Shakopee Foreclosures

Digging through the Minnesota MLS this year may possibly be one of the largest year for Shakopee foreclosures to date. So far in 2011 there have been 28 foreclosure homes in Shakopee that have closed escrow.  36 Shakopee foreclosures are currently pending bring this years foreclosure total in Shakopee to 64 homes through only February. We are pacing over a home sold per day that is consider a Shakopee foreclosure! Now theoretically take that number and multiple by six, could that mean we are heading for 384 Shakopee foreclosures for the year?

Those Shakopee foreclosure numbers seem staggering being only 197 closed homes in Shakopee last year were foreclosures. We are heading for close to double those numbers and eclipsing the high of 331 set in 2009. Currently there are 54 homes in Shakopee that are active on the market and considered Shakopee foreclosures.

All of these numbers are only estimates being many Shakopee real estate agents often do not disclose the status of their Minnesota MLS listings or decipher if the home is a bank owned home, short sale or potential short sale. Why Shakopee real estate agent don’t disclose status can vary and it would be too time consuming to go through EVERY listing to get exact numbers

Although not perfect numbers you can see how the number of foreclosures in Shakopee have escalated since last year and how many buyers will have numerous opportunities this coming year.

Shakopee New Construction Report- February 2011

Current Shakopee MLS inventory is sitting at 304 homes active in the Shakopee real estate market. of the 304 Shakopee homes for sale many are short sales and shakopee foreclosures. An article I wrote the other day tagged 44% of ALL Shakopee Homes for sale as being a short sale or foreclosure per Shakopee MLS stats. What also surprised me a bit was the number of new construction homes for sale so I wanted to break down those numbers for you.

41 homes in Shakopee are considered new construction are either  model homes, spec homes, to be built homes, Shakopee homes under construction or completed new construction. This does not included the Shakopee new construction homes not listed on the Shakopee MLS, which I’m sure there are quite a few as well. Those numbers can be obtained at the county by looking into the number of bulding permits pulled in 2011. Regardless just per the Shakopee MLS numbers that represents only about 13.5% of the Shakopee real estate market.

The Shakopee real estate market seems to be saturated with townhomes, but we are seeing few new construction townhomes buit fortunately. only 4 of the 41 active listings were townhomes in Shakopee and 2 of those are half built townhomes that went into foreclosure, but were started in 2005.

Some of the Shakopee builders and the respective development they are builder:

  • Keyland Homes (Countryside & Spring Lake Estates)
  • F & B Construction (Custom Builder in Shakopee from 200k and up, Can build anywhere)
  • Lennar (Valley Creek Crossing
  • Centex (Ridge View Estates & Park Meadows)
  • Mattamy Homes (Riverside Bluffs)
  • Wensco (Countryside
  • Charles Merritt (Stonebrooke)

The average sale price of the  single family new construction homes listed in the Shakopee MLS is pushing just over $300,000 at 301,103. Of average those homes had 2,256 sqft at a cost of  $138.25 per sqft. Foundation size averaged 1318 and homes had on average 3.68 bedrooms and 2.78 bathrooms. It is safe to assume most Shakopee homes being built today have a three car garage.

Shakopee Short Sale Market Update

I just baffled myself this afternoon when putting together my market update of the Shakopee short sale homes currently on the market. Seriously I was shocked when I learned of the 305 homes currently shown as active on the market 85 of those homes are listed as a Shakopee short sale. Short sales in Shakopee are becoming more prevalent from hardships such as job loss, divorce and too much debt. We are definately seeing more and more owners qualifying for a short sale.  Outside of those home listed in Shakopee as a short sale 5 other homes did not disclosure their status and 50 more homes were listed as Shakopee Foreclosures. With that said, Shakopee short sales and foreclosure homes as of 2/24/11 dictate a whopping 44% of all homes on the market!

Now 44% of all homes on the market being Shakopee foreclosure and short sale listings may seem high, but that number realistically is probably even a low percentage estimate. I have seen many cases where Shakopee real estate agents do not even disclose if the home is a short sale or foreclosure. When a home in Shakopee is listed an agent has three choices when filling out the Minnesota MLS input sheet. They can answer YES, NO or NOT DISCLOSED to two questions 1) Is this home a potential short sale? and 2) Is this home lender owned?

