So I get this email with this nice looking flyer from my company that talks about the recently expanded/extended housing tax credit. They want me to pass it on, well here it is digitally.
The headline, “now is the perfect time to sell”, lets throw a maybe or no after that. Unless you have a home to sell under $200k I would say put it on. It is actually very competitive in that price point unlike the upper bracket market where homes over $1 million = close to a 4o month supply. If your going to be competitive in that range, I say good luck if you do list!
Why flood the market with inventory if nobody really needs to? Especially if motivation is low and you need to compete against all the short sales and foreclosures.
When is it not a perfect time to buy or sell in the eyes of a real estate company?
My favorite part:
It has been said that this will be the last credit that the government will offer and buyers know they must act soon.
How do we know this will be the last credit? Remember, first there was the $7,500 tax credit that had to be repaid over X amount of years. Then there was the $8,000 credit that didn’t have to be repayable. Now it has been extended one more time to include move-up buyers. This little game could go on for years, but for the sake of hedging the future let’s hope not.
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Barry Ritholtz from the Big Picture, which is a good regular read tells people to grab a time machine to sell back in 2005 or get realistic over selling prices and get competitive.
No need to sell if you don’t have to. Price fixes just about everything and the market sets it!
via Frontdoor blog
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So your a buyer and can’t get financing or want to explore other alternatives? Your a seller and can’t sell your home? Might want to open the door to trying a contract for deed.
Contract for deeds may vary state to state but for the most part this one is centered around Minnesota.
What Is A Contract For Deed?
Is a basic contract between the seller and buyer in which real property is involved. The buyer makes installment payments to the seller, so it is basically owner financing. The seller retains legal title to the property until the installments are paid off or the buyer takes out a loan for the property.
The terms of a contract for deed are decided by both parties and can include interest and are typically determined by an amortization schedule. Since each one contract is different and terms are created by both parties, it’s really difficult to say which is the preferred route.
Some contract for deeds involve short repayment plans with balloon payments after 2-3 years or some are like a mortgage where terms are stretched out over years. It really depends on the situation and what both parties to the transaction agree.
The biggest reason one might choose to go the contract for deed route is that a buyer might not be able to obtain a typical mortgage product based on certain criteria. With lenders being more strict with lending money these days, contract for deeds maybe the only way some buyers will be able to purchase a home.
Works Great For Both Parties
There are always going to pros and cons for both buyers and sellers when it comes to contract for deeds and it really comes down to each transaction differently.
It really works great for sellers if the property is owned free and clear, can be a viable alternative to traditional financing from buyers. The owner of the property can draw up terms with a large down payment
If a buyer cannot obtain conventional financing, this might be the only way to go. It allows the buyer to agree to terms with a seller and make payments to the owner.
Buyers can obtain financing in a shorter period of time because of no appraisals or banks dragging their feet.
The Risks
Just like normal financing, there is always risks and they vary from transaction. If you are seller interested in offering a contract a deed, make sure to do your due diligence when qualifying a buyer. Typically a buyer will do owner financing when they can’t obtain a mortgage because of bad credit. This might be cause for alarm because repayment concerns.
This is where asking for a large down payment might be beneficial to a seller because if the buyer defaults on the property, you foreclose and keep their money that used for the down payment according to terms of the contract.
Also if your a seller and you don’t own your house free and clear, you rely on the buyer making the monthly payments to you on time. Otherwise you will be stuck making the payment to ensure that it gets to the lender on time so it doesn’t ding your credit history.
View a Contract For Deed Financing Addendum in Minnesota
These are just ‘some’ things involved with a contract for deed and the list grows.
If you need help with a contract for deed, contact me here or chat with a local attorney
photo cred jk5854
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Interesting article over on the Zillow blog about ballparks increasing values of homes or neighborhoods close to the bark. The study uses data from Zillow’s Home Index and not local MLS data but brings together neighborhood values for different ball parks in pre-completion stage to home values after completion of a new ball park.
The study shows over the course of 3 years after the ball park is open, home values tend to rise but after that level off.
