Thursday, June 28, 2007

Confessions of a Foreclosure...

...well, a near foreclosure. I have been thinking about when I would finally sit down and write about my experience on almost going into foreclosure. In a way, it is a very personal experience that I never want to live through again. But at the same time, it is an important lesson for all to understand.

See, foreclosure is often presented by the media and banks as a very bad thing. Only fools put themselves into a financial crisis where the only outcome is having the bank take back your home, right? Well, I am here to tell you that most people who face foreclosure are good people with good credit. They have families that they love, work full time jobs (sometimes with a two-income family), and want the American dream of home ownership. Most of the time they are financially sound and CAN afford the mortgage payments.

The media is only concentrating on the amount of foreclosures, and yes, there was alot of mortgage fraud. But what the media fails to spotlight is that in most cases, something unexpected happens to home owners that changes their entire lives.

Our unexpected something was a Category 4 Hurricane. In early 2004, after many successful rehab projects and flips in the Florida market, we decided to tackle another home. We started the project and had about half the work done as September 2004 came around. We were getting ready to finish the outside when Hurricane Ivan was twirling around in the Gulf of Mexico. We decided to wait and see what happened. Well, the worst that could have happened did. Pensacola was hit head on and our rehab project became a REHAB project. Many windows were busted out and most of the completed work on the inside was completely ruined. Add to that a roof half missing, with no help from FEMA on getting a tarp, and we had quite a problem. (FEMA will give roof tarps to only primary residences, not investment properties). Well, are contractor quit on us as he could make more money on smaller hurricane damaged houses, and then we couldnt' find a roofer to put a roof on. We didn't' get a roof on for 5 months after the Hurricane hit, and we proceeded to go through three more contractors in the spring of 2005 before we said enough was enough. Our flip had turned into a nightmare, and our bank account was suffering.

So, we were left with a home that needed rehabbed and we needed to sell this monkey. Two mortgage payments were now killing us as the project was 8 months over due. Add to that a job transfer and it was like looking down the barrel of a shotgun. Of course the Florida market decided to tank and home prices were dropping FAST. We started to get offers, but they were tens of thousands below what we needed to recoup our costs.

Fast forward another 6 months....we had now owned this home for three years! It seemed everything we now touched turned black. We looked at our children and wondered how this would effect them. Foreclosure was a word uttered everyday, and for two people who both have credit scores in the 800's, it was looking to be a hard pill to swallow. So with only two months worth of money left to make payments, we took our last $3000 and turned to our last hope. AUCTION. We hired a local auctioneer, told her of our plight, then held our breath. Eight people bid the day of the auction and the final bid came in very low. So the only thing left to do was either take the bid, or go into foreclosure. We decided to take everything we had made in the sale of our primary residence, plus some savings, and pay back the bank the difference. So all in all we closed two months later, at a $100,000 loss.

I know not everyone can benefit from an auction, nor has the funds to keep themselves out of foreclosure. But we were mentally drained and my husband was throwing in the towel. We had both been raised to pay off your debts, and going into foreclosure seemed the cheaters way out. He didnt' even want to put another dime into the house, let alone an auction. So I made the final decision...and thank God I did for it was our only saving grace.

Everything happens for a reason. It should go on my gravestone as it is the motto I live by. I learned alot from this experience, especially empathy for anyone else facing foreclosure, as well as the following:
  • always have an exit plan for the unexpected
  • don't get yourself in a position of being stretched to thin
  • realize that you could fail
  • don't hate yourself when you do fail
  • look for the silver lining, even though that lining is REALLY thin
  • make sure you have utilized every option before calling the bank
  • try and work with every offer that comes in

We never expected to be so close to foreclosure. It almost ruined our lives because mentally we were letting it. If you know someone looking down the same shotgun, have empathy for them as they are not bad people. Try to keep your chin up. Life isn't always fair, but life happens, and there is nothing you can do, but learn from it.

Wednesday, June 27, 2007

Any Offer is a Good Offer!

