What happened to all of those foreclosures?

I get a surprising number of inquiries from people who want to buy bank owned property. During the height of the housing market crash foreclosures were plentiful. They seemed to languish on the market. The people who bought during the crash did get some bargains.

Those days are gone at least for now. The foreclosure rate is still falling and Minnesota has one of the lowest foreclosure rates at .4%.

Foreclosures and pre-foreclosures in the twin cities

We did not go anywhere

If you are reading this. Welcome back.

This site has been down since Saturday, June 9th due to a DDos attack. The attack is about making the network unavailable to people who try to come to the site. it isn’t contagious and has nothing to do with my blog.

The server where it is hosted was attacked. DDos stands for “distributed denial of service’. The way it works is incoming traffic floods the victim and the traffic originates from many different sources. This effectively makes it impossible to stop the attack simply by blocking a single source.

Denial of service attacks create a lot of work for the people who maintain the servers and they result in downtime for sites like mine and it can have a negative impact on my business because the site has all kind of links that people who are interested in buying or selling houses use.

Being hacked and being the target of email scams have been a common experience for me in recent years but having my sites down for several days because of a denial of service attack is new for me. Right now I can not think of a thing I can do to protect myself.  The site is backed up constantly and I change the passwords on a regular basis.

Working with buyers or sellers

From the rose garden

I work with buyers and with sellers just not at the same time because I am not a fan of dual agency, which what happens when one agent works with both the buyer and the seller or there are two agents but both are under the same broker.

There are agents who are buyer’s agents only and some who only work with sellers. Agent teams often have specialists. I like working with both and I think it helps me to do a better job.

I learn things from working with buyers that I share with my seller clients. In fact, at this point, I have a feel for how buyers will react to a house and I can give my seller clients tips based on that. When negotiating I can use my experience with sellers to help the buyers. I can explain why home sellers do the things they do.

As an agent, broker and the owner of a real estate company I am well rounded in the whole process of home buying and selling and I have an understanding of how real estate companies operate and why and I understand the games agents play all to well.

What I have learned from running a real estate company is as interesting as what I have learned from home buyers and sellers over the years.

There is always something new to learn and that keeps it all interesting.

House hunting isn’t what it used to be

I did a little research on how many houses were on the market each may from 2008 to 2018. I got data from the NorthstarMLS which is deemed reliable but not guaranteed.

May houses for sale
houses for sale in May

I could have chosen any month and the chart would have shown the downward trend. I like to think that what goes down must go up. In 2008 home buyers had 4 times as many homes to choose from.

It can be hard for buyers to find a home in the hottest price ranges. There are houses on the market. There are bargains too and they are not foreclosures or low priced houses. The bargains are the overpriced houses that do not sell with multiple offers but are sold to the buyer who is willing to take a chance and offer a fair price.

When do I need to get an appraisal?

I am surprised at how often homeowners ask me if they need to get an appraisal before they put their home on the market. The answer is no. If the buyer borrows money to pay for the home the lender will order an appraisal.

The purpose of the appraisal is to make sure that the amount being borrowed does not exceed the value of the home. The house will be used as collateral.

Houses do not always appraise for the offer amount. Sometimes buyers offer an amount that is significantly over the asking price with a small downpayment. If the house doesn’t appraise for enough the buyers may have to come up with more cash or the sellers will have to reduce the sale price.

As a home seller, I would want to see something in the offer that is for more than the asking price stating that the buyer will buy the home anyway and that the buyer has the cash to make up the difference.

If not it might make more sense to accept a lower offer because it is more likely to work out. In most cases people who have to put their home back on the market because an offer fell through end up getting less for it.

Most of the time I have an idea of what a home will appraise for. That helps with negotiations when there are multiple offers.

The way the appraisal process works is that an appraiser visits the property and looks it over. The price he/she (they are mostly men) comes up with is based on the actual sale price of three similar properties in the immediate area that have sold in the last year.

There are houses that are hard to appraise because it is hard to find comps. Appraisers can compare to properties and make adjustments. It isn’t an exact science.

On average for the Month of May 2018 St. Paul home sellers got more than 100% of the asking price. That does not mean that all homeowners got more than the asking price. If the property is overpriced sellers may get offers for less than the asking price or no offers at all.

The lender will not use a recent appraisal that the owner had done. They will always get a new appraisal and the borrower will have to pay for it. With cash sales, anything goes.