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August 2018

For Sale By Owner

5 Reasons To Avoid “For Sale by Owner”

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So, you think you should try out the seemingly simple and affordable for sale by owner home sale technique?

You may be a dedicated DIYer. You know how to change your own oil, do HVAC repairs (if you don’t, you can find guides to the best HVAC contractors online), you are a big seller on eBay, and you know how to handle the Craigslist crowd.

You always buy cars rather than lease them, and you sell them after a few years, usually at a profit. You don’t like middlemen, and you avoid sites that claim 10 plumbers will bid on your project as you know how to find qualified vendors. But now it’s time to sell your house, and you are ready to put up the For Sale by Owner sign. Before you do that, however, consider the following reasons you need a Realtor.

For Sale By Owner

For Sale By Owner: The Time It Takes

When you hire a Realtor, they do the work. What work? Assessing your property’s condition and taking quality photos are two important early tasks.

Quality photos don’t mean hurried iPhone pics either. Ever notice how many shots of for sale properties are dominated by deep blue skies and warm orange glows? Do you know how to do that? How long would it take you to get 40 excellent representations of your home?

Pricing It Correctly

House Pricing

We’ve mentioned in previous posts the story of our client’s uncle who offered the following home sale pricing formula:

“Save every receipt for every repair and improvement you have. Then, add that to the original cost of your home, factor in inflation, and that will determine your asking price.”

That’s a sure method to under or overprice your home. A good Realtor will know your market, and after viewing your home, he or she will quickly know the price range in which your house will sell. Overpricing a home can be slow death as you watch the market ride it down, and while underpricing can produce a quick sale, you can lose thousands.

Perception and Agent Boycott

For sale by owner homes can be negatively perceived by buyers because they may not want to deal directly with an owner. While an agent may reply quickly, an owner may not, and prospective buyers may shy away from any situation where communication may be lacking.

Some brokers do not like homes that are for sale by the owner and don’t want to deal with commission or legal issues with what they may feel is a grossly under-informed seller. Even if you know what you are doing, real estate agents may not care to even find out, as they may take their clients to a more traditional situation.

Tied Up Property

Do you know how to vet a potential buyer? Do you understand option periods?

Are you comfortable with financing contingencies? If you aren’t careful, you could have your property removed from the market and tied up for 30 or 60 days while you wait for financing that never materializes.

Realtors can help minimize this problem.

Commission v. Sales Price

Commission Structure

Finally, look at what you are paying for. Sure, six percent commission on a $200,000 sale is $12,000. But that $12,000 buys you a great listing, instant MLS exposure, networking with other Realtors, legal diligence regarding potential buyers and offers, and a person that is dedicated to getting your property sold.

In addition, you may get $12,000 more than you would have if you follow the Realtor’s suggestions about staging, landscaping and showing your property.

If these five reasons aren’t enough, remember that with a Realtor, potential buyers are screened before they are let into your home.

At C4D, we make home ownership possible by utilizing MN contract for deed. And yes, we’ll work with your Realtor to help your home ownership dream come true. We love traditional financing, but if you can’t get it, contact us.

MN contract for deed myths

Busting the Most Common Contract for Deed Myths

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MN contract for deed can be an excellent way for those with less than perfect credit to finance home purchases. Particularly in Minnesota, contract for deed has been a preferred home financing method for years as many people have credit blips and issues that allow banks to quickly turn them down. Contract for deed, however, is sometimes the victim of misconceptions and broad statements that just do not apply.

It’s Not Rent-To-Own

mn contract for deed

Rent-to-own is another alternative financing method, but it can be an issue for buyers. In a Minnesota rent-to-own scenario, a property owner will offer to rent to a tenant. The property owner then agrees to put a portion of the rent aside that the tenant can put toward the eventual purchase of the home. This is not necessarily a down payment but could be a credit. For example, a property owner could offer to place $200 of the tenant’s $1500 monthly rent payment toward the purchase of the home. If the tenant made 36 on-time payments, the seller would then give the tenant credit for $7200 toward the purchase of the home. The problems with this are:

  • The money doesn’t really exist after it has been paid to the landlord.
  • It only is booked as a possible credit.
  • If a purchase price hasn’t been predetermined, the landlord could just raise the price of the home by the amount of the credit.
  • If the tenant is late on only one payment, all credits can be forfeited.