Having a condo with an unobstructed view of Target Field will definitely be a great way to watch a game. Which leads me to ask…
Where to Live Close to Target Field
The new Twins stadium is located in the North Loop area of Minneapolis which has grown fairly fast the past few years, aka the Warehouse District. The area used to be vacant land and commercial buildings but has turned into a vibrant neighborhood that encompasses the downtown area.
The area is definitely walkable and riding a bike can get you almost anywhere, easy access to the Grand Rounds Scenic Byway. The area will also serve a light rail station to the Hiawatha line and Northstar. No need for ‘big name chains’ in this area, here you will find trendy shops, fine dining and right next to the Mississippi River.
The area has definitely seen it’s developers with condo projects come in and listed below are some condos and lofts, new and existing in the North Loop neighborhood.
Condos and Lofts in the North Loop:
- Bassett Creek Lofts
- Bookmen Lofts
- Bookmen Stacks
- Harvestor Lofts
- Herschel Loft
- Itasca Lofts
- Lindsey Lofts
- River Station
- Rock Island Lofts
- Security Station
- SoHo Lofts
- Tower Lofts
- Whitney Square Lofts
- 5th Avenue Lofts
- 212 Lofts
- 710 Lofts
- 720 Lofts
- 730 Lofts
- 801 Washington Lofts
- 918 Lofts
Will be interesting to see if this holds true over the next few years and follows the path of existing baseball stadiums raising home values.
]]>New builds starting around $190k with about 8-10 home builders in the neighborhood to choose from, maybe more. You might also be able to bring in your own builder if you want but I should probably check on that because I am not quite sure.
Homes range from single story and split entry homes to two story. A couple of years back these homes would have gone for upper 200′s and lower 300′s.
Builders slapping up homes include:
- Keyland Homes
- Minks Custom Homes
- Fieldstone
- Donnay Homes
- DR Horton
- Pietsch Builders
- and a few more
Why So Cheap?
Apparently the whole development went belly up with the lots a little more than a year ago. The original developer went into foreclosure with about 450+ lots priced anywhere from $120k to $150k.
After going through the foreclosure process and title being cleared, the development now is being resurrected by Shamrock Development… a solid Twin Cities developer that has been around for 20+ years.
Now the lots are cheap which makes it affordable to build a starter home or move up home. Going anywhere from $40k to a little over a $60k, buyers can choose any lot in the subdivision because each builder in the neighborhood has access to ALL the lots.
Neighborhood Perks
When the area is all said and done, there should be about 2 miles of interconnected trails and 3 parks in the Countryside neighborhood when it is all said done. Close proximity to Marschall Road and 169 makes it an easy commute to other southwest metro suburbs and a 25 minute drive to downtown Minneapolis.
If you’re interested in building in Countryside just let me know, I work with builders giving you great representation as a buyer when it comes to building new construction. Contact me here or in the sidebar to get things kicked off.
Know of any other developments around the Twin Cities with the same thing going on? Let everyone know where they are by placing it in the comments below 
The HUD-1 Settlment Statement
To keep it simple, the HUD-1 is a uniformly used form at the time of closing that itemizes all the incoming and outgoing funds at the time of a closing. Back in the day, the year 1974 to be more exact The Real Estate Settlement and Procedures Act (RESPA) was created as a level of protection for consumers to be made aware of all disclosures and charges associated with a real estate transaction.
Breaking Down The HUD-1
The best way to view the HUD-1 is to start on page 2, this where all the numbers come from and are brought to page 1. For the purpose of this post we are just going to start on page 1, I know… why be confusing.
I suggest following along with the dummie mock version here of the HUD-1 Settlement form
Sections A-I
This section is probably the easiest to understand and breaks down everybody involved in the settlement. This is where you will find the names of borrowers and sellers, a long with the lender information, time/date/place of closing, etc.
Section J
This is the summary of the borrowers transaction. Section 100 is the gross amount due from the borrower and includes the sales price, personal property and adjustments made by the seller in advance.
Section 200 covers the amounts paid by or on behalf of the borrower. This is going to be the area where all the funds paid to the buyer will appear. You will see credits for earnest money, taxes that have yet to be paid by the seller, etc.
