Because buying Minneapolis real estate is one of the most important and expensive purchases you’ll ever make, it’s worth the time to consider ways you can save money. Here are a few ideas on how to save money on your mortgage and closing costs:
Pay Attention
You have to pay attention to how much the Minneapolis real estate costs. You have to pay attention to how much the loft is worth and how much more you may have to put in the kitty for any repairs that may need to be done. Use these details to negotiate.
Negotiate with the Seller
Negotiating with the seller is expected. You already know you can negotiate on the price of the condo, but did you know you can also negotiate who pays the closing costs? In this buyer’s market, it has become common to ask the seller to pay some or all of the closing costs when you purchase a condo. Be careful with your negotiations. Many sellers will up the price of the condo, if you ask for them to pay closing costs.
Negotiate with your Lender
Negotiating with your lender has become the new norm. In fact, depending on the lender’s Good Faith Estimate and your credit standing, negotiating for a better deal on your mortgage could save you thousands in the long run.
Examine the Good Faith Estimate
A Good Faith Estimate is the estimated settlement costs, or closing costs, your lender will expect you to pay. These can add up to as little as 3% and as much as 5% of the sales price. However, as the name implies, it is only an estimate, and prices are subject to change.
Carefully read your Good Faith Estimate. While some closing costs are usual, such as title insurance, others can be dropped by opting out of a service. Still others are “junk fees,” which you can negotiate for.
When buying Minneapolis real estate, you always want the best deal you can get. The same should be said when picking a mortgage lender. Pay attention to the good faith estimate. In fact, get one from several lenders and compare them. Don’t let the excitement of buying a condo override your good business sense.
Consider Rolling Closing Costs into your Loan
Many new condo owners roll their closing costs into the loan. However, if there’s a way to pay them at closing, it might be better to do so. Paying them now saves you money because spreading them throughout the life of the loan means shelling out more interest.
If you’re looking for a great deal on an even better condo, let me negotiate for you. Call me at 612.877.1676 or email me at ben@cityoflofts.com for more information.
The FHA, or Federal Housing Administration, has helped many a condo owner buy a Minneapolis condo for sale by providing mortgage insurance through FHA-approved lenders. However, a change in policy, announced in January, may make it harder for those with poor credit.
Before we talk about FHA’s change in policy, let’s cover a few of the basics about the FHA and how it might help you buy a Minneapolis condo for sale.
What is the FHA?
The FHA is a government agency that provides mortgage insurance to approved lending institutions. It assists condo buyers by providing mortgage insurance to lenders to cover most losses that may occur when a borrower defaults. This encourages lenders to make loans to borrowers who might otherwise not be able to get a loan.
What is an FHA Loan?
An FHA loan is a loan provided by an FHA-approved lenderand insured by the FHA. In other words, the FHA guarantees that a lender won’t have to write off a loan if the borrower defaults – the FHA will pay. Because of this guarantee, lenders are willing to make mortgage loans.
An FHA loan might help you get a mortgage by providing:
•Lower down payments
•Lower closing costs
•Easier credit qualifications
Now let’s talk about the changes FHA is making…
The Future of FHA Loans
Until recently, the FHA has managed to weather the real estate turmoil rather well. In fact, the turbulence surrounding other lenders had potential condo buyers flocking to take advantage of FHA loans. However, even FHA’s bank account is starting to suffer. In order to shore up capital reserves and keep 34 million families in their condos, the FHA is changing the rules.
Before the changes, borrowers were required to pay a down payment of 3.5% of the cost of the condo. Now, borrowers with a credit rating below 580 will be required to pay at least a 10% down payment. As well, the good upfront mortgage insurance premiums of 1.75% are increasing to 2.25%. The FHA is now trying to get Congress’ approval to raise the annual premiums from 0.55%, although the amount it will seek is still unknown.
What This Means for You
If you’re interested in buying a Minneapolis condo for sale or Minneapolis loft for sale, but haven’t because you’re waiting for the market to bottom out, you may end up losing out on a great deal. With almost record low mortgage rates, condo values lower than they’ve been for eight years, the first-time and upgrade condo buyer tax credits and a wide selection of condos and lofts, there may never be a better time to buy.
Whether you want to use an FHA loan or a traditional loan, I can help you cash in on this great buyer’s market. Call me today at 612.877.1676 or email me at ben@cityoflofts.com
Last November, when Congress approved an extension on the first-time condo buyer tax credit, potential condo buyers who missed the original deadline were excited. It was another chance to buy a Minneapolis condo for sale or Minneapolis loft for sale and receive an often badly needed $8,000 on their tax return.
