I’m appraising a 1/2 dozen neighborhoods in Blaine. As I’m driving around a see a ReMax sign and the agents name is “Twilight Dew”. She must have been born in the late 60s with Hippie parents! “Twilight Dew” also sounds like it could be the name of subdivision. I looked at so many it was hard to keep track.
In other Twin Cities communities that I have appraised lots in, its a struggle to even find any comparable sales for my analysis. Until the recent past, even other Twin Cities communities that still had building activity through the real estate crash, like Woodbury, did not have lot sales. Builders already had so many lots they owned that they were not buying more.
There are so many developments in Blaine, and so many neighborhoods within those developments, that it felt overwhelming to understand the Blaine market. I had to add a second full day to drive and walk the neighborhoods. But I enjoyed it, as so many of the neighborhoods were well designed.
I'm a professional with nearly 30 years experience in land development and I felt overwhelmed by the market in Blaine. So what must it feel like to a home buyer to have so many choices?
I visited with Mike, a Lennar salesman at their beautiful new development, The Woods at Quail Creek. In my ongoing quest to collect market data, I asked Mike if he had sold homes in other Lennar developments.
“I just started working with Lennar”, said Mike. “I'm a realtor and I bought a new home from Lennar in Victoria. I was so impressed with the process that I came to work for Lennar. Lennar offers 'everything included homes' with minimal options. Looking at custom homes there are so many to choices to build the house its overwhelming. Going the custom route, I could picture arguing with my wife on everything from floor material to the knobs on the kitchen cabinets. Lennar was just easy because there were so few choices to make.”
“And the price was so much lower than custom homes.”
So, as Mike tells us, when the choices become overwhelming, it gets down to price.
If you wish to unsubscribe, send an email to heresthedirt@visi.com
Monday, May 23, 2011
Thursday, March 24, 2011
Contesting Your Pay 2012 Property Tax Valuations
Contesting Your Pay 2012 Property Tax Valuations
A client who owns property in Wisconsin told me the assessor is required to keep a file of the comparable sales they used so set the value for every property. In Minnesota, the TAXPAYER has the burden of proof to show that the assessed value should be lower.
Whining doesn't work.
Those that tell me they have not seen results in contesting their property taxes either appealed something that was valued correctly, or they didn't have an appraisal to prove a lower value.
The “Notice of Valuation and Classifications for Property Taxes Payable in 2012 have been drifting in. There are no legal or filing fees for this process if its done on a timely basis. And the process to contest them is not uniform. You need to read the notices carefully.
For example, Anoka County and Ramsey County do NOT have a Local Board of Review. They have Open Book Meetings, April 5-7th in Ramsey and April 27th - April 29th in Anoka. Then they each have a County Board of Appeal and Equalization in June. But the process differs between the Counties on how to get on the addenda.
Some Local Board of Reviews are the first week of April. For Cities or Township that have a Local Board of Appeal and Equalization, you MUST go there first, either in person, by letter, or by a personal representative. Then you can move on to the County Board of Review if you're not happy with the results from the Local Board. The County Board may be more effective than the Local Board, which is typically the City Council,which, in most cases, are not valuation experts. But blow off the City and you lose your opportunity to go the to the County level.
Despite being a yogi and mediation practitioner, I'm still a woman of very little patience. I like to get things done quickly.
Tax Court can take years. I recently completed an appraisal for an attorney for a tax court case for taxes payable in 2008! The Board of Appeal and Equalization, by statute, MUST complete there work by the end of June 2011 for taxes due in 2012. And if you aren't happy with the result, you can still file in Tax Court.
I operate on the belief that when the assessor MUST look at support for the Pay 2012 appeals, they might as well review the data for the Pay 2011 Tax Court Petition at the same time. Or even earlier years if they are outstanding. Especially on more complex properties. Once the assessor gets their head around understanding the property and they go out and inspect it, its minimal effort to review another years worth of market data.
If you send me your “2011 Notice of Valuation and Classification” TODAY, then it won't be your property in 2014 that I'm writing your appraisal for a 2011 property tax appeal.
Time is running out. For a free review of your property tax valuations email your notices to heresthedirt@visi.com or, if it just a couple notices, you can fax them to 763-420-9792.
A client who owns property in Wisconsin told me the assessor is required to keep a file of the comparable sales they used so set the value for every property. In Minnesota, the TAXPAYER has the burden of proof to show that the assessed value should be lower.
Whining doesn't work.
Those that tell me they have not seen results in contesting their property taxes either appealed something that was valued correctly, or they didn't have an appraisal to prove a lower value.
The “Notice of Valuation and Classifications for Property Taxes Payable in 2012 have been drifting in. There are no legal or filing fees for this process if its done on a timely basis. And the process to contest them is not uniform. You need to read the notices carefully.
For example, Anoka County and Ramsey County do NOT have a Local Board of Review. They have Open Book Meetings, April 5-7th in Ramsey and April 27th - April 29th in Anoka. Then they each have a County Board of Appeal and Equalization in June. But the process differs between the Counties on how to get on the addenda.
Some Local Board of Reviews are the first week of April. For Cities or Township that have a Local Board of Appeal and Equalization, you MUST go there first, either in person, by letter, or by a personal representative. Then you can move on to the County Board of Review if you're not happy with the results from the Local Board. The County Board may be more effective than the Local Board, which is typically the City Council,which, in most cases, are not valuation experts. But blow off the City and you lose your opportunity to go the to the County level.
Despite being a yogi and mediation practitioner, I'm still a woman of very little patience. I like to get things done quickly.
Tax Court can take years. I recently completed an appraisal for an attorney for a tax court case for taxes payable in 2008! The Board of Appeal and Equalization, by statute, MUST complete there work by the end of June 2011 for taxes due in 2012. And if you aren't happy with the result, you can still file in Tax Court.
I operate on the belief that when the assessor MUST look at support for the Pay 2012 appeals, they might as well review the data for the Pay 2011 Tax Court Petition at the same time. Or even earlier years if they are outstanding. Especially on more complex properties. Once the assessor gets their head around understanding the property and they go out and inspect it, its minimal effort to review another years worth of market data.
If you send me your “2011 Notice of Valuation and Classification” TODAY, then it won't be your property in 2014 that I'm writing your appraisal for a 2011 property tax appeal.
Time is running out. For a free review of your property tax valuations email your notices to heresthedirt@visi.com or, if it just a couple notices, you can fax them to 763-420-9792.
Monday, March 14, 2011
Chasing Demons in Grand Cayman
Chasing Demons in Grand Cayman
Dudley, the owner of the small waterfront place I stay, hands me the jacket I left there last year. He tells me “the Canadians are staying below you.” Mr. Canadian was so loud he immediately disturbed the tranquility I travel to Grand Cayman for.
My yoga training has taught me to find compassion for whatever demons in Mr. Canadian's life, whatever experiences he's had that caused him to be so obnoxious and create his need to constantly be the center of attention.
He still irritates me. I am far from an accomplished Yogi.
I plug in the ear bugs and send a silent thank you to my neighbor for loaning me her audiotape of an Irish Harry Potter knock off. Its a series about a skeleton detective and his teenage girl sidekick as she learns magic to slay demons.
I go for a long walk on 7 mile beach. A sign advertises a new 60 unit condo building with pre-construction pricing staring at $2.7 million. Though the market here is weak, there is some activity. Further down the beach I walk through a $3 million model in a 9 unit beach front building that shows signs of some sales. And there is scattered single family construction around the island.
I lose track of time and distance walking miles on the beach and cut to the street to catch a bus back to my apartment. Buses in Grand Cayman are actually privately owned vans whose owners lease a route from the Government. As I climb on the bus I'm greeted by a “NO FARTING” sign, something I have never seen on a Maple Grove Transit Bus. I hand the driver the colored currency I found tucked away with my passport. “What's this?” he asked, as I realize the money was from Belize. The driver laughs and waves me off the bus. I've seen other drivers pull up and wait for riders to get money from an ATM.
