First-Time Home Buyer Tax Credit

It’s a great time to buy a Minneapolis house.  I know, I’ve said this several times before, but I really want to emphasize the point.  Interest rates are at an all-time low, and even better, the government wants to help first-time home buyers with a tax credit.  Here’s the deal.

If you have bought a new home on or after April 9, 2008, or are thinking of buying a new one, you have until July 1, 2009 to make your purchase if you want to qualify for the tax credit.  A first-time homebuyer is defined as someone who has not purchased a primary residential home in the past three years.  If you are married and are applying for the tax credit, then the ownership histories of both spouses are taken into account. 

You apply for the credit when you file your taxes, and the maximum credit for an individual is $7,500–$15,000 for a couple.  First, the money pays off your taxes, then you get, in hand, the remainder of the money.  Most people pay off their taxes, so if that’s you, you get the full amount.

You get the money in hand now, but it will have to be repaid to the government over a period of years.  Yes, it acts like a 0% interest-loan, but it’s a tax credit because it’s affixed to your taxes.  In a nutshell, you get 10% of the purchase price with a cap at $7,500 for individuals and $15,000 for married couples. 

This is just the bare-bones basics.  If you have questions or want to read more in depth, visit the website, http://www.federalhousingtaxcredit.com, for a more comprehensive view of the program.  Take a look and see if it’s time to buy your first home!

House Abbreviations

Real Estate Abbreviations

When advertising houses for sale, there are plenty of standard abbreviations and some not so standard abbreviations. Then there are those that even other Realtors can’t figure out. In this blog entry, we’ll look at some actual MLS entries. Some abbreviations look just like those cryptic singles ads. I can just see the next house ad:

SF, looking for s.o. that is willing to put time into new rel., must have steady income to qualify. Close to lake for long walks on the beach. Pic for pic.

It’s easy to create the standard abbreviations found in typical real estate ads. Just drop all the vowels and call it good. Let’s give it a try:

Great location close to lake with 3 bedrooms, 2 bathrooms, fantastic master suite.
Becomes
Grt lctn cls to lk, w/ 3br, 2bth, fntstc mstr ste.

Uncommon Abbreviations

Most of the common abbreviations are easy to figure out. Let’s take a look at some harder ones. Here are some actual Public Remarks from the MLS along with my translation of what it actually means:

Sample MLS Abbreviations #1

ENJOY YOUR PRIVATE VIEWS OF MINNEHAHA CRK FROM YOUR LIV RM! INCREDIBLE OPPORTUNITY.BEAUTIFUL HWFS,FP,MAC IMPROVED.NEW: UPPER LVL INSULATION & CARPET,KIT FLRS & PAINT.UPDATED 4 SEAS PORCH.FAM RM CALLED FINISHED-CARPET,PAINTED BLK,FIN’D CEILING.VERIFY MSMTS

Here’s your opportunity to sandbag every spring when the snow melts because the creek is so close and will spill over each year. Beautiful hardwood floors, beautiful fireplace, beautiful MAC improvements. New upper level insulation (lower level has old insulation), new carpet and kitchen floors, and paint. Updated 4 season porch. Family room is included in the finished square footage, even though the ceiling is just open rafters that have been painted black. Verify measurements.

Sample MLS Abbreviations #2

Low-Traffic Street. Benches/Paths w/New (Old-Style) Street Lights. EZ to Show/QUICK CLOSE/NO R&R’s/Newer Roof/Boiler/Mechs – Much Copper-100 amp C/B’s – Att Gar+Off-St Park. HS TAX = $2,137 /// $$$$$ Reduced July 07 + 1-Year Warranty w/full price offer

Street is low traffic and has benches and walking paths with new street lights. Easy to set up appointment. No city required repairs / replacements, newer roof, boiler, and water heater, most of the plumbing is copper, some of it may still be galvanized, electrical has been upgraded to 100A circuit breaker box.

Sample MLS Abbreviations #3

FRESH PAINT AND POTTERY BARN LOOK. FEATURES INCLUDE COVE CEILINGS, BRICK FIREPLACE, BUILT-IN BOOK CASES, FORMAL D.R., SS APPL. IN KITCHEN, FIRST FLOOR F.R. WITH F.P., DEN, 3/4 BATH UP, NICE LANDSCAPING,WIHT PATIO, HOME HAS BEEN MAC, LOC. IS DEAL.

Contemporary colors, formal dining room, stainless steel appliances in the kitchen, first floor family room with fire place, separate den, ¾ bathroom upstairs, nice landscaping with patio … location is ideal.

