St. Cloud, MN - Real Estate Blog

I would like to publicly say congratulations to the St Cloud Times for finally correcting the mistake that was their old Home Times Website.  I received a copy of a form letter this weekend regarding how the St Cloud Times will be abandoning its current real estate website and favoring a up to date, broker reciprocity website.

This new website should allow users to view all of the homes that are listed for sale on the St Cloud MLS.  I haven't seen the new format yet, but anything is better than the inaccurate data source that they had in the past.  It is so nice to see that the St Cloud Times has finally put the needs of its readers as a top priority.

If you are curious to see what the problem was with the old St Cloud Time Home Times Website, visit my prior post at: http://stcloudedina.com/blog/2007/11/searching_homes_for_sale_on_st_cloud_times_website.html

Look for the new St Cloud Times Home Times Website to launch sometime soon.

Once again, I can't say how much it impresses me that the St Cloud Times has finally stepped up and fixed their website concerning real estate for sale in St Cloud MN.  Congratulations.

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

http://www.stcloudedina.com - Search for open houses in St Cloud and Central Minnesota.

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

http://www.stcloudedina.com/blog - REAL ANSWERS for REAL ESTATE in St Cloud MN

Posted by Jason Tangen at 11:57 AM | Permalink | Comments (0)

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I read today from Realty Times a phrase that got me thinking.  The article is at: http://realtytimes.com/rtpages/20080402_sandiego.htm

I believe that the articles take on real estate professionals trying to predict real estate market trends is sometimes extremely careless.  However, I also believe that some real estate professionals spend a lot of time analyzing the data that comes from their MLS systems.  These real estate agents and brokers can be extremely accurate interpreters of real estate trends for their local area.

That isn't the topic that I wanted to cover. 

What got me thinking was how long it would take until you can tell that the real estate market HAD hit its bottom.  The line from the article stated that it would at least a couple of years afterwords that someone could honestly say that the bottom HAD come for the San Diego real estate market.  How true.

Think about how long it takes (with the last 5 years removed) to show significant changes in the real estate prices.  The trend for low rates of appreciation over time (1-2%) in housing could make very easy to interpret a bottom when only a specific segment of the market picked up.  With two years of data, a person can hopefully eliminate market spikes and get a much broader picture of what the real estate market actually did.

So if you are hoping to know when the bottom is going to be, the earliest we can tell you is two years from now (if today is the bottom).  If you want a crystal ball prediction, hmmm... That will cost you $10.  No self repecting psychic would give out such valuable information for free:)!

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

JasonTangen.EdinaRealty.com - Search real estate in St Cloud, MN and surrounding areas.

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

Posted by Jason Tangen at 08:35 AM | Permalink | Comments (0)

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With the end of the first quarter fast approaching, I am a little curious to find out how the numbers are going to stack up for real estate sales in '08 vs. '07.  I've heard that the number crunchers nationally and statewide are seeing a 2% increase in residential sales over the same time frame last year.

My hunch is that we will see an increase in the total number of homes sold but a decrease in the average and median prices in the St Cloud market.  My reasoning for this is the broken chain in home purchases that is caused by the increased number of foreclosed properties available on the St Cloud MLS. 

As a region in whole, we are selling through the foreclosure inventory at a very good pace.  The problem is that these distressed sales are generally of homes that are not in "Grade A" condition.  Therefore, these home price averages will reflect these smaller values. 

The positive turn on this topic is that in selling these foreclosures at a good pace, the end of this lull in the real estate market comes closer into view.  I wouldn't be surprised if by early next year we don't see some appreciation in the real estate market once again (around Central Minnesota).  It won't be anything like what we saw in the past five years, but 1-1.5% isn't out of the question (*Hint, if you are waiting for the bottom, it's probably coming if it isn't already here).

Be sure to keep an eye out for the Tangen Report which will come out in the St Cloud Area Chamber of Commerce's Chamber Pack in early May and will also be posted here by mid April.  Every quarter I break down the sales statistics for each local region on the St Cloud MLS (West St Cloud, North St Cloud, East St Cloud, South St Cloud, Waite Park, Sartell, and Sauk Rapids).  If you would like to see the past reports, click on the Tangen Report link on this website.

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

www.StCloudEdina.com - Home of the e-Market Analysis (Free Home Value Estimator)

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

Posted by Jason Tangen at 12:31 PM | Permalink | Comments (0)

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At a closing, everyone who is buying a home as their principal residence in Minnesota is informed about how to homestead their new property.  People are generally more than willing to homestead a property as they feel that it will keep their property taxes lower.  While this is true, it is not the only reason to homestead a property.