I go to yoga class and the teacher talks of bringing our demons out of the shadow. To confront them. To ignore your demons causes “dis-ease”. That a recent study showed cancer often appears 18 months after a trauma. Locking your demons in the closet or shoving them under your bed does not make them go away. These demons cause disturbance in your life that may manifest as aches, pains, insomnia or worse. Until you pay the demons the attention they demand and take care of whatever you are ignoring. And then, with yoga and meditation, you can often regain a healthy balance and get rid of dis-ease.
Any day now you'll be receiving your 2011 Property Tax Valuation Notice for taxes payable in 2012. Do you typically just toss this notice in a drawer? Bad move. You have a small window of opportunity, typically till the first week of April 2011, to quickly slay this demon. This is a quicker and simpler process than Tax Court.
I can help you with my magic to lower your property taxes if your valuation is too high. But you need to show me your valuation notices NOW! For a free review please scan the notices as soon as you receive them and email to heresthedirt@visi.com. Or, if its just one or two, you can fax them to 763-420-9792.
Dudley, the owner of the small waterfront place I stay, hands me the jacket I left there last year. He tells me “the Canadians are staying below you.” Mr. Canadian was so loud he immediately disturbed the tranquility I travel to Grand Cayman for.
My yoga training has taught me to find compassion for whatever demons in Mr. Canadian's life, whatever experiences he's had that caused him to be so obnoxious and create his need to constantly be the center of attention.
He still irritates me. I am far from an accomplished Yogi.
I plug in the ear bugs and send a silent thank you to my neighbor for loaning me her audiotape of an Irish Harry Potter knock off. Its a series about a skeleton detective and his teenage girl sidekick as she learns magic to slay demons.
I go for a long walk on 7 mile beach. A sign advertises a new 60 unit condo building with pre-construction pricing staring at $2.7 million. Though the market here is weak, there is some activity. Further down the beach I walk through a $3 million model in a 9 unit beach front building that shows signs of some sales. And there is scattered single family construction around the island.
I lose track of time and distance walking miles on the beach and cut to the street to catch a bus back to my apartment. Buses in Grand Cayman are actually privately owned vans whose owners lease a route from the Government. As I climb on the bus I'm greeted by a “NO FARTING” sign, something I have never seen on a Maple Grove Transit Bus. I hand the driver the colored currency I found tucked away with my passport. “What's this?” he asked, as I realize the money was from Belize. The driver laughs and waves me off the bus. I've seen other drivers pull up and wait for riders to get money from an ATM.
I go to yoga class and the teacher talks of bringing our demons out of the shadow. To confront them. To ignore your demons causes “dis-ease”. That a recent study showed cancer often appears 18 months after a trauma. Locking your demons in the closet or shoving them under your bed does not make them go away. These demons cause disturbance in your life that may manifest as aches, pains, insomnia or worse. Until you pay the demons the attention they demand and take care of whatever you are ignoring. And then, with yoga and meditation, you can often regain a healthy balance and get rid of dis-ease.
Any day now you'll be receiving your 2011 Property Tax Valuation Notice for taxes payable in 2012. Do you typically just toss this notice in a drawer? Bad move. You have a small window of opportunity, typically till the first week of April 2011, to quickly slay this demon. This is a quicker and simpler process than Tax Court.
I can help you with my magic to lower your property taxes if your valuation is too high. But you need to show me your valuation notices NOW! For a free review please scan the notices as soon as you receive them and email to heresthedirt@visi.com. Or, if its just one or two, you can fax them to 763-420-9792.
Wednesday, March 2, 2011
Rental Townhome #2 St. Louis Park
Rental Townhome #2 St. Louis Park
I've been trying since August to purchase this beautiful townhome in St. Louis Park. Its a short sale, with CitiMortgage being the lender. I close the end of March, two weeks before CitiMortgage would go into title. This way, I was able to use standard Minnesota Purchase Agreements and get a warranty deed from the seller.
The issue was price. In August, the list price was $121,500, I offered $110,000. The seller signed my purchase agreement, but CitiMortgage,after months of waiting, countered at $121,000. CitiMortgage had gotten a Broker Price Opinion instead of an appraisal to evaluate my offer. As I have never seen the BPO, I can just guess they didn't adjust for a pending assessment of around $7,000 for a future balcony replacement. I walked from their counter of $121,000 in the fall.
When I noticed in December that this was still on the market and the price had dropped to $116,300, I made another offer at the same $110,000 I had offered in August. The seller signed my purchase agreement. After a couples months wait CitiMortgage countered at $118,000. I countered back at $116,000 and we had a deal. I did land up $5,000 lower than their counter from the first offer.
After looking at so many townhomes, I realized that this is the best one I've seen. Its located only four blocks from the Louisiana Exit at 394, close to the new West End shopping center and only minutes from Downtown Minneapolis. If you looking at a single family home in good condition in St. Louis Park that has at least 1,700 square feet, three bedrooms, three baths, and, this is the key, a two car attached garage, you're looking in the price range of $300,000 -$700,000. So at $116,000, + the balcony, I'm pleased with the price.
For reasons I don't understand, this townhome has a shower in the master bath, and the others I've seen in the Greensboro development only have a ½ bath. That extra shower makes a big difference in the tenant appeal, and was one of the main reasons I bought the Chanhassen townhome.
After all the repairs I've needed to do to my Chanhassen townhome, I really appreciate the pristine condition of this home. All high quality laminate floors in the entire home. Updated kitchen. New furnace and air conditioner. And it helpful that the owner is still living there. Homes do better when lived in and I know everything works.
And none of that vinyl siding that can become a dirt magnet. Its brick.
The home has really good vibes.
You sit on your balcony and can you see the pool, tennis courts and clubhouse. You walk out the other way to the landscaped patio, go up ½ flight of stairs, and catch the bus. Or walk four blocks to the Louisiana Transit Center.
Where I hesitated on this was the high HOA dues to cover the amenities, which also include two full time on site property managers that even change the furnace filters, as the furnace is on the roof. The HOA dues are $337 a month, versus the $160 I pay in Chanhassen. To get the same cash flow and rate of return as Chanhassen, I needed rent of $1,795 a month.
So before finalizing the deal, I checked the MLS for rentals, found a similar townhome in a different neighborhood in St. Louis Park, that didn't have the pool and tennis, for $1,795 a month rent. The listing was marked canceled.
Thinking it won't work at this rent, I called the listing agent. She said they had a lot of showings and had two professional women ready to sign the lease, but the owners switched gears and decided to sell instead. Armed with this information, I signed the counter offer and I'm getting ready to close.
If you know anyone looking for a beautiful rental at an awesome location, clink this link, then click on the list number shown in blue.
http://matrix.northstarmls.com/de.asp?k=16494XB5BV&p=DE-67316491-977
I've been trying since August to purchase this beautiful townhome in St. Louis Park. Its a short sale, with CitiMortgage being the lender. I close the end of March, two weeks before CitiMortgage would go into title. This way, I was able to use standard Minnesota Purchase Agreements and get a warranty deed from the seller.
The issue was price. In August, the list price was $121,500, I offered $110,000. The seller signed my purchase agreement, but CitiMortgage,after months of waiting, countered at $121,000. CitiMortgage had gotten a Broker Price Opinion instead of an appraisal to evaluate my offer. As I have never seen the BPO, I can just guess they didn't adjust for a pending assessment of around $7,000 for a future balcony replacement. I walked from their counter of $121,000 in the fall.
When I noticed in December that this was still on the market and the price had dropped to $116,300, I made another offer at the same $110,000 I had offered in August. The seller signed my purchase agreement. After a couples months wait CitiMortgage countered at $118,000. I countered back at $116,000 and we had a deal. I did land up $5,000 lower than their counter from the first offer.
After looking at so many townhomes, I realized that this is the best one I've seen. Its located only four blocks from the Louisiana Exit at 394, close to the new West End shopping center and only minutes from Downtown Minneapolis. If you looking at a single family home in good condition in St. Louis Park that has at least 1,700 square feet, three bedrooms, three baths, and, this is the key, a two car attached garage, you're looking in the price range of $300,000 -$700,000. So at $116,000, + the balcony, I'm pleased with the price.
For reasons I don't understand, this townhome has a shower in the master bath, and the others I've seen in the Greensboro development only have a ½ bath. That extra shower makes a big difference in the tenant appeal, and was one of the main reasons I bought the Chanhassen townhome.