Minnesota contract for deed doesn’t work like this as we will explain below.

MN Contract for Deed is Not Predatory

How Rent to Own Works

In other states, rent-to-own and similar contracts for alternative financing are called executory contracts and are not liked by state courts.  The reason for this is that unscrupulous property owners would find un-creditworthy victims, receive a substantial down payment, sign them to a contract that requires big monthly payments, and add clauses that forfeit the down payment if even one monthly payment is a day late. Then the property owners would evict the tenant and start the process again.

MN contract deed is different, again, as we will explain below.

It’s Not Only for Those with Bad Credit

Business owners know that even with good credit it may be difficult to purchase a home. Take the example of a restaurant owner that has paid every bill on time, but he or she may have high student loan balances, high business credit balances, too many business credit cards, multiple vehicle payments and other debt. Throw in a recent divorce, and that busy successful entrepreneur may have issues getting financing.

This is a case where MN contract for deed could help.

Contract for Deed Credit

How MN Contract for Deed Works

  • You find a Realtor
  • You find a home.
  • You bring the deal to C4D.
  • We buy the home.
  • We sell it to you using a contract for deed.
  • You make all of your payments.
  • You get the deed, and you are a homeowner!

If you have any questions about us or our MN contract for deed process, be sure to contact us. We make deals where others cannot, and we have an impressive list of homeowners that would still be tenants if they had not come to us.

Repair Your Credit Score Today!

5 Ways to Repair Your Credit After Foreclosure

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Sometimes things get really difficult, and you think you’ll NEVER be able to repair your credit.

You may have lost your job, faced massive medical expenses, your business failed, or maybe you just bought a more expensive house than you could handle. While you tried to avoid foreclosure, you woke up one day and realized that it was inevitable.

Repair Your Credit

If you lived in a non-judicial foreclosure state like Minnesota, the process probably happened quicker than it would have had you lived in neighboring Wisconsin where foreclosures sometimes slowly wind their way through the court system. Nevertheless, it’s over now, and you’re afraid to look at your credit score. Times might be tough, but you NEED to understand how to repair your credit.

The Foreclosure Effect

Foreclosure

The bad news is that your credit score can drop as much as 150 points or more once the foreclosure process is completed, but the good news is that while a foreclosure will stay on your credit report for up to seven years, you can watch your credit score rise if you do the following:

Repair Your Credit By Considering Bankruptcy

If foreclosure is merely one symptom of your financial distress, and if you still have lots of debt that you are unable to pay, consider wiping the slate clean with a Chapter 7 bankruptcy. If your credit score is going to take the foreclosure hit, it may be prudent to clear as much debt as possible through bankruptcy and truly start fresh.

Remember, however, that certain debts like student loans and taxes are not normally dischargeable in bankruptcy.

Don’t Be Late

Late payments will only set you back again, so make all payments on time. Do a thorough budget analysis and do everything possible to pay all bills when they are due. This may mean getting a second job or going out to eat less often but do whatever it takes to never be late with a payment again.

Rebuild and Repair Your Credit Score

Credit can be rebuilt; it may be challenge, but it can be done. Newly bankrupt individuals often quickly receive high interest and high monthly fee credit card offers. Some of these are almost predatory as you may be offered a $300 line of credit minus a one-time fee of $75. Still, if you make on-time payments, even these companies will report favorably to the credit bureaus.

Repair Your Credit Score

Friends and Family Can Help

If you need money, see if you can borrow it from friends and family. They don’t report to credit bureaus, and they may offer you very generous repayment terms.

Go Back to School

Federal student loans are provided without checking your credit score. Didn’t hear us the first time? You can get a federal student loan with bad credit that includes bankruptcy and/or foreclosure. There are caveats of course — and you still want to work hard to repair your credit score. If you have defaulted federal student loans, or if your bankruptcy is active, you may have issues.