The Homestead Law is meant to protect a family from a forced sale (foreclosure) on their home by unpaid creditors.  In a nutshell, it's a safe haven for your money.

There are several stipulations that are mandated in order for a property to be homesteaded.  The easiest description is that your homestead needs to be your principal residence.  There are other rules involved, but this rule of thumb covers about 99% of all situations.

What does homesteading a property protect you from?

The Homestead Law protects home owners against foreclosure of their home by unpaid creditors.  It does not protect a home owner from foreclosure due to lack of property tax or special assessment payments, mechanics liens (work performed by contractors on the property), lack of payment to mortgage company, or failure to pay association dues.  All of these items are attached to your property and will supersede the Homestead Law.  Rule of thumb: The banking institutions and the government will always get their money.

This also brings up a very good point about having good title work done on a property prior to closing the sale.  You do not want any outstanding liens for assessments or lack of payment to a contractor to make you lose your newly purchased house to foreclosure.  I won't go into this here; It's a different topic for a different day.

There are also a couple of limitations to the amount of money that is covered by Homestead Law.  In Minnesota, homestead protection is limited to 160 acres and $300,000 for a residential homestead ($750,000 for an agricultural homestead).

Please note that these figures are for Minnesota Homestead Laws and do not entail what other States utilize as their guidelines.  I've heard that the old CEO of Enron moved into a property in Florida when his business came under attack.  The reason, there is no limit to the value that homesteading can protect in that State.  He can shelter millions of dollars against judgments in court about his business practices.

If you are in question about homestead law, seek competent legal advice.  I don't pretend to be a lawyer that knows everything related to real estate law, but I know enough to get me in trouble.  If you'd like, post your questions and comments here.  If I don't know the answers, I know someone who will.

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

JasonTangen.EdinaRealty.com - Search Homes for Sale in Minnesota

Posted by Jason Tangen at 07:19 PM | Permalink | Comments (2)

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I have been asked to give a presentation at a career day tomorrow and it has got me pondering the top moments and reasons to be in real estate sales.  Below is my list thus far.  Feel free to add some of your thoughts if you'd like.

1) Helping people with the single greatest building block of financial success.

2) Negotiating your client a great deal.

3) Watching a kids face when they get to pick their own room.

4) Making money.  It's a great profession, but without the money it would just be a very expensive hobby.

5) Meeting all sorts of people and dealing with their greatest joys (and sometimes biggest stresses).

6) Never having the same day twice.

7) Working in a just industry.  What I mean by this is that the people who work hard make money; the people who don't work hard don't make money.

8) Having the hot topic that everyone wants to talk about.  Right now it could be a close second to politics.

9) Seeing the best real estate bargains first.

10) Being your own boss.

I could go on and on, but I need to focus more on my presentation for tomorrow.

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

www.StCloudEdina.com - Search the St Cloud MN MLS

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

Posted by Jason Tangen at 10:46 PM | Permalink | Comments (0)

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The real estate market around the St Cloud area seems to be hot.  The temperature on the other hand leaves a little to be desired.  I went to my first showing this morning (of 6 sets of showings to different buyers this weekend) and the temperature gauge said -15 degrees.  Bundle up out there!

Yes indeed, it does seem as though the real estate market is definitely picking up around St Cloud MN.  Lately, I have been fielding a lot of calls from buyers who are anxious to see what is available to purchase.  They have heard "theres gold in dem der houses" and they are starting to believe.

It could be the 300+ foreclosed properties on the St Cloud MLS and the lure of a phenomenal deal that has given them the home-buying bug.  I know the last few of my buyers have been bitten by the foreclosure bug.  They have also averaged about $25,000 between their homes purchase price and the appraised value at time of purchase.  That is with work to be done!

It could also be that people are getting interest rates on their mortgages at around 5.5%.  We know that the rates have been slipping in anticipation of Mr. Bernanke's potential 50 basis point drop in the fed rate coming soon.  Is it possible, like some bloggers are hinting, rates will go even lower and break that 5.0% barrier?

There are many different reasons to believe that this years spring market will be a good one (especially for home buyers).  This is also a good sign that we might be able to turn the corner and get the real estate market back on track in Central MN.

Let me get off my soapbox for a little while.  I guess I'm just a little excited because I am busy and the people I am talking to seem to be picking up additional business as well.  I hope that this is a sign that St Cloud and the surrounding areas have started to turn around.  I know of a lot of good people in this area that would be more than willing to buy or sell a home if they could just get a ray of hope that the bottom isn't going to fall out.

