Minnesota Realtor | Minnesota Real Estate

St. Louis real estate – the right process for a great deal

We do not make big decisions often. We therefore do not have much experience of making such decisions of great importance. On the other hand we need to be very careful while making these big decisions because they likely will involve a lot of money and also our future happiness in general may be deeply linked to the decision. And we can easily get flustered by the decision making because we are not sure how to go about deciding and at the same time it is of paramount importance to make the right decision.

In such a situation it is a great help to know of a proper process to follow so that you can make a well informed decision that you feel confident about. For example, there are great deals to be had for a buyer in St. Louis and it makes a lot of sense to check out the deals on offer. But even when one deal is more attractive than the other there is pressure on us to get it right. Because even if we do get a good deal, we may have missed out on a better one.

Therefore one should follow a proper process to identify the deals that you will actively consider. And the first step is to identify a good St. Louis Realtor. But just as you cannot identify a good real estate deal without having quality information on the deals on offer, you will not be able to identify a good St. Louis real estate agent without having quality information on St. Louis Realtors.

But thankfully there is a simple solution to that. You can find rankings for St. Louis Realtors if you go online. These are based on feedback from their clients and are an independent source of information which makes them more reliable. And the information is thoughtfully compiled so that you can know the . details that you want to know. Once you have identified a great St. Louis realtor you give yourself a great chance of getting the best deals on offer.

Minnesota short sale – the value of insights

When you need to make a difficult decision about a house such as opting for a short sale it is already an uphill task with the all emotions involved. Possibly the decision has been reached after a determined effort to avoid having the make it in the first place. But given the circumstances you could be one amongst many who have had to face such a situation.

But though it is tough to decide on choosing a short sale option the hard work is not done once you decide to opt for it. In fact if you do not plan it well the hard work may just have begun. You will find that a short sale is a process that involves several rules and regulations and it will not be easy for you to know what expectations you should have. At such a time it is of great help if you can get the services of someone who has relevant experience and can give you good guidance. Not only will you be able to set high but realistic expectations you will also be able to get an explanation as to why things are the way they are. That is quite important because otherwise even if you get a good deal you will not be sure of why you should think of that as a good deal.

Of course you will need to find someone who has the relevant experience of short sales and also at the same time is knowledgeable about the neighborhood of interest to you. Fortunately you can get independent and reliable information on Minnesota short sale Realtor online which will include information as to whether they have experience of short sales.

You can of course get more information such as how long does the Minnesota short sale real estate agent take on an average to close deals and how many deals have been done in the past by the agent.

Once you have identified and selected an experienced professional you will find that what had started out as a difficult task has become much simpler.

St. Louis Realtors – what you need to know

We know it is very important to choose a great St. Louis Realtor if you plan to buy or sell real estate in St. Louis. And therefore we shall make an effort to inform ourselves about the Realtors so that we can choose one well. However what information about the St. Louis real estate agents will help us make the right decision? One cannot simply ask how good are they. You need to get facts based on their performance till date so that you can know what to expect and make a decision accordingly.

For this you need to get certain specific information. First you need to know how long the Realtor has been in the business. You should prefer to work with someone with adequate experience. Then you also should find out which are the neighborhoods that the St. Louis Realtor covers. Local knowledge is important and you should choose one who specializes in the neighborhood of interest to you. You should also look to find out how many homes has the agent sold. That will give you an idea of the agent to be able to deliver results for the clients. If you have a special requirement such as a short sale then you should find out if the St. Louis Realtor has the relevant experience.

Of course there is more information that you should know about the Realtor but before we add to the list you may ask where can you get this information. And even if you can get this information how can you be sure to trust it. The answer to that is quite simple, you can get the information online where it is available for free. And the information is based on customer feedback and so is quite reliable. In fact the information is quite detailed and you can know the customer satisfaction rating of the St. Louis real estate agent and also if the agent has won awards or accolades. Once you have got quality information with you, you can easily make a confident decision and look to get a great deal.

