Download file - The Tangen Report for the 2nd Quarter 2008.

If you would like to view previous Tangen reports, visit http://stcloudedina.com/blog/the_tangen_report/.

If you would like me to break down the statistics for your specific neighborhood or area in Central MN, please post your request here for everyone to see and use in the future.

Jason Tangen, GRI - Real Estate Broker Associate with Edina Realty in St Cloud

www.StCloudEdina.com - Get a free list of foreclosed properties on the St Cloud MLS

One of Bill Pennings' biggest strengths as a home mortgage consultant is his knowledge of military moves and VA loans.  Bill is a military certified lender through Wells Fargo Home Mortgage and can assist you in all aspects of transfers as active duty or moving the home front as a veteran.  As a veteran myself, it is good to have someone who knows the ins and outs of the VA system when it comes to buying a home.  For those of you who are veterans out there, you know what I'm talking about when I say the VA can be a little difficult to understand and get things accomplished through sometimes.

If you would like to learn more about Bill Pennings and the work he does at Wells Fargo Home Mortgage in their downtown St Cloud location (The Wells Fargo Building), visit his website at https://www.wfhm.com/wfhm/bill-pennings/about.page.

Jason Tangen, GRI - Real Estate Broker Associate with Edina Realty in St Cloud, MN

E-Mail:  jason@stcloudedina.com

Phone:  (320) 492-2667

www.StCloudEdina.com - Search real estate in St Cloud MN and surrounding areas.

Dan was party to the worst real estate transaction I have had to date.  I won't go into details here because I would probably start to interfere with the "don't speak poorly of other agents/offices" clause in the real estate professionals' handbook.  Sufficed to say, the closing was over one full month after the original closing date and both buyer and seller were highly aggravated.  Dan was very soothing to my buyers, willing to set them at ease through several sticky situations, and he also came to the table with several great ideas of other avenues that would keep both buyer and seller happy throughout the transaction.

If would like to learn more about Daniel Stolt or Bremer Bank in St Cloud MN, visit Dan's website at http://www.bremer.com/Home/Personal/MortgageLender.aspx?id=361.

Jason Tangen, GRI - Real Estate Broker Associate with Edina Realty in St Cloud MN

www.StCloudEdina.com - Get a free list of foreclosed properties in Central MN

www.StCloudEdina.com/blog - REAL ANSWERS for REAL ESTATE in St Cloud MN

I have had several of your clients that I have recommended to work with a professional to help fix their credit. It's surprising how many consumers make the same credit scoring mistakes over and over again. In an effort to educate your clients on credit and credit scoring, I've compiled 5 common credit scoring mistakes into a list that defines each mistake and explains why they are bad and how to avoid them:

Credit Mistake #1: Closing Credit Cards Accounts


This is probably THE biggest credit mistake that consumers make. What you may find surprising is that closing credit card accounts can hurt your credit score almost as badly as missing a payment.

Not only is this the number one on the top five credit scoring mistakes, it's also number one on the list of credit myths.

Ironically, most consumers make this mistake based on poor advice from a mortgage lender as a strategy for improving their credit scores. A word of advice people, when you're dealing with something as sensitive as your credit and credit scores, make sure you do your homework before trusting some of these so called 'industry experts' before following through with their advice.

There are two important reasons why you should not close credit card accounts:

1. Eventually, the accounts will fall off of your credit reports - The information in your credit reports are subject to certain rules in regards to how long it can remain in the report. In most cases, credit information will remain in your credit reports for seven years from the account's DLA or date of last activity.

When an account is open, the DLA will continue to update each month and the open account will never reach that seven-year mark.

If you close the account, the DLA will stop updating and the clock will start ticking. Eventually the account will be completely removed from your credit reports.

Why would this be a bad thing?

It's simple - you never want to get rid of old, positive information in your credit reports. This information actually helps your credit scores.

Credit scores want to see this positive account information. They want to see your long, perfect history of making your payments on time because this information significantly helps your credit scores.

This information significantly helps your credit scores so why would you ever want that history to disappear? You wouldn't! Here's an analogy for you: let's say you made straight A's in high school. What if the record of that perfect scholastic accomplishment were permanently deleted seven years after you graduated? Would you ever want that history deleted? Of course you wouldn't. The same is true for the credit reporting environment.

So, what should you do with old credit cards that you don't use any longer?

