Spring helps MN Real Estate

The warmer temperatures over the past weekend that have continued through this week have done more good than melt snow and ice. The warm spell has brought home buyers out in flocks (in addition to more daylight). If you had been out shopping the Twin Cities real estate market over the past weekend you were probably likely to see others doing the same. Showings on our listings spiked and open house traffic also increased. While this is great news for sellers it can be a downer for buyers. I have experienced more multiple offer situations recently on both sides of the fence either representing buyers or sellers than I have since the early fall of 2008.

What does this mean for buyers?

If you are a an active buyer in this market you should be prepared for multiple offer situations. Especially if you are targeting Minnesota foreclosures and short sales. My buyer clients frequently ask me how they can secure a property when there are so many interested parties. The fact is, there is no magic bullet or one answer for this question. There are many ways to entice a seller to choose your offer, and the situation is different every time. The buyer’s agent has to know what terms the seller really wants, and if the buyer is happy with the terms that buyer will end up with the property. I have a lot of experience dealing with multiple offers with both sellers and buyers. If you would like a few private tips please shoot me an email. Happy Property Searching!

Jesse Grumdahl is a Minneapolis Real Estate Broker and Realtor who is a short sale listing expert in Minnesota (with the #1 Re/Max Team in Minnesota for the last three years) who sharply focuses his energy on short sales and foreclosures in the Twin Cities metro area. Mr. Grumdahl does so with the help of his full-time, in-house staff that will always put his clients’ best interests first and foremost. Jesse can be reached at our contact page or directly at Jesse@BuyMinnesota.com or 612-968-2161.

I was recently out looking with a client who is interested in buying a foreclosed home in a Minneapolis suburb. We came across a one story that made us chuckle (see below left).

Minnesota foreclosure home with puking brick

It appears that the previous owner starting laying brick, and fell asleep halfway through. The brick covered the entire front of the home AND the garage!

My client came up with the clever name of “puking brick,” because while standing in front of the house and garage it really looks like the brick was ill. Or maybe the mortar was trying to escape the mess inside.  The house had not received a “trash out” yet, and every room in this home was dirty and cluttered.

I never know what to expect when I go looking at Minnesota foreclosures with buyers, or while doing BPOs, but it is always entertaining!

If you have ever thought about purchasing a foreclosure or short sale property in Minnesota, you should be aware of city inspections (Time-of-Sale Housing Inspection Ordinances). Many cities in the Minneapolis area require an inspection before the property is sold. There are variations are to when the inspection must occur. Some communities require the inspection to be completed prior to the listing hitting the MLS, while others just require the inspection to be completed prior to closing.

If repairs are needed at a property the city may require escrow funds to ensure that the repairs are completed by the new owner. Please note that some cities may require an escrow amount of 1.5 times the amount of the estimated repairs, and withdrawal stipulations often apply. It is crucial to have a clear understanding of what the property repairs are, what the repairs will cost to fix, what escrow amount is required, what the withdrawal rules are (to pay for the work), and what the time lines for completing the work are. If you are a first time buyer in Minnesota or do not have a large down payment, it is crucial that these questions are answered quickly and accurately. One of the worst things that can happen to a buyer is that he or she will not be able to afford the escrow, lose the earnest money, and not close on his or her dream home. Be an informed buyer!

City and County websites offer more information, and a great resource for is the Minneapolis Association of Realtors® website.

Minneapolis Area Cities that require City Inspections:

• Bloomington
• Brooklyn Park
• Crystal
• Golden Valley
• Hopkins
• Maplewood
• Minneapolis
• New Hope
• Osseo
• Richfield
• St. Louis Park
• St. Paul
• South St. Paul

Jesse Grumdahl is a Minneapolis Real Estate Broker and Realtor who is a short sale listing expert in Minnesota (with the #1 Re/Max Team in Minnesota for the last three years) who sharply focuses his energy on short sale listings in the Twin Cities metro area. Mr. Grumdahl does so with the help of his full-time, in-house staff that will always put his clients’ best interests first and foremost. Jesse’s goal is to get you out of your distressed situation with minimal damage so that you can move on with your life as quickly as possible. Jesse can be reached at our contact page or directly at Jesse@MnShortSale.com or 612-968-2161.

If you are a buyer ready to put an offer on a short sale listing in Minnesota what should you expect your buyer’s agent to ask the listing agent?

The very first step to buying a short sale property - even before one showing - is to be approved to purchase the property non-contingent on selling your current property (if you own one). Purchasing non-contingent means you can buy a MN property without selling the current property you own. Contingent offers are often rejected by short sale listings and REO listings alike. The seller needs the buyer to perform on time, regardless of selling other real estate. The real estate agent representing you as the buyer in Minnesota should acquire answers on the following:

• How many lien holder(s) (or lenders) are we negotiating with?
• At what stage we with in the short sale process in Minnesota?

If the listing agent cannot communicate an answer to these simple questions he or she may not know what is going with the seller(s)’ file. However, that does not mean that agent is not trying to get the property sold. He or she may be using a third party to do the negotiations. If the listing agent is using a third party to negotiate the short sale he or she should express that to the buyer’s agent. The MN Short Sale Team always negotiates the terms of a short sale direct in our local Minneapolis office.

If you submit an offer to the seller(s), what comes next?

If the MN Short Sale Team receives an offer with terms that are acceptable to the seller(s) we will “pend” the listing, collect earnest money, and negotiate final written short sale approval with the bank via a discounted payoff letter. Any offers we receive after executing one become back-up offers should the buyer decide to back out. If the buyer chooses to do an inspection the inspection period begins after written approval of the sale from all lien holders is received. If the property passes inspection and no other issues arise - we close!

Not all Minnesota agents or brokers process short sales like we do, and these are not steadfast rules. If you have questions about buying a short sale home for sale in Minnesota please contact us.

I have had the unfortunate experience too many times of a buyer getting shocked at the closing table, because the cash required to close was higher than anticpated. It is extremely frustrating to everyone in the room as making changes to a buyer’s new loan may take days - not minutes. I highly recommend that every buyer review the good faith estimate (GFE) well in advance of closing (ideally a week). On occasion, this is not possible due to time constraints, but if the buyer asks the loan officer should have everything together. Nichole Fredrickson, an expert with Lakeville homes, wrote a great post about good faith estimates, and why they are so important to home buyers.