St. Louis Housing Outlook

The housing outlook for St Louis continues to look bleak. After entering 2010 on a high note, when prices had rose in the fourth quarter of 2009, prices lost momentum as the year progressed. With prices in decline throughout 2010 the expectations for 2011 appear to be the beginning of market stabilization. Above average foreclosure rates, high unemployment and an uncertain economic climate have slowed recovery in the St. Louis area.

Local news housing coverage has focused on five key areas this past year. With the focus on the housing and market outlook, home prices, foreclosure rates, unemployment rates and vacancy rates. This trend is likely to continue as we progress through 2011 as conditions remain similar to what we experienced in 2010.

Housing and Market Outlook

The housing and market outlook is perhaps the most prominent topic in the St. Louis Housing News Headlines. Housing and Market Outlook Reports are issued in January of each year and are based on more than 20 factors such as the volume of house sales, mortgage lending statistics, new home construction, regional economic growth and development, commercial building statistics, employment levels, historical trends, and consumer confidence.

Dr. Lawrence Yun is the Chief Economist of the National Association of Realtors® and he recently spoke at a conference hosted by the St. Louis Association of Realtors®. During the conference Dr. Yun forecast that the housing market will continue to look “ugly” for the short term. Part of the reasoning behind this statement is that there will continue to be above average foreclosure rates, high levels of unemployment and the national economic outlook continues to appear bleak.

Dr. Yun predicts that there will be a 300,000 unit increase in the number of resale houses sold in 2011 and a 170,000 unit increase in the number of newly built houses sold. This a marginal increase over 2010 however it does point to stabilization in the housing markets. This stabilization should lead to moderate price increases as markets continue to moderate and become less volatile.

The St. Louis market outlook will continue to have some influence on commercial investment as well as residential. Investment dollars have flowed at a much slower rate as investors struggle with financing and liquidity in a struggling economy. The trickledown effect of these market realities have a direct impact on unemployment levels as businesses have worked to minimize debts and increased profits as consumer confidence continues to be low.

House Prices

Understandably fluctuations in home values are a concern for any homeowner particularly when you are faced with having to sell your property in an unstable real estate market. Buyers are less confident during an unstable market. This, combined with an overabundant inventory, drives house prices even lower. Prices however will steadily increase but at a modest rate of 2-5% per year.

This increase is will be directly tied to improving consumer confidence, foreclosure rates and unemployment levels. As economic outlooks continue to improve it should bring new job prospects for St. Louis. It is unlikely that we will see the explosion in home values that preceded the financial meltdown but moderate growth in all sectors of the St. Louis real estate market is expected.

Homeowners throughout 2011 will continue to be subjected to a buyer’s market. This will be marked by extended selling periods, lower home prices and a highly educated class of homebuyers that are patient and willing to aggressively negotiate.

Foreclosure Rates

There has been a lot of focus on Distresses Sales which include foreclosures, short sales and the sale of bank or realty holding owned houses. Foreclosure rates have remained high throughout the county. It is predicted that the housing market will stabilize as markets become more accustomed to the new economy.

There is a strong belief among experts that foreclosure rates in St. Louis will continue to be above the historical average for the region. Short sales are a mark of the influx of property values that have dropped since the market peaks of 2007. Bank assets have continued to increase with high foreclosure levels and these assets are being rapidly liquidated at reduced prices which have further depressed property pricing in St. Louis.

Unemployment Rates

The National Association of Realtors® Chief Economist Dr. Lawrence Yun spent a great deal of time during the conference discussing the high unemployment rates and the impact that they have on the housing market. He revealed that there is basically the same number of jobs in the United States today as there were 10 years ago. The problem is that there are 30 million more people. Dr. Yun projects that it will take another 4-6 years to get the unemployment rates back down to 5-6%.

Since the housing market in St. Louis is driven by psychological factors, the unemployment rates have a direct impact on the confidence of consumers. Not only is steady employment a requirement for obtaining mortgage financing but it also gives homebuyers the confidence that once they purchase a house they will be able to afford it.