What you don't want to do is to let the account become inactive. When this happens, the credit card companies aren't generating any revenue for your account.

Eventually they'll close the unused account because you're more of a liability than an asset. You can prevent this from happening by using the card every few months for low dollar purchases like dinner or a tank of gas.

When the bill comes in, just pay it in full. If you do this, it will ensure that the account will never be closed and you'll always get credit for your good payment history.

2. You could cause a spike in your revolving utilization and tank your scores - The percentage of your available credit in comparison to the debt you owe is a very important factor in calculating your credit scores.

This is often called "revolving utilization," or your debt-to-limit ratio.

For example, if you have an open credit card with a $1,000 credit limit and a $500 balance then you are using 50% of your available credit. This means that you are 50% utilized on this particular credit card.

Now lets add a second credit card to the mix.

Let's say you have another open, but unused credit card account with a $1,000 limit and a $0 balance. This would put your total revolving utilization at 25% because you have $2,000 in available credit limits and $500 in total balances.

If you divide your total balances by your total credit limits, you'll get your total aggregate revolving utilization: $500 divided by $2000 equals .25 or 25%.

So how will closing unused credit cards hurt your credit score? When you close an account, the amount of available credit decreases, which could result in a higher revolving utilization and lower your score.

Let's use the example from above and close the second unused credit card account. When you close the account, you remove it from any utilization calculation and now you're stuck with one open credit card account with a $1,000 limit and a $500 balance.

This caused your utilization to go from 25% to 50%.

Remember, you divide the total balance by the total available limit so $500 divided by $1,000 is .50 or 50%. As this percentage increases, your credit score decreases.

When you're talking about several unused credit cards with high limits, you can just imagine what closing credit card accounts could do. I've seen consumers go from a 10% utilization to almost 100% utilization because they closed all of their credit card accounts except the one they were currently using.

Big mistake.

Credit Mistake #2: Missing Payments


It doesn't take a credit scoring expert to tell you that missing payments is a bad thing. The only reason I made missing payments second to Closing Credit Card Accounts is because this one is a no brainer.

It shouldn't take a credit expert to tell you that missing payments is bad. Common sense should tell you that missing payments is bad. Credit scores are designed to predict how likely you are to miss payments In the future.

This means that they look at your credit history to view how you've managed all of your credit obligations.

Missed payments is the most powerful predictor of future late payments. The FICO score evaluates previous late payments in three different layers:

How Severe - How severe is the late payment? It doesn't take a statistician to tell you that a 30-day late isn't as bad as a 90-day late. The more severe the late payment, the more damaging it is going to be to your credit scores.

Consumers who have missed payments by a few weeks and then bring their accounts current score much better than consumers that have gone 90+ days past due. In fact, a 90-day past due is the threshold that will wreak havoc on your scores.

If you are unable to avoid a late payment, the next best option is to get those accounts current as quickly as you can.

How Recent - How long ago did the late payment occur?

If you've read some of my previous articles on credit scoring, you'll know that the last 24 months of your credit history are critical because the FICO score places more emphasis on your recent credit patterns.

This means that a late payment 6 months ago is going to carry much more weight than a late payment from 4 years ago. To recover from late payments it's important that you get current and stay current.

How Frequent - How often have the late payments occurred? Consumers that miss payments frequently are penalized much more severely than those that have missed a payment here or there in their past.

If you have a tendency to make late payments your credit scores will reflect your bad habits. Make your payments on time and you'll never have to worry about losing points in this category.

Credit Mistake #3: Settling Accounts


One of the most common mistakes consumers make is assuming that 'settling' with a lender is a great way to save a little cash.

Unfortunately, they don't realize what that a 'settled' indicator in their credit reports is actually derogatory.

"Settling" is a term used in the consumer credit industry that means accepting less than the amount you owe on an account. For example, if you owe a credit card company $5,000 but you can't pay them the full amount then they will likely make you a deal for less than that full amount. They have "settled" for less than the full amount, which is likely much less than you contractually owe them.

This may seem like a good idea because you save quite a bit of money but as far as the credit scoring models are concerned, this is just as negative as other severe late payments.

The only way to avoid the damage to your credit scores is to arrange a deal with the lender to report the account as 'paid in full' as opposed to 'settled'. If they don't agree then it's in your best interest to figure out how to pay them in full or else be prepared to suffer the damage to your credit for the next 7 years.