Posted by Jason Tangen at 01:40 PM | Permalink | Comments (0)

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Another one of the great implications that Bush has signed into law involves short sales and how they will affect property owners come tax time.  It looks like the amount of money lost in a short sale transaction will no longer be taxed as "phantom income" like before.  This means that there are very few reasons not to attempt a short sale (if the bank will approve the sale).  Before anyone goes through the foreclosure process, talk with a local real estate professional about how this new law can help.

Read more at : http://www.govtrack.us/congress/bill.xpd?bill=h110-3648&tab=summary

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

www.StCloudEdina.com - Get a Free List of Foreclosed Properties on the St Cloud MLS

Posted by Jason Tangen at 04:44 PM | Permalink | Comments (0)

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For those of you who haven't seen the new tax changes regarding capital gains on homesteaded properties, here's a quick highlight of one of the good changes.  On of the biggest changes to note is the ability for widows/widowers to sell their property, within two years of spouses death, and still be able to claim the $500,000 capital gains exemption that all married people enjoy.  After that year, it reverts to the $250,000 that single people are allotted. 

Read more about this story at: http://realtytimes.com/rtpages/20071228_washingtonreport.htm

Posted by Jason Tangen at 12:45 PM | Permalink | Comments (0)

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I am anxiously awaiting the turn of the year so that I can start compiling my year end numbers of homes sales on the St Cloud MLS.  Below are my predictions (we'll see how accurate my guesstimates end up being):

I predict that sales will be down from 2006 approximately 14% for the total number of homes sold.

I predict that average and median home prices will be approximately 1.5% lower than 2006 with some areas actually showing slight increases due to the price range of homes that were sold.

I predict that the time on market it takes to sell a home actually went down - further proof that the homes at great prices are still moving fairly fast.

Big prediction - 2008 will continue to be a sluggish year in real estate sales in the St Cloud area.  It will continue to be a buyer's market with plenty of inventory to chose from.  The biggest addition of homes for sale will come from bank foreclosed properties.

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

jasontangen.edinarealty.com - Search Open Houses in Central MN

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

Posted by Jason Tangen at 09:37 AM | Permalink | Comments (0)

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I feel the need to at least give my two cents on the issue of Bush's legislation to freeze the rates on some adjustable rate mortgages (ARMs).  This legislation is meant to aid the people who could potentially face foreclosure due to the expiration of their original interest rates on ARM loans.

In some areas of the nation (i.e. California, Nevada, Florida and others), I can see where this policy will definitely help.  There are many people in these areas that couldn't afford to purchase a home due to the increasing home prices.  The only option for them was to try one of these riskier loan products and hope for continued appreciation. 

This is not necessarily the case in Central Minnesota.  Although there are some people in the St Cloud area who have chosen to go with one of these riskier ARM loans (Note - not all ARM products are bad - find a good lender that will get you in the right loan product for you), the majority chose a less risky loan or went with the traditional 30 year fixed rate mortgage.  I believe that freezing the interest rates around St Cloud MN will only lengthen the time it takes for our market to fully correct.

Instead of this legislation, I think we should let this downturn run its course.  If we freeze interest rates and delay this problem into 2009 or even 2010, many home owners might see their home values dip even further than they necessary.  I think that one year of a market flooded with foreclosed properties is in the majority of the St Cloud area's best interest over 2+ years of sales stagnation and falling prices.

I know that this is not the best alternative for many of you who might be currently facing a foreclosure process.  I'm sorry that your situation has turned south and things are not working as originally planned.  Whether it be purchasing advice from a poorly informed lender, real estate professional, or just bad judgment on your part, the problem needs to be fixed.  The sooner the better.  Call a local real estate professional that you trust so they can try to help you out of your current situation if it is fixable.  If you have just plain given up, please don't trash the home as you leave.  That affects everyone in the neighborhood and community more than the bank.

I'd love any of your takes on this issue.  This is just my opinion and thoughts on the issue.  Please post your thoughts or questions here for answers and review.

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

www.StCloudEdina.com - Search the St Cloud MLS

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

Posted by Jason Tangen at 12:30 PM | Permalink | Comments (0)

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In reading a couple of real estate blogs here recently, I've seen some statistics thrown at me that were slightly alarming.  Also, I'm not sure that they are quite accurate.