2011 will continue to see above average unemployment in St. Louis and surrounding areas as industry struggles to adapt to the new economic reality. As markets stabilize industry will once again begin to expand creating new employment opportunities. This will result in increased consumer confidence and will contribute to an improved national economic outlook.

Vacancy Rates

Vacancy rates continue to remain high as people double up. Doubling Up refers to the tendency of families to live together in the same house. Adult children are staying home with their parents longer and helping with finances while obtaining post secondary education. Senior parents are choosing to live with their adult children in their homes rather than downsizing to an apartment. This arrangement is a win-win situation as grandparents can watch the grandchildren saving the family money on child care.

Another form of doubling up is the taking on of room-mates or tenants. Homeowners rent out a room or portion of the house and in some cases there is also a sharing of utility costs. Although this has resulted in a savings for tenants, landlords have been impacted by the increase in vacancies as a result. Although this has a limited impact on employment and housing markets it is another indicator of a struggling economy.

Overall Outlook

The overall outlook for St. Louis for 2011 is one of slow and steady stabilization. Home prices should stop dropping and slowly begin to increase at moderate levels throughout the year. St. Louis homebuyers that are prepared to enter the real estate market can take advantage of low home prices and high foreclosure rates to maximize their buying power.

With the real estate market reacting to market conditions buyers have an opportunity to educate themselves and operate from a position of negotiating strength. Above average foreclosure rates, high unemployment and an uncertain economic climate have slowed recovery in the St. Louis area and the local focus on the negative is having an impact on the overall market.

When to attempt a short sale in Minnesota

Across Minnesota, thousands of homeowners are struggling to make their monthly real estate payments. Each month brings new challenges and home prices are becoming more and more depressed as foreclosures and short sales dot the Minnesota landscape. Many homeowners are looking at a short sale as the only way out of bad situation. Minnesota short sale REALTORS® are a great resource for people who have questions about short sales in Minnesota.

A short sale is done in order to avoid foreclosure in instances where the homeowner owes more on the mortgage than the house is worth. The worst thing a homeowner can do is to avoid taking responsibility for your mortgage commitment and bury your head in the sand. The short sale process can take several months to complete and the lender can always exercise their option to enter into foreclosure proceedings right up until the day of closing.

Financial hardships such as divorce, job loss or job loss could mean that the homeowner may qualify for a short sale. Short sales should only be attempted with assistance of a qualified professional. It is important to first understand the differences between a short sale and a foreclosure.

What’s the difference? First of all short sales involve asking the lender if they will accept less money than the initial value of the mortgage on the property. Unlike foreclosure proceedings, the seller does not need to be in default for a short sale to occur. The Minnesota homeowner must be able to provide evidence of legitimate hardship by presenting at least 2 months worth of bank statements, 2 years worth of tax statements and pay stubs for the past 2 months.

There are differences in how each option will affect your credit score and subsequent ability to obtain credit. For example, if you are way behind on your mortgage but have not been through a foreclosure and need to sell your home as a short sale it remains on your credit report up to 7 years. A Minnesota foreclosure will remain on your credit report for 10 years. Nate Green, Owner / Broker of Record for Blue Roof Real Estate in Arizona (an organization that assists homeowners with the short sale process), suggests that there is an average 2-year period following a short sale before one is able to buy another house. Furthermore, Green advised his clients that remaining current on your credit cards and other financial obligations and even paying them off following a short sale can have positive effects on your ability to obtain a new loan.

When do I start? As soon as possible after realizing that you are in need of assistance and you have explored all of your options. When you find yourself in a situation where you owe more than your home is worth and you are facing a financial hardship (job loss, illness, divorce) than you should attempt a short sale with the assistance of a qualified Minnesota REALTOR® that specializes in Minnesota short sales. Another circumstance that warrants the exploration of the short sale option is when you are already facing foreclosure and as you are several months behind on your mortgage payments.