It's also important to understand that if the account has already made it to the collection phase, the damage is already severe and settling won't really make a difference. Settling is only an option if the account has already made it to a severe delinquency state.

Credit Mistake #4: High Revolving Utilization on Your Credit Cards


Most consumers believe that making your payments on time is all it takes to have good credit and earn great credit scores.

What they don't realize is that almost a third of your score is determined by how much you owe on your credit card accounts. If you have high balances on your credit card accounts, you're credit scores could be severely impacted by your revolving utilization.

In order to score the most possible points in this category, I advise keeping your revolving utilization at 10% or less.

Don't be fooled when you hear some of these celebrity experts telling you that 50%, 30% or even 25% is best.

While 30% is considerably better than 50%, 10% or less is ideal. The lower the utilization percentage, the better your score will be. (*To read more about revolving utilization and how it's calculated, please read the revolving utilization bullet in Mistake #1.)

Credit Mistake #5: Excessively Applying for Credit

Whenever you apply for credit your application gives the lender permission to access your credit reports. When they pull your credit reports, it automatically posts an inquiry in your credit record. This inquiry is a record of who pulled your credit report and the date it occurred.


Credit scoring models use inquires to determine if and when you shop for credit. Statistics show that consumers who have more inquiries are higher credit risks than those with fewer inquiries.

It is for this reason that the more inquiries you have, the more points you lose in the credit score calculation.

The exact point value of inquiries is a much argued topic and is impossible to give an exact point value because it really depends on all of the other information included in your individual credit file.

The best strategy would be to only apply for credit when you absolutely need to.

This means that you should avoid those in store offers of "10% off" in exchange for applying for a store credit card. This may sound like a great idea but the reality is that while you may save a few bucks on your purchase, those inquiries could end up costing you a lower credit score which could result in higher interest rates on auto or mortgage loans in the future.

There you have it. Now that you know the top 5 credit mistakes, you can avoid making the same mistakes that so many other consumers make.


Mark "The Mortgage Guy" Timpane
110 Division Street Waite Park, MN 56387
320-240-6157 Office
320-240-6148 Fax

Jason Tangen, GRI - Edina Realty St Cloud MN

Broker Associate

http://jasontangen.edinarealty.com - Search real estate in St Cloud and Central MN

This excess of foreclosed properties is not a good thing for our market.  I think the best thing that could happen is that we sell them off at a fairly quick rate.  I know that it isn't great news for people who are trying to sell their homes, but we need to get the vacant properties moved so that our home builders can start on new properties in the future.  We have a lot of people sitting idle in Central MN just waiting for this housing lull to pass so that they can resume work.

If you are on the fence about buying a property, I highly suggest talking to a real estate professional about what is going on with the market. 

1)  I can think of several great potential purchases for a new homeowner that would probably net somewhere between $30-100K in equity to their future owner. 

2)The interest rates are rising slowly and if inflation keeps moving upward with the gas prices, home loan rates will follow suit and go even higher.  

3)Lastly, if you do not have the money set aside to make a home purchase, your chance to get a home with 0% down could be gone by the end of the summer.  The last (non-VA or rural development) 0% down home purchase program is under great scrutiny from both the President and the department of Housing and Urban Development (HUD). 

Those are three reasons that now may be the best time to purchase for quite some time.  Talk to your professional and I'm sure they will give you several more reasons.

Jason Tangen, GRI - Real Estate Broker Associate with Edina Realty in St Cloud MN

www.StCloudEdina.com - Get a free list of foreclosed properties in Central Minnesota

www.StCloudEdina.com/blog - REAL ANSWERS for REAL ESTATE in St Cloud MN

Am I sad?

Not really.  I think that a lot of people are not meant to be home owners.

Do this hurt the real estate market?

Most definitely.  If we take all of the first time home buyers out of the equation that don't have downpayments, we are left with 4 first time home buyers (a sarcastic statistic - say that 3 times fast).  We already have enough problems with the buying chains being broken by every foreclosure that sells.  If we take eliminate more of the buyer pool, our problems will magnify.

But this isn't really the negative that my last paragraph makes it sound to be.  It is a good thing to pre-qualify people that would like to buy homes.  What better way to ensure that they can handle their money then to make them save some.  If someone wants to buy a home bad enough, they will save the money to get it.  I know that it sounds harsh, but if you really think about it, I think you will agree.

