Edina, Minnesota
Let's talk about the Twin Cities Real Estate Market. I will post helpful links and answer questions about real estate or mortgages. I live and work in Minnesota, so some of my ideas may focus specifically on Minnesota real estate or mortgage regulations applicable to our state.
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Jun. 17, 2008
MGIC-one of the nation's leading underwriters and providers of private mortgage insurance has recently created a FREE online resource for consumers. What they've done is create two online classes that will provide buyer education for first time home buyers and budding landlords. You can login and take the class at your leisure. Once you complete the class and you pass a short test, you will receive a certificate of completion. This MAY be able to be used for mortgage programs that require buyer education prior to closing your home. For example, many of the grant and bond programs provided by various agencies have home buyer education as a condition of getting the loan.
Did I mention the cost?-It's free! This is what you need to do: go to http://www.MGIChome.com and look at the class. You can start it immediately. When you are ready to take the test, you will need the lender email login. Feel free to use ours-it is: learning@ventureloanapp.com
Here is a brief synopsis of the class that I've taken from the MGIC site:
So you’ve decided to make the leap and become a homeowner. Congratulations! You’ve come to the right place to prepare yourself for what lies ahead, to ensure that you go into the home-buying process with your eyes wide open.
Homebuyer Education: If you’re purchasing a single-family home:
- Study each section of the Buyers Ed Homebuyers Guide:
- Getting Ready To Buy A Home
- Buying Your Home
- Getting Your Mortgage
- Closing Your Loan
- Being A Successful Homeowner
- Review the Buyers Ed Test tips at the end of each section.
- Take the Buyers Ed Test.
Landlord Education: If you’re purchasing a two- to four-family home:
If you are in Minnesota, please stop by my website at http://www.selling.mn You can begin your online search at this site. You will also find a TON of info in the side bar links. To get pre-approved for a Minnesota mortgage, visit http://www.ventureloanapp.com
Apr. 15, 2008
GOVERNOR PAWLENTY ANNOUNCES ADDITIONAL ACTIONS TO ASSIST HOMEOWNERS FACING FORECLOSURE
~ Includes Foreclosure Counseling Workshops, funding for mediation, lender compact ~
Saint Paul –
"With additional help, the American dream of home ownership can be kept alive for more families facing foreclosure," Governor Pawlenty said. "Foreclosures continue to hit families and our state’s economy hard. We are hopeful that connecting more homeowners with counselors and providing a neutral third-party in some cases will help keep more homeowners in their homes, without negatively impacting the availability of credit in Minnesota."
Actions announced by Governor Pawlenty today include:
• Expanded Foreclosure Counseling Workshops to be held around the state
• Creation of the Minnesota Foreclosure Prevention Compact
• Mediation funding to assist homeowners when counseling is unsuccessful
• New Commerce Department assistance hotline for counselors
To provide Minnesota homeowners with additional tools to prevent foreclosure, Governor Tim Pawlenty today announced expanded foreclosure counseling workshops to be held around the state, creation of a compact with lenders to reduce foreclosures, and state funding for voluntary third-party mediation when counseling is unsuccessful.
Expanded Foreclosure Counseling Workshops to be held around the state
Governor Pawlenty announced a series of expanded mortgage Foreclosure Counseling Workshops around the state that bring lenders and borrowers together in one location. These workshops, sponsored by the Minnesota Home Ownership Center, will be greatly enhanced with additional lender participation. Lenders are being contacted directly by Department of Commerce to participate in these events.
Mortgage lenders and servicers will meet directly with homeowners to review their individual situation, and when possible, modify the terms of the loans in an effort to prevent foreclosure.
The first four expanded workshops will be held:
Tuesday, April 22, 4:30-8:30 p.m.
Minneapolis Urban League, 2100 Plymouth Avenue North, Minneapolis
Tuesday, May 13, 4:30-8:30 p.m.
Anoka County Technical College, 1355 West Highway 10, Anoka
Tuesday, May 20, 4:30-8:30 p.m.
Buffalo Discovery Center, 301 NE Second Avenue, Buffalo
Thursday, June 5, 4:30-8:30 p.m.
Eagan Community Center, 1501 Central Parkway, Eagan
Additional workshops in St. Cloud, Rochester and Duluth are being planned. More information is available at www.hocmn.org.