I can see Realtors reasons for not disclosing the short sale status of a home, but Shakopee foreclosures are pretty obvious, is your seller a bank? If yes, well then it’s lender owned, answer the question correctly please Shakopee Realtors! Now many Shakopee short sales listed might not be listed as a short sale because they are not short sales, yet. Sure you may have a home priced at $224,900 that is not a short sale, but at $220,000 will it be one? How about $210,000? I commonly see many overpriced homes in Shakopee that have NO CHANCE of selling. The Shakopee townhome market is notorious with many homes cancelling in frustration or expiring their listing contracts. I just saw a Shakopee townhome listed for close to $150,00 when the previous week I showed two homes in the SAME DEVELOPMENT for $98,000 and $109,900 respectively. Now sure the home may not be a labeled as a short sale in Shakopee, but will it sell? Doubtful. Another reason I hear Shakopee Realtors not wanting to label  homes as a short sale is because they feel no one with show the listing because buyers don’t want to wait to hear back from the bank. I find that discouraging as an agent and very frustrating for a buyer because we take the time out of our day to show the home it is a complete waste of time. Some buyers may have ample time to look for a short sale home, but others have a strick timeline and need to purchase with 45 days or less. That does not leave a lot of time to search for a Shakopee Home.

PENDING HOMES IN SHAKOPEE

Homes in Shakopee that are currently sold and waiting to close escrow represent an even higher percentage of short sale and foreclosure homes. Of the 63 homes pending in Shakopee, 27 homes are forclosures and 7 are short sale listings representing close to 54% of the total homes pending. Again this does not include the nondisclosure I previously spoke about. Being a curious Realtor, I decided to look at the homes pending being there are not nearly the numbers to go through like active homes on the market in Shakopee. Of the 29 homes not tagged by Realtors as a Shakopee short sale or foreclosure, 5 showed in either the exclusive agent remarks or tax records as being bank owned. Another interesting fact that jumped out at me was 7 of the 29 homes in Shakopee pending were new construction. Again out of curiosity I went back and reviewed active homes listing in Shakopee to find of the 170 homes not tagged as shorts sale or foreclosures 31 of those were new construction homes in Shakopee.

Are you PreApproved or Pre Qualified?

There is a huge difference between being pre qualified or being pre approved. There is a lot of confusion I hear from buyer so I would like to take a moment to clarify.

If you are just starting your Shakopee home search you may have been told by friends or your Realtor to first talk to a loan officer. Discussing your options with a loan office before you begin to look for a new home should be one of your first priorities. Many mistakes buyers, especially first time buyers make is looking too early and then either looking at too high of a price range, too low of a price range or unfortunately they may not even qualify to buy at all for the time being. I recommend to clients to sit down with a good local Shakopee loan officer with a reputable company. If you can, try to meet them in person rather than doing everything over the phone.  I think talking to the loan officer leads you into more questions you may have than if  it were just a phone conversation. I also think you can read the loan officer a bit better to see your level of comfortability.

PREQUALIFICATION

I hate hearing from buyers when they tell me their loan officer should have them approved within the next few weeks. A good loan officer should be able to give you some general numbers the same day or at least within 24-48  hours max. Loan Officers also should be able to be pretty accurate pending the information you give them is current. Getting pre qualified is one of the first steps in the home buying process. It’s easy, quick and painless. Typically the loan officer in Shakopee will ask for your income and ask about any debts you may have. After evaluating this information, the loan officer can give you an idea of the mortgage amount and monthly payment for which you qualify.

During your first meeting with the loan officer, they are going to gauge where you are also comfortable with payments. Make sure you stick to those numbers! A loan officer may tell you to qualify for a $1,000,000 home, but if you would like your payments to be $1,500…not going to happen, unless you have a gigantic down payment. They also may discuss various mortgage options and recommend the type of mortgage that might be best fit your situation.For example comparing a 5% conventional loan to a FHA loan or a 203k loan.

Remember, the loan officer has not pulled credit at this point and based their analysis only on the information you provided to them. Being told you are pre-qualified is not a sure thing the underwriters with give you a loan, it just give you a basis to start your search. For this reason, a pre-qualified buyer doesn’t carry the same weight as a pre-approved buyer who has been more thoroughly investigated and through the underwriting process. This is not a commitment to lend a buyer money.