Jason Tangen, GRI - Real Estate Broker Associate with Edina Realty in St Cloud

www.StCloudEdina.com/blog - REAL ANSWERS for REAL ESTATE in St Cloud MN

www.StCloudEdina.com - Search real estate in St Cloud MN

Why you ask?

Because if she had succeeded I would need to think of something else to use as an inspiration for my daughters.  Something grand that they could achieve in their lifetimes.  I don't know how many times I have told my oldest that she can be whatever she wants when she grows up - even the first female president of the United States.  With Hillary out of the picture, now this dream is still alive. 

There is just no motivation to the phrase, "You could be the 2nd female president of the United States."  I also wasn't real keen on the "first female on the Stanley Cup" phrase.  Beyond that, most of the things that are generally reserved for just men I wouldn't necessarily want my daughters achieving.

With that, I would like to give a big "Thank you" to Hillary Clinton for finally stepping aside and leaving the dreams of millions of little girls unscathed.  You had us scared for a little while, but now all of my cliché phrases for parenting are still in tact.

Jason Tangen - Real Estate Broker Associate with Edina Realty in St Cloud MN

www.StCloudEdina.com - Get a free list of the foreclosed properties on the St Cloud MLS

http://jasontangen.edinarealty.com -Lakefront and recreational land real estate search in Minnesota

Norm (my friend) has stayed in the San Diego area and is thinking about starting the home buying process.  I told him that I would get him in touch with my contact out in San Diego  to help him start getting prepared to buy a home.  I had someone in the San Diego area previously that I utilized to keep me up to date on the market conditions and help me whenever one of my in-laws might be thinking of moving.  My wife grew up in PB (Pacific Beach) and we still know a lot of people in Southern California that are close friends or relatives.  Unfortunately, my contact is no longer in the real estate community and I needed to find someone else to help.

I could have used the relocation network within my company, but I wanted to ensure that my new contact was a tech savvy individual to keep me abreast of situations.  Consequently, I used ActiveRain's real estate referral network.

Within 8 hours of posting my request for a real estate agent in the Santee CA area, I had over 30 real estate professionals reply for the potential client. 

WOW! 

It is definitely a testimonial to the ability of the ActiveRain community to connect real estate professionals with other real estate professionals in a very short period of time.

It is also a sign of how much more tech savvy the real estate agents from Southern California are compared to the real estate agents in Central Minnesota.  I'd bet that there are only a handful of real estate professionals in the St Cloud area that have response times to Internet queries of under 1 day.

Now my dilemma is which agent to choose.

Jason Tangen, GRI - Real Estate Broker Associate with Edina Realty in St Cloud MN

www.StCloudEdina.com - Search Homes for Sale in St Cloud MN

www.StCloudEdina.com/blog - REAL ANSWERS for REAL ESTATE in St Cloud MN

While not all foreclosed properties in the St Cloud area are completely trashed, most are.  Especially when you look in the <$100,000 market.  These homes generally need much more than just paint and carpet (and paint and carpet can sometimes run $5000 on their own).

With this in mind, if you have been pre-approved for a loan to purchase a home that needs some work, take the time to accurately calculate the true cost to make living there comfortable.  Get bids from contractors if necessary to give you a better picture of all of the expenses involved.  Does the home need carpet? paint? doors & windows?  Do you have some liquid cash to fix potential problems?  The answers to these questions will really dictate the answer to your buying decision.

Jason Tangen, GRI - Real Estate Broker Associate with Edina Realty in St Cloud, MN

http://jasontangen.edinarealty.com - Search for open houses in St Joseph, MN

So here we are, half way through the second quarter in 2008 and we have yet to have the negative numbers necessary to declare a recession.  We haven't even had one quarter's worth of decline in the gross national production (it takes two consecutive quarters to declare a recession).

So my question is, why do I keep hearing about this inevitable recession?  Anyone??

My guess - it's an election year.  Read into that phrase whatever you would like.

My hope - we don't have a self fulfilling prophecy and create a recession by constantly stating that there is going to be one.

Jason Tangen, GRI - real estate broker associate with Edina Realty in St Cloud MN

www.StCloudEdina.com - Search the MLS for real estate in Sartell MN

i.e.  Does anyone know of a quick way to get rid of those darn doggy dead spots (10 pts for execellent use of alliteration)?  Besides getting rid of the dog?

