This past weekend I participated as a vendor at the Twin Cities – South of the River Wedding Expo in Burnsville at the Best Western Nicollet Inn.  In preparation for this event I published a First Time Homebuyers Guide to assist new couples through the process involved with buying their first home.  This 15 page guide goes through all of the essentials needed to help first time buyers (or any buyer for that matter) in understanding how to go about making such a significant purchase.   With over 200 attendees at this Expo it was a great opportunity to meet many new couples from throughout the Twin Cities who were not only about to start a new life together but were contemplating the purchase of their first home as well.

First Time Homebuyer Guide Contents

The First Time Homebuyers Guide is packed full of information that will assist Twin Cities couples understand the entire process.  It starts by talking about the advantages of buying instead of renting and then goes on to talk about getting approved for a loan and what that loan will cost you.  It then discusses things that are easier to understand like making a wish list of features and how location, floor plan and condition play into choosing a home.

Finally, the Guide discusses more difficult topics like how to come up with an offer price, what goes into making an offer and the entire process of what happens from the time an offer is made until you close on the home and move in.

Get Your Free Copy

It turns out that I printed more copies of my First Time Homebuyers Guide than I needed for the Twin Cities Wedding Expo so I thought I’d make them available to others as well.  I’d be happy to mail you a copy today if you contact me.

The First Time Homebuyers Guide includes a number of customer testimonials from other couples I’ve helped.  It’s always one of my favorite experiences as a Realtor in seeing the excitement of a first time buyer close on their new home.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

The Housing Affordability Index in Dakota County (and the rest of the Twin Cities) is at an All-Time High this month.  At the end of December 2011, the index hit a mark of 264 which is 8.6% above this time a year ago.

What Is The Housing Affordability Index

The Index was developed in 1971 to measure whether the typical family can afford to qualify for a mortgage on a typical home.  It’s really a measure of 3 primary factors -

• Average Home Prices
• Median Incomes
• Interest Rates

This definition is available from the National Association of Realtors -

a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment. For example, a composite HAI of 120.0 means a family earning the median family income has 120% of the income necessary to qualify for a conventional loan covering 80 percent of a median-priced existing single-family home. An increase in the HAI, then, shows that this family is more able to afford the median priced home.

In other words, the Index assumes a 20% downpayment which isn’t always typical these days but an FHA loan allows for a 3.5% downpayment and is very popular right now.

Impact On Dakota County Residents

Dakota County has continued to see home prices drop while interest rates have continued at near record low levels.  This combination has driven the Housing Affordability Index ever higher.

The index of 264 means that the typical family has 264% of the income they need in order to qualify for a loan to purchase the median priced home in Dakota County.  Basically, they would have no problem qualifying as they would have plenty of income to meet standard mortgage acceptance measures and could likely qualify for a house much more expensive than the median price.  The median priced home in the Twin Cities declined to $145,000 in December.

Median Mortgage Payment

Another way to look at the Housing Affordability for Dakota County residents is to look at how much of a households income would be eaten up by the median mortgage payment.  As you can see below (in this national number) the average household’s mortgage payment fell to around 15% of their income which means that people can spend a lot less of their income on housing and hopefully allow them to save more money.

This graph is from ADS Analytics

Buy vs. Rent

This all ties in quite a bit with feedback I’m getting from many potential first time homebuyers in the past couple months who are considering buying their first home.  They are seeing that it’s cheaper to buy vs. rent (as I wrote about last May), especially as rental rates go up in the face of low rental availability.

Housing Affordability Conclusion

With this combination of low prices, low interest rates and higher rents it may be the right time for Dakota County residents to explore their options.  Many people start by finding a Realtor and then getting qualified by a lender.   You can contact me and we can get started.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

Evermoor continues to be one of Rosemount’s premier development’s so it’s time to do a 2011 home sales update in the place I call home.  This former 500+ acre sheep farm is finally about to be completely filled with homes as Lennar is expected to finish the final open lots in the Glendalough neighborhood by the summer of 2012.  You can read my 2010 home sales recap here.

