Ok, now I am definately not advocating any funny business or any faulty appraisals here. An appraisal with fudged numbers and unrealistic comparables does not do anyone any good. And, it won’t make it through underwriting and then the deal is dead anyway. Plus, we don’t need anymore bad deals out there – this is part of the reason the housing market took a dive to begin with.

What I am saying is that if you get one appraisal that is not where you’d like it to be it does not hurt to get a second opinion (or 3rd or 4th). You would get a 2nd opinion from a doctor if you were not sure about the original diagnosis, right?! So, why not get a few opinions for what is probably the largest purchase you will make?

I bring this up because I just had clients who had an accepted offer on a home in Richfield, MN that they absolutely loved and 2 weeks prior to closing the appraisal came back $75,000 UNDER their offer price! Nothing against the appraiser that did the appraisal or the lender who ordered it – they did a great job but we wanted to see what other appraisers would have to say.
So, what happened?
This house in Richfield was somewhat overdeveloped for the neighborhood it is in (I have to say it is gorgeous!) so there were no accurate comparables to choose from. Going into the offer, we knew this but to my clients, the house was worth the offer price (and the seller’s were firm on their pricing). The appraiser did a very thorough job but bottom line, if this house had been in Edina or Minneapolis it would have hit the offer price NO PROBLEM!! Unfortunately, Richfield does not have as many high priced homes. So, instead of just walking away from their dream home, we went to 2 other lenders and 3 other appraisers to get their opinion.

What did we find out about this house in Richfield? 2 of our new appraisals came in $25,000 better and our final one came in $45,000 better than the original appraisal. How does this happen? These different lenders have underwriting with different guidelines on what comparables can be used. Again, these were legitimate appraisals! Sometimes there can be more leniency with local lenders.

Bottom line, we never did get an appraisal at the original offer price which is OK because now we know what the more realistic value of this house is and we were able to negotiate the offer down to the new appraisal. In this market, the seller’s now know that they would not get a higher price for their home and that if they wanted to sell it, they would have to come down to match the appraisal.

In the end, my clients got their dream home at a fair market price!

Now, you ask, what happens if the home appraisal comes in under the offer price and you can’t renegotiate the offer? What happens?

1. Home buyer can walk away due to financing
2. Home buyer can pay the difference between the appraisal and the offer price in cash at closing because the lender will not loan on the difference
3. Home buyer can get more opinions from other lenders and appraisers and potentially renegotiate again

Bottom line, it will depend on how badly you as a buyer want a house and how badly the sellers want to sell. Make it happen!

Looking to buy a home?
Give me a call!

Jen McKinnon
Realtor / Investor
MN Real Estate Team

612.384.1073
jen[at]mnrealestateteam[dot]com

So, I was reading an article the other day that talked about the possibility of home owners becoming renters in lieu of getting kicked out of their homes when foreclosure happens.

It was an interesting concept to me and I thought I’d write about it.

So, right now, we all know there are too many foreclosed houses on the market and the Twin Cities market is no different. Even the best neighborhoods like Crocus Hill, Highland Park, Macalester Groveland, Lake Calhoun and Lake Harriet are not immune to it.

If you have a foreclosed home in your neighborhood, you know it is not usually a pretty picture. Typically, a homeowner who gets foreclosed on is not a happy camper and in their mind, why take care of a house that is only going to be taken away from them? So, what happens is that the house becomes run down, the yard turns into a weed bed and in general it becomes an eye sore to the entire neighborhood. Once the owners move out, it gets even worse because signs get posted about vacancy and water shut off, etc…
Bottom line, NO ONE wants their home to be foreclosed on and neither do any of the neighbors.

SO…..what would happen if the bank gave up on the entire LONG process of foreclosure and simply made an agreement with the current owners that they could stay living in the house as tenants paying rent?
Maybe the bank would negotiate with the owners to come up with a “rent” amount that would be affordable for them and still work out for the bank as well. Then, hopefully, the “owners” turned tenants would stay in the home, continue to care for the home as though they owned it and we’d end up with less vacant, run down homes.

