Minneapolis Real Estate Blog

A lot of press and media attention has been focused on housing, mortgages, delinquencies, and all too often, some of the most important information gets lost in the mind of the consumer. 

This past weekend, U.S. Treasury Secretary Henry Paulson made an announcement that the U.S. Government was taking over Fannie Mae and Freddie Mac, which together, hold almost half of the mortgages in the United States.

Some very key points Dan Hollerman Group and Mark Merry, our mortgage specialist, want you to know:

• The U.S. Treasury has stepped in and taken the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Corporation (“Freddie Mac”) under conservatorship of the Federal Housing Finance Agency.  A fact sheet with common FAQ’s on conservatorship is available at www.ofheo.gov/media/pdf/FHFACONSERVQA.pdf
• The Treasury will begin buying mortgage backed securities issued by Fannie Mae and Freddie Mac in the open market.  Additionally, the Treasury will also provide up to $100 billion of capital to each Agency, in exchange for the issuance of preferred stock.
• We believe that this move to intervene was the right step to take.  It was needed to secure financial system stability as the two enterprises were having problems securing capital and to refinance their own debt in the capital markets.
• Beginning in 2010, Fannie Mae and Freddie Mac will lower their exposure to the marketplace, allowing time for liquidity to be restored.

Despite a series of interest rate reductions of 2.25% by the Federal Reserve since this time last year, interest rates on mortgages provided by Fannie Mae and Freddie Mac, as of last week, had not changed. 

Now that Fannie Mae and Freddie Mac are under conservatorship, the market has relaxed its risk assessment of conforming mortgage rates, as already seen since this weekend’s announcement, as the 30 year fixed rate mortgage fell 0.50%.

A decrease of 0.50% in interest on a 30 year fixed rate loan is significant.  When mortgage rates fall by 0.50%, this can mean that the homebuyers’ ability to finance a home increases by 5% – we believe that this is excellent news. 

Here are a few examples:

• The homebuyer considering a $150,000 purchase can now buy $157,500 with a similar monthly payment.

• Another homebuyer looking to purchase last week at $250,000 can now purchase $262,500 today with a comparable monthly payment.

• A homebuyer considering a $350,000 purchase last month can now purchase a $367,500 today, again with a comparable monthly payment.

While the challenges in real estate are in the news almost every day, the messaging on housing affordability is often lost.   

Dan Hollerman Group can help you with a confidential, no-obligation consultation on today’s opportunity in mortgage financing.  We work with RMG Mortgage and Mark Merry to help our customers!

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What happens if the property you have agreed to buy has been storm damaged between the time you signed the purchase agreement and the day of your closing?  The purpose of this piece is to raise some issues for you to consider.  Please be advised that the sellers are not required to do some of the things listed below which you may ask of them, or their insurance company may not permit it. 

A.     The purchase agreement states that the risk of loss and damage remains with the sellers until the closing has occurred (Minnesota Association of Realtors® Purchase Agreement, page 2, lines 92-95).  It also states that the buyers may cancel the purchase agreement if there has been damage to the property prior to the day of closing.  It is recommended that you consult with a qualified attorney if you have any questions concerning this provision.

B.     Ask if your sellers have filed an insurance claim with their insurance company specifying all storm damage.  Ask for a copy of the written claim for your records.

C.     The sellers homeowner’s policy terminates on the day of closing.  You may request that the sellers provide you with a letter from their insurance company stating the insurance company’s commitment to repair all storm damage even though the sellers’ homeowner’s insurance policy terminates on the day of closing.  The insurance company’s letter is most useful if it is addressed to both you, as the buyers, and to the sellers.

D.    Ask if the storm damage be seen by the insurance company’s adjuster and insurance agent.  If so, ask for a copy of the written report.

E.     Obtain an estimate for the storm damage from the insurance adjuster if at all possible.  If the sellers’ insurance company will not send an adjuster to the property until after the closing date, obtain an estimate from a contractor.

F.     You may ask the sellers to sign a document assigning and transferring their insurance company proceeds for the damage to the contractor which will be performing the repairs, or escrowing the insurance company proceeds until repairs are completed.

G.    You may ask the sellers to sign an agreement to come back at a future date to amend their insurance claim if the contractor discovers additional storm damage while making repairs.