Evermoor Development

Using my “fancy map” above you can see that Evermoor stretches from Diamond Path along the Apple Valley border on the west side almost to Highway 3 on the east end.  The development is broken up into 13 sub developments which I outlined in my initial Evermoor blog story.

You can also find a drive through video I did showcasing the different neighborhoods on YouTube.

2011 Home Sales Recap

This year I decided to include both the 2010 and 2011 sales figures so it’s easier to spot trends.  I have columns for total sales, traditional sellers, new homes, bank owned and short sales.  Some of the major themes that emerge include -

• There were a total of 64 homes sold in Evermoor in 2011 which was an increase from the 58 sold in 2010.
• Lennar continues to sell new homes like crazy as they sold 28 new homes in the Glendalough development.  This number was better than the total number of previously owned homes in the entire Evermoor Development for 2011
• There was a marked increase in the number of bank owned properties, although the bulk of them are in the lower end townhouse sub-development at Roundstone
• When you take out the new homes and lender mediated homes there were actually fewer homes sold by traditional sellers in 2011 than in the previous year

Prices Continued Downward

Overall, the Minneapolis Association of Realtors says that the Average Sales Price of homes sold in Rosemount have declined by 9.7% in the past 12 months.   We can see that show up by looking at homes in the Cross Croft neighborhood.  These are detached townhomes that are very similar to each other in style and size so it makes it easy to watch pricing trends.

Example 1:

13621 Crosscroft and 13570 Crossmoor are almost identical homes.  The home on Crosscroft sold on 11/29/2010 for $260,000.  The home on Crossmoor sold on 12/14/2011 for $229,000 which is actually almost a 12% decline.

Example 2:

3694 Crosscliffe & 13603 Crossglen are larger homes but very similar 2 level models with 3 bedrooms & 3 baths.  The home on Crosscliffe sold on 2/19/2010 for $335,000 while the Crossglen home sold about 18 months later on 9/21/2011 for $295,000.  That’s another 12% decline.

Active Listings

There are currently only 13 active listings available in the Evermoor development of Rosemount.  5 of those listings are new homes by Lennar and 4 of them are condo’s in the Bard’s Crossing sub-development.  You can see them by using my Home Finder tool.

The number of listings in the Twin Cities is down all over and while it is expected this will increase rapidly once we approach spring the lack of listings is actually stabilizing prices right now.

Summary of Evermoor Development

Rosemount’s Evermoor Development continues to be one of the premier places to live in the south metro.  One has to only look at how many new houses are still selling here to see it’s a place that people want to call home.

If you are looking to buy or sell in Evermoor choose a Realtor who lives here and knows it extremely well. Just contact me and we can get started.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

It’s been a while since I wrote an expired listing success story so as we enter the new year it’s a good chance to go back and get caught up on some of the 8 listings that I helped sell in 2011 that had failed with a  previous Realtor.  I have written up a number of other expired listing success stories which can be found here.

Steve & Susan’s Story

I got a call from Steve February 2011 to come and meet to discuss their home in South St. Paul.  Steve and Susan had recently gotten married and she moved into his townhouse in Woodbury so they were selling her South St. Paul home.  They had the home listed with another Realtor for over a year with little interest.  The home was now sitting empty, except for Steve’s vintage car in the garage.  They wanted the house sold quickly.

The Interview Process

I met Steve at the home and after my normal walkthrough I scheduled to come back and meet to go through my pricing analysis.  I was a little nervous as my comparable pricing analysis said the fair market value was $106k and they had previously been on the market at $137k.

What was interesting is that Steve & Susan knew that the price was too high as they could see a lot of the same sold data on the internet themselves.  Their previous Realtor just hadn’t had the boldness to tell them what they needed to price the home at to get it sold.  This lead to a wasted year on the market and an expired listing.

Steve & Susan’s Results

We listed the home at $109,900 and the home sold in 11 days at $106,532 – pretty much right on what I had told them.  They were extremely happy as they met their goal of getting the home sold quickly and at full price!

Steve’s testimonial was short and sweet – “Hire Bill Wallace. He will get your house sold!”