Of course, that is the ideal scenario.

The issues that could arise are many:
- The bank is not in the business of being a landlord so who will take over these duties that go along with owning rental properties? Would a new bank owned property management department get set up?
- Who will pay the utility bills and what happens if any of these go unpaid?
- What happens if the rent does not get paid?
- Could the bank set up a sort of Contract For Deed or Rent To Own situation?
- What happens if repairs need to be made – new roof, furnace, broken window, light bulb, etc.?
-
These are just a few questions and I am sure there are many more. I don’t have all the answers but I’m sure this topic could spur some interesting conversation.

Need a Realtor or have real estate questions?
Give me a call!

Jen McKinnon
Realtor/Investor
MN Real Estate Team

612.384.1073
jen[at]mnrealestateteam[dot]com

Not all Title and Closing companies are created equal. I have dealt with many and by far, my favorite is Trademark Title Company.

Here are a few things to keep in mind:

1. In the state of Minnesota the BUYER has the right to chose the title and closing company for a residential real estate transaction. The MN statute states the following:
7.45 RESIDENTIAL REAL ESTATE CLOSINGS
Subd 4. Choice of Closer; notice
(a) No real estate salesperson, broker, attorney, auctioneer, builder, title company, financial institution, or other person making a mortgage loan may require a person to use any particular licensed attorney, real estate broker, real estate salesperson, or real estate closing agent in connection with a residential real estate closing.

2. Sometimes, especially with foreclosure or REO properties, the selling bank will tell you that they will only accept your offer if you use their title and closing company or to further entice you, they say they will pay for your title insurance if you use their title and closer of choice. As you can clearly see from the MN statute, this is not allowed. True, they may not pay for the title insurance or any of your closing costs if you don’t use their title / closing company but you, the buyer, has the right to chose whatever title / closing company you want to use.
Typically, when the seller is a bank and they offer to pay your title insurance if you use a company of their choice, the insurance that they provide is not as comprehensive of a policy as what you would get on your own.
Title insurance is very important since what you are actually buying is title to a property – the right to occupy and use the land. So, you want to make sure this right is protected, correct? Even with the most careful title review conducted something could get missed and the last thing you want is someone coming back to you with a “right” to your property. Also, many of the policies that the seller or bank say they will provide to you if you use their title / closing company do not include coverage of the time between closing and when the paperwork is actually filed. Yet another reason to get your own title insurance policy.

3. In my opinion, one of the BEST reasons to chose your own title / closing company is that it gives you your own representation at the closing table and someone who has your best interest in mind and isn’t just trying to get the transaction pushed through. This is a good thing for a major purchase like a house! You have your own Realtor – you should have your own title / closing company.

Like I mentioned above, I really enjoy working with Trademark Title Company for a few reasons:
1. They are very professional and great communicators.
2. Their prices are competitive and they will usually beat any prices if you give them the chance.
3. They get the closing done on time and done correctly.
4. They have multiple closing locations around the Twin Cities and work with you, the buyer on what location is convenient for you. Many other companies will not do this.
5. They get all paperwork recorded in a timely manner. Again, many other companies are not concientious about this.

Feel free to contact me for more information!

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

Yes, it is a home buyers market. Yes, the interest rates are great. Yes, there is alot of home inventory to choose from in the Twin Cities.

Think about this: If you wait and “play the market” you are also gambling that the interest rates will hold steady or drop. So, even if you are right and home values do drop 10% BUT interest rates go up only 1%, you will have negated the entire 10% price drop over the course of a 30 year mortgage loan. The moral of the story – it’s always a crap shoot. You will never hit it just perfect and hindsight is always 20/20 and then it’s too late. Buy now while the gettin’ is good!