H.     You may ask the sellers to sign an Escrow Agreement which provides that some of the proceeds from the sale of sellers’ property be held in an escrow account until the insurance company proceeds are received.

Please consider these issues carefully.  If you have any legal questions concerning these issues, consult with a qualified attorney of your choice.  Dan Hollerman Group cannot give you legal or insurance advice in these matters, but we wanted to inform you on this situation.

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Many people think that obtaining homeowners insurance is simply a formality that they need to do to get their mortgage.  They never think that they will use it and do not see much value in it.  That is a wrong approach to protecting your largest asset- your home! 

At Dan Hollerman Group, we believe in protecting our customers and setting them up with the best insurance agency in the state, ATC Agency Inc.  ATC Agency is an Allstate Insurance Company agency that operates out of St. Louis Park, Minnesota.  Time and time again, the staff at ATC Agency Inc has helped our customers protect themselves against any unforseen disaster.  ATC Agency sells a wide variety of products including: homeowners, condominium, automobile, personal umbrella policies, motorcycle, life insurance, and recreational insurance policies.

Please call them today and the friendly staff at ATC Agency will help answer any questions you may have and evaluate the current coverage you are carrying.

See below for their contact information:

ATC Agency

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See below for the Average Closed Price of home sold in the 13 County area of Minnesota.  Our job at Dan Hollerman Group is to help you be informed buyers and sellers.  Please use our Search Feature to search for active listings in your area of interest.

Average Closed Price of Homes in 2007

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Overview

District

There are approximately 7,834 students, K-12, served by 1,170 teachers and support staff in six elementary schools (Grades K-5), two middle schools (Grades 6-9) and one senior high school (Grades 10-12). Community Education Services provides learning opportunities for all ages. The district serves Edina, a residential community of approximately 47,450 people adjacent to the city of Minneapolis.

School Choices

Elementary

Parents have three elementary (K-5) program choices:

       Neighborhood Program which serves 70% of students

       Continuous Progress in which teachers work with students more than one year in multiage groups

       French Immersion which students enter in kindergarten

Secondary

There are two middle schools (6-9) serving students based on geographical boundaries. There is one high school.

Small Class Sizes

Edina Public Schools is committed to keeping class sizes as small as possible while retaining the educational support needed to ensure quality learning opportunities. Class size guidelines are: Kindergarten 18-21, grades one through three 21-24, grades four and five 24-27, grades six through nine 25-28, grades ten through twelve 29-32.

Academics and Recognition

Academic Achievements

Edina High School has had National Merit semifinalists and finalists each year the National Merit Foundation has been in existence. In 2007, there were 18 semifinalists and 27 commended scholars.

In 2007-08, on the ALT test, seventy to ninety-two percent of second through seventh grade students scored above the national average in reading and math. Overall, two to three more Edina students than expected score in the top quarter of the nation.

In 2007-08, nearly 2,000 Edina students took Advanced Placement examinations in 27 subject areas, making it one of the largest AP programs in the Midwest. Eighty percent of the Edina scores were in the 3-5 range, making them eligible for advanced placement and/or credit at the college level.

The class of 2008 posted an average composite score of 26.2 – Edina’s highest ACT composite score in 13 years. In addition, the number of Edina graduates who report taking the ACT continues to be between 75 and 85 percent.

Graduates

Ninety-seven percent of seniors go to college. Eighty-six percent finish in five years. A recent survey conducted 10 years after graduation showed that 45% of Edina graduates completed graduate school degrees or were pursuing graduate degrees.

Special Recognition

Edina school system has been consistently selected as one of the top in the country.

       All three secondary schools, Valley View, South View, and Edina High, as well as Creek Valley, Cornelia, Normandale, and Highlands elementary schools, have received the National School of Excellence award from the U.S. Department of Education.

       In 2008, SchoolMatch service rated Edina as a Parents’ Choice winner for schools that most match what parents want in a school district. Edina has won this award every year since its inception in 1992.

       Edina High school once again listed as one of the “Best High Schools” in the Nation” by Newsweek Magazine 2008.

       National Sleep Foundation 2000 Healthy Sleep Capitol of the Nation Award to the district

       Edina KIDS Club, Edina Schools’ quality, affordable care and enrichment program, was the first school-aged childcare program in the state to earn accreditation from the National Academy of Early Childhood Programs. It is available at each school site.