This week we put an offer in on a home in Minneapolis. We've been looking for 5 months, and this is the first home we could see ourselves living in for many years. The seller has had her home on the market for exactly a year, and reduced the price $40,000....but it still hasn't sold. She bought at the height of the market and in today's terms, paid too much. She moved out in February and the home sits vacant. The listing agent told me that the bank will not allow a short sale, so this tells me the owner is finding herself in a financial bind.

So I was surprised to hear today that the seller flat out rejects our offer. Apparently there has been some "interest" in her home so she is hoping that one of the other lookers will bring her a better offer. I am not sure if this is coming from the seller because she is afraid of the amount of money she will lose, or if the agent is telling her to wait it out some more. Either way, the seller needs to sell.

My question is, why not send back a counteroffer? Most likely she was offended by our lower offer and let ego and emotion get in the way of sound judgement. Holding out for another offer that doesn't exist is not sound judgement. What is good is to at least start the negotiating through a counteroffer.

In today's market, any offer is a good offer. You just have to change your view to one of optimism. It might not be the price you were hoping for, but at least you now have an offer to work with. So next time you find yourself staring at an offer that is more than disappointing, take a breath, calm down, and start a dialog on how to make it a win-win for both parties. It could be your last hope and keep you out of foreclosure.

Tuesday, June 26, 2007

Minneapolis Market Update

Details for Downtown Minneapolis Real Estate Market

Due to Minneapolis encompassing a large area of real estate, the local Realtor association has created 11 areas in Minneapolis in order to better organize the sale data.The Downtown region is denoted by the number 302 in our multiple listing system.

Following is some year-to-date (YTD) sales information.
  • Average Sales Price : YTD the average sales price is $311,511. In 2006, it was $313,644. Values have been holding steady in downtown with an overall decline of only .07%.
  • % of Original List Price Received : currently sellers are getting 95.8% of the list price, where in 2006, sellers were receiving 102% or more. Home owners are realizing that in order to sell, they must have multiple price reductions because they are not pricing the home correctly from the beginning. In 2006, some owners were getting multiple offers, with buyers offering over list to get the property. Those days are now long gone and buyers are hard to find.
  • Average Days on the Market : it is taking 171 days for a home to sell Downtown, one of the longest selling areas in Minneapolis year to date
  • New Listings vs. Closed Listings : YTD there have been 609 homes listed for sale (with only 7 being single family homes) most being condominium units, down 20% from 2006. At the same time, only 165 have closed this year, which is down 66% from 2006!

As you can see, the downtown market is experiencing a major market correction. While it was trendy to live downtown and buy a condo, it may not be so much anymore. Home owners are learning that to sell, they must reduce their prices, but buyers aren't seeing the reductions they want, as evidenced in the small amount of 2007 solds.

I will be posting updates every couple months as the new data is released so you can get a better view of how the market is progressing as the year goes on.
So far the Lakes area and Camden area have been highlighted so check those markets out while I get more data ready for you to read!

Monday, June 25, 2007

Historic Home on Lake Harriet #1

This weeks Historic Home in Minneapolis is 4700 Lake Harriet Pkwy W.

Built in 1910 by Bertrand and Chamberlin, it was designed for Harry S. and Paula Pierce. The home sits on a small hill east of Lake Harriet, giving sweeping views of the Lake. Influences of Prairie Style are seen in the windows and roof design,. The most striking feature of the home is the frieze located on the second story which depicts a wooded scene with knights and maidens.

The most recent sale of the home was in 1997 for $745,000 and has an estimated value, now 10 years later, for just over $2 Million. It's interior was updated at the time of sale with about 3000 square feet, 3 bedrooms, 4 baths, sunrooms, verandas and more.

Saturday, June 23, 2007

The Art of Bonsai

A couple weeks ago I had the chance to attend the beginners workshop for bonsai that is only offered twice a year by the Minnesota Bonsai Society. It was truly a great experience. Many seasoned experts were available to guide students on how to shape the Juniper plant we were given.

Take a look at some photos I took of my tree from the beginning plant, to shaping, and then the final potting. One thing I love about the Twin Cities is the opportunity to do just about anything!