At Foreclosure Counseling Workshops, homeowners can ask questions and receive free and confidential advice from non-profit foreclosure counselors and mortgage lenders. The events are free and open to the public. There is no registration required and homeowners may stop by any time during the "open-house" style events.
Lenders and servicers asked to sign Minnesota Foreclosure Prevention Compact
Governor Pawlenty is asking lenders and servicers to sign a compact and agree to efforts to reduce foreclosures in Minnesota. The Department of Commerce has been meeting with lenders and servicers regarding the compact. Principles of the Minnesota Foreclosure Prevention Compact include:
• Work with mortgage foreclosure prevention counselors, and when necessary, participate in voluntary mediation.
• Participate in all Foreclosure Counseling Workshops in Minnesota.
• Engage in a substantial and large-scale loan modification effort for subprime mortgages and adjustable rate mortgage resets.
• Identify, evaluate and make good faith attempts to contact at-risk or defaulting borrowers as soon as possible.
• Modify loans to the extent permissible within existing fiduciary, contractual or other legal obligations and in accordance with prudent mortgage lending and servicing practices.
• Report progress to the Minnesota Department of Commerce.
Mediation funding to assist homeowners when counseling is unsuccessful
Because there are times when counseling cannot resolve issues surrounding a possible foreclosure, Governor Pawlenty has directed Minnesota Housing and the Department of Commerce to work with the Minnesota Homeownership Center and lenders to provide access to mediators when housing counselors and lenders believe it would be effective in keeping families in their homes.
Lenders and counselors have indicated that on occasion their efforts could benefit from the perspective of a neutral third party with mediation skills.
Mediators will be paid for by the state through grants from Minnesota Housing.
Earlier this month, Governor Pawlenty announced a $4.3 million federal grant, the second-largest such grant made to any state, to expand foreclosure prevention counseling in the state. With this funding, 37 additional counselors are being added to the statewide counseling network, for a total of 76 counselors.
Department of Commerce establishes Minnesota Foreclosure Hotline for counselors
At Governor Pawlenty’s direction, the Minnesota Department of Commerce has established a hotline for loan counselors if they experience problems contacting or negotiating with lenders. The department will then be able to contact the lender or servicers to ensure they are responding and acting in good faith.
The counselor hotline number is (651) 296-2569. This number should only be used by counselors and mediators, not individual homeowners.
Homeowners facing foreclosure are encouraged to call the Minnesota Foreclosure Hotline toll-free at
"The last thing your lender wants is for you to fall into foreclosure," said Minnesota Commerce Commissioner Glenn Wilson. "If you are behind on your mortgage and fear foreclosure, call your lender immediately for help or call the Minnesota Foreclosure Hotline."
Foreclosures typically occur due to unemployment or other loss of income. However, the increase in foreclosures beginning in 2006 is related to an increase in subprime loans and other non-traditional loans. Additional causes include flattening housing values, home equity cash-outs, and buyers assuming too much risk.
According to the nonprofit Housing Link, there were an estimated 20,573 foreclosures in Minnesota in 2007 – an 84% increase from 2006. Housing Link is projecting between 29,000 and 37,000 foreclosures in 2008. The figures are based on sheriffs’ sales of foreclosed properties.
1-866-462-6466 for information on counseling and other resources.
Pawlenty Administration’s ongoing efforts to curb foreclosures
Today’s announcement continues efforts by the Pawlenty Administration to address foreclosures and predatory lending practices in the state:
• Earlier this month, Governor Pawlenty announced a $4.3 million federal grant, the second-largest such grant made to any state, to expand foreclosure prevention counseling in the state. With this funding, 37 additional counselors are being added to the statewide counseling network, for a total of 76 counselors. It is estimated that this will result in 7,500 foreclosures being prevented this year.
• Also this month, Governor Pawlenty announced that Marquette Financial Companies provided a $500,000 grant to Minnesota Housing for foreclosure prevention deferred loans in the Twin Cities metropolitan area. These loans will be offered to homeowners who, with a modest amount of additional assistance, will be able to bring delinquent loans to current status over the long term.
• Minnesota mortgage laws were strengthened in 2007, significantly increasing the net worth requirements for mortgage originators operating as Minnesota corporations, requiring training for loan officers, and making mortgage fraud a specific crime in Minnesota. Minnesota law also now requires originators to verify a borrower’s ability to repay a loan and prohibits negatively amortizing loans, churning, subprime prepayment penalties, and partial payment quotes. These are among the toughest such laws in the nation.