       The board of education/superintendent team named top three in the nation by the New England School Development Council

       Former Superintendent, Kenneth Dragseth, Ph.D., (1992-2006 ) was named National Superintendent of the Year for 2003-2004.

       Edina High School named as one of the Best High School Athletic Programs in the nation by Sports Illustrated (May 16,2005)

       Edina Public Schools received the Award for Excellence in Education from Senator Mark Dayton for going above and beyond expectations for educating students. (January 2006)

       Top State ratings in school finance received for five years.

Arts

A full range of art learning opportunities are offered in both courses and cocurricular activities. Theater productions, and fine arts events and courses are offered each year. There is a rich tradition of excellence in the arts:

       High school literary magazine, Images, has received the All-American Award for 36 years running from National Scholastic Press Association and the Gold Crown for 2001 from Columbia Scholastic Press Association.

       Student newspaper, Zephyrus, received the Gold Medallist Certificate for 1999 through 2002 from Columbia Scholastic Press Association; 1st Place for 2000 from National Scholastic Press Association; and 1st Place with Special Merit for 1999 & 2001 from American Scholastic Press Association.

       Student yearbook; Windigo, received 1st Class from National Scholastic Press Association and American Scholastic Press Association, a Silver Medal from CSPA, and 1st Place from the Minnesota Journalism Education Association.

       High school concert choir has received outstanding performance honors at state competitions for 22 consecutive years

       The concert band has received superior ratings at Minnesota State High School League contests for 52 consecutive years and the orchestra has received superior ratings for 24 years.

       Edina High School recognized as a GRAMMY Foundation Signature School for outstanding commitment to music education in 2004-05

       Edina High School received the GRAMMY Signature School Award in 2005 and again in 2007

World Languages

Eighty percent of students take at least one year of a world language. Spanish is offered at all elementary schools beginning in grade two. French immersion continues through middle school. Eight languages are offered in middle school and high school: Chinese, French, German, Japanese, Latin, Russian, Spanish and American Sign Language.

Technology

The incorporation of high tech resources into the teaching program is a major focus of the current teaching and learning goals. Computers are located in all classrooms and each school has computer labs. In addition, most elementary classrooms have SMART Boards. The new telecommunications network provides staff and students with improved communications, access to visual learning resources and computer-based learning tools.

Special Programs

Special Education

11 percent of students are served each year by Special Education in the areas of learning disabilities, mental handicaps, physical impairment, hearing and vision impairments, emotional/behavior disorders, communication disorders and autism spectrum disorders.

English as a Second Language

The English as a Second Language Program is growing and serves students speaking 39 languages.

Gifted Education

Gifted Education provides a comprehensive K-12 program for gifted students, offering support in classroom activities and the additional support needed to keep high achievers and extraordinary students challenged.

Values and Service

2008 marked the 19th anniversary of the district’s Ethical Values Program which focuses on six values: Integrity, Courage, Commitment, Compassion, Appreciation of Diversity and Responsibility. The values were selected by the community and are incorporated into the learning program. All schools do service projects helping people locally and globally. High school students are expected to complete at least 10 hours of community service by graduation.

Athletics and Extracurricular

Athletes

Edina athletes have won a total of 125 state championships, making Edina Schools number one among the 500 members of the Minnesota State High School League. There are 12 sports for boys and 17 for girls offered at the high school level, with 10 sports offered in the middle schools.

Extracurricular

Edina Public Schools offers 41 non athletic, extracurricular activities in fine arts, academics and social service. Ninety percent of high school students participate in one or more extracurricular activities, winning local, state and national recognition for their work and commitment.

Community Education

The goal of Edina Community Education Services is to support lifelong learning to meet the needs of the community. It has seven program areas:

       Adult Enrichment provides a wide variety of quality day, evening and weekend classes.

       Learning Exchange offers a wide variety of customized classes for adults with disabilities.

       Youth Development/Youth Service actively engages youth and adult members of the community to work together in a variety of projects.

       Edina KIDS Club offers childcare and enrichment programs before and after school, and during the summer for K-8 students.

       “K Plus” (All Day Kindergarten) provides a full-day experience aligned with current classroom curriculum for kindergarten.

