Monday, April 30, 2007
Saturday, April 28, 2007
Wednesday, April 25, 2007
Well, I am here to tell you that is a very flawed thought process to not see the need for a survey, especially if you are the buyer. Here are some reasons to get a survey the next time you buy a home.
- Why would anyone need to know the exact lot lines? It's called Encroachment, meaning an unauthorized use of someone's property. A lot of times, peoples' fences encroach on a neighbor's land, and is usually not a big deal because a fence can easily be moved. What do you do though if the neighbor has built part of a buildings foundation onto your land, or built a patio deck over the property line? If you are buying a piece of property with such a defect, and the previous owners have ignored it for over 15 years, that simple encroachment could turn into an easement by prescription, or even give that neighbor title to the land by adverse possession.
- Many homeowners have an Easement through their property, most commonly a driveway for a neighbor to reach his own property. But if you never have a survey of the land, how would you know if there are any hidden easements? Case in point, we were looking at a property to buy last year in Bloomington. We were about to make an offer, but decided to drive around the neighborhood once more. I noticed at the end of the adjoining street some large markers that said "Warning-Natural Gas Pipe Line". Upon further investigation we found that the pipe line rain directly through the properties back yard and had a 35 foot easement on each side of the pipeline. That turned out to be the entire back yard! There would be no way we could ever put in a pool or add on to the home. If they ever wanted to work on the pipe line, they had automatic permission to dig up the yard. The homeowner never knew because they never had a survey completed. Needless to say, we decided to not buy that home. Only because I am use to looking at these details was I saved from making a mistake. How many other buyers have not been so lucky?
- A survey will also reveal the proper set back lines on a property. Set back lines tell you how far away from the property line you are allowed to build. We ran into another problem where a seller had added on a third garage stall directly up to the property line. Its was encroaching on the set back by 10 feet! (also meaning the proper building permit was never pulled by the owner) If we inherited this problem, we might either have to get a variance or remove the structure. We decided to not inherit the problem and moved on.
Are you beginning to understand the reason why a survey is so important? It puts the buyer at ease knowing the property is in good standing with neighbors and the city, but it also helps the seller sell the home by offering the buyer another "insurance" policy on why the property is sound.
Some states require a survey on every property that sells, as does the mortgage company. However in Minnesota and Wisconsin, this is just not the case. How would you feel if you purchased a home and one day came home to find your yard was gone because the power company decided they needed to install some power lines in your backyard? The only one to blame would be yourself. A title search won't tell you anything about encroachments, hidden easements, or set back lines. Do yourself a favor...make sure to request a survey next time you buy real estate in Minnesota!
Tuesday, April 24, 2007
#91. New Ulm, MN
Monday, April 23, 2007
This weeks follow on to the Minnesota Homes in Foreclosure series explains the Methods of Foreclosure found in Minnesota. Not all states have the same methods, so check with your local agent for more information.
Remember that the reason for a mortgage is to give the lender the right to foreclose, have the property sold, and the debt paid out of the sale proceeds. So upon default, the bank has two options:
- Foreclosure by Advertisement - also known as the power of sale method, this is the most commonly used method in Minnesota. It allows the bank to conduct a foreclosure and sheriff's sale without taking the matter to court. The property must be advertised by publishing a notice in a newspaper in the county where the home is located for six weeks prior to the sale. Also, at least four weeks prior to the sale, a copy of the notice must be sent to the homeowner.
- Judicial Foreclosure - if a mortgage does not contain a power of sale clause, then the mortgage must go to court. The lender must file a lawsuit in the county where the property is located. An attorney will further record a lis pendens, making the judgment of the court binding on all persons that have interests in the property. The judge will then order the sale of the property.
- Deed in Lieu of Foreclosure - some borrowers might have the option of giving the deed and title directly back to the bank, rather then going through the foreclosure process. Some banks might except this as it saves them time and money, but they may decline and proceed with #1.
Be forewarned that in some cases, the proceeds of a foreclosure may not cover the full amount owed to the bank. The lender might want to seek what is called a Deficiency Judgment in order to get the full amount owed. However, know that a DJ is not allowed after the Foreclosure by Advertisement method if redemption periods are 6 months or five weeks. If the redemption period is 12 months, then it is possible to get a DJ, or else the lender must close by Judicial Foreclosure.
I know this all might be confusing, so if you are facing foreclosure, my best suggestion is to seek the advice of an attorney. Everyone has different circumstances. Check back next week when I post the third instalment on What Foreclosure Means for You. Also read part one of this series about pre-foreclosures and redemption periods.
Saturday, April 21, 2007
Well, it looks like we could be having a funeral very soon. Let's all cross our fingers and pray for it to die. I'll be the first to shovel some dirt over the coffin...and let's make sure we dig a really, really deep hole so it cannot resurrect itself in the future.
