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There are four distinct Minnesota real estate markets

Never before has there been as much confusion about residential property values as there is now.  The fact that more real estate listings are available online for public viewing than ever before is both a blessing and a curse. The confusion is that asking prices on homes vary widely because the terms of the sales are in four distinct, unequal categories.

Foreclosures

These are homes that the bank has repossessed for the owner, often in poor condition, and are homes listed at prices the bank seller will usually accept, BUT only with harsh “As Is” terms.  A typical foreclosure home sales contract does not guarantee anything, not even that the property’s condition will be maintained until closing, or even that you will get good title to the property.   Minnesota real estate law encourages (rather than requests) all sellers to disclose all material defects in the property to buyers, but in practice most banks don’t even have knowledge of the problems.  Bank contract terms usually demand a very fast closing and then impose penalties if you, your lender, or your title company closes late.  They put your earnest money at risk and then limit your options if you discover a problem through a property inspection.  However, with an experienced knowledgeable Realtor, foreclosures can be a source for great deals on homes and investment properties.

Short Sales

Short sales have a wide variety of list prices and often times are unrealistically low.  Low prices sound good to buyers, but not if the buyer can’t purchase the home at that price.  The seller sets the home price and will get nothing if the house sells.  These are homes that have not yet been foreclosed on, but the owner is behind on payments (deleted last part of sentence).  They are called short sales because the seller plans to ask the bank to accept a loan payoff that is “short” of the amount owed to complete the sale.  Once you make an offer on the home you have to wait 3-12 months for the bank to respond to the short sale request.    Regardless of the home price you and the seller agree to, it is the bank that will determine the price of the home they will accept long after you have made your offer to purchase the home, assuming they will approve the short sale at all.

Traditional Sale

Traditional home sales are just what you think.  Private owners that have equity in their homes, selling their home with written property condition disclosure statements and full clean title, without the messiness which short sales or foreclosure involve.   However, traditional seller list prices can be perplexing too.  With the market value decline over the past four years, some home sellers remember their high water mark value and insist their home is exempt from market decline, therefore listing their home at unrealistically high prices.

New Home Construction

New home construction was a significant part of the market 5-10 years ago.  However, it is a very tiny portion of the market today and will remain so until more of the housing surplus is absorbed.  With lower lot prices, and builders trying to compete with the low prices of existing homes, new construction may seem comparatively affordable.  However, by the time you add in all that may not be included in a new home you will find that existing homes are a better deal in nearly every case.

Greenwell Realty can create very detailed search criteria that will notify you by email automatically of homes for sale that you desire as soon as they come on the market.