What’s the process? The short sale process is a lengthy and time consuming one. Before a lender will consider a short sale, there are 2 things that must be determined. First the lender must consider your ability to make the mortgage payments. Then secondly they must consider the possibility that they will end up in the same position if they foreclose and attempt to sell the property. Any homeowner considering a short sale should seek the advice of a qualified and experienced Minnesota REALTOR®, an attorney, and a Certified Professional Accountant.

The homeowner must provide a hardship letter and supporting documentation to the lender. Wells Fargo, one of the nation’s leading lending institutions has established certain guidelines to facilitate the short sale process. They recommend a comprehensive package which includes the following:

Agreement of Purchase and Sale and any attachments
Clear escrow instructions
Comparables, appraisals and other information available from the title company (you will likely be required to pay for the appraisal and other reports, since you are the one initiating the process)
The Title-Search Report (which will show any second or third liens on the property and evidence that they have been settled prior to submission to Wells Fargo)
Copy of the Deposit in Trust

Wells Fargo will likely retain the right to continue with foreclosure proceedings up to the scheduled closing date or the date that the foreclosure is due to take place depending which comes first.

Most lenders have a preference for dealing with a Minnesota REALTOR® as opposed to dealing directly with the homeowner. There are several reasons for this and professionals will advise you to work with a REALTOR® in order to eliminate difficulties in negotiating while under emotional duress. Furthermore, avoid dealing with a professional who is a friend or relative. Your Minnesota real estate agent® will assist you in providing the necessary documentation to the loss mitigation department of your lender and will ensure that the lender’s process is followed.

One negotiation tactic is for the homeowner to pay for these reports upfront in exchange for a written agreement from the lender that they will not pursue you for any money that is lost due to the short sale of the property.

What are the implications? At first it may seem a reasonable solution to secure a short sale however, there are long term drawbacks. There are tax consequences and your credit report will also be affected by a short sale. The negative credit note will remain on your credit report for 7 years.

Once you have a clear understanding of the differences between a short sale and a foreclosure, and have researched all of your options, then you should look into a short sale. The short sale process is very lengthy and involves a great deal of organization and paperwork and there is a risk that the lender can foreclose right up to the last minute. Taking responsibility for your situation is the best thing that you can do and the lender often looks favourably upon this effort.

St. Louis Homebuyer Trends

Missouri homebuyers are approaching the 2011 St. Louis market with cautious optimism. Above average foreclosure rates and high unemployment levels have created an environment that fosters lower home prices. With the help of St. Louis REALTORS®, buyers are making a conscious effort to better educate themselves to the realities of the local real estate marketplace. With the stabilization of home prices, St. Louis homebuyers have a rare opportunity to capitalize on low interest rates and the substantial home values that are currently available. REALTORS® throughout Missouri are being approached by first time home buyers who are excited about current home prices and low mortgage interest rates.

Although the economic forecast for St. Louis is still shaky there seems to be some room for optimism in homebuyers. The number of buyers has been greatly reduced due to high unemployment levels and this is a benefit for homebuyers looking to get into the market at this time. Sellers are experiencing above average sale times and with reduced buyer activity they have been forced to lower prices and offer incentives to attract homebuyers.

Home prices have basically stabilized and are expected to remain low, only increasing by about 2-5% per year for the next 2 years. This is an indication that home prices have bottomed out which means St. Louis homebuyers are currently getting the best possible value for their real estate dollar. This is partially a result of the fear of foreclosure, high unemployment levels and low buyer activity.

Foreclosures make up a substantial portion of the St. Louis real estate market at this time. The number of distressed sales (which include short sales, foreclosures, bank owned and real estate company owned houses) account for 35-40% of the inventory. Ideally, the foreclosure market should only account for about 5% of the housing inventory. Due to an explosion of distressed sales homebuyers are entering into a market with a huge housing inventory that is competing for the limited number of homebuyers looking to purchase a home. Homebuyers have the opportunity to negotiate homebuyer incentives and lower prices as a result of this glut of properties.

