Ryan Bretzel

I recently had a friend ask about what to watch for when buying a short sale or foreclosure. Though these properties can be bought at significant discounts there are some risks as well that can be assumed. You don't always know the outcome but at least know the possible risks.

Things to look for when buying short sales:

1. Has there been a sheriff's sale yet, if so you have 6 months to sell the home before it is foreclosed on.

2. If the sheriff's sale was done about 5-6 months ago it is probably not worth writing on.

3. Find out what the sheriff's sale amount was from the sheriff's office. If it is considerably less then the market value then you might be able to redeem the property through the sheriff's deed.

4. Make sure the other agent has done short sales or has a negotiator they work with. If they do not get all the required paperwork into the bank then it is a big waste of time for everyone.

5. Many banks will only allow up to 3% of seller paid closing costs. If the buyer requires more they will have to pay the difference.

Things to look for when buying foreclosures:

1. You will most likely get addendum's back from the bank to sign. These can not be altered and a heavily favored towards the seller/bank.

2. Watch for the "effective date" or "contract date" all important time frames go back to this date.

3. Know when you need to get your inspections done. The buyer may have to pay to have the property de-winterized and or re-winterized

4. Read how taxes and assessments are paid. Many banks are getting the buyer to assume any unpaid assessments.

5. The bank will try and make the buyer use their title company and closer. These owner's policies they provide for using their people are many times not as good, so don't save the money because it is not worth it.

******Special tip regarding Title Insurance******
Old Republic Title, the largest title insurance company in the U.S. is now not insuring certain properties of post-foreclosure REO properties of Ally Bank/GMAC and JP Morgan Chase held for FNMA in the following 23 states: Florida, New York, Ohio, Illinois, Pennsylvania, New Jersey, Connecticut, Hawaii,Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Mexico, North Carolina, South Carolina, North Dakota, South Dakota, Oklahoma, Vermont, and Wisconsin. Please be aware if you are purchasing one of these!!

There is no prohibition on writing title insurance on any other properties with a mortgage foreclosure in the chain of title or on any other properties involving Ally Bank/GMAC or JP Morgan Chase. When issues concerning the foreclosures involving those two lenders are resolved, we expect to insure those transactions, also.

Tax Credit, economy recovering, or both; numbers are numbers and at least they are positive. i was recently reading an article in the Pioneer Press posting the latest numbers from the Minneapolis Area Association of Realtors regarding April 2010's median sale prices compared to April 2009 numbers. The 13 county Twin Cities Metro median home sales price is up 11 percent. The April 2010's median sales price was $169,800 versus a 2009 sales price of $153,000.

Of course the biggest question is are these prices due solely because of the tax credit or other factors? It would be naive to think that the tax credit had no impart. The last week of April's pending sales we up 31% compared to the same time last year. Buyers were hurrying to get the offer accepted before April 30th. Interest rates are still very low, the lowest of the year actually. This time next year will be a great reality check for the economy and real estate market

Chart of Twin Cities and Closest County Stats:

County Closed Sales '10 2010 vs 2009 Median Prices '10 2010 vs 2009

Twin Cities 3,927 17.1% $169,800 11.0%

Anoka 401 22.3% $150,000 4.8%

Dakota 467 22.6% $173,300 8.3%

Hennepin 1,375 9.1% $185,000 14%

Ramsey 527 18.7% $152,000 23%

St. Croix, WI 101 40.3% $166,000 10.9%

Washington 331 49.8% $180,000 -2.3%

Have you ever wondered where the top public schools are in Minnesota or any other state? Well there is an easy website that can help you out. In a recent article I was reading in News Week they have randed the top 1500 U.S. Public High Schools.

In Minnesota there were 28 schools in the top 1500. The top three for Minnesota were: St Louis Park ranked 107th, Edina ranked 111, and Minneapolis' Southwest was 231.

The complete list for 2009 and other years can be found at http://www.newsweek.com/id/201160

Young wealth right here in Minnesota. I was recently reading an article that ranked Scott County number 9 in the US for people of the age 25-34 who are making more than $100,000 annually as a household income! It was amazing to note this as you would think other larger cities would have ranked higher.

Out of the 45,157 residents of Scott County 6.6% (2,975) make up the qualified residents. Below is the list of top 10 US counties. The majority of the young wealth as you can see are in the D.C. area. Interestingly enough, Scott County is the fastest growing county in Minnesota.

1. Loudoun County, Virginia (D.C. metro area)
2. Arlington County, Virginia (D.C. metro area)
3. San Francisco County, California
4. New York County, New York
5. Douglas County, Colorado
6. Forsyth County, Georgia
7. Alexandria City, Virginia (D.C. metro area)
8. Delaware County, Ohio
9. Scott County, Minnesota
10. Broomfield County, Colorado

For the full article please visit: http://channels.isp.netscape.com/homerealestate/package.jsp?name=fte/youngandrich/youngandrich

Twin Cities Market Report for the Week of October 5, 2009

New Listings This Week: 1,725 (one year ago 1,725) 0.0%

Active Listings This Week: 24,503 (one year ago 30,873) -20.6%

Pending Sales This Week: 1,056 (one year ago 749) +41.0%

Days on Market: Aug 2009 (133 days), Aug 2008 (143 days)

Percent of Original List Price Received at Sale: Aug 2009 (94.1%) Aug 2008 (92.7%)

Months of Supply: Aug 2009 (6.9) Aug 2008 (9.9)

Closed Sales: Aug 2009 (4,572) Aug 2008 (3,992)

Median Sales Price: Aug 2009 ($175,000) Aug 2008 ($200,000)

Average Sales Price: Aug 2009 ($208,022) Aug 2008 ($241,096)

*Data collected from Regional Multiple Listing Service for residential properties in the 13 county region.