Trading Up: Didn’t think you could afford that bigger home? Now you can! You can get alot more home for the money in this market. A home buyer’s market could also be called a trading up market. Even if your current home sells for less than what you bought it for (which is the case for MANY home owners all around the Twin Cities), typically, this will be a smaller amount and can be offset by greater savings in the new home purchase.
Here’s how: Say your home cost $200,000 and sells for 10% less at $180,000 or $20,000 loss as a seller. This same 10% price drop on the normally $300,000 home you want to purchase equates to a list price of $270,000 for a $30,000 savings as a buyer.

There is ALOT of inventory – around 9-10 months worth of inventory. This is good because you could have your pick of the litter but bad because there are almost TOO many choices. Make sure you take a little time to research an area or 2 or even 3 that you want to live in – this will save you alot of time when you get ready to see houses live. For your sanity and to be realistic, I’d say keep your “serious considerations” pile to no more than 3-4 homes at any given time.

Bottom line – get pre approved and start looking. Jump off that fence and take charge. Real Estate is still one of the most financially sound decisions you can make! I don’t know about you but my Real Estate is worth alot more than my 401k right now!

Give me a call – I’d be happy to help!

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

Ah, property taxes….Last year, the property taxes on my St Paul rental properties went up almost 50% while the value of the property went down.  Many property owners in the Twin Cities – especially St Paul, saw felt this similar pain.  I tried calling my local tax appraiser and was told that I was too late to appeal SOOOOO, this year I will pay more attention to the Proposed Property Tax Statement that comes my way in mid – end of November.

So, can you appeal your property tax statement and get it changed?  Yes.  Will it work?  Who knows….
Property taxes are based on the market value of the home. As we all know, market values have dropped recently which would make you think that your property taxes should drop too, right?! The assesment is typically done in the year or so PRIOR to the taxation year so your 2008 tax value was based on the market value of your home from 2007 or maybe even earlier and are not always reevaluated on an annual basis.

Steps:
1. Watch for and READ your Proposed Property Tax Statement when it arrives in the mail.
2. If you feel that your home is not “worth” the amount on your statement, have a licensed REALTOR do a market analysis for you on your home.
3. A market analysis will tell you what other similar homes in your area have sold for recently which will tell you what you could probably sell your home for. This will give you an updated “market value”.
4. If you still feel that the assesment amount is inaccurate you can file an appeal with your local taxing jurisdiction but make sure you know what the filing deadline is.
5. You may also be required to appear at a live hearing before the assessment appeal board.

Bottom line, if you don’t agree, fight it. Nothing changes if you don’t act. I think we all pay enough taxes and any chance we get to fight it, we should.

Good luck!

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

Did you know that Minneapolis was voted the 7th “Greenest City” by www.sustainlane.com?
Check out their website for more information.

If you are looking for “green” or eco – friendly home design trends with advice from local experts, check out the latest issue of MARQ magazine or go to www.marqtwincities.com for their article titled “Greenway”.

Buying a home in the Twin Cities is a big deal - buying a home is the biggest purchase most of us will ever make in our lifetime. 

So, you’ve found the “perfect” home in the Twin Cities and you want to write an offer up right now and can picture yourself moving in tomorrow….BUT, in my opinion, it’s always a good idea to get a 2nd opinion from someone other than your Realtor.  Whether it’s your spouse, significant other or a friend who’s opinion you trust and value, a 2nd opinion can save you from jumping into something too quickly or can confirm your thoughts about the “perfect” home.

It is your Realtor’s job to assist you in finding real estate to look at, offer professional opinions on the qualities of the home and neighborhood and guide you through the process of writing an offer and seeing it through to closing.  A Realtor holds what is known as Fiduciary Duties to each client and it is the Realtors duty to provide: Loyalty, Confidentiality, Disclosure, Obedience, Reasonable care and skill and Accountability.  The Realtor should do what you, the client wants within the law and within the fiduciary duties listed above.   A Realtor shouldn’t talk you into or out of a home but merely give his or her opinion.