Avoiding Your Own Expired Listing Story

Each of these clients could have saved themselves a lot of headaches by hiring the right Realtor in the first place. Things like asking the right questions and getting references can go a long way in helping make sure you don’t have your own expired listing or cancelled listing story when trying to sell.

To find out more about these stories or begin your own interview process with a specialist in Dakota County and the rest of the Twin Cities please fill out my Contact Me form so we can get started.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

10% returns on Dakota County investment properties are readily available to people that are looking for a proactive way to invest extra cash outside of the volatile stock markets.  While the real estate market has certainly been volatile, collecting regular rent checks no matter what happens to the underlying value of the property makes for a much more stabile investment vehicle.

Apple Valley Townhouse

Right now the following townhouse can be had that should return 10% without even considering depreciation write offs or the possibility of appreciation.  The property in question might be hard to finance right now but if it could be financed the leveraged investment would return closer to 18%.

Here’s what the investment spreadsheet I use looks like for this property in a prime location that’s less than 12 years old -

This property should easily rent for $1,000/month if not more but even if it only rents for $950/month it would bring in over 9%.  While I’m factoring in the investor self managing them it could also be managed by a property manager.  I also build in conservative estimates for 5% vacancy, a $200/year legal budget and a full month’s rent for repairs.

10% Returns on Investment Property

The point is that many investors feel we have maybe 1-2 more years of opportunity to capitalize on bank owned and short sales property prices to scoop up real estate at about half of what it sold for 5 years ago and realize these 10%+ returns on Dakota County investment properties.

In addition, vacancy rates are declining and rental rates are increasing in response to more people moving out of homes and in need of rental housing.

If you are looking to diversify into real estate it’s a good idea to find a Realtor with experience in buying investment properties as well as the processes to find and manage tenants.  With 5 rental properties of my own in Dakota County I’m in a unique position to help investors.  To get started contact me.

If you’re looking for more real estate investment property advice I highly recommend the articles and message boards at www.biggerpockets.com

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

We are entering 2012 but I thought it would be good to do a home sales recap to show how I did in 2011 in helping clients in Dakota County to buy & sell homes.  I did a similar home sales recap for 2010 sales so I thought this would be a good annual update.

Overall Recap

If you’ve read my profile you’ll know that 2011 was only my 2nd full year as a Realtor.  That said, it was another successful year as I once again qualified for RE/MAX’s Executive Club which is their designation for the top 25% of their Realtors nationwide.  This is something that most new Realtors never accomplish so I’m proud to have hit that mark again.  Overall, I had 18 transactions for the year with all but 2 of them happening in Dakota County.

You can read from a number of my 2011 clients in the testimonial & customer reviews area of my website.

2011 Home Sales Recap – Sellers

For the year I helped 9 clients get their home sold in Dakota County during 2011.  These homes were located in the following cities -

• Apple Valley – 3
• Farmington – 3
• Mendota Heights – 1
• South St. Paul – 1
• Burnsville – 1

One of the things I’ve focused a lot of effort on is helping people sell their home after they failed selling with a previous Realtor.  These expired listings have become a good source of business as 8 of the 9 seller’s homes you see below had failed in a previous attempt to sell.  I’ve done write ups on some of these transactions and plan to write more in the coming weeks.

2011 Home Sales Recap – Buyers

In 2011 I also had the privilege of helping in 9 buy side transactions.  These included:

• 3 first time buyers (Bloomington, Lakeville & Farmington)
• 2 previous buyers who were moving to new homes (Apple Valley & Inver Grove Heights)
• 4 investor buyers (Apple Valley, Rosemount & Minneapolis)

2011 Dakota County Recap Final Comments

2011 continued to be a difficult year for Dakota County home sellers but there are some good signs for 2012.  Currently, the biggest helping trends are the huge reduction in the number of listings on the market.  Currently there are 22% fewer listings on the market in the Twin Cities than we had at this time last year.  That’s helping stabilize prices as home sellers have fewer competitors to have to discount against.  Continued low interest rates are also a big incentive for buyers.  If we can just reduce the number of lender mediated homes we might actually see prices rise.