Thursday, June 21, 2007

This will Be Amazing!

I always like to report on interesting things to do around the Twin Cities. From now until September 30th, the University of Minnesota Landscape Arboretum is showing its "Art to A-Maze" exhibition. Check out the Maze Garden which is a network of tunnels, dead ends, and passageways to get lost in. I will be going there myself in the next couple weeks with my son so I will be sure to post some photos of the fun. Check out their website for more information.

Wednesday, June 20, 2007

Minneapolis Hit with Snow in June

What's that you say? You don't see any snow? Well I sure do.

I look through the homes in the local multiple listing service every day and am amazed at the amount of homes who have recently received snow.

Sellers, it's pretty simple. If your home photo still shows snow on the ground in summer, then you are not putting your best foot forward with potential buyers. The first photo shown online in a listing is like looking into the soul of your home. It needs to be the best you've got.

So if your home is currently listed, and it was put on the market last winter, check your home photos and make sure there is no snow on the ground. If there is, call your agent immediately and make them come take an updated photo, today.

I am a buyer right now so I have the unique perspective of knowing what I am talking about. If I see a home with snow, I don't even look at it any further. I just hit the next button because with the supersaturation of homes on the market, I know their are plenty more choices available. How many buyers have passed up your home for the same reason? You will never know. Take care of the problem before you waste any more time!

PS. If you still have Christmas lights up on the exterior of your home, please TAKE THEM DOWN! It also shows poorly on your home when you are trying to sell.

Tuesday, June 19, 2007

Minneapolis Farmer's Have Markets

Minneapolis is a great place to descend upon Thursday during the summer. If you want fresh produce at a lower price then you will find in a grocery store (plus some organic options), then head on down to the Farmer's Markets of Minneapolis. They have everything from fresh cut flowers, flowers for potting, hanging baskets, fruit, veggies, and more!

Two great locations are available, depending on your time schedule. The Lyndale location is across the highway from the International Market Square, and just west of the Basilica of St Mary. It is considered the flagship location, but the last day I was there is was less busy than the one located downtown. If you are adventurous, then travel downtown and stroll down Nicollet Mall, which has 7 blocks of vendors. Take in the city sites and get some fresh cut flowers. Strawberries are in season so get the "real" thing from local farms instead of imports from California and Florida.

Here are the location hours:

Lyndale Market: Open everyday 6am - 1pm, until mid November
Directions to Lyndale location

Nicollet Mall Market: Open Thursday & Saturday, 6am - 6pm until November 8th.
Directions to downtown Minneapolis.

Monday, June 18, 2007

Not Enough Time in the Day

Children make my life very busy, especially balancing a career, blogging, feeding my husband, etc. I don't always find time to do everything so I have to sacrifice one thing or another, every now and then. Being Father's Day this weekend, I never got around to updating my blog.

So I wasn't being lazy, I just wanted to spend the weekend with my family. I have the tendency to sit down in front of the computer for "a couple of minutes" and those quickly turn into 1-2 hours. Not good when your husband is looking at you tapping his foot.
My son gives me a good clue when it's time to put the laptop down. He walks over and hits the "off" button!

Friday, June 15, 2007

The Complexities of a Buyer's Real Estate Transaction, Part 1

How a Buyer's Agent Shows their Worth

I have been hearing as of late there is some confusion on what a Buyer's agent does for a buyer client. A lot more is involved than just driving a buyer around and showing homes. As an Accredited Buyer's Representative (ABR), I have taken the time to achieve additional education on the ins and outs of the buying side of a home sale. This is Part 1 of a two part series, so please check back this upcoming week for the second installment. Here is list of items I perform for buyers I work with, and what any ABR will do for you:

Initial Meeting:
  • Discuss and explain Agency relationships available
  • Discuss how agents are compensated in a real estate transaction
  • Go over the importance of a Buyer's Broker Agreement and how in Minnesota a buyer is not represented unless a signed relationship is formed.

