Buying Bank Owned Minneapolis Real Estate
Today’s Minneapolis real estate market and real estate markets across Minnesota suffer from many things. The overwhelming number of foreclosures and bank owned properties in Minnesota that are driving the majority of home owners price’s down and have been for a few years now. The majority of home owners realize that the Minnesota real estate market is down and they hear from friends and family that are trying to sell their home how difficult it is to sell in today’s market. What many Minnesota home owners don’t realize is how it affects their own Minneapolis Mn homes value. In the not too distant past it was possible for a Minnesota home owner with good credit to take their county property tax statement into a loan officer and get approved for a home equity loan or to refinance their home for twenty to twenty five percent more than what the tax statement indicated without a appraisal . In today’s market your application may be turned down with excellent credit because your Minnesota home is worth what the tax statement would indicate or possibly considerably less ten to twenty percent depending on the area of your home and condition. The price of real estate has always been based on location, condition and pricing of homes sold in a area. Many Minnesota home owners with excellent credit are faced with being overstretched in today’s economy and have a home that is worth considerably less than what they have paid for the home and are forced to sell their home in today’s real estate market where foreclosures and bank owned homes over saturate the market.
Thinking about buying a home in today’s Metro Minneapolis real estate market you should keep these things in mind. This Metro Minneapolis real estate market may possibly be the best real estate market to buy in, in your life time. Interest rates are as low as they have been in 30years, more and more cities are coming up with special loan programs to help first time home buyers buy in their cities. I talked with a loan officer today that told me of a loan program in Edina Minnesota, that the home buyer received sixty thousand dollars from the city of Edina to buy a townhome in Edina. Recently I helped a young family in Brooklyn Park who received fifth teen thousand dollars to buy in the city of Brooklyn Park. Plymouth Minnesota was selected by money magazine in 2008 as the best place to live for United States cities with populations between three and five hundred thousand. Plymouth has a special loan program where first time home buyers can receive a second mortgage up too twenty five thousand dollars with 0 percent interest to buy in the city of Plymouth. Plymouth Minnesota also has a outreach loan program that gives up to $3000 for entry cost assistance to lower income families, this loan program is also available in Wayzata and Minnetonka Minnesota. Minneapolis Minnesota has the Minneapolis Advantage Loan, the buyer can get up to ten thousand dollars entry cost assistance at zero percent interest, no payments and forgiven after living in the home for five years. The home buyer must buy in targeted neighborhoods in Minneapolis Minnesota, no income limits and you are not required to be a first time home buyer. There are many city, first time home buyer programs out there to assist with down payments and closing cost.
Along with individual city loan programs there is also a growing number of county loan programs for first time home buyers in Minnesota. The Anoka County down payment assistance program which will go up to a five thousand dollar second mortgage with zero percent interest to buy in the cities of Anoka county, Anoka, Blaine, Fridley, Columbia Heights, Coon Rapids and other Anoka County cities. Dakota County has the Dakota County CDA Assistance loan program, no payments and zero percent interest on this second mortgage but must buy in Dakota County. Up to five thousand dollars if household eligibility income is eighty percent of median income based on family size. Up to ten thousand if household eligibility income is fifty percent of median based income based on family size. Washington County has a Washington County HRA Assistance Loan that will go up to ten thousand if household eligibility income is eighty percent of the median income based on family size and up to twenty thousand if the household eligibility is fifty percent of the median income based on family size. In Addition to county loan programs there is also county bond programs. The Dakota, Washington and Scott County Bond Program, up to four percent of the mortgage amount in down payment assistance grant or a below market interest rate. Must buy in Dakota, Washington or Scott County. Maximum household income for family of one or two equals Seventy seven thousand six hundred and for a family of three or more income must be less than eighty five thousand three hundred sixty. The maximum purchase price is two hundred fifty six thousand and eighty dollars for a single family home and you must be a first time home buyer. Minneapolis and St Paul Minnesota also have a bond program called the City Living Bond Program. With the City Living Bond Program you could get up to four percent of the mortgage amount in down payment assistance grant or a below market interest rate. The home buyer must buy in the city limits of Minneapolis or St Paul. The maximum household income is eighty thousand nine hundred but up to eighty eight thousand nine hundred ninety for targeted areas. The maximum purchase price is two hundred sixty six thousand nine hundred seventy for a single family home. In targeted areas, the maximum purchase price is three hundred fifty five thousand nine hundred sixty dollars. Must be a first time home buyer.
Things to keep in mind when buying a foreclosed home from the bank, it is quite different than buying a home from a traditional seller. First be prepared to wait, most banks are still not setup to deal with foreclosed homes or at least the number of foreclosed homes that are in their portfolio be prepared to be patient. A typically bank transaction will take 45-90 days from the time you write the purchase agreement to closing, it may take a couple of weeks to negotiate terms, it may take a couple of weeks for the bank to return signed documents before you can even have the home inspected and then the bank will normally ask for 45days once it is negotiated for closing your transaction. A big misconception is that banks will give homes away at next nothing, that’s not true banks pay money for appraisals and realtors to do BPO’S short for broker price opinions so that they start with the right listing price. Usually home buyers who start with a low ball offer will never get the home they want, banks will sit on the offer until another higher offer comes in and then it becomes a multiple offer. Be prepared for the bank to pay closing cost’s typically 3-3.5percent and then they will negotiate hard as close to the list price as possible. Also be prepared to use a banks closing company, they want to manage the money being spent on closing cost however in the state of Minnesota it is the law that the home buyer is allowed to use their choice of a closing company. Typically there is no savings to the home buyer to use the banks closing company and you give up making sure that it is done correctly and on time, it’s very helpful to the home buyer to have their own closer to keep a eye on the transaction. Another good reason to use your own closing company is so that any assessments against the property get paid in full by the bank and not you. Be prepared to negotiate the dewinterization of a home before the inspection, banks would want the home buyer to pay for it but in reality it is best that the bank do it and keep the legal responsibilities of problems that may arise from the dewinterization the banks responsibility. Would you really want the legal responsibility of breaking the water pipes or any other problems that could arise, remember you could be legally responsible if you dewinterized the home. Banks always sell homes as is and usually with no disclosures. The bank wants no legal responsibilities after the sale of the home, they have never lived in the home and know nothing about the home. Having your future home inspected by a qualified home inspectors is a must to help eliminate any unexpected surprises after you have moved in to your home.