• The Pawlenty Administration requested, and the legislature agreed, to add additional investigators at the Department of Commerce. The department assigned three additional investigators to respond to the increasing volume of cases and complexity of housing and lending fraud. For FY07 and the first half of FY08, the Minnesota Department of Commerce has taken 220 enforcement actions and imposed $678,850 in civil penalties in real estate or mortgage related cases.
• Minnesota’s ongoing commitment to foreclosure prevention includes a broad partnership that provides funding for a statewide network of counselors and state funding for foreclosure prevention loans of up to $5,500. Governor Pawlenty has proposed this year to increase the maximum size of these loans to $10,000 each. These efforts received an appropriation of $1.7 million in FY 2008-09.
• In 2007, Minnesota Housing made its largest single funding award ever of $11 million dollars to fund an effort in Minneapolis to acquire, rehabilitate, and re-market foreclosed and other vacant and boarded properties. A similar award of $500,000 was provided for a similar pilot program in Saint Paul.
• In 2007, the Minnesota Department of Commerce, with the support of the Minnesota Association of Realtors, transferred $500,000 to Minnesota Housing from the Real Estate Education, Research and Recovery Fund which is funded by real estate license fees. Minnesota Housing awarded the grants to the Minnesota Home Ownership Center and the Minneapolis Urban League for an early intervention foreclosure initiative for at-risk homeowners in targeted areas.
• In November 2007, Governor Pawlenty announced state funding for early intervention efforts and foreclosure prevention counseling. The Minnesota Housing award to the Greater Minnesota Housing Fund of $1 million was part of a response to a predicted 3-5 year situation. Another $800,000 in private, philanthropic and local funds were also committed to the effort. The funding doubled the number of
foreclosure prevention counselors from 18 to 37 statewide and effectively tripled the number of households that can be served.
The Minnesota Department of Commerce also reminds borrowers to beware of predatory lending practices. Homeowners who choose to refinance their mortgage should deal with a Minnesota licensed mortgage originator; check the department’s website at www.commerce.state.mn.us to
check the licensing status. Also, call the Minnesota Department of Commerce at (651) 296-2488 or 1-800-657-3602 to report suspected mortgage fraud. To contact a foreclosure prevention counselor, call the Home Ownership Center at (651) 659-9336 or (866) 462-6466. They will identify a counselor in a specific area of the state. The web site is www.hocmn.org
Mar. 28, 2008
I don't have a lot of information about this yet, because everything right now is preliminary. That being said, keep your eyes and ears open for a new proposal by the Bush Administration that would allow people with mortgages that exceed the value of their home to refinance. How the difference in value-ie negative equity would be handled is yet to be determined. I have talked to many home owners who are upside down. Rather than a short sale or foreclosure, they want to stay in their home. At the same time if they had an ARM, they may have a higher payment that can't be refinanced because of the loan to value. What if you could just refinance what it was worth? Wouldn't that be powerful! The biggest question would be how to deal with the evaporated equity. It will be interesting to see what can be created or if this will die as an idea that just can't be brought to the market.
Mar. 6, 2008
FANTASTIC NEWS!!
They have just released the new updated FHA loan limits. Go to this link and find out what your state and county limit has been changed to: https://entp.hud.gov/idapp/html/hicostlook.cfm For Minneapolis -St Paul and the majority of the Twin Cities area the loan limit for single family homes has just been increased to $365K for single family homes. Mpls-St Paul are considered hight cost areas-not everywhere in our state are we considered high cost. This means that going forward, you will be able to finance more homes using FHA financing. FHA financing is important to borrowers who want to be able to take advantage of some of the unique features of FHA mortgage loans. More borrowers and buyers will be able to benefit from this great government program. In the Wall Street Journal today, they had an article saying they anticipated that 1/3 of the loans done this year will end up being FHA. I would estimate it might even be more! Conventional zero down loans are gone in MN for at least a while.
For example, you can do a cash out refinance up to 95% loan to value.
You can finance a home downpayment with a gift program like the Nehemiah program-which essentially makes the home 100% financed.
If you had an ARM that had a teaser rate, and you were current with payments during the 2 or 3 year period before it adjusted, you may be eligible to refinance into a FHA Secure mortgage.