After all the repairs I've needed to do to my Chanhassen townhome, I really appreciate the pristine condition of this home. All high quality laminate floors in the entire home. Updated kitchen. New furnace and air conditioner. And it helpful that the owner is still living there. Homes do better when lived in and I know everything works.
And none of that vinyl siding that can become a dirt magnet. Its brick.
The home has really good vibes.
You sit on your balcony and can you see the pool, tennis courts and clubhouse. You walk out the other way to the landscaped patio, go up ½ flight of stairs, and catch the bus. Or walk four blocks to the Louisiana Transit Center.
Where I hesitated on this was the high HOA dues to cover the amenities, which also include two full time on site property managers that even change the furnace filters, as the furnace is on the roof. The HOA dues are $337 a month, versus the $160 I pay in Chanhassen. To get the same cash flow and rate of return as Chanhassen, I needed rent of $1,795 a month.
So before finalizing the deal, I checked the MLS for rentals, found a similar townhome in a different neighborhood in St. Louis Park, that didn't have the pool and tennis, for $1,795 a month rent. The listing was marked canceled.
Thinking it won't work at this rent, I called the listing agent. She said they had a lot of showings and had two professional women ready to sign the lease, but the owners switched gears and decided to sell instead. Armed with this information, I signed the counter offer and I'm getting ready to close.
If you know anyone looking for a beautiful rental at an awesome location, clink this link, then click on the list number shown in blue.
http://matrix.northstarmls.com/de.asp?k=16494XB5BV&p=DE-67316491-977
Wednesday, February 23, 2011
Property Tax and Classification
Property Tax and Classification
Developer owns three one acre lots on a Trunk Highway.
Each of the three parcels are CLASSIFIED as Commercial for Property Taxes and VALUED as Commercial for Property Taxes.
Initial research reveals:
Parcel
Zoning
Comp Plan
Tax Classification
A
Med Density Residential
Med Den Residential
Commercial
B
Med Density Residential
Commercial
Commercial
C
Commercial
Commercial
Commercial
Under Minnesota State Statute when there is a conflict between the Zoning and the Comprehensive Plan, like in Parcel B above, the Comprehensive Plan prevails when a development application is submitted.
Quiz: Answers at the end of the quiz
1) Parcel A should be CLASSIFIED for property taxes as:
a) Non Homestead Residential
b) Commercial
c) Don't have enough information
2) Parcel A should be VALUED for Property taxes as:
a) Non Homestead Residential
b) Commercial
c) Don't have enough information
3) Parcel B should be CLASSIFIED for property taxes as:
a) Non Homestead Residential
b) Commercial
c) Don't have enough information
4) Parcel B should be VALUED for Property taxes as:
a) Non Homestead Residential
b) Commercial
c) Don't have enough information
5) Parcel C should be CLASSIFIED for property taxes as:
a) Non Homestead Residential
b) Commercial
c) Don't have enough information
6) Parcel C should be VALUED for Property taxes as:
a) Non Homestead Residential
b) Commercial
c) Don't have enough information
7) If a property is misclassified as Commercial when it should be Residential, the Property TAX may be TRIPLE what it should be at the same Valuation.
a) True
b) False
Answers to the quiz:
1) A 2) C 3) A 4) C 5)B 6) C 7) A
You needed to know these two facts to ace the quiz:
A) For Property Tax Classification of VACANT land where there is no obvious use, its classified how its ZONED. Comp Plan is irrelevant in classification.
B) Property should be VALUED at its highest and best use. Highest and Best Use is based on what is a) Physically Possible; b) Legally Permissible; and c) Financially Feasible.
The Highest and Best Use is the most critical component of any appraisal. And I haven't finished my analysis for these three parcels to make that determination.
Classification is something I've observed most property owners blow off, focusing on the value. But challenging the classification may have even greater impact to your property taxes than challenging the valuation because there is such a huge difference in tax rates.
Are your properties misclassified? For a free evaluation, send me your PIDs, property locations and your contact info to heresthedirt@visi.com.
The deadline to challenge your Pay 2011 property taxes is April 29th, 2011.
Developer owns three one acre lots on a Trunk Highway.
Each of the three parcels are CLASSIFIED as Commercial for Property Taxes and VALUED as Commercial for Property Taxes.
Initial research reveals:
Parcel
Zoning
Comp Plan
Tax Classification
A
Med Density Residential
Med Den Residential
Commercial
B
Med Density Residential
Commercial
Commercial
C
Commercial
Commercial
Commercial
Under Minnesota State Statute when there is a conflict between the Zoning and the Comprehensive Plan, like in Parcel B above, the Comprehensive Plan prevails when a development application is submitted.
Quiz: Answers at the end of the quiz
1) Parcel A should be CLASSIFIED for property taxes as:
a) Non Homestead Residential
b) Commercial
c) Don't have enough information
2) Parcel A should be VALUED for Property taxes as:
a) Non Homestead Residential
b) Commercial
c) Don't have enough information
3) Parcel B should be CLASSIFIED for property taxes as:
a) Non Homestead Residential
b) Commercial
c) Don't have enough information
4) Parcel B should be VALUED for Property taxes as:
a) Non Homestead Residential
b) Commercial
c) Don't have enough information
5) Parcel C should be CLASSIFIED for property taxes as:
a) Non Homestead Residential
b) Commercial
c) Don't have enough information
6) Parcel C should be VALUED for Property taxes as:
a) Non Homestead Residential
b) Commercial
c) Don't have enough information
7) If a property is misclassified as Commercial when it should be Residential, the Property TAX may be TRIPLE what it should be at the same Valuation.
a) True
b) False
Answers to the quiz:
1) A 2) C 3) A 4) C 5)B 6) C 7) A
You needed to know these two facts to ace the quiz:
A) For Property Tax Classification of VACANT land where there is no obvious use, its classified how its ZONED. Comp Plan is irrelevant in classification.
B) Property should be VALUED at its highest and best use. Highest and Best Use is based on what is a) Physically Possible; b) Legally Permissible; and c) Financially Feasible.
The Highest and Best Use is the most critical component of any appraisal. And I haven't finished my analysis for these three parcels to make that determination.
Classification is something I've observed most property owners blow off, focusing on the value. But challenging the classification may have even greater impact to your property taxes than challenging the valuation because there is such a huge difference in tax rates.
Are your properties misclassified? For a free evaluation, send me your PIDs, property locations and your contact info to heresthedirt@visi.com.
The deadline to challenge your Pay 2011 property taxes is April 29th, 2011.
Wednesday, February 16, 2011
Ramsey Town Center
Ramsey Town Center
I made my first visit to the Ramsey Town Center today. Its not a location that is typically on the way to anything. I was out there for a tax appeal. And anyone that has property in the Ramsey Town Center needs to consider appealing their property taxes, residential or commercial.
When you visit the struggling commercial area, I find it ironic that this shiny new building is the offices of the Midwest Medical Examiner. As the Ramsey Town Center is strewn with dead developments.
Its sad because there are some lovely homes built there, beautiful architecture on the the townhomes. But the projects have all been mothballed. Not one model home to be seen. And one sad “to be built”, a 2 bedroom, 1 bath single family home on a 55' wide lot advertised at $154,000 is the only active listing I could find on the MLS. As often the case, in addition to the builders, those that are suffering the most are the homeowners that bought into the dream. Unless they are very fond of quiet and don't like having neighbors.
As to solds in the last year--3 partially completed townhomes sold for $45,000 and a water damaged one for $52,000. And a new nice single family home, 2,500 square feet finished with 4 beds and 3 baths sold for $262,000. Lonely, though. It was really quiet out there on this flat open land.
It was a project that never made sense, even when it was conceived in the peak of the hot real estate market by the City of Ramsey, who sought out a developer. Though I doubt the City could have even considered the resulting bank fraud that landed people in jail and contributed to the main appraiser involved committing suicide. Back to the dead body thing again.
Expect for what appears to be a mostly empty commercial building with an event center, and a new Alina Clinic being built, all of the other “Town Center” commercial buildings are this amazing City Hall, the new VA Clinic being built, a large multistory empty parking garage, and the Medical Examiners Office.