If your only problem is bad credit, late payments and even a foreclosure in progress, you can still get a loan. At a good state non-profit university, you can take six credits—some of them online—get a federal student loan, have the loan pay your tuition, and there still can be money left over for you to live on. Yes, you have to pay back student loans, but not until you are finished with school.

Buying a Home After Foreclosure

Steps to improve credit score

Banks want squeaky-clean credit and no missed payments of any kind for 36 months before they will even consider you for a home mortgage. We know it’s tough to go for three years without a financial blip, but this is where the experts at C4D can help, while you work to repair your credit score.

We use MN contract for deed to get you into a home that you will own free and clear after you make all of your payments. Because we look at people—not only credit reports—and because we have developed superior banking relationships over the years, we can help you buy a home after a financial crisis. Bankruptcy and foreclosure should not be considered financial death. You will have been injured, but you can recover. Check out our site to see how we can help you like we have helped countless others.

Home Renovation Tips

Home Renovation Tips: Must-Have Tools

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Need help with some home renovation tips? We know, the thought of renovating your property can be both exciting and slightly daunting. Figuring out what needs to be done is one thing, but putting your plan into action and locating the necessary tools can soon seem a bit too much. However, it doesn’t have to be such a stressful ordeal. But according to A+ Kitchen & Remodeling, “Home renovation doesn’t need to cost an arm and a leg. If you know what you’re planning on doing, and you follow a home remodeling & renovation guide, plus only buying tools that are essential to get your plans underway and eventually completed — it doesn’t have to be that difficult.

This time, we’ll be looking at the essential tools you’ll need to help get your renovation project underway.

Home Renovation Tips

The Hammer

Surely this goes without saying but owning a hammer is absolutely essential. It’s arguably the most essential tool for your house. They are ideal for hanging up posters, knocking in nails, pulling out nails and aiding any general fixes around the house. While it’s fairly difficult to go wrong buying a hammer, there are a few things you may want to look out for. First, ensure it’s drop forged. This means it’s been made with more care and will last longer. It will be more expensive but it’s far less likely to rust.

The Ladder

Another household essential, owning a ladder will see you experience fewer problems when trying to reach areas that would usually prove difficult. We won’t list all the obvious advantages of owning a ladder, as there are too many. What will we say, is that owning a ladder will help you solve problems such as changing light bulbs and hanging frames with ease. Otherwise, you may try and balance yourself on a chair, table or something without the structural stability of a ladder, and this is a health and safety concern.

The Hand Saw

If you’re not too keen on spending a small fortune on a power tool, stick to a trusty handsaw, or even a tracksaw for that extra safety. At some point, it’s going to come in handy, whether it’s for a quick DIY job, or cutting wood for the fire in winter, handsaws are handy to have around the home. Additionally, they’re not that expensive to buy!

The Drill

For those who see themselves as avid DIYers or remodelers for luxury, this is essential. While having a hammer is essential, a drill comes in handy whenever you need to fix loose screws and fittings, as well as making light work of new additions such as wall hangings. Drills essentially speed up your renovation process. Instead of spending time screwing nails into a new door, or stabbing your hands with screwdrivers, drills relieve that pressure and the simple hit of a button.

The Pliers

Pliers will come in useful when you need to pull out those nails you incorrectly drilled into your new wall! Again, pliers will come in handy in almost every DIY project. Additionally, they’re fairly inexpensive for such an important tool.

The Tape Measure

Another classic tool you’ll be needing to renovate your property is a tape measure. Easily forgotten, but incredibly important, the tape measure is your best friend when it to comes to home renovation. You’d find it pretty difficult to begin a home renovation without a tape measure, as measuring would become, well, pretty much impossible. When it comes to building projects, you’re going to need a tape measure, otherwise things are left wonky and you’ll be wasting time!