You can do a rehab loan combined with an initial purchase loan under the FHA 203K
The FHA ARM has 1/5 caps with annual adjusters of 1%. Most conventional ARMS are 5/2/5 or 6/2/6 caps with an annual 2% adjuster and a higher margin.
You get a flat .5% MI (mortgage insurance) factor on FHA loans. Conventional loans vary by down payment and credit score.
You can do temporary and permanent buydowns off of the interest rate.
There are product changes on FHA reverse mortgage coming too. They just aren't here quite yet.
These are some of the major differences between a conventional and FHA Loan-there are more. Call us for more information at 952-285-4319 or visit our Minnesota mortgage website
Feb. 25, 2008
Then senate is going to have an accelerated hearing on this Tuesday. The ramifications for our industry are huge.
A cram down is where a judge can literally "cram down" new terms on an existing mortgage. The investor or owner of the mortgage has to live with it. The bankruptcy judge can force this upon the investor. During the Saving and Loan crisis of 1990 and 1991 this was done with some commercial loans in various parts of the country. The bankruptcy cram down bill S2636 is being put forth by Democrat Harry Reid.
I have to write this today to warn us all about the repercussions of America's willingness of not allowing people to fail. It is with much dismay and consternation that I see bills like this being proposed in congress that allow judges to determine the interest rate and repayment amount on a mortgage. This is simply WRONG. I don't want anybody to lose their house. At the same time, a contract was made between and investor and borrower. That contract has remedies for non payment. If the lender wants to do their own modification to the note, let it be their decision. If they want to take the property back in foreclosure, let it be their decision.
Put yourself in the shoes of the lender or investor. If any bankruptcy judge could modify a mortgage note and deprive you of your rights as an investor, would you EVER buy or invest in a pool of mortgages again? The answer is NO you wouldn't. If the investors completely leave the mortgage market, rates will need to rise to attract them back, and high loan to value mortgages will become non existent. This will worsen the housing crisis because the cost for everyone will be higher and options will be fewer.
We need more mortgage programs, not less. We can't deprive the investors of their rights. Remember there is plenty of blame to go around in this mortgage foreclosure crisis mess of today. It is easy to pass the buck and blame the investors and banks as that relieves people of any personal responsibility.
We must let the free market work. If we change the rules during game, we have a new game, and nobody will play in that game. The recent Mortgage Debt Forgiveness Act was supposed to help people work out payment solutions with their lender and not incur a 1099c for debt relief. Instead, I have witnessed in the last week alone, four individuals make the decision to go into foreclosure and live 6 months free during their redemption period. Instead of stem foreclosures, it actually encourages it by making it penalty free.
Visit our online Twin Cities real estate site at http://www.selling.mn and our Minnesota mortgage site at http://www.ventureloanapp.com
Feb. 20, 2008
Have you heard of Seth Godin?
Here is Seth's description of himself from his website-copied verbatim:
SETH GODIN is a bestselling author, entrepreneur and agent of change.
Godin is author of ten books that have been bestsellers around the world. His most recent titles include The Dip and Meatball Sundae. Free Prize Inside was published in early May, 2004 and All Marketers Are Liars was published in 2005. His books that have been bestsellers around the world and changed the way people think about marketing, change and work. Permission Marketing was an Amazon.com Top 100 bestseller for a year, a Fortune Best Business Book and it spent four months on the Business Week bestseller list. It also appeared on the New York Times business book bestseller list.
Unleashing the Ideavirus is the most popular ebook ever written. More than 1,000,000 people downloaded the digital version of this book about how ideas spread. Featured in USA Today, The New York Times, The Industry Standard and Wired Online, Ideavirus hit #4 on the Amazon Japan bestseller list, and #5 in the USA.
The Big Red Fez, Godin's take on web design, was the #1 ebook (worldwide) on Amazon for almost a year before it was published in paperback in 2002. The Miami Herald called it one of the best business books of the year.
Survival is Not Enough has made bestseller lists in Germany, the UK and the United States. With a foreword by Charles Darwin, this breakthrough book redefines what change means to anyone who works for a living. Tom Peters called it a, "landmark." The book was first excerpted in Fast Company, where Godin is a contributing editor.
His latest book, Purple Cow, was a New York Times and Wall Street Journal bestseller. It's all about how companies can transform themselves by becoming remarkable.
