national recession, which means lower prices, and makes houses more inexpensive for individuals that could not afford to buy a few years ago. With the account of short sales, bank owned, and foreclosed houses that we have at this time, many home sellers are frantic to get out of their mortgages. This makes them very open when it comes to seller assistance for closing costs, seller bought home warranties, and making repairs to otherwise insignificant items that a buyer may have accepted as is just a few years ago, such as needed paint, carpet, or windows.

Since, we are, still in a recession. They best way to improve the economy, and put an end to the recession is to buy Minnesota housing participating in the economy. In an article by a financial expert stated that we have an inventory of about two to three years of foreclosures and bank owned properties, and the number will grow over the next two years.

A lot of this is due to the fact too many people bought far about their price range due to relaxed qualification standards causing banks to write loans for just about everyone who had a job. Currently, Mr. Minnesota Homeowner has a home that he paid $350,000 for that has returned to its suitable fair Minnesota housing value of $175,000. The adjustable rate, interest only mortgage that he got at an amazing starting rate has changed its terms and Mr. Minnesota’s $1,200 payment just went up to $2,200 and caused him to default. The bank will take his property and either auction it off or advertise it for sale. Knowing that they will never get the $350,000 that is owed to them, and they will likely never get the $175,000 that the home is worth. They will write off the loss and offer if for a bit less. Now, Mr. Smart Minnesota Homebuyer can buy this $175,000 home for a gigantic discount, gain instant equity, have most of his closing costs paid for, get a Minnesota home warranty out of the deal and settle into his new house with a 4% Fixed APR no money down FHA backed mortgage with a $800 payment, that’s $400 less than he was paying to rent his two bedroom one bathroom apartment.

We are in a Buyer’s Market and many Minnesota people are going to find unbelievable houses at incredible prices with fantastic terms. Unfortunately, we will have people that were left behind and will continue to daydream of owning a home because they are terrified of the current market without even understanding what it was that they were scared of. The government will continue to come up with encouraging ideas and create programs intended to fix the economy and improve the Minnesota market, but it will be a slow and lengthy process. The only way to jump start the economy and raise us up out of the national recession is to participate in the Minnesota Real Estate Market and clear out the inventory of discounted property overflowing the Minnesota housing market. Do your part and buy a Minnesota home. If you already own one, buy another Minnesota home to rent to your friends who are too chicken to buy and create an income from it. We need action, go out and make it happen!

We have reached the midway point of the year. Today, we want to look back over the first six months and give you what we believe were the 5 items that have had the biggest impact on the Minnesota real estate industry so far this year.

The government Wants Out of the Mortgage Business

From the outline of the Dodd-Frank regulations to the talk of closing Fannie Mae and Freddie Mac to the projected Quality Residential Mortgage (QRM) guidelines, the government has made it very clear that they want to dramatically limit their involvement in the mortgage industry. What will come of this? Will private industry step up and fill the void created? What will be the increased cost to the Minnesota consumer? Only time will tell.

Despite Early Headlines, Sales are on the Upraise

Headlines earlier in the year announced the total breakdown of the Minnesota housing market. To those in the know, it was clear that comparing sales numbers in the first month of this year to the same period last year made completely no sense. Large numbers of transactions were dragged forward last year so Minnesota buyers could take benefit of the credit. Pending Minnesota home sales (transactions going into contract) on the other hand have done quite nicely and many organizations such as (Fannie Mae, Freddie Mac, NAR and Moody Analytics) are projecting good sales numbers throughout the rest of the year.

Among Warnings of a “Double-Dip”, Prices Began to Stabilize

Prices continued to retreat for the first few months of the year and brought the bears out. Some called for another major fall is prices (15-20%) and almost all recalculated their projections to show continued depreciation. Just as these new projections were made available, some pricing indices announced that values actually increased (though by a rather minimal percentage.)

Foreclosures Were Delayed Longer Than Originally Projected

Distressed properties (foreclosures and short sales) have a major impact on the Minnesota housing market. Because of paperwork challenges, the flow of these properties to the Minnesota market was virtually shut off.  At the beginning of the year, most Minnesota real estate experts like Jason Walgrave believed the banks would correct these challenges by the end of the first quarter. That didn’t happen and therefore many of these properties were delayed coming to the market. This is a major reason why prices seemed to recover: there were fewer discounted properties available for sale. Most now believe that the banks are within 60-90 days of releasing this inventory and that prices will again begin to soften.

Main Stream Media Begins to Announce “Now Is the Time to BUY!”

With prices and interest rates at historic lows and the chance that mortgages will become more costly as the private sector steps in, many in the main stream media are announcing that buying a home now makes sense. In the last 45 days, the Wall Street  Journal, Forbes Magazine, National Public Radio  (NPR) and CBS Money Watch have all ran articles calling for the readership to consider buying now!