       Edina Family Center offers Early Childhood Family Education (ECFE), parenting classes, resources and preschool classes.

       Curricular Resources and Programs provides curriculum enrichment programs upon teacher request.

       Edina Resource Center connects people to community services and resources.

       Business/Education Partnership promotes the exchange of resources between business and education for mutual benefit.

Creating the Future Annual District Strategies

Our Mission:

The mission of the Edina Public Schools, working in partnership with the family and the community, is to educate all individuals to be responsible, lifelong learners who possess the skills, knowledge, creativity, sense of self-worth, and ethical values necessary to thrive in a rapidly changing, culturally diverse, global society.

Creating the Future, has four areas of focus:

       We will work in partnership with the community to increase student assets.

       We will work in partnership with the community to welcome and support diversity.

       We will develop and implement programs and practices that will address gender differences in student performance and other measures of success.

       We will maximize the achievement of all students by developing a clearly articulated curriculum and appropriate research based instructional strategies implemented by highly qualified staff.

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Many would-be Minneapolis or St. Paul real-estate investors cringe at the thought of dealing with tenants.  Many investors are busy people with full-time jobs.  The thought of screening renters, maintaining the properties, and collecting rental fees is not very appealing.   If fact, the entire idea of buying Minneapolis homes, Edina homes, Eden Prairie homes, and Minnetonka new homes just for investments sounds a little pie in the sky.   However, they have heard some great stories and are still toying with the idea of owning investment real estate in Minneapolis or St. Paul.  Some call us repeatedly for Minneapolis home loan estimates.

Some worry, “What if I cannot even rent the home? Do I really want to be fixing toilets?”  Obviously, the owner may choose to hire a property management company to handle all of the responsibilities, but there will be more cash flow if he chooses to keep an eye on his properties himself.

For various reasons, many good people rent.  Some are not able to afford to buy a home.  Others do not think that they have the necessary credit scores to purchase.  Some need mobility for their jobs.  Both Section 8 (government assistance) and non Section 8 renters are also looking for places to live.

The steps are relatively simple once the owner tucks them into his regular routines.  The first step is advertising.  Responses and applications will follow.  It is necessary to do a complete and thorough background check on all serious contenders for the property, including a credit, criminal, and unlawful-detainer background check.  Always require two months of rent payments up front, one for a security deposit.

The easiest way to manage the financial end of the investment property is for the owner to pay the mortgages via automatic withdrawals from a checking account every month.  Likewise, owners can arrange for tenants to deposit the rent directly into the same account.  Monitoring these payments and deposits is as easy as going online to the account once a month to be sure the transactions happened.

Maintenance is much easier if the owner will find a reliable handy man.  Additionally, owners may want able tenants to fix certain smaller problems and turn in the receipts.   For larger problems like a new water heater, then the tenant calls the owner who turns it over to the handy man.  Another key to purchasing investment properties is for the owner to live within a 30-minute of the property and to occasionally drive by to keep an eye on things.

Certain types of units are doing better these days.  The current market is down for 1-2 bedroom rentals in the Twin Cities.  People are looking for larger places like 3-4 bedroom houses.   Rental demand may be very slow in one area and strong in another and it is important to know the market.

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There are several primary motivators involved with buying Minneapolis real estate or St. Paul homes for rental properties.  Any investment buyer in the Minneapolis and St. Paul real estate market who wants a “great” investment is wise to keep these purposes in mind.
Most investors are, first-of-all, looking for some extra cash flow.  Buy the Minneapolis homes or apartments with our Minnesota mortgage package with little money down.  Rent out the property and receive rent monies from the tenant.  Then pay the mortgage, taxes, insurance, and maintenance.  Whatever is left is cash flow that goes back to the investor.

Cash flow is important to consider in investments, however it is not everything.  The IRS allows the investor to depreciate the building over 27.5 years.  That means that every year, investors may subtract the depreciation expense from their regular gross income.  For example, if the rental property costs the investor $200,000 and the IRS values the building at 85% of the purchase price or $170,000, the buyer can use 1/27.5 or $6,181 as a depreciation expense against active income.   The numbers multiply when the investor buys more properties.  In fact, some real estate investors do not pay federal or state income taxes because they have large depreciation expenses.