Seth is a renowned speaker as well. He was recently chosen as one of 21 Speakers for the Next Century by Successful Meetings and is consistently rated among the very best speakers by the audiences he addresses.
Seth was founder and CEO of Yoyodyne, the industry's leading interactive direct marketing company, which Yahoo! acquired in late 1998.
He holds an MBA from Stanford, and was called "the Ultimate Entrepreneur for the Information Age" by Business Week.
He's the man behind the Squidoo Lens. If you go to www.squidoo.com you can build out a mini expert page. The pages are FREE to build. There is no hosting fee and they are indexed and ranked in the search engines. If you are looking for back links and a quick way to attain expert status for various keywords, then you should head over to Squidoo and spend an hour to build a lens. There are no limit-other than your time-on the number of lens that you can build. Build your lens and Shout Out to the world where you are an expert.
I live and work in Minnesota. As such, my area of expertise is the Twin Cities- Minneapolis St Paul area and surrounding suburbs. I've built two lens. One is Minnesota Real Estate and the other is Twin Cities Real Estate. Check them out. This is a free resource that many internet marketers use.
Feb. 13, 2008
Unless you are in the mortgage industry, you probably haven't heard about the Mortgage Insurance Industry is experiencing HUGE losses. Public company MGIC Investment Corp-symbol MTG just announced today that they lost 1.5 BILLION DOLLARS LAST QUARTER ALONE. PMI Group-symbol PMI and Radian Group Inc-RDN might be next. They haven't announced their earnings yet. Since they are all in the same business it might be a logical inference to assume they will be announcing less than positive news.
What PMI did do this week is send out a letter to mortgage broker clients like myself with a guideline change effective for March 1st. Basically, they are not going to be insuring the all the same loan programs at the higher loan to value 100% limit that they once did. They are also raising their cost of insurance. What does this mean to a consumer? YOU need to buy now before the programs change. Most companies will allow you to close on an older approved program at the lesser cost mortgage insurance, as long as you are approved with a mortgage certificate by a certain date. PMI told me when I called them that I needed to have my client's mortgage insurance certificate in hand by March 1st. Some area of the country are also being designated as declining areas, this too is a reason the insurance companies are stopping to provide insurance for high loan to value loans. If you are a first time buyer-it's time to take action.
The higher cost of MI and greater down payment requirements are defensive measures put in place because of all the foreclosures and defaults in mortgage loans. I can't blame the mortgage insurance companies, in fact I commend them for being proactive and protecting their business. At the same time, if you are a buyer who needs the maximum amount of financing-such as 100%-you might not be able to get it. Not all programs are affected by this change and not all mortgage insurance companies have changed their guidelines-YET. The window of opportunity is here and now. This lack of liquidity will remove more potential buyers from the real estate marketplace and make the inventory of unsold homes that much worse. That in turn will put more pricing pressure on the existing inventory of homes. What a viscous cycle.
We have been in this business since 1986. We've seen something similar in the real estate and mortgage markets back in 1989-1991 during the Resolution Trust days and the first Gulf War. This time it seems a little more severe in nature. If you are contemplating buying, NOW really is the time to buy, especially if you need underwriting flexibility or a low down payment program. Visit my Minnesota real estate site to begin an online search for a new home.
Feb. 13, 2008
This my Valentines Day song for everyone out there! It is my first attempt at embedding video in the blog and it WORKED!! Yipee!!!
Feb. 10, 2008
 "The housing market is falling apart! This is a horrible time to buy a home, or sell a home or even LIVE in a home!"
Have you been hearing a lot of news that sounds like this lately? Well, economists love, and I mean LOVE, to spread the gloom and doom. When the economy's going great, they don't get any attention. But as soon as the market changes, everybody's listening to them again. So, when you hear all that bad news, keep in mind that it sells newspapers.
That's certainly not to say the market hasn't changed. It is still changing, in fact. But that makes investing in real estate all the more enticing, if you know what you are doing.
But here's the skinny on investing in real estate. It is one of the best decisions you'll ever make. And guess what? I'm here to tell you that this is actually a GREAT time to buy.
There are very few purchases you will ever make in your life that will actually increase in value while you are using them every day. These are called INVESTMENTS, and anyone that knows anything about investments will tell you that good investors are in it for the long haul.