Sample MLS Abbreviations #4

Upscale n’hood steps from Diamond Lk. Walk/bike trails, fun in the water. Kitchen updated w/cherry/granite/stainless. 2 fp, formal Living/dining, hdwd, main flr BR & full bath, hot tub, private mstr bath, fenced yd, 2 car garage. Convenient location.

Upscale neighborhood, close to Diamond Lake. Walking and biking trails. Unexpected fun in the water because the timer on the sprinkler system is broken. Cherry cabinets with granite counters and stainless steel appliances. This home has 2 fireplaces, a formal living room and a formal dining room. Hardwood floors. Main floor bedroom and full bath. Private master bath. Fenced yard.

Sample MLS Abbreviations #5

WOW! Such attention to detail – your buyer will certainly appreciate all that has been done to this home! From the hand made breadboard to the thoughtful wiring to the efficiency measures implemented, this home is for the prudent home buyer!

I’m not even sure what thoughtful wiring means.

When in doubt, use your imagination as to what each one means. Or just adding some vowels back in.

Advertising Words Translation Matrix

House Advertising Words

You know how some real estate agents have a knack for describing homes in glorious and grand ways? Well, sometimes the words are a slight exaggeration of the actual home. In our industry, we call that puffery. Here’s a list of some common terms used in advertising and what they really mean.  If you come across some that are not on the list, please drop us a note. We’ll add it.

Adorable – The shutters are worth more than the furnace
Charming – compared to the one right next door
Cozy – means that it’s really small
Fantastic upper level master suite with walkthrough closet- someone stuffed a sink into the far side of the closet which you can reach when you open the closet door. And remember, just because the upper level is “fantastic,” the lower level may be somewhat less than fantastic.
New paint – it’s amazing how far $5 per gallon paint goes
New carpet – covering up the scratched hardwood floors
Must see! – Driving by, one can’t help but see orange and purple!
Close to Park – SO close that you’ll never find a parking spot
Pedestal Sink – one of the legs fell off, leaving just one leg left.
Peaceful backyard– because 36,000 cars drive by the front yard each day.
Professionally remodeled – the owner and their siblings didn’t do the work, the neighbor’s sister’s husband’s son did.
Movable center island – the kids ran into it so many times it came loose.
Quaint – it’s pink!
Steps to the lake – 2510 to be exact!
Steps to the creek – be ready to sandbag the front yard each spring.
On golf course – high insurance for broken windows
Across the street from golf course – high insurance for broken windows
Across the freeway from the golf course – fun watching cars dodge golf balls which then bounce off the cars and break your windows. May look like hail damage though. Call the insurance adjuster.

3 Fixer Upper Considerations

Fixer Uppers

I have a client that is looking for a fixer-upper house in Minneapolis. This client wants to purchase a house, fix it up, and then sell it for a profit. I’m going to share some insights on some of the considerations that go into buying a fixer-upper home. 

Location

1. One consideration to keep in mind is location. You want to select a location that has houses that sell in a wide price range. For instance, you want to purchase a home that is well below the average price of other houses in the area. Find a neighborhood that has homes that sell in the $120k price range as well as the $200k price range. That leaves room for the cost of improvements, as well as profit.

Number of Sales

2. A second consideration is the number of sales in the higher price bracket. In the above example, you’ll want to see how many houses sold at about $200k within the past 6 months. If there is only 1 sale in the past 6 months, but there are a bunch of houses currently available, that may indicate a difficult sale. On the other hand, if there are 15 sales around $200k, then the house will have an easier time selling.

Level of Improvements

3. A third consideration is the level and quality of improvements. You want to aim for the middle of that neighborhood’s price range to have access to the most buyers. Don’t overimprove which could put your house into a higher bracket than the average, which then would put the house into a bracket with less buyers.

Are You Ready to Buy a Home?

Factors to Consider Before Purchasing a Minneapolis Home

There are many factors in determining where or when you buy your first home, but first ask yourself these questions:

Do you have a steady source of income (usually a job)?

Have you been employed on a regular basis for the last 2-3 years?

Is your current income reliable?

Do you have a good record of paying your bills on time?

Do you have few outstanding long-term debts, like car payments?

Do you have money saved up for a down payment?

Do you have the ability to pay a mortgage every month, along with taxes, insurance, and utilities?

If you can answer “YES” to these questions, you are probably ready to buy your own home.

Green Home Guide

Everybody is talking green, and by green, I don’t mean money. Green is in. It’s the latest thing.

The government has gotten into the act by forming ENERGY STAR, a joint program of the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy.  This program rates different appliances, office equipment, home electronics and more (there are over 50 categories total) to identify the most efficient of them all.  If an item has rated an ENERGY STAR, you can be assured that it has met strict guidelines for energy efficiency. 