I made my first visit to the Ramsey Town Center today. Its not a location that is typically on the way to anything. I was out there for a tax appeal. And anyone that has property in the Ramsey Town Center needs to consider appealing their property taxes, residential or commercial.
When you visit the struggling commercial area, I find it ironic that this shiny new building is the offices of the Midwest Medical Examiner. As the Ramsey Town Center is strewn with dead developments.
Its sad because there are some lovely homes built there, beautiful architecture on the the townhomes. But the projects have all been mothballed. Not one model home to be seen. And one sad “to be built”, a 2 bedroom, 1 bath single family home on a 55' wide lot advertised at $154,000 is the only active listing I could find on the MLS. As often the case, in addition to the builders, those that are suffering the most are the homeowners that bought into the dream. Unless they are very fond of quiet and don't like having neighbors.
As to solds in the last year--3 partially completed townhomes sold for $45,000 and a water damaged one for $52,000. And a new nice single family home, 2,500 square feet finished with 4 beds and 3 baths sold for $262,000. Lonely, though. It was really quiet out there on this flat open land.
It was a project that never made sense, even when it was conceived in the peak of the hot real estate market by the City of Ramsey, who sought out a developer. Though I doubt the City could have even considered the resulting bank fraud that landed people in jail and contributed to the main appraiser involved committing suicide. Back to the dead body thing again.
Expect for what appears to be a mostly empty commercial building with an event center, and a new Alina Clinic being built, all of the other “Town Center” commercial buildings are this amazing City Hall, the new VA Clinic being built, a large multistory empty parking garage, and the Medical Examiners Office.
Thursday, February 10, 2011
I'm a happy landlord
I'm a Happy Landlord!
As my closing approached for the beautiful townhome in Chanhassen, I placed a for rent ad on Craig's List. When I did my original projections it was based on a rent of $1,300 a month. And there were two other three bedroom townhomes advertised in the area at $1,300.
I knew my townhome was a superior location and floor plan. So I tossed it on Craig's list at $1,475 on a Friday evening. And got two calls right away--though they wanted an April 1st move in and I was looking for March 1st. But I was excited and told my friend who I copied the rental townhome strategy from.
“Laurie,” he told me. “It usually takes 15 showings to get a signed lease.”
Two days later I get a call from a wonderful woman, newly divorced, with three teenage girls who specifically wanted to live in the my Oak Hill townhome neighborhood in Chanhassen. Her marital home was close by and the girls' dad lived just down the road, with his new young honey and baby boy. Same schools for the girls, close to their friends and sports. This townhome is close to EVERYTHING, at the intersection on Highway 5 and Powers Blvd.
My closing was delayed three days due to the Texas storms, as the seller was Freddie Mac from San Antonio.
For some odd reason, Freddie Mac does not pay deed tax when they sell property.
Got the signed papers from Freddic Mac at 4:00. And the lease was signed at 8:00 that evening.
So the seven month search for the perfect townhome was not wasted. I wouldn't have immediately recognized how special this one is. I paid $4,100 over list price because there was another offer. If I hadn't seen all the others first I would have probably bid too low and lost it.
I'm getting about a 12.5% rate of return. Given both the real estate and financial markets, I'm pleased with that. So I'm a happy landlord!
As my closing approached for the beautiful townhome in Chanhassen, I placed a for rent ad on Craig's List. When I did my original projections it was based on a rent of $1,300 a month. And there were two other three bedroom townhomes advertised in the area at $1,300.
I knew my townhome was a superior location and floor plan. So I tossed it on Craig's list at $1,475 on a Friday evening. And got two calls right away--though they wanted an April 1st move in and I was looking for March 1st. But I was excited and told my friend who I copied the rental townhome strategy from.
“Laurie,” he told me. “It usually takes 15 showings to get a signed lease.”
Two days later I get a call from a wonderful woman, newly divorced, with three teenage girls who specifically wanted to live in the my Oak Hill townhome neighborhood in Chanhassen. Her marital home was close by and the girls' dad lived just down the road, with his new young honey and baby boy. Same schools for the girls, close to their friends and sports. This townhome is close to EVERYTHING, at the intersection on Highway 5 and Powers Blvd.
My closing was delayed three days due to the Texas storms, as the seller was Freddie Mac from San Antonio.
For some odd reason, Freddie Mac does not pay deed tax when they sell property.
Got the signed papers from Freddic Mac at 4:00. And the lease was signed at 8:00 that evening.
So the seven month search for the perfect townhome was not wasted. I wouldn't have immediately recognized how special this one is. I paid $4,100 over list price because there was another offer. If I hadn't seen all the others first I would have probably bid too low and lost it.
I'm getting about a 12.5% rate of return. Given both the real estate and financial markets, I'm pleased with that. So I'm a happy landlord!
Thursday, February 3, 2011
How To Speed Up Property Tax Appeals
How to Speed Up Property Tax Appeals
If you believe your property tax assessments are too high, there are three roads you can take: 1) “The Road to Nowhere”; 2) “The Toll Road to Tax Court”; 3) “The Express Route to the Board of Review”.
1) “The Road to Nowhere”. Call your assessor and whine that your TAXES are too high. Assessors don't set your taxes. I'm seeing many properties where the VALUES have declined and the TAXES have increased.
Understand that when it comes to property tax assessment, the ASSESSOR is presumed to be correct. Its the TAXPAYER'S Burden of Proof to demonstrate the assessed value should be lower. And this typically takes a well supported appraisal.
Whining doesn't work. And wastes everyone's time, including yours.
2) “The Toll Road to Tax Court”. If you believe your property tax assessment is too high for taxes due this year, TAX COURT is your ONLY option at this point in the game. Filing deadline is the end of APRIL 2011, and its approaching faster than we can imagine spring under the snow piles.
This road has fees that must be paid for each year. And you can be traveling on it for years and never get where you want to be--a reduced property tax assessment. In Hennepin County, for example, ½ the cases are dismissed with no change--but the taxpayer still pays the toll. Of the less than 1% of cases that actually go to court, its become more common for the judge to rule that the assessed value be raised HIGHER THAN THE ORIGINAL ASSESEMENT!
Its been my extensive experience, that when I treat the assessor with respect, don't play games, and provide a very well supported appraisal that omits the fluff that just wastes their time, I've gotten reductions as much as 66% on settlements without going to tax court.
These are some of the detours that can make the Toll Road to Tax Court take years:
a) Cases filed that have no merit. Remember ½ the cases in Hennepin County were dismissed? Those dismissals took a lot of the assessor's time that could have been spent settling the valid cases. If your property tax attorney/consultant files a case without doing even some basic valuation research, find another provider. For example, I may review eight subdivisions and recommend filing on only two or three. Without the up front valuation research, you're likely to pay years of tolls to tax court and land up in the dismissal pile.
b) Reluctance to Hire an Appraiser AND an Attorney. To successfully navigate the road to tax court takes two kinds of vehicles: an attorney and an appraiser. Only engaging one greatly increases the chances of your case being dismissed with no change, but you still paid the toll. Engaging neither will often lead to The Road to Nowhere.
c) Some Assessors are just really slow. I can provide them an appraisal and they sit on it over a year. And I don't think its because they sit around playing video games. They have many statutory responsibilities in addition to tax appeals. And they have to deal with cases that have no merit. Court dates can be extended for years. And they are dealing with older cases. Many tax appeals filed for 2010 still haven't been assigned initial court dates by the Tax Court.
3) “The Express Route to the Board of Review” In a few weeks you'll get your January 2nd, 2011 valuation notices for property taxes due in 2012. As this is the time of year when most of us are focused on completing our INCOME TAX for 2010, who wants to think about 2012 property taxes? So most people glance at this notice and toss it in the drawer.
Bad move. This notice states you can appeal the valuation by attending your local board of review, which is typically held around the first week of April 2011, when you're scrambling to get your income tax done. Note the pay 2012 board of Review is held before the Pay 2011 property tax court filing date.
The board of review is typically the City Council or Town Board, and they typically are not valuation experts and will defer to their assessor. You can appear in person, have a representative or send a letter. I went this route for Pay 09' for a group of clients. It was a total waste of time, got zero reductions, filed in tax court and got reductions as high as 65%.