In one post a gentleman claims that 70% of the real estate transactions in his area are dual agent situations where the potential buyer calls the listing agent and buys the real estate through them.  I'll have to do a little further research, but I would wager that the St Cloud MN area is closer to 30% of homes sold have the same listing and selling agent (dual agency).

For my own business practices, I will not be a dual agent in a real estate transaction unless my sellers give me written permission to do so.  The reason for this is that I can not have a true fiduciary responsibility to both the seller and the buyer in the same real estate transaction.  I expect more of myself and offer more to my clients than just being a "go-between".

Question: How can you work for the sellers best interests and the buyers best interests at the same time?  I realize that some transactions are smooth full price offers that close in under a month, but that is not the norm.  Most of the time, real estate transactions vary from slightly friendly counter offers between buyer and seller to truly heated arguments.  This is the way it should be.  As a real estate professional, one of your fiduciary duties is to get your clients the best deal possible.  This will more than likely aggravate an opposing home owner or buyer on more than one occasion.

Here is the scenario of why I will not perform a dual agent transaction without first having my sellers written approval:

A seller has a home listed for $200,000.  They need to sell and say, "Jason, get us an offer for $170,000 and we will sell this home today."

I have a buyer for that same home who says "Jason, do you think that they will take $185,000 for their home?" 

What should I do?

If I tell the buyer to write the offer for $185,000 and see what happens, I have just cost them $15,000.  If I tell them the seller might be willing to take less, then I am taking money out of my sellers pocket.  How can I feasible work in both of these real estate consumers best interests?

I'd love to hear your take on this issue.  How would you like to be represented as a buyer or seller?  I'd also like to hear some real estate agents takes on how they view dual agency.

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

www.StCloudEdina.com - Search the St Cloud MN MLS

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

Posted by Jason Tangen at 11:05 AM | Permalink | Comments (0)

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Attached below is a copy of the form laying out the specifics of agency relationships in real estate transactions in the State of Minnesota.

Download file

For more information regarding this disclosure form, visit my prior post at http://stcloudedina.com/blog/2007/11/minnesota_agency_relationships.html

Jason Tangen, GRI - Broker Associate

Edina Realty

http://jasontangen.edinarealty.com

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

Posted by Jason Tangen at 10:04 PM | Permalink | Comments (0)

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Early in any sort of real estate relationship between a potential home buyer or seller and a real estate professional, the state law is that the agent must disclose where their loyalties lie and who they represent.  By default, any agent working with a home buyer or seller without a signed contract is a facilitator of that potential client.  They are facilitating the potential client by showing them properties, preparing a CMA, or giving them advice.  Please note that while working in this role the only duty a real estate professional is mandated to give the potential client is confidentiality.  Other fiduciary duties may be laid out by state law or specific terminology in a Facilitator Services Agreement.  The other mandated fiduciary duties of loyalty, obedience, disclosure, reasonable care, and accounting are only obtained through hiring a real estate professional with a specific contract.

The other four forms of real estate relationships break down as follows:

Seller's Broker - The real estate professional AND EVERYONE LICENSED AGENT WITH SAME COMPANY that has a home listed for sale.  For example:  Jim Schaaf is the managing broker for Edina Realty in St Cloud MN.  If he has a home listed for sale, I am by default a Seller's Broker mandated to look out for that seller's best interests.  This is regardless to whether or not I know the seller's intimately or what their situation entails.

Sub-Agent - A person who is working with the buyer, but represents the seller.  This is not very widely used in Minnesota because who would want to have someone help them purchase a home knowing full well that they are representing the other party?

Buyer's Broker - This role is when a potential home buyer signs into contract with a real estate professional to represent their best interests in the purchase of a home.  This is generally a free service provided to home buyers, but there are scenarios when a potential home buyer may have to provide payment for the real estate professionals services.  Definitely ask your potential real estate professional what these circumstances may be before you sign into contract with them.

Dual Agency - When a real estate professional represents both the buyer and the seller in a given real estate transaction.  When you are filing out a contract with a real estate professional to represent you, make sure they go into detail how they approach this situation if it presents itself.  It can be very difficult to represent both involved parties to a given real estate transaction without a specific set of guidelines that the real estate agent plans to follow.  To view the entire Minnesota form regarding real estate relationships, click on the following link:  http://stcloudedina.com/blog/2007/11/minnesota_disclosure_form_for.html

Feel free to post your questions, comments or concerns here for answers and review.

Jason Tangen, GRI - Broker Associate

Edina Realty St Cloud

www.StCloudEdina.com

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

Posted by Jason Tangen at 09:40 PM | Permalink | Comments (0)

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