For example, an ENERGY STAR dishwater are at least 25% more efficient that contemporary conventional models.  In addition, an ENERGY STAR clothes washer cuts watery and energy consumption by over 40% as well. 

I found these statistics in the RE/MAX-published Green Home Guide which also has useful tips on how to make your home more green, and best of all, it’s free for the asking.  The guide is clear, concise, and full of practical advice that anyone can follow.

This guide includes:

• What is a Green Home?
• 5 Essential Things to Keep in Mind
• Green Return On Investment
• And more….

Just send me an e-mail and I’ll send you a pdf.

Smart Buyer Guide

Many times, searching for the perfect house seems to be a daunting task.  There are so many things to consider, including location, surrounding environs, not to mention features of the house.  With all these thoughts racing through your head, it’s easy to overlook one salient fact or another. 

The first thing to do is make a list of what is absolutely nonnegotiable to you as a buyer, what you are willing to negotiate on, and what doesn’t matter as much to you.  Not only will it give you a clearer picture of what you want in a house, it will make your dream seem more concrete. 

This is just one tip available in the RE/MAX Smart Buyer Guide, which is free for the asking. I have several hard copies left, as well as a pdf version. Just let me know which you would like to have.

There are also other helpful hints such as wearing comfortable clothing and sturdy shoes to go looking at houses.  It seems like common sense once you hear it, but it’s not necessarily something one would think of beforehand.

This short guide includes:

• House Hunting Tips
• 20 Questions for Picking the Perfect Neighborhood
• Mortgage Myths
• 10 Simple Steps to House Buying
• And more….

Request your copy today.

How’s THAT going?

When I meet people for the first time, they usually ask THE question when I mention that I’m in real estate. The question: “How’s THAT going?” or “Isn’t that a tough business?” or “Isn’t it hard to sell homes right now?” or somthing else to the effect.  Frankly, the real estate market is not as bad as the press makes it out to be. We’ve seen an up-tick in the amount of house showings, as well as houses that go pending. I got quite a bit of interest for one particular house with the on-line marketing model that I use. In fact, that house sold in 2 weeks. Of course, it was priced right, staged nicely, and showed well.

The market isn’t really that bad right now. It certainly isn’t as robust as previous years, but houses still sell. People still buy. Real estate transactions still take place. Business goes on.

Difference between Short Sale and Foreclosure

What’s the difference between a Short Sale and a Foreclosure?

A Short Sale is when the homeowner owes more than the property is worth, and cannot pay back the difference. They are short of full payoff. Here’s an example: Let’s say the homeowner buys a house for $200,000, with a primary mortgage of $160,000, and a secondary mortgage of $40,000. 2 years later, they need to sell the house but the values have dropped. Now the house is worth $170,000. If they put the house on the market at $200,000, they will get no buyers interested in the house and no offers. If they put the house on the market at $170,000, they will have to bring $30,000 to sell the house, or see if the bank would take less for the house than the full mortgage (a short sale).

The word Foreclosure can mean a couple of different things, depending on when in the foreclosure process that particular house is in. If a house is “in foreclosure” that usually means that they were served a notice of intent to foreclose. This is usually the period of the notice up to the sheriff sale. The redemption period is after the sheriff sale and before the bank takes the house back. This period is called the “redemption period” or “6 month right of redemption period” or usually “in foreclosure”.

After the bank takes the property back, it is called “foreclosed” or “bank owned” or “reo”, which stands for Real Estate Owned.

To sum it up, a short sale is when the seller owes more than what the house could sell for, and cannot come up with the difference, and a foreclosure is when the seller is delinquent on payments. A house can be be both a short sale and in foreclosure at the same time as well.

How to find out more information on a property

If you are looking at a specific house, and want to find out more information than what is on the MLS system, there are free resources that will allow you to find out things such as structure information, assessments, whether the property is in foreclosure, and more. This is public information, and much of it is available on the internet.

For a house in Minneapolis, the city’s website has lots of information based on county records, as well as assessor records. The Minneapolis property information website has the following categories: 1. Structure information (bedrooms, baths, sq ft, foundation), 2: Permits / Inspections (when they were pulled, and what they were for), 3: Business License information, 4: Truth In Sale Of Housing (TISH) Inspection reports. If the house is currently on the market, there should be a TISH report online. Minneapolis requires it.

Hennepin County Property Information has all the tax information about a house (or property), as well as a map that will show the lot lines, acreage, aerial photos and more. Hennepin County also has a Foreclosure page, where you can look up if a house is in foreclosure. This information will include the date of the sheriff sale, the redemption date, and the amount of the sale. Read more

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