The next reason to invest in rental property is that the property is going to appreciate over time.  It may not appreciate in leaps and bounds, depending on location and the market, but it will evaluate and build long-term wealth.  That is why real estate debt is the best type of debt.  Back to our previous example:  If the buyer purchases two rental homes for a total investment costing $400,000 and they appreciate 5% over 10 years, the homes will then be worth $651,557.85.  That is an increase in equity value of $251,557.

Another important point for investors to keep in mind is to pay down the mortgage principle.  That means hanging on long enough to get beyond paying only the interest.  When investors pay down the principle balance with the rental monies, they build equity; even if they pay the “interest only” portion, however, equity still builds and at times “interest only” types of loans allow more cash flow to purchase other properties.  The reason “interest only” works is because the real moneymaker is the appreciation over time.

Call the Dan Hollerman Group for expert advice when purchasing investment properties and securing your real estate loans.

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Lenders and Realtors with a good listening ear and smart streetwise strategies are more inclined to find success in the investment market for Eden Prairie homes and Edina real estate.  The complementary relationship of the lender and Realtor with the client does wonders for solving problems and achieving investment goals.  Matter of fact, investing in the Edina real estate market can be lots of fun, especially if you like curve balls and sliders.

By listening closely to an investor’s goals and timelines, the lender/Realtor will get a feel for the parameters of the project.  If an investor is working in the low down-payment range, the lender/Realtor must put on a creative cap and outsmart the courses, seminars, books and tapes, and advice in his/her head.

During clutch moments of tremendous opportunity, all of the training becomes prologue.   It is like having a baby.  You may read every book, consult various medical professional, eat right and sleep right.  However, during the birth process, the experience takes on its own unique, creative tone.

There are many stages to the investment property process.

1. Finding the best financing
2. Determining an overall strategy
3. Targeting what type of property to find
4. Finding that property
5. Learning how to advertise for the rental property

Each stage of the process, all the way through to getting the rental income coming back to the investor, is important.  That is why a successful investment property lender and Realtor are willing to walk with the investor the whole way through.

When investors know exactly what they want to accomplish, the parameters of the project will help to obtain the investment property in a creative way with little money down.  Our advice is to look for the best lender and Realtor, who have no strings attached, the ones who really enjoy teaching you the ropes of how to make money in this business.  Look for licensed real-estate agents with Edina Realty who only makes money from the seller’s commission on the investment property, a Realtor who can build strong relationships and earn repeat business from the investor.

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Welcome to beautiful Minnesota, where friendly people, clean cities, thriving economy and outdoor recreation await you and your family. Perhaps the best known area of Minnesota is the famed Twin Cities, the Minneapolis-St. Paul area. Minneapolis real estate is popular for many reasons, not the least of which are its beautifully clean and virtually crime-free streets. Trust the Dan Hollerman Group to show you all the available Minneapolis homes for sale that meet your wants and needs.

St. Paul real estate is equally appealing for many who love to be in the heart of a thriving city. St. Paul homes for sale range from single-family residences to town homes and condos. When you partner with St. Paul Realtors at the Dan Hollerman Group, you can rest assured that you’re in good hands during your home search.

Edina is located near Southdale Center, the world’s first indoor climate-controlled shopping mall. Many of the older Edina homes for sale have been updated to include more modern amenities. Expert Edina Realtors at the Hollerman Group can guide you to the best buys in the Edina real estate market.

Money Magazine named Eden Prairie one of the top ten places to live in the US, which means Eden Prairie homes are sure to continue to rise in value. Choosing one of the many Eden Prairie homes for sale represents a wise investment, and Eden Prairie Realtors at the Hollerman Group can assist you in finding your ideal home.

If you dream of lakeside living at its finest, you’ll certainly want to check out Lake Minnetonka real estate. Many Lake Minnetonka homes for sale feature lakefront property in beautiful scenic surroundings. The Dan Hollerman Group is a team of Lake Minnetonka Realtors who can connect you with the home of your dreams.

West Bloomington real estate is popular among families and couples seeking more a upscale residence. West Bloomington homes for sale are priced in the $500,000 to $1 million range. The experienced West Bloomington Realtors at the Hollerman Group can assist you in finding your ideal home.

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