Before you start reading…please note that I am not a lender, an appraiser or an inspector.
So, today I ran into a client who was hoping to purchase a bank owned property that needs quite a bit of work done to it. This home north of the Twin Cities needs a new furnace, the gas line is not hooked up to the house, it is missing smoke detectors and it is missing quite a bit of copper. So, you ask, where does the problem come in? The problem is this…
1. With FHA financing the lender will not lend or insure a property that has issues like what I have listed above. They would require some of these things (and each house is it’s own case by case situation….) to be repaired PRIOR to closing.
2. When a property is bank owned it is typically sold “as is” which means the bank will not make any of these repairs for you in advance of the closing. If the property was still owned by a private citizen, you could ask them to make the repairs first.
3. Also, the bank will not let you, as a potential buyer, come in and do any repairs on your own. They do not want the insurance risk and ultimately, are not “general contractors” to oversee your handy work. Also, it would not make sense for you to spend the time and money doing any repairs on your own either because the bank could change their mind and end up NOT letting you purchase the property and of course, the bank will not pay you back but they will gladly take advantage of the work you have done.

This is not to say that you can’t buy a bank owned property with FHA financing, you certainly can, but you will probably want to look at something that does not need alot of major fixes like furnace, plumbing or gas.
Again, each property will be assessed individually by an FHA inspector but my advice would be to stick to buying something that only needs some cosmetic updates unless you are buying with a conventional loan, cash or a rehab program like 203K.
For more information about 203K take a look at HUD’s website. As always, for lending information you should contact a reputable lender in your area. I recommend Cornerstone Mortgage located in Burnsville MN.

Jen McKinnon
Realtor/Investor
612.384.1073
jen[at]mnrealestateteam[dot]com

So, I was just out this past weekend with clients looking at condos in downtown Minneapolis in areas like the North Loop and along Washington Avenue near the Guthrie Theater.

I have to tell you….now is the time to buy a condo if that’s what you are looking for. There is alot of inventory and for the most part, they are in pretty good condition, selling at great prices and they are desperate to sell which means there is some room to negotiate.

Because there was a building boom over the last few years in Downtown Minneapolis, there are a large number of condos available at reasonable prices.
You will see alot of foreclosures or short sales or REO’s (Real Estate Owned) because, back when the building boom was going on and real estate prices in the Twin Cities were growing like crazy, you had people who at the time were very smart and bought these condos at market rate even before the building was finished. Their plan at the time was to buy the condo in Downtown Minneapolis and as soon as it was finished, they would sell it at an amazing profit because the market was growing so rapidly. Unfortunately, for many who invested in condos in Downtown Minneapolis, the market stopped growing and there was such large inventory of condos that the market values started to decline and those who bought were stuck. Some people moved into the units and some decided to sell are still being sold on the open market – AT BIG DISCOUNTS!

All of the units that I saw this past weekend ranged in price from low $200,000′s – $350,000 and when I looked at the taxable market values on these for 2009 – ALL of them had dropped substantially from 2008 – some close to 40%. What does this mean? It means that you get to buy a condo in Downtown Minneapolis at a great price, pay lower taxes and if you plan to stay in the property for a couple of years you will most likely see it rise back to the levels we saw a few years ago. The market is cyclical and the Twin Cities Real Estate Market is no different.

IT WILL COME BACK. NOW IS THE TIME TO BUY.

Take advantage of low interest rates, first time buyer tax credits and buying at / near the bottom Another benefit to living Downtown Minneapolis is proximity to shopping, nightlife and sporting events (think about that new Minnesota Twins Stadium being built…..)

One thing to watch out for when buying a condo is the health of the condo association. I recently showed a condo near the U of MN and my buyers decided against it only because the association was in such bad shape. The builder had gone into foreclosure and now because all of the units have not sold (which means very few people paying association dues….) the bank has had to pick up the tab on running the building. So, anyone who now purchases one of these Minneapolis condos will have to pay association dues that go directly to pay off the bank.
What this means is that this particular association does not have any money in reserves to pay for anything that may go wrong with the building. So, if your window breaks or washing machine dies or anything else….tough luck….you will have to pay out of pocket. Although this building had great units, you do not want to get into a bad situation like this because your association dues will be going to pay for others bad mistakes instead of maintaining your property. Just something to think about when buying ANY property that is part of an association but especially now with all of the foreclosures.