PREAPPROVAL

Now obtaining a pre approval letter carries more weight and gives you more negotiating power and will put you in a better position as a buyer. Realtors feel much more comfortable presenting an offer if it has solid backing from a good loan officer and bank. I have seen lately even if you do have a pre approval letter from a bank, foreclosed homes are requesting buyers to get an approval letter also from their requested bank. Don’t be alarmed, you do not need to commit to them or anything, but they have seen a lot of transactions fall apart over the course of the past few years and are trying to protect their interests.

Pre Approval letters typically state the terms, loan amount and address, but do not need to include everything. Again some banks will request exactly what they prefer to be on the approval letter on occasion.

Getting pre approved involves completing a mortgage application, many companies have this online. From that point lenders need to get a hold of W-2’s and bank statements. One of the most important steps to the process is pulling your credit report. Many institutions now highly regard credit scores and tie that score to your interest rates more than ever. Insurance companies and even employers now lok at scores. It used to be if you had a pulse, you could buy a home and I am SO happy those days are gone. Not everyone is financially responible to buy a home. I have seen many hardships where I truely sypathize with the owner, but I have also seen many more where they are doing a short sale or geting foreclosured and it’s flat screen after flat screen, new cars isitting in the driveway because their garage is full with the boat, motorcycle, snowmobile and fourwheeler….sell your stuff! Okay, I went on a tangent and off course there, sorry. Again, take this as a reminder to stick to your budget and don’t get carried away with purchasing a home. Buying a home can be a very emotional experience so make sure you are also making a sounds financial and logical one as well. The biggest reason credit scores ar so important is because it can dicate who will lend to you, what programs you qualify for and what your interest rate and some fees may be.

Once the application process is complete you will receive a pre-approval letter indicating the amount your lender is willing to lend you for your home. Although a pre-approval letter lets you, the Realtors invloved and the seller know you are a solid purchasor,  it is subject to the appraisal of the home and often cases other conditions pending case by case. Getting pre-approved for a mortgage also enables you to move quickly when you find the perfect place.

If your financial situation changes for some reason such a job loss your Realtor should be able to protect you per the financing addendum of the real estate contract, or if interest rates rise. I

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Shakopee Short Sale Help

CERTIFIED DISTRESSED PROPERTY EXPERT (CDPE) and SHORT SALE FORECLOSURE SPECIALIST (SSFS)

One needs a thorough understanding of complex issues in today’s Shakopee real estatemarekt and the knowledge of foreclosure avoidance options available to homeowners. Being a CDPE has provided me and my clients a solutions for homeowners facing market hardships primarily short sales.

Homeowners regularly proceed without guidance of any kind through the often financially and emotionally devastating prospect of foreclosure. Setting up an appointment with a well-informed, licensed Shakopee real estate agent is the best course of action for a homeowner in distress.

There are thousands of licensed Realtors in the state of Minnesota and many Shakopee Realtors, but few decided to focus their efforts in helping those in need of assistance to avoid foreclosure. Through comprehensive training and experience, CDPEs have the tools to help homeowners find the best solutions for their unique situations and to avoid foreclosure through the efficient execution of a short sale.

Living through financial difficulties poses a challenge for any family, so why make the process of finding a qualified real estate professional difficult too? Select an agent with the CDPE Designation or Short Sale Foreclosure Specialist to ensure you have a trained professional to address your specific needs.

I have also teamed with an attorney to help answer any questions one may have tht goes beyond my real estate expertise.

Bank Owned Homes (Shadow Inventory)

It looks like we will be having quite a few more foreclosures coming on the market over the next few years in the Shakopee real estate market. What banks and MN realtors are calling “shadow inventory” of bank owned properties are those homes that are in the midst of foreclosure and are at some point of the foreclosure process. With the amount of current homeowners currently late on payments and in default it will take nearly three years to clear at the current sales rate, according to a report from the credit rating agency Standard & Poor’s.

It has been said more and more lenders are trying to mitigate the amount of foreclosed properties by taking on more short sale scenarios and loan modification, however i have not seen that process get much better and from what I hear 2011 will be the biggest year of foreclosures to date. At the end of March it sounds as though there will be an influx of Fannie Mae owned properties coming on the market that will be eligible for the “Home Path” financing in which buyer can purchase with a lower downpayment, 3% vs the 3.5% FHA minimum downpayment and these homes will also require no appraisal saving buyers an additional $350-500.

As for the total amount of homes in the “shadow inventory”, an article from housing wire states that Amherst Securities places the total at 7m. The Royal Bank of Scotland found 2.7m, and First American CoreLogic counted 1.7m. Those are some HUGE numbers nationwide! The Shakopee real estate market along with other homes for sale in Minnesot are a sure to see more inventory coming to the market.