Last year, the St. Louis Association of Realtors® hosted a conference in which Dr. Lawrence Yun, the Chief Economist for the National Association of Realtors®, predicted that 570,000 new homes will sell this year. This is a 170,000 home increase over 2010. There has been a steady increase over the last three years. Although this is a modest year over year increase it is a sign of slowly improving buyer optimism.

Dr. Yun also predicted that 5.6 million resale houses will sell in 2011, up from 5.3 million in 2010 and 5.15 million for 2009. This further supports the slowly improving buyer sentiment in the St. Louis marketplace. The modest sales increases support the idea that pricing has finally stabilized in St. Louis. For prospective homebuyers this indicates that home prices have finally bottomed out and should begin to steadily increase in the near future.

Home purchases have many psychological factors. The fear of unemployment, foreclosure and unstable housing markets has created more cautious and better educated homebuyers. Homeowners are finding ways to save money and create personal security. One of the ways they are doing this is by “doubling up” also known as taking in borders, room-mates and letting children stay home longer so they have additional financial contributions to the household. This is creating a stronger marketplace for homes with additional living space, in-law suites and the ability to accommodate larger groups of people comfortably.

Due to the prevailing market conditions buyers have an opportunity to fully educate themselves not only on market conditions but to the real estate process as a whole. There is no sense of urgency as there is a wealth of suitable properties available for most homebuyers at all budget levels. As a result buyers are educating themselves better than ever before. They are prepared to exercise patience and extend their home buying search as they familiarize themselves with the St. Louis market.

St. Louis homebuyers are experiencing far fewer competitive bidding environments as foreclosure rates have continued to soar. Although these competitive situations do exist they have become a rarity in this market. Buyers are prepared to move on to the next home rather than get involved in a bidding war with other homebuyers as there are plenty of suitable homes available in St. Louis for most homebuyers.

Short sales and foreclosures in Missouri have improved the ability of homebuyers to negotiate the best deal for each property. They may experience additional obstacles with the sale process as they negotiate with financial institutions. This has created an environment that involves longer wait times for responses and limited ability to negotiate extras into sales agreements. Foreclosures and short sales require additional paperwork that is not present when dealing with a typical home sale. Foreclosures report to a financial institution which means the wait times for a response can be more than 48 hours. Costs such as appraisals, repair estimates and inspections are the responsibility of the homebuyer in many of these cases. These costs can be offset by the buyer’s ability to negotiate a more favourable price for the homebuyer.

When dealing with traditional Missouri home sellers that do not have a distressed home for sale extras such as assistance with closing costs, inclusions of furnishings and appliances are available. These extras are becoming more commonplace as sellers compete for buyers in the St. Louis area. Home sellers are experiencing increased sales time, more competition due to high levels of foreclosures and as a result they are seeking new ways to attract potential homebuyers.

Interest rates for mortgages continue to be favourable for St. Louis homebuyers. Even with the additional hoops that buyers have to jump through to get financing due to reforms to the mortgage markets. As a result qualified homebuyers are being allowing tremendous buying power.

Homebuyers are seeing lower home prices, lower interest rates and high foreclosure rates in St. Louis. This has created an environment that allows for greater negotiating power for homebuyers. Home prices appear to have stabilized which is an indication that they are the lowest they are going to get. Home prices should begin to increase gradually over the next couple of years creating an opportunity for buyers to rapidly build equity as home prices improve. As we progress through 2011 St. Louis homebuyers can realize the unlimited potential of investing in the local real estate market.

St. Louis Real Estate Market Projection 2011

There is a debate amongst economists, REALTORS® and other analysts regarding the stabilization of the real estate market in 2011. According to a report in Major Metropolitan Market Forecasts in 2011 the St. Louis real estate market ranks 21 out of the 230 markets included in the House Predictor results released at the beginning of the year. Although this period continues to be very trying for home sellers it presents great opportunities for those looking to get into the St. Louis housing market.

Some argue that the real estate market in St. Louis may not bottom out in 2011, while others predict that it will take another year or two before the real estate markets stabilize. The reason for the debate is that there are number of factors, both localized and nationally, that are used to evaluate market conditions and establish forecasts. Things like the volume of home sales, mortgage lending statistics, new home construction figures, regional economic growth and development, commercial building starts, employment levels, historical trends and consumer confidence are all taken into account.