If you are thinking about investing in real estate in the current market, as long as you choose a property that is worthwhile and maintain it well, it will reward you with plenty of equity over the years. If you are a foolish investor that just wants to get in and out and turn a quick profit, this likely isn't the best market for you.
But if you are thinking of investing in real estate the smart way, using pragmatism and patience, this is a great time to buy. Prices have fallen on homes, and so have interest rates. So, you can lock in a mortgage at a fantastic rate and save money on your purchase price.
Prices will inevitably rise back up, and you'll be sitting pretty with a great interest rate and extra profit from your amazingly discounted price. Since sellers often have had their homes on the market for longer than they've wanted to, they may be willing to cut you a deal. That's all the better for you, and they will finally be able to get on with their lives. Everybody wins, especially your pocketbook.
If you are looking to buy a fixer-upper to rent out as an income property, this economy will benefit you, too. Because lenders are leery nowadays about handing out home loans to people with bad credit, and many people have lost their homes because their adjustable-rate mortgages went through the roof (literally), a surplus of renters is soon to hit the streets.
Just don't be overly eager to flip your investment property. If that's your intention, it might take some time before it sells in this market. But by all means, rent it out.
The economy might be cyclical, but history teaches us that investing in real estate is nearly always a great decision for the long term. Despite what the media tells you, today is no exception to the rule.
Visit http://www.selling.mn and begin your home search NOW
Jan. 25, 2008
Loan Size on FHA Mortgage Loans Will Be Increased
Here's what we know so far: There will be an FHA modernization bill that passes this year. The proposed bill is bouncing back and forth between the House and Senate. Once thing is for sure, or as sure as we can be at this time, the FHA mortgage loan limit will rise to 125% of the median home price with a cap of $730K This will have a bigger affect on areas of the country that don't utilize FHA to a great extent at the moment-Areas such as the two coasts which have more expensive housing. FHA mortgages price better than conventional jumbo loans. This can make that big house more affordable.
In Minnesota, our average home is just over $200K. At the same time, this new FHA loan limit will help as it will bring in another financing option to consider. With regards to refinancing, this might prove to be extremely advantageous. FHA allows you to refinance up to 97% of a homes value. Unlike conventional loans, the mortgage insurance-called MIP( mortgage insurance premium) is not predicated on loan to value or credit scores. For this reason, I could see many people with conventional loans refinancing into an FHA loan in order to get a lower payment. This will also help on reverse mortgages. If the limit is increased, people can do larger FHA reverse mortgages in place of conventional reverse mortgages. So the big question under the new law is how big will the new FHA mortgages be allowed in Minnesota.
Some sticking points revolve around the down payment requirement with FHA. Will they allow a zero down product. Fannie Mae and Freddie Mac allow zero down with programs such as the Flex 100, My Community and Home Possible. FHA may create a similar program. The lower mortgage insurance with FHA will make a dramatic difference in the housing payment when all the other options are compared side by side.
There are a couple of other points of contention, such as down payment assistance and bonding requirement vs. net worth requirement for mortgage brokers that want to offer FHA loans. These points are being fine tuned. The future for FHA loans looks very bright indeed.
To find out more about FHA mortgages and the FHA Secure Mortgage program, visit our website http://www.ventureloanapp.com and specifically our FHA page http://www.ventureloanapp.com/FHA_20_LOANS.html
Jan. 20, 2008
Sellers: Think about the statistics in the report below. Are you marketing your home correctly given the data below? If you're not, then you'd better think twice. The data below is comprehensive and tells you who the buyers are in today's market. Do you see what it doesn't say? It doesn't say they read the newspaper or go to open houses. That's what our generation of buyers and sellers did-before the internet. This is why you need an updated internet based marketing campaign. You may be best served to select an agent who is in tune with these statistics.
MNAR has Minnesota home buyer characteristics from NAR report
The last section of the Minnesota Association of REALTORS® (MNAR) Resource Update highlights information specific to Minnesota that was generated from NAR's Home Buyer and Home Seller Survey.
The data was collected by NAR as part of their annual profile. NAR received 9,966 responses nationally, and an additional 441 in Minnesota.
Some characteristics of Minnesota home buyers:
Median age of all home buyers was 36 years old. For first-time buyers, the median age was 28.
Household income of home buyers was $69,300.
69 percent of home buyers said there were no children under 18 residing in the property.