To help you achieve your house buying or selling needs in 2012 the first step to success is to contact me.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

Providing updated real estate market statistics for Dakota County has always been a focus for my website.  My most recent blog article went into some detail showing what is happening with home sales in Dakota County for the months of September and October.  You can find links to other recent market statistics from the category links to the right on the main page.

Real Time Market Statistics

I’ve long relied on the excellent market statistics that are provided by the Minneapolis Association of Realtors.  They put out weekly, monthly and annual reports that help both Realtors and consumers to have a better feel for what’s happening on today’s Twin Cities real estate market.

To make this data more readily available I now have a link at the top of my website that will pull this data and make it available without having to go find it somewhere else.  The reports available include (click on the picture to try them out) -

This Report gives the most current stats on weekly Twin Cities sales

Market Updates for 200 different communities on a monthly basis

Monthly Indicators gives details for the entire market on many key stats

Monthly data on the availability of homes by inventory measures

Gives an annual review of the prior years sales in the Twin Cities

This report gives data on distressed property sales on a monthly basis

Conclusion

Providing updated real estate market statistics for Dakota County will continue to be a focus and by adding this data right within my website should be a nice added value to have all of it in one location.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

Halloween is over so it gives me a chance to take a look at the latest home sales statistics for September and October 2011 in Dakota County.  Now certainly the Minneapolis Association of Realtors does some detailed reports for every city but I wanted to dive in to a few statistics that goes behind their numbers and into a little more depth that will especially help traditional sellers.

Statistics Methodology

To do my analysis I pulled data for all sold transactions in September & October from the Northstar MLS for all listings in Dakota County.

There were 848 transactions in Dakota County during the period in the primary cities within the County.  The columns I used are Average Sold Price, Average Total Finished Square Feet, Count is the number of transactions in each city,  Average Days on Market and the Average Price Per Square Foot.

The report doesn’t start really getting instructive until we dive into it using an Excel Pivot Table function to pull out data.  What I really want to do is separate out distressed properties (bank owned & short sales) and single family from townhouses.

Traditional Seller, Single Family, Previously Owned

When I pull out data for just traditional sellers of previously owned, single family houses in Dakota County (my primary seller) we see the following -

Now we can see data that helps us to make some analysis:

• The average Price Per Square Foot for single family, traditional sellers is almost exactly $100/foot but that varies quite a bit by city.  Mendota Heights continues to have the strongest home sales although they do take the longest to sell there.
• Surprisingly to me, Farmington actually is tracking near the Dakota County average while Rosemount is trailing behind.
• Hastings shows some weakness with longer market times and sales averages that are 2nd from the bottom

These numbers can help sellers to get some overall feel for what to expect from a pricing and time on market standpoint.

Comparing Traditional Sellers to Bank Owned and Short Sales

The following chart compares the number of sales transactions in Dakota County by house type and the type of sale.  PPSF is the price per square foot for finished space in each type of home and a way to measure home prices no matter the size of the house.

• Overall 42.3% of all home sales transactions for Dakota County in the last 2 months have been distressed properties.  This is the primary reason that home sales prices are stagnant despite in higher sales than last year and fewer listings than last year.
• There is a big spread in prices paid for single family homes depending on whether it’s a traditional seller, bank owned or short sale.  Interestingly, for townhouses the difference in price between bank owned and short sale is much smaller.

Other Dakota County Statistics

Some other data that might be of interest:

• There were 31 new construction homes sold or 3.7% of all homes sold
• The average Days on Market for a short sale was 158 days compared to 68 days for non short sales.  Therefore, it looks like it is taking almost exactly 3 months on average to get bank approval.

Wrapping It Up

Knowing the Fall 2011 home sales statistics for Dakota County can make you a more informed buyer or seller.  While every home is different and needs to be evaluated on specific characteristics these overall numbers can give you some better perspective on what’s happening in the current challenging market we face.  If you’d like more information about the Dakota County real estate market contact me.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

The US Department of Housing and Urban Development (HUD) has just approved a program to allow people to purchase a HUD home for only $100 down.  This program is scheduled to last for 12 months and will expire in October 2012.  This offer is good not only in Dakota County but all throughout Minnesota and Wisconsin.  Being able to buy a home for $100 down should be a huge benefit for potential buyers who have the income to qualify for a house but don’t have a large enough downpayment saved.