Last year the St. Louis Association of Realtors® hosted an event in which the Chief Economist for the National Association of Realtors® Dr. Lawrence Yun was the feature speaker. His Housing Market Outlook projects the following:

5.6 million resale houses will sell this year (up 0.3 million from 2010)
570,000 new houses will sell this year (up 170,000 from 2010)
There will only be a 2-3% increase in house values (compared to 0-2% for 2010)
If there is a double dip in the market it will much milder than the first one

In a recent article by the St. Louis Business Journal St. Louis home prices were compared to previous area statistics. The figures paint a bleak picture indeed. Overall home sales (including distressed sales) dropped by nearly 8% in November of 2010. Even when the figures were analyzed to exclude the distressed transactions (which include foreclosures, short sales, bank and real estate owned properties) the year-over-year home prices were down 3%. Nationwide figures are not much better. Overall sales figures (which include distressed sales) fell 5% while figures which exclude the distressed sales still fell 2%.

The St. Louis real estate market first appeared to be stronger in the spring and summer of 2010. The majority of this was due to the $8,000 tax credit for first-time home buyers which according to Tim Logan of SLToday.com “had an outsized influence in a modestly-priced markets like ours.” Dr. Yun takes it a step further and claims that 1 million of the buyers would not have purchased a house without the tax credit while 3.4 million buyers would have bought a house regardless. He credits the program for reducing the inventory of houses for sale by 1 million and helped bring about the early stages of stabilization.

Since psychology is one of the driving forces behind the real estate market today the unemployment rates and population figures are a valid determining factor in market projections. Using these and other figures Dr. Yun predicts the short term inventory conditions will look very unfavourable. The reason being that there are “basically the same number of jobs today in the U.S. that there were 10 years ago, but we now have 30 million more people than then.”

According to Dr. Yun several factors will continue to affect the St. Louis real estate market. The high unemployment rate is taking its toll on the area and it is predicted that it will take 4 to 6 years to get the unemployment rate back down to 5-6%. Short sales and foreclosures account for 35-40% of house sales (they should only account for about 5%) and these rates are expected to remain for about two more years.

Furthermore, new housing starts have not increased with the population. This means that although the population has increased the demand for housing has not. This is due to the fact that many people cannot comfortably afford to go it alone. More and more frequently people and families are doubling up either by taking in room-mates, living with parents longer and helping them to pay their mortgages; senior parents are choosing to live with grown children.

There is a significant decrease in the number of people who are moving “inter-state” and with the unfavourable employment figures inter-stators are reluctant to relocate to areas which are experiencing the brunt of the financial turmoil. Even within the state there is a modest decrease in the number of people who are moving.

Economists continue to debate as to when the St. Louis real estate market will stabilize and with so many local and national factors to consider, it is a very daunting task indeed. The Clear Capital One-Year Metro market Forecast claims that the wild spikes that the market experienced in 201 will likely be replaced with more gradual price trends for 2011. The current St. Louis real estate market is being driven by psychological factors and the high ratio of short sales and foreclosures and the rather dismal unemployment statistics are not instilling residents with a great deal of consumer confidence.

As 2011 progresses above average foreclosure rates and low interest rates should promote buyer activity in the St. Louis area. This will help offset some of the prevailing doom and gloom sentiment created by an uncertain economic forecast, above average unemployment and high foreclosure rates. A full St. Louis real estate market recovery is heavily tied to the national economic outlook and will not experience a full recovery to economic confidence is developed on a national level.

Savvy homebuyers can capitalize on the St. Louis market environment by realizing housing values that may not be seen again for generations. Home sellers unfortunately will look forward to long sale times, lower prices and lots of competing properties. Those homeowners that are currently struggling are unlikely to find help in 2011 as support for homeowners is limited at this time. Without speedy government intervention foreclosure rates will continue to rise as the year goes on.