Section 300 is the total cash to or from the borrower. If the number is negative on line 303 the buyer will receive cash back at closing, if the number is positive, it will indicate the amount of funds needed to close the transaction.
Section K
If the borrower has one, then the seller has to have one just as well which would be the summary of the seller’s transaction. Section 400 looks at the gross amount due to the seller. Along with the contract sales price, personal property and any other amounts of money due to the buyer paid for by the seller.
Section 500 is where you will find reductions in amounts due to the seller. Any liens that have yet to paid off such as existing mortgages, prorated taxes and any utilities left unpaid will be paid.
Section 600 is going to be cash at settlement due to/from the seller. Line 603 usually indicates the amount of cash owed to the seller. It is possible that the seller will have to bring money to closing.
Section L=Settlement Charges
This is the 2nd page of the HUD-1 and this is where all the charges are spelled out and then brought to the first page.
Section 700 outlines all the commissions paid out to the different real estate agencies involved in the transaction. The funds are paid for from the seller.
Section 800 deals with ‘Items Payable In Connection With The Loan’. These items are typically paid for by the buyer, but in the case of the mock HUD-1, the seller is paying because of seller paid closing costs.
Section 900 are items required by the lender to paid in advance. These fees include interest to be collected at closing, mortgage insurance premiums, hazard insurance premiums and any miscellaneus fees. Once again these fees are typically paid for by the buyer but the seller is paying some in this particular instance.
Section 1000 is all the fees that deposited with the lender in advance. Such as mortgage insurance, hazard insurance and county/city taxes. These fees are usually in escrow and the number of months varies for what a lender can collect. This is to make sure the lender doesn’t collect more than necessary.
Section 1100 has to do with title charges. These are fees associated with the transfer of title, examination of title, title search, title insurance, etc. If there are any attorney fees, they are also listed in this section
Section 1200 is used for government recording and transfer fees. This section is an itemized section for recording deeds and mortgage info.
Section 1300 is used for any additional settlement charges. Most common entry found in this section will be the home warranty.
Section 1400 is the total settlement charges by both the buyer and seller.
There is a final page which is to be signed by both buyer and seller acknowledging that you have reviewed and received a copy of the HUD-1.
Finally! That is everything that is on the HUD-1.
Any questions just ask me here or better yet ask Genevieve from Urban Title.
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Just like those Zubaz (and if you want you can still buy these) that you just don’t want to get rid of because they might wander back into style. Whether a buyer would want something or not, when in doubt just throw it out.
]]>Single family homes are selling faster than a year ago, with a big reason being the declines and homes being more affordable to home buyers pushed out of the market a couple of years ago. Condos and townhomes are moving but not at the pace of last year.
- 3209 Galleria #1804, Edina, MN 55435 List Price $2,425,058 Sold Price $2,425,058
- 222 2nd Street SE #1201, Minneapolis, MN 55414 List Price $2,079,000 Sold Price $2,424,570
- 700 2nd Street S #W30, Minneapolis, MN 55401 List Price $2,449,000 Sold Price $2,275,000
- 222 2nd Street SE #1006, Minneapolis, MN 55414 List Price $1,324,990 Sold Price $1,424,343
- 731 Hidden Lane , Excelsior, MN 55331 List Price $1,695,000 Sold Price $1,350,000
- 3209 Galleria #1308, Edina, MN 55435 List Price $1,336,048 Sold Price $1,337,704
- 743 Goodrich Avenue , St Paul, MN 55105 List Price $1,275,000 Sold Price $1,306,000
- 4254 Queen Avenue S , Minneapolis, MN 55410 List Price $1,395,000 Sold Price $1,300,000
- 3066 Island View Drive , Mound, MN 55364 List Price $1,495,000 Sold Price $1,215,000
- 1684 Tonkawa Road , Orono, MN 55356 List Price $1,500,000 Sold Price $1,125,000
Upper bracked condos seemed to top the list this month with The Westin Galleria Residences, Phoenix on the River and Washburn Lofts all popping a few near the top.
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