If you do make an offer on a condo, you will get to review the condo associations documents and have 10 days to read them (have an attorney look at them…..) and still have the chance to back out and retain your earnest money if you choose. Now, I don’t recommend making a bunch of offers unless you really like a property but it is nice to know that you have an out if you don’t like what you read in that particular condo’s association paperwork.

Anyway….there are great deals to be had so weather you want to buy your first home in Downtown Minneapolis or a Second Home in the City, now is a great time to look.

Please contact me to start your search!

Jen McKinnon
Realtor / Investor
MN Real Estate Team

612.384.1073
jen[at]mnrealestateteam[dot]com

I know I am a bit biased since I live in St Paul’s Macalester-Groveland neighborhood but it is very evident that the residents here are proud to live in this highly desired area of St Paul, MN.
You have to love a community that has a “Beautification Committee”.
This committee conducts a competition annually in spring and fall (my 2 favorite seasons by the way….) Alley Garden Awards in addition to other “beautification” projects throughout the Macalester-Groveland neighborhood. The Alley Garden Awards, in my opinion, provide a benefit to everyone because, if you have ever driven through the alleys of St Paul (or most cities for that matter) you probably noticed that they are typically not all that attractive. But, this competition gets neighbors to at least think about what their alley looks like and maybe plant a few extra flowers or pull a few extra weeds.
The committe also hosts an annual plant exchange which is great because not only can you drop off your unused flowers and plants for “recycling” but you can also pick up some great items in return. And, this is a great way to get to know some of your neighbors which is also good for safety and crime fighting.
If you are interested in being a part of the beautification of St Paul’s Macalester-Groveland, the meetings are held on the 4th Monday of each month from March – October.

For more information about the Macalester-Groveland Neighborhood check out www.macgrove.org or call 651.695.4000

Interested in moving to Macalester-Groveland? Give me a call!
Jen McKinnon
Realtor/Investor
MN Real Estate Team
612.384.1073
jen[at]mnrealestateteam[dot]com

Have you been thinking about buying a second home, retirement home or cabin in Minnesota? It is a BUYER’s market right now which means you can and usually will be a great deal on your choice of homes. The Land Of 10,000 Lakes has alot to offer but here are a few things to consider when making your decision.

1. Know what you can afford. Financing remains tight so you will need to have everything in order and have a credit score over 740 to get the lowest mortgage interest rates. Talk to a reputable mortgage lender BEFORE you start looking – I recommend the MN Home Loan Partners .
2. Pick a location in MN that you love. Deals abound just about everywhere – even on some of Minnesota’s lakefront properties. Do you want water, winter activities, antique shopping, restaurants, close to Minneapolis / St Paul or in the woods? One word of warning – stay away from developments that have not been finished or have fallen into foreclosure. You could run into lawsuits or issues with associations.
3. Drive a Hard Bargain. Don’t be afraid to make an aggressive offer – most buyers will at least look at your offer and if need be give you a counter offer. But when you find a property you like DO make an offer and do it quickly. We are starting to see multiple offers on the best properties and especially properties in high demand areas. Either you or your REALTOR should determine what similar properties have sold for recently and then bid BELOW that but be ready to close quickly and don’t have alot of contingencies if any (although I do ALWAYS recommend a professional home inspection). You can get away with offering 10% below the list price or 20% if you want to be really aggressive but I’d expect a counter offer. Go low – you’d rather start low and meet in the middle than offer too much and then wonder if you could have gotten it for less.
4. ALWAYS use a professional REALTOR.. A buyer’s agent is legally bound to represent your best interest in any transaction and this means to get your the BEST price and terms possible.

If you want to know more or feel it’s time to start looking please give me a call!

Jen McKinnon
Realtor / Investor
MN Real Estate Team
612.384.1073
jen[at]mnrealestateteam[dot]com

Are you a first time home buyer and on the fence about buying your first home in the Twin Cities?
Get off the fence! This is a great time to buy in the Twin Cities with low rates and the first time home buyer $7500 tax credit that the US Government is offering.