What am I talking about? For those of you who have never dealt with a foreclosure or short sale this might be news, but to those of you currently in this unfortunate position, it could be good news. See, when a Minnesota home owner short sales their home and sells if for $150,000 instead of the $200,000 they owe, the bank issues a 1099 to the federal government. The government sees you as actually getting $50,000 in income (the difference between the two numbers) and sends you a tax bill. That's right. You got stabbed in the gut with a really large knife when you lost your home or had to short sell it, then the government steps in and twists it back and forth just to make sure it hurts a little more.
But now the National Association of Realtors is very close at getting the Federal Government to stop twisting the knife. The House of Representatives has introduced H.R. 1876, the Mortgage Cancellation Tax Relief Act, which will no longer tax individuals when they have had a part of a mortgage loan forgiven or have been forced to foreclose because of their inability to pay their mortgage.
Let's pray that this bill passes. With the increase of foreclosure and short sales being seen all over the country, it has the potential to affect thousands of home owners by ridding them of one financial burden being replaced by another. Just another way Realtors are looking our for the consumer!
Friday, April 20, 2007
Wednesday, April 18, 2007
Last week I took my Wisconsin real estate class in St Paul, at a complex called Bandana Square. It is an old train station used at the turn of the century, and is currently used mostly for offices and a Best Western Hotel. The complex is on the National Registry of Historic Places. The Children's Museum was located here a few years ago too.
Tuesday, April 17, 2007
- Calhoun - Isles : the average sales price for 2006 was $263,590, an increase of 19.9%
- Camden : the average sales price for 2006 was $164,000, an increase of 72.6%
- Central : the average sales price for 2006 was $270,000, an increase of 84.9%
- Longfellow : the average sales price for 2006 was $207,500, an increase of 66.1%
- Nokomis : the average sales price for 2006 was $225,000, an increase of 60.8%
- North : the average sales price for 2006 was $153,000, an increase of 93.9%
- Northeast : the average sales price for 2006 was $210,000, an increase of 62.8%
- Phillips : the average sales price for 2006 was $191,580, an increase of 122.9%
- Powderhorn : the average sales price for 2006 was $183,700, an increase of 67.0%
- Southwest : the average sales price for 2006 was $287,000, an increase of 57.1%
- University : the average sale price for 2006 was $240,000, an increase of 62.2%
Please know that these amounts include all single family detached homes, all condominiums, and also twin homes.
If you would like to know how another area or town compares, please either comment below or send me an email request!
Monday, April 16, 2007
- The truth is, there are more mortgage options available to buyers than just the typical 30-year fixed loan. Known as "unconventional mortgages", buyers should know the additional options available. Please remember,they may not work for you, and to check with your lender about personal pros and cons.
40-Year Fixed - these loans offer fixed rates with principal and interest payments each month. While your interest rate will usually be higher, your monthly payments will be less. One benefit of this type of financing is that it might be easier to qualify for and not hit your monthly budget too hard, but it will mean paying more in interest over the life of the loan and also cause you to build less equity into the home.
Interest Only - this payment plan allows a borrower to only pay interest on the loan, usual a fixed time period of 5-7 years. At the end of the term, you will have to refinance, pay the balance, or start paying Principal and Interest. If you are likely to move in the next few years, this could be an option for you, but if you plan on living in the home for a while, then the increase in payments after the initial period of interest only could be too much for your pocket book to handle.
80-20 or 80-10-10 - if you have a small down payment amount, then these two types could be for you. The 80-20 is a first mortgage of 80% and a second mortgage for the remaining 20%. It helps you avoid paying PMI (private mortgage insurance) which is tacked onto any loan higher than 80% of the purchase price. If you have at least a 10% down payment, then the 80-10-10 might work. In this instance, you have an 80% first mortgage, 10% second mortgage, and the 10% down payment. Some call the second mortgage a "piggy-back" loan. While the interest rate might be higher than on the first mortgage, the monthly payment for the combined loans could be less than a conventional loan with PMI.So if you are looking for additional options to purchase your next home, here are just a few to consider. Remember that many things could affect your eligibility like credit score, yearly income, etc, so go in with an open mind. You just never know what you might qualify for!
Friday, April 13, 2007
Tuesday, April 10, 2007
Email me : JKirby@theLuxuryAgent.com
Monday, April 9, 2007
With all the activities planned by Grandma, I was just too tired to sit down and write some good blogs. Please forgive me. I will work on it this week.
I should have some good content as I am taking a class to get my Wisconsin real estate license this week. It will be interesting to see how much similar and different the laws are for WI and MN.