Counseling Session:

  • Describe the buying process in Minnesota
  • Understand the needs and wants of my client, including past real estate experience
  • Present disclosure forms that might come up during the transaction
  • Look into finance options and explain the importance of loan pre-approval before making an offer
  • Find out if any special circumstances will need to be met, or if anyone else will be party to the transaction

View Properties:

  • Communicate with client available property choices
  • Schedule appointments and view properties with buyer, taking a thorough look at home for items that buyers might miss
  • Analyze the pros & cons of each property and help buyer narrow down the field
  • Review any seller's disclosures and Housing inspection reports provided by seller
  • Prepare market analysis on buyer's finally three choices and advise accordingly

Of course this is just a brief overview of duties I perform. Each item above is much more detailed than shown. Working with buyer's is extremely rewarding for me. I put myself in their shoes and walk the process as if I was the one buying the home. I truly love being a real estate agent. There is nothing more rewarding than handing a buyer the keys to their new home, especially if it is their first. I remember how exciting it was when I bought my first home and how American I felt by doing so.

Just make sure to interview your agent and check that they fit your personality. It is also important to see if they have any real estate designations and certifications. Having one or more shows the dedication of that agent on pursuing education above and beyond what is required by the state licensing board, and also shows you their commitment to you as a professional.

Look for the second part of this series where I will discuss writing up an offer, negotiating, post-offer, and closing duties.

Thursday, June 14, 2007

Detailed Minneapolis Market Update

Recent Real Estate Statistics for the Camden area.

Due to Minneapolis encompassing a large area of real estate, the local Realtor association has created 11 areas in Minneapolis in order to better organize the sale data.The Camden region is denoted by the number 301 in our multiple listing system.

Following is some year-to-date (YTD) sales information.

  • Average Sales Price : YTD the average sales price is $150,087. In 2006, it was $166,767. That is a decrease of 10%!

  • % of Original List Price Received : currently sellers are getting 92.3% of the list price, where in 2006, sellers were receiving 95.0% or more.

  • Average Days on the Market : it is taking 140 days for a home to sell in the Camden area

  • New Listings vs. Closed Listings : YTD there have been 746 homes listed for sale, up 7% from 2006. At the same time, only 147 have closed this year, which is down 21.4% from 2006!

As you can see, the market has cooled a little. Price and condition of the home has been the determining factors on getting a home sold. Since there are so many options available to buyers, the cream of the crop are being snatched up the fastest.

I will be posting updates every couple months as the new data is released so you can get a better view of how the market is progressing as the year goes on.

Look for my breakdown of the other 10 Minneapolis regions over the next week or so.

Wednesday, June 13, 2007

Why did I leave?

One of the things that has made my life wonderful is the ability to pick up and move every few years. It's so exciting to learn about a new area. But once I get settled in, it's time to go and I cry as I look in the rear view mirror and drive away.

Why would I do this? Well, my husband was a pilot in the navy so we had to move every 3-4 years. Luckily, being in the navy meant we were always stationed near water. There is something about water that is soothing and calming.

When it came time for my husband to leave the service, we had to have an in depth conversation on where we wanted to move to next. Being a real estate agent, I knew I could start over anywhere in the United States, so where we moved more depended on the jobs available to my husband. The only stipulation I had was there must be a large body of water near by. He was asking me to leave the Gulf Coast of Florida, paradise as far as I was concerned.

When he finally got a job offer, he told me there was a huge body of water in the state, but it was divided into 10,000 lakes. Since I wasn't specific enough, he felt his part of the bargain was fulfilled. Knowing I had little chance of winning this mind game, how could I possibly argue with that? I hate losing on a technicality!

So here we are two years later. Living in a place that I most happily call home. In this short time I have fallen in love with the Twin Cities. There is so much to do and the scenery is some of the best I have lived in. Though I miss my Emerald Coast and some of the most amazing sunsets you will ever witness, I am a Midwestern born girl happily living again in the Midwest. While I never thought Minnesota would be my home, or that I would grow to love hockey, I don't see myself leaving for quite a long time!