So, who does the Government consider a first time buyer? Basically, if you have not owned a primary residence in the last 3 years and are not married to someone who has owned a primary residence in the last 3 years, you are considered a first time home buyer in the eyes of the Government.

Like all good things, this too will end as of June 30 2009. So…like I said, get off the fence and jump into the great Twin Cities home buying market with both feet!

There are alot of great houses, condos, town homes and investment properties out there in all price ranges! If you want more information about this first time home buyer tax credit please go to the Federal Housing website.

Need help? Give me a call!

Jen McKinnon
Realtor / Investor
AGENT REFERRAL NETWORK
MN Real Estate Team – #1 team in MN!
612.384.1073
jen[at]mnrealestateteam[dot]com

If you can answer yes to the following questions, then you may want to look at the following cities for your new home.
1. Do you want an open floor plan to accomodate family / entertaining needs?
2. Do you want a modern kitchen and bath?
3. Do you want a larger yard?
4. Do you want good schools and parks?
5. Do you want a quality built home?

If you answered yes to any of these, The Twin Cities suburbs such as Edina, Plymouth, Chanhassen and Minnetonka may be up your alley! These cities are not only popular among Twin Citians but boast nice homes, great schools, restaurants, shopping, waterfront and more!

If you are wondering when to buy your new home and thinking you will wait until the very bottom of the market, trends in the Twin Cities are showing that it won’t be long. According to Rob Bonahoom, mortgage coach at Cornerstone Mortgage “I think some time mid summer we will see the market get back to what we call a “balanced market”. This means, the time is NOW to buy. Mortgage rates are great and homes are priced right! There are many deals to be had if you are looking to move up into one of these Twin Cities suburbs.

According to MPLS / ST PAUL magazine here is what these upscale suburbs have to offer:

Edina
- Close proximity to Minneapolis
- Immaculately clean thanks to City of Edina street sweeping and plowing
- Great school system with a national reputation
- 50th / France shopping and restaurant district
- A few very high end neighborhoods (White Oak, Country Club, Highland and Rolling Green)
- Country Clubs and Golf Courses

Plymouth
- One of the Twin Cities most popular 2nd ring suburbs
- Close to Minneapolis and Lake Minnetonka
- Developments that have larger residential lots (great for kids and pets and private space)
- Neighborhoods that were designed to slow or discourage traffic
- Extensive trail networks
- Great schools including Wayzata High School
- Wonderful sense of community

Chanhassen
- Further away from the hustle and bustle of Minneapolis
- 5 city parks and 12 lakes
- Great value for your money on homes
- New state of the art High School set to open in Fall 2009

Minnetonka- Considered one of Minnesota’s best school districts which also serves nearby Deephaven and Shorewood with spectacular theater and language programs.
- Water, water, water! Lake Minnetonka is the biggest but there are 4 others to enjoy as well.
- Mature suburb with charming homes that typically have large lots for play and or expansion.

If you want to learn more or get out and take a look at what these or any other suburbs have to offer, please give me a call!

Jen McKinnon
Realtor/Investor
AGENT REFFERAL NETWORK
MN Real Estate Team – #1 team in MN

612.384.1073
jen[at]mnrealestateteam[dot]com
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This is good news if you currently live in Minneapolis or St Paul and another good reason to move to the Twin Cities if you don’t!

According to Men’s Health and Women’s Health Magazines (January / February 2009 issues) here are the rankings:
Best Cities For Men 2009
St Paul, MN ranks #2
Minneapolis, MN ranks #10
Best Cities For Women 2009
Minneapolis ranks #6
These rankings are based on Health data, Fitness, Quality of Life Variables including crime rates, air quality and job growth (30 variables total).

I have live in both cities – they each have their own great qualities. Although they are called the Twin Cities, they are very different from one another. Want to learn more? Give me a call!