56 percent of home buyers were married couples, 24 percent single females, 11 percent single males and 9 percent were unmarried couples.
6 percent of home buyers were born outside of the U.S., compared with 9 percent nationally.
First-time home buyers accounted for 42 percent of homes purchased in 2007.
66 percent of first-time home buyers were between 25 and 34 years old.
30 percent of buyers use social networking websites (e.g., Myspace, Facebook, Linkedin).
Among home buyers aged 18 to 24, 59 percent reported using social networking sites.
19 percent of homes purchased were new construction.
64 percent of homes purchased were detached single-family.
The typical home buyer purchased a home 14 miles from their previous residence.
The median price of homes purchased was $221,900 compared to $215,000 in the U.S.
The typical buyer purchased a home that was 1,850 square feet in size.
Recent homebuyers plan to live in their home a median of 10 years.
Source: Minnesota Association of REALTORS®
If you want to begin an online search for a new home, one excellent place to start is on my website. http://www.selling.mn
Jan. 15, 2008
It’s a much different picture renovating a home in 2007 than in 1997. Fueled by huge gains in the price of real estate, homeowners a decade ago were tapping home equity with little care since prices were expected to keep climbing, more than covering the cost of such improvements.
Today, with the slowdown in real estate and the widening damage in the subprime loan market, home prices aren’t rising much – and falling in some places. And lenders tend to be a lot choosier these days about who to do business with. So before considering a home renovation, it makes sense to make sure your financial house is in order:
Start with your credit report: If you’re considering borrowing, make sure your credit report and payment records are in the best possible shape. As in most economic crises, lenders go from being permissive to squeamish in an instant, so even people with good credit behavior are going to be under the microscope. Start by checking your credit report -- you have the right to get all three of your credit reports – from Experian, TransUnion and Equifax – once a year for free. You can do so by ordering them at www.annualcreditreport.com, but do so at staggered times throughout the year so you can catch potential errors in your report as they happen. Also, if you need to clean up any bad behavior – late bills, heavy credit card debt, clean it up before you wander back into the real estate market. Remember that a bad credit score can raise the total cost of your mortgage.
See what kind of payoff your chosen renovation will have: During the housing boom, people thought virtually any renovation would offer big returns. That wasn’t true then, and it’s particularly untrue now. Take the time to figure out what renovations have the best chance for return on investment now – go to Remodeling magazine’s annual Cost vs. Value report online (http://www.remodeling.hw.net/content/CvsV/CostvsValue-project.asp?articleID=381305§ionID=173) and check 2006 project cost averages for your region of the country. In this market, renovate because it’s going to bring you comfort or pleasure, not because you’re expecting immediate profits.
Know how long you’ll need to stick around: When you sell, remember that most married couples can exclude from their taxable income up to $500,000 of gain and most individuals filing single or married filing separately can exclude up to $250,000. It’s required that you must have owned and used your home as your principal residence for two out of five years before the sale. The exclusion is generally applicable once every two years. However, if you are unable to meet the two-year ownership and use requirements because of a change in employment, health reasons or unforeseen circumstances, then your exclusion may be prorated.
Beware the bump in property taxes: The great thing about a more valuable home is the potential higher value when you sell. The bad thing is a visit from the county assessor – more valuable property tends to lead to higher tax assessments. Make sure you cannot only afford the cost of renovation, but what you’ll need to pay higher taxes if your home is reassessed.
Don’t forget to deduct applicable sales tax: If sales tax was imposed on a major renovation or if your state or locality imposes a general sales tax on the sale of a home or the cost of a substantial addition or major renovation, you might be able to deduct it. This alternative is particularly valuable in low-tax states, and the sales tax paid on the purchase of some large items including the purchase of a home or major addition can be added to the table amounts.
Make sure your renovation makes your home salable: A discussion with a real estate agent or someone familiar with the value of improvements in your immediate neighborhood can tell you what will add to value or take it away. For instance, a big addition can take away from the value of a home if it’s not aesthetically in tune with the rest of the neighborhood. Obviously, any renovation that keeps your house on the market longer better be worth it now because it might damage your sales prospects later.
January 2008 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by John Mazzara CFP CLU CHFC CEBS CMB MBA MS-Financial Planning Associates 952-929-2577 http://www.investments.mn , a local member of FPA
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