The Level

Last but not least, the level. When it comes to home renovation, there’s nothing worse than setting up a shelf, only for the leveling to be off. This doesn’t just apply to shelves, every project you undertake in your renovation may require a level at one point. Buying a level will save so much time when it comes to determining if something is level or not.

Home Renovation Tips: Tool Wrap

These are the 7 tools your home renovation cannot be completed without. While they are fairly obvious, you’d be surprised to know how many people forget to purchase such tools, even when there are coupon websites available to them. The above items won’t even set you back too much, yet, their role in your home renovation project cannot be undermined. If you do require a tool that’s not on the list and you’re not keen on spending a fortune on a tool you’re only going to use once, then tool hire might be an idea for you!

Better yet, buy a toolbox to keep these in! Except for the ladder, as you may have some trouble fitting that in. If you’re a homebuyer, you will not regret owning these tools. 

Costly First Time Homebuyer Mistakes

Avoid These 4 First Time Homebuyer Mistakes

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You’re ready to make the move from a rental unit to your new home. You’ve checked and updated your credit, and you are ready to look for properties. You have saved a nice-sized down payment and you are set to pull the trigger. Be careful, however, that you don’t make one of these crucial first time homebuyer mistakes.

First Time Homebuyer Mistakes #1: The Wrong Agent

First Time Homebuyer Mistakes

Let’s be clear. You don’t need to be represented by a real estate agent at any time during the purchase process to avoid making a first time homebuyer mistake, but many buyers like to contract with an agent because:

  • It’s free! The buyer pays the commission.
  • You have instant access to MLS listed properties.
  • The agent does the negotiating.
  • You never have to meet the owner except maybe at the closing.
  • The buyer can be a great information resource.

Homebuyer Mistakes

If all that’s true, what could be the problem? Well, the wrong agent could slow down the buying process because:

  • They are too busy.
  • They don’t have sufficient market knowledge in your area.
  • They are inexperienced.
  • They are not ethical.

Therefore, make sure you have carefully vetted your agent, and that you are comfortable that they are reputable, knowledgeable, ethical, and are not overloaded with clients. Also, at the initial meeting, understand agent contact rules. While you may expect instant answers to your questions, real estate agents and Realtors do have other clients, and you may have to be patient at times.

First Time Homebuyer Mistakes #2: Wrong Lender

Many entities make mortgages. Banks, credit unions, private lenders and even Internet banks regularly offer mortgages. This is one area where you need to do your homework and understand the difference between 15 and 30 year mortgages, for example, and all of the implications thereof. Mortgage rates can vary, so don’t take the first deal that’s offered to you. Later, we’ll talk a little about MN contract for deed financing.

First Time Buyer Errors

First Time Homebuyer Mistakes #3: Falling in Love with a Property Too Soon

Just because you have always wanted a great lawn and the first property you see has impeccable landscaping doesn’t mean you have to buy it at any price. Sure, it might be great to live there, but you are not living there now, and other homes are available. Don’t get caught in bidding wars (here’s how to win a bidding war, should you encounter one); see lots of houses before you make a decision. This isn’t HGTV where you get three options and that’s it.

First Time Homebuyer Mistakes #4: Wrong Neighborhood

If you are from out of the area—especially if you are from a different state—it’s extremely important to gain total knowledge of the municipality before you make a move. A first time homebuyer mistake, at this point, would be terribly expensive.

There are many stories of first-time out-of-state buyers that purchased a home in what they thought was a desirable location, only to find out six months later that they would have liked to have located somewhere else. Viewing many properties on the same day in an unfamiliar city can just be a blur. Sometimes renting a home in a new city before you buy is a good option since that will give you time to figure out exactly where you want to live.

First Time Homebuyer Mistakes

It’s all about good Realtors and agents, proper financing, not making rash decisions, and of course choosing the best location. Sometimes everything works out except the financing, and if that’s the case, don’t give up, because we’ve helped many persons that, for a number of reasons, just can’t qualify for a mortgage. We use MN contract for deed, and we invite you to visit our site to learn how we make home ownership a reality when others have said no.