Jen McKinnon
Realtor / Investor
AGENT REFERRAL NETWORK
Member of The MN Real Estate Team
612.384.1073
jen[at]mnrealestateteam[dot]com

So, I was in a suburb south of the Twin Cities doing a showing today on a great property, in a high demand neighborhood and we found that the disgruntled sellers had taken a number of things from the property before they moved out.  They had gone into forclosure and apparently got mad at their lender so before they moved out they took all of the appliances, light switches, door knobs, smoke detectors, the water softener and even the kitchen sink!

Luckily, the bank will be taking care of replacing most of these items except the appliances.  It turns out that they replace anything that could be hazardous if not replaced and anything that FHA lenders would require the home to come equipped with.

Unfortunately, this is not uncommon for  home sellers who are in a bad situation with their lender.  They become angry at the situation and take it out on future home buyers.  I guess the home seller figures that since they are not making any money at the sale of their home, they are going to make it harder for the bank to sell it too.  Too bad…all this does is continue to drive the poor market situation that is driving down prices.  This house is most likely worth close to $400,000 but is listed at under $300,000.  Great for a future buyer but bad for the Twin Cities housing market and home values.

I wonder where the sink ended up…..

Jen McKinnon
Realtor / Investor
612.383.1073
jen[at]mnrealestateteam[dot]com

If you have been considering buying a home in Richfield, take a look at this website that discusses a new development coming to the high traffic area of Hwy 62 / Penn Ave.  http://www.ci.richfield.mn.us/CD/Projects/Penn/PennCorridor.pdf

Yes, this will mean lots of construction for awhile but a gorgeous development of shops, condos, green space, parks, cafes, sidewalks and alot of beautiful landscaping appears to be on its way!  This face lift is much needed as many of the stores and streets in that area are looking run down and do not do justice to the work being done on many homes in the neighborhoods just off of Penn between the Hwy 62 and 68th Street.

Many of the rambler style homes in these neighborhoods were built in the 1950′s and we are finding many that have been redone to add updated ammenities like granite countertops and updated kitchens, new paint, landscaping, finished basements and more.  There are even some that have gone from being a rambler to a full two story nearly doubling the space of the home! 

Add this new development into the mix and watch home values rise in this area that is close to major Highways 62, 494, 35W and Hwy 100 and just minutes from 50th / France in Edina and Lake Harriet or Lake Calhoun in Minneapolis / Uptown.

Call me today to start looking at your future home in Richfield, MN!

Jen McKinnon
Realtor/Investor
612.384.1073
jen[at]mnrealestateteam[dot]com

AGENT REFERRAL NETWORK
MN Real Estate Team
#1 Real Estate Team in MN

So, you want to write a purchase agreement on a home in the Twin Cities but still need to sell your current home – what do you do?  I have been asked this question recently from clients who have found a great home in Richfield but still need to sell their home which is out of state.

Bottom line, in Minnesota, you can write an offer that is contingent upon the sale of your home.  However, in this position, you lose some negotiating power because even if the seller accepts your offer, they can continue to offer the house for sale on the MLS until you remove the contingency.  And, because you have limited control over if / when your home will sell, this could put you in a bind as far as completing the purchase agreement.

The seller can also entertain other offers even though they have accepted yours.  If they get another offer that they like, they can request that you remove your contingency within 72 hours by sending you a Request for Removal of Contingency. 

In MN, once this form is received, you will have 72 hours to sell your home and provide the seller with a Notice of Intent to Remove Contingency which must be accompanied by a copy of a valid, fully signed purchase agreement for the sale of your current home and can not be contingent upon anything else besides financing and must have a closing date no later than the closing date for the new home.

You will get your Earnest Money back if: 

• You can not remove the contingency and the seller moves forward with another offer.
• You decide to cancel the purchase agreement before the contingency is removed or can not close before the date on the purchase agreement.
• You remove the contingency but still have an Inspection Contingency, you can still back out during that designated time period for any reason.
• The seller backs out for any reason.
• You have all contingencies removed but can not obtain the financing to purchase the home.

You will lose your earnest money if:

• You remove all contingencies, obtain financing and decide that you just don’t want to go through with the transaction.  Translation….make sure you want the home before this point.

Jen McKinnon
Realtor/Investor
612.384.1073
jen[at]mnrealestateteam[dot]com

AGENT REFERAL NETWORK
MN Real Estate Team – #1 team in MN!