Tuesday, June 12, 2007

Minneapolis Real Estate getting a Little Bit Greener

Minnesota homeowners will soon be able to certify their remodel projects as "green" through a set of standards being developed by the Green Remodeling Group.

The program will be based on a point system, which will be awarded on four remodel categories:

  • renovation with no heated /cooled space added
  • renovation that adds space that needs to be heated and cooled
  • renovation that changes exterior without changing foundation size
  • renovation that changes foundation size
Once a remodel is complete, it will be required that a neutral third party inspect the work to certify it is complying to the new green standards.

Other great aspects of remodeling with green materials, according to the Green Remodeling Groups website, are that projects may qualify for:

  • Mortgage and home equity rate discounts
  • Rebates on building materials and products
  • Tax credits
  • Preferred utility rates
  • Preferred homeowner and health insurance rates
With the recent trend of consumers becoming more environmentally conscious, homeowners are wanting ways to cut energy costs. Going green includes more than just recycling paper. Now we must be concerned about the energy efficiency of our homes, water conservation, and recyclable waste. Building a green home, or just remodeling that way, might cost a little more in the beginning, but the long term effect will be nothing but profitable.

Monday, June 11, 2007

Lowry Hill Historic Home #5

This weeks featured home is 1005 Mount Curve Avenue in Minneapolis.

Built in 1906 for Charles Gluek, this home is a simple version of the Beaux Arts style of architecture. The low pitched hipped roof is covered with tiles, both details occurring in the Beaux Arts tradition, as well as the pairing of columns seen on the front porch.

The original carriage house still exists and has been converted to a detached garage. The property itself has barely changed as evident in this 1915 photograph.

The last recorded sale was in 1991 for $575,000, with the home having over 5000 square feet, 7 bedrooms, and 5 bathrooms.

Sunday, June 10, 2007

Remodeling vs. Renovation

You see it everywhere, books on remodeling, renovation guides, and TV shows on how to fix up your home. When searching through the multiple listing service, I constantly see description notes stating that a home has been "completely remodeled" or "newly renovated". It got me thinking...just what is the difference between the two?

The Webster Dictionary defines the two as:

Renovate : to restore to a former, better state
Remodel : to alter the structure /use of

If I was to say I am going to "remodel" something, I would be changing the use of it. So if I had a floor plan that wasn't working and needed to reconfigure the whole thing, than I would be "remodeling". If I was just taking the current floor plan and adding new floors, new sheet rock, paint, etc, then I would be "renovating" as I was just replacing the old with something new.

Case in point, we looked at a home this weekend that was built in 1957. The MLS said the home had been remodeled. What we found was a basement, originally a cinder block underground space, that had been converted to living space. So it had been "remodeled", as the basement function was altered.

A good example of a "renovation" would be converting a multi-unit historic home, back to its original single family status.

It can get really confusing on the proper term to use because so many people use the two words interchangeably. I think it might be better to equate renovation with rehabilitation, but I am not a dictionary. I am of the nature that words mean something so I try and use the right term when needed. But with so much emphasis on housing the last four years, I doubt anyone will care or notice the true difference between the two words.

What do you think? Do you find yourself using the two words as one?

Friday, June 8, 2007

More than Price keeping Buyers Away

I have an interesting perspective when it comes to the current Minneapolis real estate market. We are buyers, looking for a new home in a world of too many listings, and are seriously overwhelmed by the amount of choices available.

I find I am growing tired of looking because we just can't make a decision. At a count of about 50 homes, including new construction, the glut of homes makes the winner hard to find. This one has a great kitchen, but has outdated baths. That one has remodeled baths and kitchen, but is too small. This home has everything we need except the yard my kids need to play in. Oh, and the one that is perfect in every way is too expensive.

Now this week a new twist was thrown into the mix, interest rates have jumped dramatically in the last few weeks. Friday our lender informed us the 30-yr fixed loan we want now has a rate of 6.65%. Holy cow! It seems just last week it was at 5.75. With this news, we have decided to take a step back and see if rates will go down (hopefully like gas prices have since Memorial Day).