Last year a client filed in tax court for Pay 2010. She got the notice for the Pay 2011 local Board of Review and asked me to go. After the last experience, I wasn't going to miss my Yoga class so she went by herself. Nominal reduction, but a letter explaining she could appeal to the Hennepin County Board of Review. I like new experiences, so I set the appointment, wrote a well supported appraisal, and presented to the County Board of Review in June of 2010. The County Board of Review in Hennepin County are appointed by each Commissioner. It was primarily Realtors and a developer. They were knowledgeable about the market, listened closely and asked questions. And the Pay 2011 assessment was reduced from $1,300,000 to $600,000.
No tax court. No lawyers and no filing fees. And most importantly, its the express route to tax appeals. But if you miss the entrance ramp, you can't go back.
How to Speed Up Property Tax Appeals
1) Send me the PIDs and basic property information for ALL of your real estate holdings THIS MONTH. I'll do a free evaluation, and for those cases that have merit, I'll work with an attorney to file your Pay 2011 property tax court appeal.
2) Send me those Pay 2012 notices AS SOON AS YOU GET THEM. Since I would have already been familiar with your property, I can do a quick evaluation if you have a case for Pay 2012 Board of Review. If you had a valid case for 2011, its likely you will still have one for 2012.
3) If you've provided me with what I need on a timely bases, I can prepare appraisals for Pay 2011, Pay 2012, and even older tax court cases that haven't settled yet for the same property.
4) As part of the Board of Review, the assessor must review your case. I'll ask them, while they need to get their head wrapped around understanding your property, to review the appraisals for the tax court cases for prior years and settle them altogether.
No guarantees, but I have used this strategy since 2009 with one particular County with really good and fast results. By pushing hard this spring, lets work toward getting your tax court cases settled by June. Then I'll have time to play golf with you all summer!
Don't delay and get stuck on the wrong road. The Board of Review is an express process and I need time to write a well supported appraisal. So get your free evaluation now. TODAY send me your PIDs, property locations, short explanation what the property is, with your contact information to heresthedirt@visi.com.
If you believe your property tax assessments are too high, there are three roads you can take: 1) “The Road to Nowhere”; 2) “The Toll Road to Tax Court”; 3) “The Express Route to the Board of Review”.
1) “The Road to Nowhere”. Call your assessor and whine that your TAXES are too high. Assessors don't set your taxes. I'm seeing many properties where the VALUES have declined and the TAXES have increased.
Understand that when it comes to property tax assessment, the ASSESSOR is presumed to be correct. Its the TAXPAYER'S Burden of Proof to demonstrate the assessed value should be lower. And this typically takes a well supported appraisal.
Whining doesn't work. And wastes everyone's time, including yours.
2) “The Toll Road to Tax Court”. If you believe your property tax assessment is too high for taxes due this year, TAX COURT is your ONLY option at this point in the game. Filing deadline is the end of APRIL 2011, and its approaching faster than we can imagine spring under the snow piles.
This road has fees that must be paid for each year. And you can be traveling on it for years and never get where you want to be--a reduced property tax assessment. In Hennepin County, for example, ½ the cases are dismissed with no change--but the taxpayer still pays the toll. Of the less than 1% of cases that actually go to court, its become more common for the judge to rule that the assessed value be raised HIGHER THAN THE ORIGINAL ASSESEMENT!
Its been my extensive experience, that when I treat the assessor with respect, don't play games, and provide a very well supported appraisal that omits the fluff that just wastes their time, I've gotten reductions as much as 66% on settlements without going to tax court.
These are some of the detours that can make the Toll Road to Tax Court take years:
a) Cases filed that have no merit. Remember ½ the cases in Hennepin County were dismissed? Those dismissals took a lot of the assessor's time that could have been spent settling the valid cases. If your property tax attorney/consultant files a case without doing even some basic valuation research, find another provider. For example, I may review eight subdivisions and recommend filing on only two or three. Without the up front valuation research, you're likely to pay years of tolls to tax court and land up in the dismissal pile.
b) Reluctance to Hire an Appraiser AND an Attorney. To successfully navigate the road to tax court takes two kinds of vehicles: an attorney and an appraiser. Only engaging one greatly increases the chances of your case being dismissed with no change, but you still paid the toll. Engaging neither will often lead to The Road to Nowhere.
c) Some Assessors are just really slow. I can provide them an appraisal and they sit on it over a year. And I don't think its because they sit around playing video games. They have many statutory responsibilities in addition to tax appeals. And they have to deal with cases that have no merit. Court dates can be extended for years. And they are dealing with older cases. Many tax appeals filed for 2010 still haven't been assigned initial court dates by the Tax Court.
3) “The Express Route to the Board of Review” In a few weeks you'll get your January 2nd, 2011 valuation notices for property taxes due in 2012. As this is the time of year when most of us are focused on completing our INCOME TAX for 2010, who wants to think about 2012 property taxes? So most people glance at this notice and toss it in the drawer.
Bad move. This notice states you can appeal the valuation by attending your local board of review, which is typically held around the first week of April 2011, when you're scrambling to get your income tax done. Note the pay 2012 board of Review is held before the Pay 2011 property tax court filing date.
The board of review is typically the City Council or Town Board, and they typically are not valuation experts and will defer to their assessor. You can appear in person, have a representative or send a letter. I went this route for Pay 09' for a group of clients. It was a total waste of time, got zero reductions, filed in tax court and got reductions as high as 65%.
Last year a client filed in tax court for Pay 2010. She got the notice for the Pay 2011 local Board of Review and asked me to go. After the last experience, I wasn't going to miss my Yoga class so she went by herself. Nominal reduction, but a letter explaining she could appeal to the Hennepin County Board of Review. I like new experiences, so I set the appointment, wrote a well supported appraisal, and presented to the County Board of Review in June of 2010. The County Board of Review in Hennepin County are appointed by each Commissioner. It was primarily Realtors and a developer. They were knowledgeable about the market, listened closely and asked questions. And the Pay 2011 assessment was reduced from $1,300,000 to $600,000.
No tax court. No lawyers and no filing fees. And most importantly, its the express route to tax appeals. But if you miss the entrance ramp, you can't go back.
How to Speed Up Property Tax Appeals
1) Send me the PIDs and basic property information for ALL of your real estate holdings THIS MONTH. I'll do a free evaluation, and for those cases that have merit, I'll work with an attorney to file your Pay 2011 property tax court appeal.
2) Send me those Pay 2012 notices AS SOON AS YOU GET THEM. Since I would have already been familiar with your property, I can do a quick evaluation if you have a case for Pay 2012 Board of Review. If you had a valid case for 2011, its likely you will still have one for 2012.
3) If you've provided me with what I need on a timely bases, I can prepare appraisals for Pay 2011, Pay 2012, and even older tax court cases that haven't settled yet for the same property.
4) As part of the Board of Review, the assessor must review your case. I'll ask them, while they need to get their head wrapped around understanding your property, to review the appraisals for the tax court cases for prior years and settle them altogether.
No guarantees, but I have used this strategy since 2009 with one particular County with really good and fast results. By pushing hard this spring, lets work toward getting your tax court cases settled by June. Then I'll have time to play golf with you all summer!
Don't delay and get stuck on the wrong road. The Board of Review is an express process and I need time to write a well supported appraisal. So get your free evaluation now. TODAY send me your PIDs, property locations, short explanation what the property is, with your contact information to heresthedirt@visi.com.
Tuesday, January 25, 2011
The Tenants says "baaaaaa"
The tenant says “baaaa”
I went to see “Babe the Sheep Pig” at the Childrens' Theatre. Babe the pig saves himself from being Christmas dinner by learning to act as a sheep dog. And saving the sheep from being eaten by wolves.
My first day of Real Estate School we were told the public are “sheep” and we, the real estate professionals, are “wolves”. Now that I'm going to be a landlord, I've learned that Minnesota Landlord Tenant law takes the sheep/wolf concept to a whole other level.
Try out this quiz I made up to get up to speed on Minnesota Landlord Tenant Law. Answers are at the end of the quiz.