Real estate agents were excited as well, because the tax credit extension expanded to include “upgrade” buyers – those who wanted to replace their current condo with a bigger one. The possibility of selling a condo was higher than it’d been in a while. However, expansion to include upgrade buyers wasn’t the only change.
If you’re hoping to buy a Minneapolis condo for sale and take advantage of the tax credit before the new 2010 deadlines, here are a few things to keep in mind:
•Two dates are crucial. You must sign a contract before April 30. The closings must be complete by June 30. One of the best ways to make sure things go smoothly is to get pre-approved for a mortgage before you go condo shopping. Pre-approval tells you, as well as the seller, exactly how much condo you can afford. This way, you don’t waste your time or the seller’s.
•Negotiate without emotion. Potential buyers have lost the condo of their dreams because they became competitive. If you’re negotiating for closing costs, housing price or anything else, make sure that your requests are reasonable. Don’t change something “just because.”
•Taxes must be mailed in. Due to people trying to scam the system, you won’t be able to file your taxes electronically; you’ll have to mail them in. Make sure you’re using the right forms, and, if you need your tax refund by a specific time, you might want to file early.
•Documentation is truly priceless. Again, thanks to scammers, buyers will have to include a signed mortgage statement, proof of residency and a driver’s license with their taxes.
You still have until April 30 to sign a contract on a Minneapolis condo for sale or Minneapolis loft for sale to get the tax credit. Today’s real estate market is beneficial for buyers. Put it to work for you!
If you’d like to take advantage of the condo buyer tax credit, I can help. Call me right away at 612.877.1676 or email me at ben@cityoflofts.com so we can beat the deadlines.
New Years has just turned the corner, and for many with Minneapolis condos for sale, it’s the perfect time still to make some resolutions. Let’s be expansive, though, shall we? Don’t say, “I will sell my loft by May.” We can be more specific than that. Here’s a short list of resolutions that might help you take that home off the sales shelf:
1.Resolve to look over the competition. Not just one or two of the Minneapolis condos for sale, but ten or eleven. Look at them with the buyer’s mindset. What selling points do they have? What negative points do they have? Your goal should be to outshine the competition. You can’t do that if you don’t know what the competition is.
2.Resolve to do a little home improvement. These don’t have to be big projects. Your project could be as simple as adding a few bushes for better curb appeal. You don’t have to spend a lot of money or a huge amount of time for the home improvement to count. What you do have to do, however, is make the improvement count. In other words, don’t forget to walk buyers past whatever you’ve decided to do, or tell your real estate agent about it.
3.Resolve to check with your agent about the state of your home. Not when they think it will sell, but what you can do to up the value. Remember, “value” is a relative term. Upping the value for buyers may be as simple as cutting $5,000 off your price.
4.Resolve to be calm if a buyer suggests a lower price than you want. Consider the options fully – don’t just snap his or her nose off. Can you afford to let the loft go at the offered price? If you can and still want to say no, think about it… how long did it take to get this potential buyer? Can you afford to wait longer?
If you have one of the Minneapolis condos for sale, keep in mind that it’s just one of the condos for sale. You have an amazing amount of competition; not just here, but around the nation. Take a chance to do something a little different. Your New Years may turn out to be even happier than you expected!
If you’re looking for unique ways to sell your home, I can help. Call me at 612.877.1676 or email me at ben@cityoflofts.com for more information
Consumer Reports surveyed over 17,000 readers on the state of their home improvement projects. The results of the home improvement survey point out that you should definitely do your homework before doing the home improvement on your Minneapolis real estate.
Over half of those surveyed went at least $2,000 over budget for room additions. On basement finishing, 56% spent $1,350 over budget. Kitchen remodeling also had 56% going over budget, by $1,200. Lastly, 45% went over budget by $700 on deck additions. What was the reason? Surprisingly, they all had similar reasons:
•Plan adjustments
•Underestimated labor
•Increased cost of materials
•Special tools needed
•Unexpected system upgrades
If you plan to remodel your Minneapolis real estate in the near future, keep these tips in mind so your home improvement goes as planned:
•Do your research – Factor in delivery and removal fees. Make sure you know which products the contractor should have and plan ahead.
•Don’t deviate – Once you have a well-developed remodeling plan, don’t deviate from it. Those who did ended up going anywhere from $2,000 to $10,000 over budget.
•Check the contract – Make sure your contractor’s contract has a set amount for materials. Some have open-ended amounts, which makes it quite easy to go over budget. Read the contract before you sign it!
•Check up on the remodeling contractor– Get the referrals and then put them to work. In other words, don’t just get a list of numbers and names, and then forget to check up on the contractor. Follow through and make sure the contractor is a good one.
