Outlook for 2012

We are all children at heart.  Especially when it comes to asking questions!  Consumers today remind me of my 2 year old daughter, asking the same questions over and over and hoping/praying for different results.
 "Can I have candy?"   "Are we there yet?"  "How about now?"

Thankfully adults have more mature questions like, "How's the market, now?"  So without further adieu I will try and predict the market in the Bemidji area for 2012!  Using local MLS statistics I have compiled some facts and some speculation based on what I have heard and what I know to be true.

•  The total number of listings in Bemidji is down 21%. I believe that more sellers are waiting until prime spring/summer season to list, because the need to sell isn't as great as it has been in the past few years.
•  There are 26% more homes pending this year than last year at this same time.  With the mild winter it has been easier for buyers to get out to look at homes.  Also, I see an influx of first time home buyers fueling the market and getting things moving.  
• 41% more homes sold.  This speaks for itself.  The market is rebounding and homes are selling.
• The total volume of homes sold is up 90%! In my opinion this shows that with the first time buyers finally fueling the market, sellers are able to be move-up buyers and move more expensive homes that in the past few years have been taking longer to sell.  Also, because interest rates are so low buyers are able to afford a larger home.
• The average sale price is up from $122,016 last year at this time to $164,313 year to date.  I believe this is due to the fact that the average buyer is able to buy a larger home because of low interest rates. 

One of the other questions that gets asked frequently is, "What effect do foreclosures have on Bemidji's market?"  I believe that we will start to see less foreclosures in our area compared to the past 5 years and that the average price of those foreclosed homes will go up.  During those past 5 years we have had an influx of lower valued foreclosures that have brought the average sale price down for our area considerably.  Homeowners with homes of greater value seem to have been able to hold on to their homes longer, but we are now starting to see some of them come on to the market as foreclosures.

I hate to sound like a broken record or like my 2 year old, but remember, NOW IS THE TIME!  Don't miss out.  I believe that the market is now on the rise and people will be kicking themselves in the future for missing out on this wonderful opportunity to buy in Bemidji!  So get out there and find your dream home, vacation cabin, or rental property today!

Little Green Houses

Now you know what you need to get started in investment real estate: Little Green Houses!  Now let's expound on HOW?!  I mentioned earlier that there are "creative" ways to purchase your first investment property, now I will expound on those ways along with the more traditional ones.

• Cash is King (whether it's your own or borrowed from a rich friend or relative) You may be able to secure a better "deal" with this method.  Often sellers are more negotiable when a buyer pays cash, because it can close faster and with less issues.

• 20% cash down and finance the rest through your favorite mortgage banker. This option would be for a buyer who has 20% of the purchase price in liquid funds of thier own.  How do you get cash like this you say?  Start saving or sell things you don't use/need anymore.

• 20% down with Other People's Money (OPM)!  How do I get OPM, you say?  Either from a friend or relative, Home Equity Loan or Line of Credit on your personal house, or from another investor/business partner. 

• 10% down!  My favorite banker, Anne Kehoe from Wells Fargo Home Mortgage, introduced me to a program where you can put as little as 10% down on an investment property if it is a HomePath property!  This means that it is owned by Fannie Mae.  To view a list of eligible homes in the area visit http://www.homepath.com/ . To find Anne go to www.wfhm.com/wfhm/anne-kehoe

• Contract for Deed.  This is how I bought my very first investment property!  They are difficult to find because many sellers are not able to offer a contract for deed. But if you are unable to obtain a traditional mortgage this is another avenue.  As long as the terms are right and the house is a good fit.  It works well for people who have a good down payment, but for some reason cannot get financed.  (For me it was because I was self employed and could not show 2 years of income at the time.)

• Credit card.  I do not recommend this method but I have to tell you that I used it once!  I bought a lot at the county land auction for $13,400 with a credit card check.  It was a promotional no interest, no payment for 6 months and I had a limit of $13,600!  I knew that I could pay it off from another sale that was coming up within that 6 months so I took the plunge.  USE THIS METHOD WITH EXTREME CAUTION!!!

If you or someone you know has always dreamed of investing in real estate NOW is the time.  First of all, prices are down and rates are still incredibly low!  If you'd like to get started NOW, contact me TODAY! Or you can always check out my website to view all of the area listings at: www.realliving.com/mandy.gazelka  Happy hunting!

REO and foreclosures in Bemidji

REO: Real Estate Owned or Bank Owned

The Bemidji real estate market is beginning to be "REO Driven". What does that mean? It means that a large number of the homes sold in the past few months have been REO property. The banks are able to keep reducing prices on the real estate they own until the property sells and that is bringing down residential home prices in Bemidji. It's is good for buyers but for ordinary sellers.

Remember, just because a property is REO does not mean it is a "good deal". Sometimes a buyer must wait until a property has been on the market for a while for the bank to reduce their price, even after that you may have to bargain back and forth with the bank until you come to a price you are comfortable with.

If you want to find REO (Real Estate Owned) or foreclosure properties in Bemidji the best way is to call me for a list. But if you want to search on your own, I have come up with a few websites for you to try.

http://www.pasreo.com/

http://www.reotrans.com/

http://www.ocwen.com/

http://www.fnams.com/

http://www.realtytrac.com/

http://www.res.net/

http://www.homesteps.com/

http://reosearch.fanniemae.com/

If you want to take a look at any of the properties you find on these sites, just give me a call.

Foreclosure Buying

Purchasing foreclosed homes is the current talk of the town. You may be able to save up to 50% by purchasing one of these properties. There are a few things to think about and investigate before you go ahead with your search.

1. Most foreclosed homes are sold as-is with no disclosures. This means that you will have to inspect the home yourself or hire a professional home inspector to make sure it doesn't have any major defects.

2. Just because it's a foreclosure does not mean it's a good deal.

3. Get pre-approved before you make an offer. Properties owned by a bank usually require a pre-approval letter from a lender at the time of offer or the offer will not be considered.

4. Make sure you have the funds to do all the necessary repairs. Typically your bank will not lend you extra money to do repairs. Some of which may be costly, such as a septic, well, roof or foundation.

5. Check for freeze damage. Especially in Minnesota homes may sit vacant over the winter without the proper winterization. In this case you may have burst pipes and/or water damage.

6. Get a REALTOR to represent you in the transaction. It's always a good idea to have an agent represent you and your best interests during any real estate deal. They will be able to use their knowledge and expertise to guide you through.

Of course there are more steps to purchasing a foreclosed home but these are a few tips from my personal experience to get you started. Contact me today to get started investing in foreclosures in the Bemidji area.