Requirements & Restrictions

As you can imagine, there are a number of requirements that go along with this program but they aren’t that difficult -

• You must use an FHA loan to buy the home
• You must pay the current full list price for the house – that said, many of the HUD homes are priced very aggressively already

How The Financing Works

In a typical purchase with an FHA loan the buyer needs to come up with a 3.5% downpayment along with closing costs (although these are often paid by the seller).  On a $100,000 home that means that a buyer needs to have a $3,500 downpayment and would get a loan for $96,500.

With the HUD $100 Down program a buyer would only need to come up with that $100 downpayment and would get a loan for $99,900.  HUD says it will even cover up to 3% of the buyers closing costs in most cases which should help to minimize additional out of pocket costs at closing.

What About Money For Rehabbing?

One potential downfall for a $100 Down program is that many HUD homes are not in move-in ready condition and need some work in order to make them livable.  It would make no sense to come up with a program to help buyers without a lot of money for a downpayment if they needed to come up with $1,000’s of dollars for needed repairs like new carpet, appliances or paint.

Fortunately the developers of HUD’s $100 Down program thought that through and allow buyers to use an FHA 203k loan which allows buyers to finance not only the home but additional money needed for rehabbing the home after the sale.  Therefore, if the house needs $8,000 in repairs a 203k loan establishes an escrow account for extra money to pay for the repairs needed and just adds those into the total loan amount.  No need to come up with the funds out of pocket!

Finding HUD Homes

The primary way to find HUD Homes that are available for the $100 Down offer is to log onto HUD Homestore.  You can use the search criteria to look just in Dakota County or anywhere in Minnesota.

If you’d like to be sent an automatic list of new HUD listings you can send me an e-mail or use the Contact Me page and I’ll set it up to send you an e-mail anytime a home that meets your criteria comes on the market.

There are currently only 19 homes available in Dakota County so it’s important to be watching for new listings, especially since owner occupants usually have an exclusive bidding period on new listings before investors are allowed to make offers.

Buying a HUD Home in Dakota County with $100 Down

Buying a HUD home is a very different process than purchasing any other home as it’s more like an online auction and you need to find both a Realtor and Broker who are registered and know the process.  Luckily, RE/MAX Results is fully established as a HUD Broker and I have helped other clients through the process of successfully buying a HUD home.  This will make buying a HUD home with $100 down much more likely to succeed.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

A couple weeks ago I had a new client that was looking to buy a home in Hastings which is the county seat of Dakota County and a place I’ve spent considerable time in.  In addition to looking at Hastings they were looking at possible acreage properties within a 5-6 mile radius of Hastings which led them to the possibility of looking at homes near Prescott, Wisconsin.  This was just the opportunity I was waiting for as I’ve had a couple other clients inquire about the possibility of moving to the Wisconsin side of the border.  Therefore, I went ahead and completed the requirements to get my Wisconsin Real Estate License and passed the test with flying colors.

Getting A Wisconsin Real Estate License

If you already have a Minnesota Real Estate License you don’t even have to leave Minnesota in order to get your Wisconsin Real Estate License.  The Wisconsin Department of Safety and Professional Services administers their Out of State Reciprocity program and has a 13 hour online course to obtain the necessary knowledge needed to pass the license exam.  All of the requirements and training are available through the Wisconsin Realtors Association.

After completing the online course you then go to Pearson VUE to take the 4 hour, 140 question test.  You still don’t have to go to Wisconsin to take this since it’s available from their Edina, Minnesota testing center.

Successfully Completed

The whole process took me just 1 week to complete.  I started the online classes on a Monday, finished them on Thursday and took my test on Friday.  After submitting my license through RE/MAX Results I now have my Wisconsin Real Estate License firmly in hand.

While my intent is certainly to continue to focus the vast majority of efforts on assisting buyers and sellers in Dakota County it’s certainly nice to have the flexibility to work with buyers and sellers in Western Wisconsin.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul.  He is licensed to practice real estate in both Minnesota and Wisconsin.