1) If the landlord enters the premise without giving prior notice, the tenant may:
a) Terminate the lease
b) Recover up to $100 per violation in court
c) Both A & B
2) The tenant owes rent and the landlord brings an eviction action. To “stay and pay” the tenant must pay the past due rent, plus interest, plus landlord paid court and service fees. How much does the tenant need to pay to cover the landlord's attorney fees?
a) $5
b) $100
c) Landlord's actual attorney fees
3) Not only does your deadbeat tenant leave in the middle of the night with rent unpaid, but he leaves his junk. What do you do with the tenant's stuff?
a) Sell it and apply the proceeds to the unpaid rent.
b) Store it, and return it to the tenant if he shows up to pay the past due rent.
c) Store it, and return it to the tenant when they reimburse you for storing their stuff – they don't have to pay you the back rent to get their stuff back.
4) Your tenant is found to posses illegal drugs or contraband valued at more than $100, which is seized from your property. After given notice, you have 15 days to evict the tenant. You're tenant does well in the drug trade and pays his rent on time so you don't evict him. Tenant gets caught again and the value of the controlled substances exceed $1,000.
The government can take your rental property.
a) True
b) False
5) You don't want to rent to kids. Can you discriminate against renting to families with children?
a) No. You can never discriminate based on “familial status”
b) Yes, only if its a “55+” building
c) It an owner-occupied house, duplex, triplex or fourplex.
d) Both B and C.
6) The tenant skips out and doesn't pay the last month's rent. You can apply his security deposit for the rent payment.
a) True
b) False
Answers to quiz:
1) B
2) A
3) C
4) A
5) D
6) A
How did you do? Are you ready to be a landlord? Any advise for me?
I went to see “Babe the Sheep Pig” at the Childrens' Theatre. Babe the pig saves himself from being Christmas dinner by learning to act as a sheep dog. And saving the sheep from being eaten by wolves.
My first day of Real Estate School we were told the public are “sheep” and we, the real estate professionals, are “wolves”. Now that I'm going to be a landlord, I've learned that Minnesota Landlord Tenant law takes the sheep/wolf concept to a whole other level.
Try out this quiz I made up to get up to speed on Minnesota Landlord Tenant Law. Answers are at the end of the quiz.
1) If the landlord enters the premise without giving prior notice, the tenant may:
a) Terminate the lease
b) Recover up to $100 per violation in court
c) Both A & B
2) The tenant owes rent and the landlord brings an eviction action. To “stay and pay” the tenant must pay the past due rent, plus interest, plus landlord paid court and service fees. How much does the tenant need to pay to cover the landlord's attorney fees?
a) $5
b) $100
c) Landlord's actual attorney fees
3) Not only does your deadbeat tenant leave in the middle of the night with rent unpaid, but he leaves his junk. What do you do with the tenant's stuff?
a) Sell it and apply the proceeds to the unpaid rent.
b) Store it, and return it to the tenant if he shows up to pay the past due rent.
c) Store it, and return it to the tenant when they reimburse you for storing their stuff – they don't have to pay you the back rent to get their stuff back.
4) Your tenant is found to posses illegal drugs or contraband valued at more than $100, which is seized from your property. After given notice, you have 15 days to evict the tenant. You're tenant does well in the drug trade and pays his rent on time so you don't evict him. Tenant gets caught again and the value of the controlled substances exceed $1,000.
The government can take your rental property.
a) True
b) False
5) You don't want to rent to kids. Can you discriminate against renting to families with children?
a) No. You can never discriminate based on “familial status”
b) Yes, only if its a “55+” building
c) It an owner-occupied house, duplex, triplex or fourplex.
d) Both B and C.
6) The tenant skips out and doesn't pay the last month's rent. You can apply his security deposit for the rent payment.
a) True
b) False
Answers to quiz:
1) B
2) A
3) C
4) A
5) D
6) A
How did you do? Are you ready to be a landlord? Any advise for me?
Friday, January 21, 2011
Size Matters
Size Matters
Looked at a townhome in an awesome Plymouth location in Wayzata Schools. It backed a wetland. The neighborhood was primarily single family. It was well priced, a bank owned.
I emailed the listing agent “Can you please send me the contact info for the property manager for the H O A?”
And she responded “Can I get back to you in a week or so?”
“What's the problem?”
The problem was the H O A had been run by the woman whose unit had been foreclosed upon! No one knew who was in charge of this 18 unit HOA.
An agent's mom was in an H O A for one building of 6 units. A big storm damaged the roof. While mom wanted to fix the roof, her neighbor's wanted to pocket the insurance money.
When you buy into an H O A and the unit has unpaid dues, the H O A can't require the new owner to pay the old dues. They can go after the deadbeats, and the bank is responsible to pay the dues for the period they own the unit, but banks can be deadbeats too. But you are paying those dues in future dues increases to cover uncollected dues. Money has to come from somewhere.
Say there are 3 deadbeat owners in the H O A. If there are only 6 units, that's 50% of the budget! With the 18 unit one in Plymouth, that's 17%. In the 90 unit development I'm buying into in Chanhassen, that 3%.
After 6 months of aggresively looking for a townhome to purchase as a rental property, I finally found one that I'm not looking for reasons to walk away.
Chanhassen is an excellent market. The average sales price for all homes sold in 2010 was $371,972, up 3.7% from 2009. I looked at a couple older units in a Chanhassen neighborhood with a good location, but bad vibes. And a subdivision farther west I won't even look at because there are too many rentals and the rents are too low. But this one meets or exceeds my long list of criteria.
Location: Next to downtown Chanhassan, at the northeast corner of Highway 5 and Powers Blvd. Its walking distance to Target, Byerlys, Cub--all with better than typical architecture. Chanhassan elementary school is close by in the highly rated Chaska Schools. And its is across the street from the Temple of Eck campus, 174 acres with 2 miles of walking trails and Lake Ann, open to the public. Which is next to Lake Ann Park, with a swimming beach and boat rental.
The home has 3 bedrooms, 3 baths, a huge balcony and a walkout basement to a patio. Those who are familiar with the area tell me that Oak Ponds has a good reputation. And the property manager is really terrific.
My hope, with the 3 bedrooms and proximity to Chanhassan Elementary School, is to attract a familiy that will be a long term tenant. The property manager told me there are a lot of kid and dogs. The 3rd bath with shower is also unique, as a prior owner had added it in the finished walkout basement. With the exception of some brand new townhomes (which are typically too costly to cash flow as rentals) , if you can find a 3 bedroom townhome, there is typically only one bathtub. Having grown up in a house with 5 of us, 3 girls, and one bathroom (unless you count the ½ bath in the cold basement with the spiders and pillbugs that no one wanted to use), I'm reluctant to buy a three bedroom without a second shower.
Looked at a townhome in an awesome Plymouth location in Wayzata Schools. It backed a wetland. The neighborhood was primarily single family. It was well priced, a bank owned.
I emailed the listing agent “Can you please send me the contact info for the property manager for the H O A?”
And she responded “Can I get back to you in a week or so?”
“What's the problem?”
The problem was the H O A had been run by the woman whose unit had been foreclosed upon! No one knew who was in charge of this 18 unit HOA.
An agent's mom was in an H O A for one building of 6 units. A big storm damaged the roof. While mom wanted to fix the roof, her neighbor's wanted to pocket the insurance money.
When you buy into an H O A and the unit has unpaid dues, the H O A can't require the new owner to pay the old dues. They can go after the deadbeats, and the bank is responsible to pay the dues for the period they own the unit, but banks can be deadbeats too. But you are paying those dues in future dues increases to cover uncollected dues. Money has to come from somewhere.
Say there are 3 deadbeat owners in the H O A. If there are only 6 units, that's 50% of the budget! With the 18 unit one in Plymouth, that's 17%. In the 90 unit development I'm buying into in Chanhassen, that 3%.
After 6 months of aggresively looking for a townhome to purchase as a rental property, I finally found one that I'm not looking for reasons to walk away.