Seeing as I am also licensed in Florida, I wonder how many other real estate agents have three or more states they can sell real estate in. If you know of someone who has more than three, please let me know!
Saturday, April 7, 2007
See, I am in the process of buying a home and now find myself in the shoes of my buyers and all the buyers out there. Seeing as there are so many homes on the market here in Minneapolis, I have to find a way to narrow the field. With two kids in tow, it is my responsibility to pick the best, as they can only last through four homes a day.
While it is required in our MLS that a photo be placed online within so much time, I am amazed that so many agents still only place one photo for the public's viewing pleasure. There has been alot of debate on AR, ePRO, and Real Talk about multiple photos, and agents that pass these listings by when searching for their clients. Some felt that was unfair and not representing the best interest of the client by NOT showing them "every home".
Let me tell you this...now that I am looking for myself, I am definitely passing any home by that only has one photo of the home. I am even passing those by with only exterior photos. I don't care if the rest of the details describe it as what I am looking for, I just don't have time to mess with a listing agent that refuses to snap a couple photos and post them on line. The last thing I need is to pick one of these homes and walk in to find it is in terrible shape. Now I have just wasted a home on my family who will need a nap soon.
So what is a photo worth to those sellers out there wanting me to buy their home? Well, $300,000. Without those interior shots, there is no way I will be writing a contract on your home simply because I won't be viewing it!
My advice to sellers is that you make sure your agent is posting at least 6 pictures of your home into the MLS. If they don't do this within a week of the listing, ask them to cancel the listing and find a better agent. Or better yet, when you are interviewing her, ask them about photography and how they implement it into the listing. You might be surprised that most agents do not take alot of photos. I have seen Million dollar homes have one photo, too.
(We have been searching for a month or so and still have not found what we are looking for. Of course it doesn't help me being a real estate agent as I am more picky than the average buyer. You can see my first post about our search regarding Smelly Homes. I thought it might be good to those of you out there that care, to see how the buying process goes for me, so I will be making various posts as time goes by. It will be fun to be in my buyers shoes again and experience the pains they go through)
Thursday, April 5, 2007
When driving down any road with two lanes or more and you see flashing emergency lights from a police vehicle, ambulance, tow truck, etc, it is now your responsibility to move over a lane. Too many police officers have been killed by distracted, inattentive, or just lazy drivers, who fail to move over for safety. The "move over law" was written after a local state trooper was killed as he was issuing a citation to another driver while parked on the shoulder.
- Keep one lane away from any stopped ambulance, fire truck, or law enforcement vehicle while passing them on a roadway with two or more lanes.
- If you are not able to get over due to traffic, then you must slow down considerably.
- Failure to do so means you could be the one receiving a citation.
Too many times I see drivers not observing this law. Maybe they do not know about it. But I honestly have to say I don't care of their ignorance. It is common sense to get out of the way of any emergency on the side of the road. Stop rubber necking and just drive safely to your destination.
Tuesday, April 3, 2007
Sunday, April 1, 2007
Pre-foreclosure in Minnesota
Once a home owner begins to stop making payments and the bank is aware of the default, the home enters the state of pre-foreclosure. One thing that should always be done is keep in constant contact with the bank. From the second an owner knows they can no longer pay the loan, they should call or write the bank with an explanation of their problems. Banks are not the bad guy (yet) and are willing to work with customers and advise owners of possible solutions. If you choose to ignore their letters of inquiry, you are only making matters worse.
During this time period, it is also advisable to seek help through a Realtor to market the home for sale. Try contacting a local investment club for potential buyers. They might know someone looking for a deal. What ever you do, don't haggle too much. Your goal is to get out of this home without going into full foreclosure and ruining your credit for 10 years. Check your pride at the door and try to leave emotions out of negotiations. (I have first hand knowledge on the stress a possible foreclosure can cause to yourself and your family and will feature a post on the subject at the end of April).
There is hope should you find yourself able to reinstate payments or pay for the loan in full. After default, and up until the time of the sheriff's sale, the borrower can stop the foreclosure process by bringing past payment up to date and paying any penalties the bank has charged (usually lawyer fees and such).
Another plus is that Minnesota state law gives the borrower the right to redeem the property after the auction, too. To get your property back, the owner usually has to pay the bank the price bid at auction plus interest. Here are the Statutory Redemption Periods in Minnesota:
6 Months - Most mortgages allow only six months time to return home to owner
12 Months - in order to have a year, one of the following must be met:
- the Mortgage is more than one-third paid off
- the Property is more than 40 acres
- the Property is more than 10 acres and is used for agricultural purposes
- the Property is more than 10 acres and mortgage was originated before July 1, 1987
Look for future posts on the Foreclosure Process in Minnesota when I discuss the Methods of Foreclosure and What Foreclosure Means for You.