Do I Need a Shakopee Realtor to Buy a Home?

Simple answer NO.

Surprised a Realtor told you that you do NOT need their services? I know this may seem odd and a bit confusing a real estate agent in Shakopee said you may not need a Shakopee realtor, but you as a buyer do have a choice to use someone or not.

Obviously I as a Shakopee realtor I do find it advantagous to use a real estate agent, but I do so for the following reasons:

1) Commission is Paid by the Seller. Typically the majority of the real estate commission is paid by the seller. In the state of Minnesota often times the total commission is split between both Realtors. Typically 55% of the total real estate commission going to the Realtor who has the home listed, and then 45% of the total real estate commission going to the Realtor who represents the buyer. Often the only real estate commission that is paid by the buyer is a broker administrative commission. That commission is part of the closing costs and generally around $375. It is a fee you can have the seller pay as part of seller paid loan costs.

2) Market Knowledge. I beleive if you select a good real estate agent they will have the knowledge of the area. I see this often with buyers and sellers. You can tell when a Realtor who is not familiar with the Shakopee real estate market. They come in  price homes incridibly high and those homes will sit on the market. Make sure when you have a free market analysis the agent does not just give you a price you want to hear, but backs that price up with homes that have sold recently,within the last 4 months. That also goes if you think they are pricing the home low, make them show you the comparable sales. A Shakopee realtor should be able to give you a value within 24 hours and may not even need to go to your home to give you a ballpark idea on price if they know the area well enough.

3) Contracts, contracts, contracts. No, a real estate contract is not the hardest document to disect, but having a Realtor who knows how to structure the contract to present your offer in the best light can be very helpful. Knowing the contingencies, how they are structured, timelines, how to negotie them can be very valuable.

4) Negotiations. I think many Realtors try to play the we offer A, you counter with C, and then we will meet in the middle at B. All negotiations do not have to go this way, otherwise you could easier do it yourself.  One reason in my opinion to have a Realtor is to take out the emotion of  buying a Shakopee home. Sure buying a house is one of the biggest decisin you can make and emtions run high, especially in multiple offers. We are seeing many mutltiple offer senarios with bank owned homes in Shakopee and knowing what banks are looking for and how to structure your offer can be crucial. I just heard of one accepted offer an agent in our office had that was only $200 higher than the offer that was accepted. Really $200? That was the difference between getting a home that sold over $125,000 more only a few years ago! Make sure you have a real estate agent in Shakopee who can structure your offer optimally.

5) Prelist Inventory. I can literally find out information on hundreds of homes for sale in Shakopee with networking with agents in my local office. Re/Max Advantage Plus is one of the top listing brokers in the state for bank owned homes.

6) Do You Want Representation? In my opinion this is the biggest reason to hire your own Shakopee Realtor. If you are going from open house to open house or call the agent on the signs, those agent represent the best interests of the seller. That’s right; those agent priming you for data are representing the seller and will use that infomation against you if you are trying to negotiate on the home they are standing in. If they ultimaely decide to represent you too, then you are in a dual agency representation senario in which the realtor almost needs to stay neutral.

Hopefully you found this information helpful and if you want any information on a Shakopee Realtor, I do not require my clients to sign buyer contracts with me until you are either comfortable or we eventually write an offer. I look at the process as I would, and if I were to buy a home I would not sign anything with anyone until i knew how they worked and if I knew they were going to do a great job.

Shakopee Townhome Update

There are many townhomes in the Shakopee real estate market. Of the 301 current active listings 126 are townhomes, twinhomes or condos which represent almost 42% of the current market inventory. The Shakopee real estate townhome market is very affordable now compared to past markets especially after seeing values drop significantly over the past few years. Currently of the 126 active Shakopee townhomes, the average sales price if hoovering just over $129,000 for a 2+ bedroom 2 1/2 bath townhome built in 2001 with over 1550sqft. 4-5 years ago these Shakopee townhomes would have sold in the $190’s. If you are searching for a home you need a way to narrow down all your choices. The best options in the Shakopee real estate market I feel are in the 3+ bedroom 3+ bathroom townhomes with at least a 2 car garage built after 2000 and priced competitively under $125,000. If you were to narrow down the Shakopee real estate market with that search criteria you would still have 15 homes. To view all Shakopee real estate listings or homes in other areas, go to my website www.MinnesotaListingSearch.com

Shakopee Real Estate Market Hits Bottom

That is a question many Shakopee real estate buyers are asking these days. It’s hard to look at this market and think that we are not close to the bottom if not there. It is true the Shakopee real estate market will see many more foreclosures over the next few years, however currently most pricing is cheaper than if you were to rent real estate in Shakopee.