So, bottom line, your Realtor can give their opinion but shouldn’t tell you whether to write and offer or not or whether this is the perfect home for you.  Your Realtor should provide a professional opinion and you should really have a friend, spouse, etc…come check out the house to make sure it is “perfect” for you.  The best scenario would be to have your 2nd opinion along for the first visit because sometimes you do find the “perfect” house and should write an offer right away.

As a buyer in the Twin Cities, what you want to avoid is writing an offer, getting it accepted, paying for an inspection, getting all the paperwork moving with the lender, the title company and both Real Estate companies and then having your 2nd opinion take a look at the home, give you their thoughts and then realizing that you made a mistake.  Although it is MUCH better to back out at this point (and you still can within your inspection contingency timeline – see my related article http://http://www.twincitiesrealestategal.com/home-buying/how-to-sweeten-the-deal-tips-on-getting-the-house-you-want/ ), you could have saved yourself time and money by having your 2nd opinion along for the very first visit. 

The last thing your Realtor wants you to do is purchase a home that you later regret.  We are on your side and want you to be happy with your purchase.

So, do you know who your 2nd opinion will be?

Jen McKinnon
Realtor/Investor
AGENT REFERRAL NETWORK
MN Real Estate Team

612.384.1073
jen[at]mnrealestateteam[dot]com

I live in this lovely and popular neighborhood of St Paul, MN and what follows, is some history and statistics about the area I call home.

Many of the homes in this neighborhood are single family, owner occupied homes but this neighborhood has a great history that starts back in 1880. The Macalester College Board of Trustees bought farmland outside of St. Paul and divided it into houses and the campus of Macalester College. It evolved into a farming community and then into what was considered a commuter “suburb” and now is now what you see today – a lively, bustling community of families and neighbors who care about their homes, businesses and eachother.

Macalester-Groveland is bordered on the north by historic Summit Avenue. To the south are Randolph Avenue and Highland Park. The Mississippi River makes up the west border and Ayd Mill Road the east. One of the most popular streets in St Paul, Grand Avenue, runs east and west through Mac-Groveland. 

Mac-Groveland has 2 major institutions of higher education.  Macalester College and The University of St. Thomas.  The St. Paul Seminary is also located in Mac-Groveland.

Many of the neighborhood homes in Mac-Groveland were built before 1940. Larger homes in the neighborhood feature Tudor, Prairie Style and Colonial Revival architecture.  With many of the Mac-Groveland homes built in the 1920′s and 30′s, the Arts and Crafts bungalows are still prevalent throughout the neighborhood.  These St Paul homes boast beautiful woodwork, built in buffets and character that is hard to come by in newer neighborhoods.  However, new construction and remodeled homes, town homes and condominiums are also available if you are looking for something newer.

The two public, neighborhood elementary schools in Macalester-Groveland are Randolph Heights Elementary and Groveland Elementary.  Mac-Groveland also has a number of private schools, including Saint Paul Academy and the Summit School.

One thing I love about living in Mac-Groveland is easy access to all of the neighborhood restaurants and shops.  For casual atmostphere but great food, look no further than The Groveland Tap and The St Clair Broiler.   Good Italian can be found at Carmelos or for great American cuisine and a more upscale atmostphere head over to The Heartland.  There are also numerous neighborhood coffee shops such as Brewberry’s and Coffee News.  Great Grand Avenue finds within Macalester Groveland are Shish, Italian Pie Shop and Homemade Pizza.   Shopping ranges from eclectic gift shops to specialty stores – one of my favorites is Gypsy Moon on Randolph.  The neighborhood also features the Grandview Movie Theater, a Whole Foods and the Mississippi Market.

Macalaster-Groveland Real Estate Statistics
Median Sales Price 2007:  $280,000

Average Sales Price 2007:  $325,737

Price Per Square Foot 2007:  $192

Sales Price % Change from 2006:  +0.7% and from 2001 +40.1%

Please contact me with more questions about Macalester-Groveland (or other) great St Paul neighborhoods!

Jen McKinnon

AGENT REFERRAL NETWORK

612.384.1073

jen[at]mnrealestateteam[dot]com