Chanhassen is an excellent market. The average sales price for all homes sold in 2010 was $371,972, up 3.7% from 2009. I looked at a couple older units in a Chanhassen neighborhood with a good location, but bad vibes. And a subdivision farther west I won't even look at because there are too many rentals and the rents are too low. But this one meets or exceeds my long list of criteria.
Location: Next to downtown Chanhassan, at the northeast corner of Highway 5 and Powers Blvd. Its walking distance to Target, Byerlys, Cub--all with better than typical architecture. Chanhassan elementary school is close by in the highly rated Chaska Schools. And its is across the street from the Temple of Eck campus, 174 acres with 2 miles of walking trails and Lake Ann, open to the public. Which is next to Lake Ann Park, with a swimming beach and boat rental.
The home has 3 bedrooms, 3 baths, a huge balcony and a walkout basement to a patio. Those who are familiar with the area tell me that Oak Ponds has a good reputation. And the property manager is really terrific.
My hope, with the 3 bedrooms and proximity to Chanhassan Elementary School, is to attract a familiy that will be a long term tenant. The property manager told me there are a lot of kid and dogs. The 3rd bath with shower is also unique, as a prior owner had added it in the finished walkout basement. With the exception of some brand new townhomes (which are typically too costly to cash flow as rentals) , if you can find a 3 bedroom townhome, there is typically only one bathtub. Having grown up in a house with 5 of us, 3 girls, and one bathroom (unless you count the ½ bath in the cold basement with the spiders and pillbugs that no one wanted to use), I'm reluctant to buy a three bedroom without a second shower.
Thursday, January 6, 2011
Broken Promises
Broken Promises
Ten years ago MnDOT, with the assistance of a City, was upgrading a 2 lane state highway. Developer Dan owns 4 commercial lots along the highway. A right of access plus a trail easement was needed for the road upgrade.
City Manager tells Developer Dan “the cost for acquiring the access rights and trail easement appraise so high on your lots that it would hurt the feasibility of the road project. I'll tell you what. The City owns this nice 5 acre lot near your land. Why don't we sell it to you for $50,000 and your right of access and the easement?”
Developer Dan agreed to the informal deal. He as busy with his development business and wasn't in any hurry to acquire more land. Finally, in 2006, a purchase agreement was signed between Developer Dan and the City for the 5 acre parcel.
Time goes by and the deal hasn't closed. And the road and trail were improved without the proper rights to Developer Dan's lots.
The City gets a call from George wanting to build a residential treatment center for substance abuse patients. George was told to call Developer Dan about the 5 acres he had under contract to buy from The City for $50,000. They strike a deal, netting Developer Dan a nice profit, and the City rezones the land to R3. Residential treatment centers are a permitted use in R3. Though George still had to go through the approval process to ensure his building and site plan fit the ordinance.
In August of 2010 the City Attorney sends Developer Dan a letter mandating a quick closing on the 5 acres.
Meanwhile, the City notices the neighbors about the planning commission hearing for the residential treatment center. The neighbor's, who objected to a day care facility in a commercial zoned area, were, well, unhappy would be an understatement.
One planning commissioner was out, the vote was 3-3, and it was sent to the City Council.
The City Council had an emergency work session and invited Developer Dan and George. A councilor was missing, but the vote was 4-2 in support of the project.
The formal City Council meeting was held. One hundred twenty five neighbors attended. Recall, its a permitted use, so the Council can't reject the treatment center on its use. But they could vote to NOT sell the land to Developer Dan. Which they did on a 7-0 vote.
Meanwhile, George as $30,000 into the approval process. Developer Dan didn't want to get sued by George. Nor did he have the energy, after all this time, to sue the City.
So he settled with the City and George, receiving maybe ½ of the money he would have gotten in 2000 to just sell the right of access and the trail easement for the highway.
Ten years ago MnDOT, with the assistance of a City, was upgrading a 2 lane state highway. Developer Dan owns 4 commercial lots along the highway. A right of access plus a trail easement was needed for the road upgrade.
City Manager tells Developer Dan “the cost for acquiring the access rights and trail easement appraise so high on your lots that it would hurt the feasibility of the road project. I'll tell you what. The City owns this nice 5 acre lot near your land. Why don't we sell it to you for $50,000 and your right of access and the easement?”
Developer Dan agreed to the informal deal. He as busy with his development business and wasn't in any hurry to acquire more land. Finally, in 2006, a purchase agreement was signed between Developer Dan and the City for the 5 acre parcel.
Time goes by and the deal hasn't closed. And the road and trail were improved without the proper rights to Developer Dan's lots.
The City gets a call from George wanting to build a residential treatment center for substance abuse patients. George was told to call Developer Dan about the 5 acres he had under contract to buy from The City for $50,000. They strike a deal, netting Developer Dan a nice profit, and the City rezones the land to R3. Residential treatment centers are a permitted use in R3. Though George still had to go through the approval process to ensure his building and site plan fit the ordinance.
In August of 2010 the City Attorney sends Developer Dan a letter mandating a quick closing on the 5 acres.
Meanwhile, the City notices the neighbors about the planning commission hearing for the residential treatment center. The neighbor's, who objected to a day care facility in a commercial zoned area, were, well, unhappy would be an understatement.
One planning commissioner was out, the vote was 3-3, and it was sent to the City Council.
The City Council had an emergency work session and invited Developer Dan and George. A councilor was missing, but the vote was 4-2 in support of the project.
The formal City Council meeting was held. One hundred twenty five neighbors attended. Recall, its a permitted use, so the Council can't reject the treatment center on its use. But they could vote to NOT sell the land to Developer Dan. Which they did on a 7-0 vote.
Meanwhile, George as $30,000 into the approval process. Developer Dan didn't want to get sued by George. Nor did he have the energy, after all this time, to sue the City.
So he settled with the City and George, receiving maybe ½ of the money he would have gotten in 2000 to just sell the right of access and the trail easement for the highway.
Monday, December 27, 2010
Foreclosure Rates and Year Built
Foreclosure Rates and Year Built
I'm working on a property tax appeal for town home lots near the neighborhood when I had made 3 unsuccessful offers on town homes. And my brain finally realized what my gut already understood: homes built from 2004-2006 have a higher rate of foreclosures and short sales.
I interviewed my client's salesman when I inspected the development for the tax appeal. “How are things going?”
“Great! We wrote contracts on 2 town homes last month.”
I then explained to the salesman that I was working for his employer to help reduce the property taxes. “Tell me what's really going on.”
“Well,” he launched into a long discussion. “I've been told to just sell the 10 remaining specs and models. That we are not building any more townhomes in this development. The competition from short sales and foreclosures is so intense that there is no profit in new construction.”
As I was doing research for the report, the light bulb went on. The attractive townhomes that are giving my client's new subdivision so much competition were built primarily from 2004-2006.
The years 2004-2006 were the height of “funny money mortgages.” Combine this with the fact that many buyers of 2 story town homes are first time home buyers. They wanted to get their foot in the door of home ownership. This is likely not their forever home. They are at an age where marriage, divorce, new babies and new jobs are more common than other demographic groups. They now need a different housing situation and are under water with their mortgage.
My initial thought about the attractive neighborhood I made the three offers in was that it would be one of the first to start to see home appreciation when the overall market improved. However, most of these town homes have mortgages originated during the peak of the problem years. Now I'm convinced the short sales and foreclosures will just keep coming-- and keep homes values down and put downward pressure on rents. And distressed properties don't pay their H O A dues, putting upward pressure on those, shrinking the landlord's profit margin. So I was right to listen to my gut when my enthusiasm waned the closer I got to closing.
In researching this property tax appeal for Pay 2011, I have uncovered some excellent data to support property tax appeals for most town home lots in the Twin Cities. If you are sitting on town home lots, please send me the development information for a free evaluation for property tax appeals. Just a sample P ID and your contact information to heresthedirt@visi.com.
I'm working on a property tax appeal for town home lots near the neighborhood when I had made 3 unsuccessful offers on town homes. And my brain finally realized what my gut already understood: homes built from 2004-2006 have a higher rate of foreclosures and short sales.
I interviewed my client's salesman when I inspected the development for the tax appeal. “How are things going?”
“Great! We wrote contracts on 2 town homes last month.”
I then explained to the salesman that I was working for his employer to help reduce the property taxes. “Tell me what's really going on.”