The other day I looked at a home behind St. Francis hospital in the Pheasant Run neighborhood. The home was price at $162,500 and really all that needed to be done was paint and carpet. This home was built by Keyland Homes and years ago in the Shakopee real estate market this home would have sold upwards of $300,000. Today, given values of homes in shakopee, this homes was priced almost 50% lower.

Generally speaking if you were to take estimates of a full price offer of $162,500 with the buyer putting 3.5% as a downpayment, current taxes at $2678 and annual insurance of $900 the estimated monthly payment would be only $1225 given a 4.75% interest rate. That shows you right there where the Shakopee real estate market is it today, a bargin. If 5 years ago the value for this home was even $275,000 and interest rates were one percent higher at 5.75% and taxes the same, your payments would be a staggering $2025.

This shows you what type of buying power there is out there in the market today. I see many Shakopee townhomes that sold in the $190,000’s a few years ago now priced under $100,000. You could buy these townhomes today, rent them out and cashflow the homes at $300-400 per month! The opportunities are endless and we may not know truely if we are at the bottom of the Shakopee real estate market, but we do know now more than ever pricing is great.  So if you are starting your Shakopee real estate search today, have your loan officer run the numbers and realize truel how low interest rates are in this market and what it means to your botom line.

STOP before you buy a MN townhome!!!!

Don’t panic!!! MN townhomes can be great, I lived in one for five years and loved it. With almost 10 years of experience now and seeing a more depressed real estate market than in the past, competition is tough. The Shakopee Real Estate market has a large inventory of quality townhomes ripe for the picking. I walked into one MN townhome last week that was PERFECT for $95,000, built in 2006!!! Now most first time buyers tend to lean towards townhomes rather than single family for a few reasons. 1) they don’t want to do yard work 2) they don’t want to buy everything to do yardwork 3) pricing typically is lower 4) you generally can buy a newer townhomes without needed repairs.

In the aggressive market we are in with so much more buying power than in the past, I now advise clients when looking at MN townhomes to try to look for four things 1) two car garage 2) At least three bedrooms, ideally also with an additional loft space 3) at least three bathrooms. 4) basement There are many reason for looking

Private Master Bathroom

When looking at townhomes in MN, having a private bathroom may be nice for privacy, living and for resale. Townhomes in MN typically have two bathrooms, a half bath on the main level of the home and then  full bathroom shared with the bedrooms on the upper level. Usually the only exception I see to this is with many one level townhomes in Minnesota where I will usually see a full bath bath in either the master or somewhere else on the main level and then also a 3/4 bath as the reciprocal. I think finding

Three Bedrooms and an Additional Loft

I like to try and find townhomes in MN with three bedrooms for a few reasons. I see a lot of buyers grow out of townhomes a lot quicker than the anticipate, and having a third bedroom buys them more time. Obviously given the market you are buying a lot lower than most buyers did at the peak, and that buys you more flexibility as well. If for some reason you could not sell, as a lot of people can’t in the current market, you always can turn to renting the home out. Having the third bedroom would easily pocket you more money per month and make it easier to rent.

Two Car Garage

The larger the garage, the better.One garage stalls and MN townhomes don’t mix well with the current market because there is SO much inventory with a two car garage. Even with a two car garage you might not be safe. Builders will literally cram a garage that is just as wide as the 16 foot door and call it a two car garage. Especially for couples with two larger cars, this can present a problem you don’t realize until you come home from closing and try to unload things. In an ideal world, try to find a 22-24 foot wide garage. Depth & Height can also cause problems for someone with a large truck or van. I have had many clients test the garage to see if their truck can fit, only to find out it does not. When looking to resell, this just might eliminate some of your buyer pool.

Basement

Tornado!!! Hide under the…stairs??? Well, Minnesota bring us tornados every year and thankfully most do not touch down to create too much damage. Regardless it always gives us a little more peace of mind heading under ground. Another benefit to MN townhomes that have basements would be they typically feel more like a house as there is multiple living areas for different members of the family.