Your Guide To Buying A Foreclosed Home

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Buying a foreclosed home became extremely popular about a decade ago. Why? Well, the problems that began in 2009 led to a meltdown that created scores of opportunities for both investors and previously foreclosed homeowners that wondered if they’d ever purchase a home again after foreclosure. 

Over 5 million homes were foreclosed since then, and many investors have looked upon these as opportunities.

Since HGTV shows like Flip or Flop have become popular, many people think they are familiar with what a foreclosure is, and they think they can make big money by picking off great property values before someone else does. We advise you to be careful.

What is Buying a Foreclosed Home?

When you are looking at a home that is listed as a foreclosure, you need to understand what that means. Is this home in foreclosure, is the seller trying to avoid foreclosure, is someone offering a short sale, or is the property genuinely bank owned?

Buying a Foreclosed Home

How Does Buying A Foreclosed Home Work?

Usually, after a homeowner crosses the 90 day past due mark, the lender will begin the foreclosure process. This simply means that the lender begins the legal work necessary to take back the collateral—the home—that the homeowner placed as security with the lender. Unfortunately for Minnesota debtors, MN foreclosures are many times non-judicial; this means that properties can be taken back outside of the court system. Foreclosures can take a lot longer in judicial foreclosure states like Wisconsin. Our friends at alllaw.com tell us this happens as follows in Minnesota:

Notice of the Foreclosure

In Minnesota, a foreclosing party must give the defaulting borrower the following notices.

Notice of the default. In most cases, the foreclosing party must mail the borrower a written notice of any default before officially starting a foreclosure. The notice must provide the borrower with 30 days to cure the default.

Notice of availability of foreclosure prevention counseling. Along with the notice of default, the foreclosing party must also provide notice that foreclosure prevention counseling services are available and that the homeowner’s contact information will be sent to an approved foreclosure prevention agency.

Notice of sale. To start the foreclosure process, the foreclosing party must first file a notice of the pendency of the foreclosure with the county recorder’s office. After filing the notice of pendency, it must publish a notice of sale for six weeks before the sale. The foreclosing party must also serve a notice of sale to the occupant of the home four weeks prior to the sale.

Foreclosure advice to owners and notice of redemption rights. Along with the notice of sale, the foreclosing party must provide a foreclosure advice notice, which provides information about how to get help, as well as a notice of redemption rights providing information about what happens after the foreclosure sale.

The foreclosure advice notice must also be provided with each subsequent written communication mailed to the borrower. A foreclosing party is deemed to have complied with these requirements if it sends the foreclosure advice notice at least once every 60 days up to the date of the foreclosure sale.

In Foreclosure

So if you are looking at buying a foreclosed home, the actual home shown as “in foreclosure” is probably somewhere in the process described above. If you are interested in a property while it is in foreclosure you have to deal with all parties including the homeowners and all lenders. You can’t make a deal with only one of the parties involved.

Short Sale Forclosure

Short Sale

Sometimes the homeowner gets the lender to agree to a short sale. This means that the lender may agree to take less than what is owed on the property in order to streamline the process and allow the homeowner to avoid a foreclosure appearing on their credit report. These deals can take quite a while to engineer, and again, all parties need to agree.

Bank Owned

When the foreclosure process has been completed and the collateral has been returned to the lender, the home is termed bank-owned. At this point you only need to deal with the bank or its agents, since the bank is the legal property owner.

Forclosed Home

Strategies

Foreclosures, like storage shed content sales, used to be a more quiet and shadowy business. This isn’t the case any longer, however, as foreclosed properties are commonly inundated with multiple offers as many people want to cash in on the misfortunes of others. The best way to attempt to buy a Minnesota foreclosure is with cash.

Once you have located the property you are interested in, do your diligence and find out who actually owns it. Then, if you have the power of a cash offer, you may be able to make a quick deal. Remember, with foreclosure deals we recommend that you get qualified legal help, and please be advised that this article does not constitute legal advice.

If you have any additional questions, please feel free to contact us here.