Anyone have a sure fire (and cheap) way to kill multiple dandylions?

Where's the cheapest place to buy patio pavers in St Cloud?

Anyone have an effective way to patch cracked vinyl siding?

I'm sure if you think about it for a little while, you will have lots of cool tricks that you can share with the local community.

Jason Tangen, GRI - Real estate broker associate with Edina Realty in St Cloud MN

www.StCloudEdina.com - Get a free list of the foreclosed properties on the St Cloud MLS

www.StCloudEdina.com/blog - REAL ANSWERS for REAL ESTATE in St Cloud, MN

How does the e-Market Analysis work?

Every month I scan the MLS to get average prices on specific home amenities for specific areas.  By utilizing these prices, plus the current listing and sold prices of the best comparable properties on the St Cloud MLS, I can get a fairly accurate estimate of value.

What makes this different than other home value estimators?

1) The e-Market Analysis uses only the most current data from the St Cloud MLS for comparisons.  2) The e-Market Analysis is performed by a human to make sure that only the best comparable properties are used.  3) The e-Market Analysis can generally be delivered within a few hours of request (depending on my schedule that day).  4) For an non-viewed property analysis, it is amazingly accurate.  Granted, the specific amenities and condition of a home can move the final market value up or down accordingly.

What have I learned in doing these e-Market Analysis'?

1) I learned that many people do not want to hear the potential sales value of their home.  When I first started doing e-Market Analysis' in 2006, I had several people tell me that I was crazy and that their homes were worth thousands more.  As it turned out, there have been 8 homes that have been listed for sale with a different real estate agent after an e-Market Analysis was performed.  All ten have sold at or slightly under what the e-Market Analysis said.  They also averaged more than 6 months on the market before they sold.  If you have an e-Market Analysis performed and you feel it is inaccurate, give me a call.  If I stop at your home there might be something that I am missing.  Which brings me to my second point...

2) Some homes don't fit into boxes.  What I mean by this is that certain properties just cannot receive good numbers without being seen first.  It seems the more unique the property, the bigger the difference between the e-Market Analysis value and the actual value.

If you are interested in finding out what your home might be worth at a time of sale, visit http://www.stcloudedina.com/e-MarketAnalysis.html and I can have an e-Market Analysis out to you within a few hours.  Also, if you know of some other good value estimators available on the market, I would love to check them out.  I have tried Zillow's Zestimates before and it just doesn't have enough data to be accurate in Central Minnesota yet.

Jason Tangen, GRI - Real Estate Broker Associate with Edina Realty in St Cloud MN

www.StCloudEdina.com/blog - REAL ANSWERS for REAL ESTATE in St Cloud, MN

Download file

If you would like to view previous Tangen reports, visit http://stcloudedina.com/blog/the_tangen_report/.

If you would like me to break down the statistics for your specific neighborhood or area in Central MN, please post your request here for everyone to see and use in the future.

Jason Tangen, GRI - Real Estate Broker Associate with Edina Realty in St Cloud MN

www.StCloudEdina.com - Search real estate on the St Cloud MLS

www.StCloudEdina.com/blog - REAL ANSWERS for REAL ESTATE in St Cloud MN

Download file

Jason Tangen, GRI - Real Estate Broker Associate with Edina Realty in St Cloud MN

www.StCloudEdina.com - Search real estate in Central MN.

Maybe I should try out a new slogan...  "Not for Sale...  SOLD."

Or maybe...  "Jason, Jason, he's our man.  If he can't sell it no one can."

With real estate sales, a lot of real estate agents will tell you how many homes they've sold in a given year.  The true question is how many of the homes do they list to sell that do not sell?

When it comes to hiring a real estate agent, think about what it is that you truly want to achieve.  Do you want to have pretty pictures of your home in the Home Times magazine, or would you rather have maximum exposure on the Internet?  Do you want open houses or not?  Do you want to stay where you are or do you want to move?

It doesn't matter who you hire to sell your home, just make sure that their marketing plan fits into what you want for your home.  Nothing aggravates sellers more than expecting one thing and getting something completely different.

Jason Tangen, GRI - Real Estate Broker Associate with Edina Realty in St Cloud

www.StCloudEdina.com - Search homes for sale in St Cloud MN and surrounding areas.

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