It makes me wonder, if we are having a problem with interest rates going up, what are other buyers out there thinking? I am pretty sure that some are waiting it out too. Most likely because they cannot afford the home they want to buy now because the monthly mortgage payment has increased. Hopefully they decline. Sellers are not the only ones feeling the pinch in this market!

Thursday, June 7, 2007

Minneapolis Sculpture Garden

If you would like someplace to take a leisure stroll while visiting downtown Minneapolis, or see some interesting art, then stop by the Minneapolis Sculpture Garden by the Walker Art Center.
You'll soon discover the infamous Spoonbridge and Cherry that has become one of the most common images to represent Minneapolis.

Garden Hours : Open Daily 6am - 12 midnight
free admission

Wednesday, June 6, 2007

Niagara Falls moves to Woodbury

It comes like clockwork every month in the mail with all the other household bills you dread. For most people, it doesn't cost too much, but for some local Woodbury residents, that's about to change.

I'm talking about your water bill. And contrary to some beliefs, water is not free. An article in the Pioneer Press this Sunday amazed me. Not the fact that Woodbury is imposing a higher fee for residents who use more water than normal, but the attitudes of the residents who are water abusers.

Here are people that use over 90,000 gallons of water in three months of summer (the equivalent of 3000 baths) , just so the lawn will stay green. One person quoted says "What can I do? I am not going to let my grass suffer." Suffer? It's a weed. It will grow back. What can you do? Stop watering your lawn twice a day.

Minnesota is known for being environmentally conscious, but I find it interesting that residents of the state believe that water is available like Niagara Falls. Some think,"well, at least were not like the western states who have to buy their water from Colorado". Well, in my opinion, these people take water for granted. I lived in California for a couple of years so I know how water bills differ in price compared to the Midwest, as well as water rationing for yards. But I have also lived the flip side, having resided in Florida where some neighbors had their sprinkler systems running during a hurricane. Talk about a waste!

The same person also stated in the Sunday paper that Midwestern suburbs were built with big lawns under the assumption of cheap water. So they are meant to be watered. Are you kidding me? Hmmm, I grew up on two acres of land and we had a sprinkler was called rain. If the sprinkler worked the grass was green. If the sprinkler was broken, the grass turned brown, until miraculously it was fixed again. Simple enough, and it didn't cost us an arm and a leg.

So the real problem with these high consumers is ego. They want to have the best looking lawn in the neighborhood at whatever cost. In the case of Woodbury, this means a potential revamp of the entire water infrastructure that could cost millions. Hmmm, I wonder where they are going to get the funds to do that? I guess from all the neighbors who live next to the water hogs.

Monday, June 4, 2007

Your Opinion Counts!

I have been writing on this blog since last year, commenting on taxes, educational issues, Minneapolis market updates, and buying / selling tips. I also recently started a Historic Home tour of Lowry Hill to highlight local architecture. It has been a whirlwind in my head as I think about different topics to write about, scribbling down ideas in the car so I won't forget later.

It's hard to judge just how many readers I have monthly. Some people just stop by to see what the blog is about, but others visit regularly and I am grateful to them.

I would like to know what you, my readers, would like to read more about. Are there any topics that I haven't touched on in which you would be interested in learning about? Please let me know as I want to help my blog, which I put a lot of time and energy into, to be the best it can be.

Now don't be a lurker on this post...let me know your thoughts through comments!

Saturday, June 2, 2007

Got CO2?

Being aware of the Environment around you seems to be the new trend in Minneapolis, especially since the state continually wins awards for being Greener and more environmentally friendly than most other states.

Scientists say that everyone of us produces a certain amount of carbon just by living our daily lives, whether it be breathing, driving, using electricity, or walking the dog. This carbon emission is what leads to greenhouse gases and global warming, according to some scientists.

To see what your carbon emission footprint is for you, your family, and your business, visit It will put you into one of the five categories below. My family came in at "much less than avg" as we use as little energy as possible, and combine our errands into one big trip (instead of multiple trips).

Look for my post in the upcoming week on how to help make your home more "green".