A little remodeling can go a long way in helping you sell your Minneapolis real estate. Just make sure you know what you’re doing before you hire anyone to do it!
If you’re trying to sell your home, or looking for a great home to buy, I can help. Call me at 612.877.1676 or email me at ben@cityoflofts.com for more information.
Lots of people think about ways to save the environment in a physical manner such as changing light bulbs from incandescent to florescent and recycling, but many drop the ball when it comes to cleaning their Minneapolis condo. Keeping your condo clean in a way that is healthy to you, your family, and the environment just takes a little extra thought and soon becomes second nature.
Danger, Danger
Get rid of any products under your sink, in your bathroom, or your cleaning closet that have danger cautions. If they are bad for you, they are probably bad for the environment too, and why have such hazardous materials in your Minneapolis condo?
Labels that have cautions such as poison, hazard, and danger on them are not only bad to have around small children, the toxins leak into the air when you use them causing health problems for your family. They also leech into the environment when you use them and are hazardous for the environment.
Re-usable and Natural
Buy mop heads and sponges made from natural materials that are bio-degradable and replenishable. Check for recycled materials labels on paper towels, toilet paper, and other disposable objects so that you know those products are making the best use of production materials.
Conserve
Use as little water as possible when doing dishes by turning off the faucet while you are washing and only using running water when you are ready to rinse. Don’t just think about conservation when cleaning your condo. Turn off the faucet while you are brushing your teeth as well for extra savings. Remove your shoes or put a rug by the entry doors of your condo to help cut down the need to wash floors.
Bring in the Green
Bring nature into your Minneapolis condo in the form of hanging and potted plants. Plants clean the air around you and take in harmful carbon dioxide in the air.
Want top buy a clean, green condo? Let me help. Contact me today at 612.877.1676 or email me at ben@cityoflofts.com.
Oh, the dreaded/happy DOM question. “How long has this house been up for sale?” If it’s your Minneapolis condo for sale we’re talking about, you’re probably wondering about the split “dreaded/happy” bit. For that matter, whether you’re a buyer or a seller, you’re probably asking, “what the heck is ‘DOM’?”
Days On Market
“DOM” is the shortened industry term for Days on Market, used by the multiple listing services(MLS). It’s exactly what it sounds like: the number of days your Minneapolis condo for sale has been on the market. This metric covers the time it actually goes on sale to the time the deal is closed.
Why Is DOM Important?
Remember the “dreaded/happy” part at the beginning of this article? As a buyer’s agent, I might gleefully answer, “Fifty days.” I say “gleefully”, because a house that has sat on the market for a long time is a good thing for my client. The seller is probably more eager to sell than a month before, and is most likely willing to work a deal. An eager seller makes a happy buyer in most cases.
On the other hand, as a seller’s agent, I might not be so happy about it, and for the same reason. My seller is now an eager seller. I want to get the best deal for my client, but I know the buyer has the upper hand. It is then up to me to help my client get the condo sold without giving away the barn, the pool, the tool shed and the tools.
Already, you may be beginning to understand how the Days on Market metric can affect the sale of your condo.
The problem with the DOM metric is that it causes buyers and agents to build false assumptions. If a condo has been on the market for an above-average length of time, we start to wonder, “What’s the matter with that listing?” Even though I know there are other reasons for a condo to go static and not sell, many people automatically think there’s something wrong.
Although you can’t force a Minneapolis loft or condo to sell, you do have control over some of the reasons for an extended DOM metric:
•The condo may be overpriced – Nothing is wrong with the property itself; it’s just priced too high.
•Testing the market – Although it’s a big mistake and agents will tell you so, some sellers test the market by throwing a high price on a condo they don’t care if they sell – just to see if somebody is foolish enough to take it.
•Sticking to your guns – Often, sellers get fixed on a price and won’t budge, come hell or high water. They figure they can wait around until the market can meet their price, not the other way around.
•Renovations – Sometimes, a condo will go on the market in the middle of renovations. The sellers aren’t ready to let the condo be seen, so it just sits there.
•Availability – A growing problem is the lack of access to a Minneapolis condo for sale. Sadly, agents and FSBOsalike seem to be unavailable when a buyer wants to view the condo. Obviously, no viewing means no sale.
Don’t let your DOM get high because of simple mistakes. If you’re serious about selling your condo, remember the five reasons above and make sure you aren’t doing them.
If you’re ready to sell your condo with a professional who understands how to keep the DOM to a minimum, give me a call today at 612.877.1676 or email me at ben@cityoflofts.com.
It’s in the news and has been for several months now; financial institutions may be holding back their inventory of Minneapolis foreclosures and national foreclosures.Why on earth would they do that?
For those of you who are wondering what would cause lenders to hold back on listing Minneapolis foreclosures, here’s a little information that might enlighten:
April 2009, the San Francisco Chronicle published a news article about the state of foreclosed homes. In the article, Rick Sharga, vice president of RealtyTrac said, “We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market.” With an already glutted market, imagine what would happen to real estate if those 600,000 foreclosed properties flooded the market further.
October 2009, CNN Money.com stated in an article, “Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter, according to a report issued Thursday.” According to the report, one in every 136 homes – a staggering 937,840 homes - were in foreclosure.
Financial institutions know that the foreclosures could cause a severe drop in the average price of housing. Should prices fall farther, faster, lenders would not be able to recoup their losses.
Some may be holding a few properties back for a “rainy day” – for when the prices start to rise again.
Even though lending institutions are holding back on some of their inventory of Minneapolis foreclosures, there are still some great deals to be found.
If you’d like to find a great deal on a foreclosed Minneapolis property (including Minneapolis lofts and or condos), I can help. Call me now at 612.877.1676 or email me at ben@cityoflofts.com for more information.
Those with Minneapolis condos or lofts for sale are buckling down for the long haul, but exactly how long will that be? I spent a little bit of time roaming the Internet to get the general “feel” from people on the housing market. It turns out that the answer all depends on who you ask…
Housing Predictor
Housing Predictor.com says, yes, the housing market appears to be making a rebound. However, that rebound, says economist, John Hines, is a false front. The government is pushing the rise in sales to make the housing markets look good and increase buyer confidence. Will the market ever get back on track? According to Hines, if Congress can get the lending pipeline going again, we might finally see a bottom around the third quarter of next year.
The Ledger
According to an article at The Ledger, Stephen Blank of the Urban Land Institute isn’t at all optimistic. Blank says there’s no quick fix, and that 2010 will be sobering. While the housing market is being helped by various factors, the foreclosure rate probably isn’t going to drop and lenders aren’t lending. Blank worries that financing may be lacking, even for those wanting to buy. He doesn’t see the market doing much for another year.
CBS Money Watch
The best article I’ve come across so far, however, was written back in June at CBS MoneyWatch. The article says give the market at least seven years to recover. The author doesn’t just quote doom and gloom, however. She has some great points for people with Minneapolis condos for sale. I highly recommend the read, but here is the quote that stuck firmly in my mind:
“If you are a seller, get realistic about what you can get for your condo or loft. With so little upside in the foreseeable future, you may be better off to sell, even at a loss, since you can probably get back into a similar property at a lower price and very low interest rates.”
It’s a buyer’s market; the supply of empty homes is much higher than the demand for them. If you have one of the Minneapolis lofts for sale and it’s not selling, you may need to change your mindset a little. In this buyer’s market, sellers may just have to bite the bullet.
Ready to buy or sell? I can help. Give me a call today at 612.877.1676 or email me at ben@cityoflofts.com.
A recent interview with FHA commissioner David Stevens on CNBC gives hope to Minneapolis real estate owners with FHA loans. The Federal Housing Administration now covers at least 30% of new home loans, so when Stevens announced that it might not make its 2% capital reserve, people were understandably nervous. For no reason, Stevens says in the CNBC interview.
Instead of immediate risk management in the form of strict guidelines that might make it harder on potential Minneapolis real estate owners, such as those Fannie Mae and Freddie Mac have put on condo mortgages, the FHA is going for some changes. The changes include hiring a chief risk officer and requiring higher capital standards for loan originators.
Once it was out that the FHA wouldn’t meet its 2% (please note that the FHA itself is the one who broke the news), news portals, blogs and other websites spread the news that the FHA was a train wreck. However, the CNBC interview with Stevens cleared the air a bit.
It appears that the FHA, put in place for instances like this when people can’t afford other loans, actually has two capital accounts. According to Stevens, the FHA has “lots of capital in primary reserve to cover expected defaults.” Combined, FHA capital is over $30 billion dollars.
At the present, says Stevens, the FHA isn’t considering a minimum credit score, and they may not have to. Looking at their portfolio, the average credit score has gone up 60 points, from 630 to 690, pointing to a higher quality of borrowers.
So, when thinking about buying Minneapolis real estate and looking at mortgage companies, don’t forget to look at the FHA. If Fannie Mae and Freddie Mac are lending, the FHA is – and it’s going strong!
You can watch the CNBC video for the full interview.
If you’re looking for a beautiful home, I can help. Call me now at 612.877.1676 or email me at ben@cityoflofts.com for more information.