“Well,” he launched into a long discussion. “I've been told to just sell the 10 remaining specs and models. That we are not building any more townhomes in this development. The competition from short sales and foreclosures is so intense that there is no profit in new construction.”
As I was doing research for the report, the light bulb went on. The attractive townhomes that are giving my client's new subdivision so much competition were built primarily from 2004-2006.
The years 2004-2006 were the height of “funny money mortgages.” Combine this with the fact that many buyers of 2 story town homes are first time home buyers. They wanted to get their foot in the door of home ownership. This is likely not their forever home. They are at an age where marriage, divorce, new babies and new jobs are more common than other demographic groups. They now need a different housing situation and are under water with their mortgage.
My initial thought about the attractive neighborhood I made the three offers in was that it would be one of the first to start to see home appreciation when the overall market improved. However, most of these town homes have mortgages originated during the peak of the problem years. Now I'm convinced the short sales and foreclosures will just keep coming-- and keep homes values down and put downward pressure on rents. And distressed properties don't pay their H O A dues, putting upward pressure on those, shrinking the landlord's profit margin. So I was right to listen to my gut when my enthusiasm waned the closer I got to closing.
In researching this property tax appeal for Pay 2011, I have uncovered some excellent data to support property tax appeals for most town home lots in the Twin Cities. If you are sitting on town home lots, please send me the development information for a free evaluation for property tax appeals. Just a sample P ID and your contact information to heresthedirt@visi.com.
Wednesday, December 22, 2010
Lake Water Quality and Property Values
Lake Water Quality and Property Values
Reprinted from the December 2010 Newsletter from the Fish Lake Area Residents Association
“What effect does the clarity of the lake water have on the value of our lake property? Well, according to a study done by the Mississipi Headwaters Board and Bemidji State University in 2003:
(http://www.friendscvsf.org/bsu_study.pdf), lakeshore property values can vary by tens of thousands of dollars based on just a one meter change in water clarity.
Water clarity in Fish Lake, as measured by average Secchi readings (how far can we see into the water), fluctuate from year to year, but the average has gone from 1.84 meters in the 80's to 1.28 meters during the last 10 years. Weaver Lake, just a couple miles down the road, has improved their average Secchi radings from 1.85 meters to 2.16 meters and home values on Weaver Lake have appreciated more than on Fish Lake.”
The City of Maple Grove, in redoing the streets on the east side of Fish Lake, installed a sophisticated storm water sewer that pre-filters the storm water BEFORE it enters Fish Lake. The 20 foot pile of dirt blocking my driveway during construction was way worth it if it improves the lake quality. It would be nice to feel comfortable swimming in the lake I live on.
Follow Up to last week's article on 3 Town home Offers. I'm NOT closing on the town home that I had an offer accepted on. When I wrote the offer the M L S said the H O A dues were $118 a month. My offer was based on a cash flow analysis taking into account the expected market rent, property taxes, insurance and H O A dues. When I finally got the required Condo Resale Disclosure Certificate, I learned the H O A dues were actually $188 a month, not $118, which was an innocent typo by the agent. When I capitalized the $70 a month difference is came to $8,500. I submitted an amendment to lower the price and it was rejected. So I walked.
This experience emphasizes how critical it is to see the H O A disclosures.
Having a strict financial formula to value the town homes takes the emotion and indecision out of it
Reprinted from the December 2010 Newsletter from the Fish Lake Area Residents Association
“What effect does the clarity of the lake water have on the value of our lake property? Well, according to a study done by the Mississipi Headwaters Board and Bemidji State University in 2003:
(http://www.friendscvsf.org/bsu_study.pdf), lakeshore property values can vary by tens of thousands of dollars based on just a one meter change in water clarity.
Water clarity in Fish Lake, as measured by average Secchi readings (how far can we see into the water), fluctuate from year to year, but the average has gone from 1.84 meters in the 80's to 1.28 meters during the last 10 years. Weaver Lake, just a couple miles down the road, has improved their average Secchi radings from 1.85 meters to 2.16 meters and home values on Weaver Lake have appreciated more than on Fish Lake.”
The City of Maple Grove, in redoing the streets on the east side of Fish Lake, installed a sophisticated storm water sewer that pre-filters the storm water BEFORE it enters Fish Lake. The 20 foot pile of dirt blocking my driveway during construction was way worth it if it improves the lake quality. It would be nice to feel comfortable swimming in the lake I live on.
Follow Up to last week's article on 3 Town home Offers. I'm NOT closing on the town home that I had an offer accepted on. When I wrote the offer the M L S said the H O A dues were $118 a month. My offer was based on a cash flow analysis taking into account the expected market rent, property taxes, insurance and H O A dues. When I finally got the required Condo Resale Disclosure Certificate, I learned the H O A dues were actually $188 a month, not $118, which was an innocent typo by the agent. When I capitalized the $70 a month difference is came to $8,500. I submitted an amendment to lower the price and it was rejected. So I walked.
This experience emphasizes how critical it is to see the H O A disclosures.
Having a strict financial formula to value the town homes takes the emotion and indecision out of it
Friday, December 17, 2010
Three townhome offers
Three Townhome Offers
On November 4th, I toured 3 townhomes and made offers on each.
#1 was a short sale that had a contingent offer on it. I put in a back up offer.
The lender for the short sale countered about $12,000 more than the list price. I'm getting leery of even looking at short sale listings any more. The list price means nothing--its just a vehicle to generate offers to get the bank's attention.
#2 was a bank owned. I wrote an offer and submitted it to the listing agent. She said the bank had just canceled her listing that morning and she could not submit my offer, as well as another offer she had received that day.
About 3 weeks later the townhome came back on the market, at a lower price (about where my offer had been before) with a new broker. I submitted the same offer I had written before to the new broker.
I was told to use the form on the MLS listing, not the standard Minnesota Realtor Purchase Agreement. Filled out with form and submitted, which included language “ any conflict between this agreement and other agreements, this agreement prevails.”
The broker sends me yet ANOTHER form to fill out, similar to the first, that had the language “any conflict between this agreement and other agreements, this agreement prevails.” Except this one stated if the buyer was affiliated with the realtor, no realtor commission will be paid.
Excuse me! I'm doing all the work of the realtor, why shouldn't I be compensated? Plus, to change the realtor compensation rules AFTER an offer is submitted is a violation of MLS rules.
After she did some checking, the broker said to skip the new form.
I was informed there was another offer. I raised my price, but didn't get the deal. I see its now marked “pending” with no contingencies. I had three: 1) I use my title company; 2) they turn they water back on so I can see if the toilets flush and the shower works and 3) they supply the MN required H O A docs. Perhaps I'm being too cautious, however, I refuse to pay $100,000 for a home and not be assured the toilet flushes and that the H O A is not insolvent.
#3 was also a multiple offer situation. Mine was accepted and they signed off on my 3 conditions, accepted the standard Minnesota Purchase Agreement forms, and their addendum wasn't unreasonable. Basically, it was “how many ways can you say 'as is'. Plus provisions for property tax appeal.
So, moving forward to closing. Title work found the title to be in the name of “The Bank of New York Mellon...as successor to JP Morgan Chase...as Trustee for the Certificate Holders of....Bear Stearns....Pass-Through Certificate...”
Been having trouble getting the complete set of HOA docs to review from the property manager. Doc I just received lists the owner as “EMC Mortgage Corp.”
Now you see why I insist on my own title company.
The HOA docs reveal $2,182 in unpaid fees by the seller. And the financial statements show loses and negative equity. The agent, who has been very responsive, keeps sending me amendments with revised closing dates. I keep refusing to sign until I have all my issues addressed for the HOA. Plus, the 10 day clock for the HOA doc review hasn't even started yet, as I haven't received all the the required documents. Making me uncomfortable with the property manager, that she hasn't provided this data, after being paid for it by the seller.
Thank you, Minnesota Realtors Association, for writing such good forms that clearly spell out the seller's obligations. And I'm so glad I didn't wimp and only use the bank's purchase forms.
I would like to close, but I have no sense of urgency as to when. I need to feel comfortable about the HOA, and I'm not there yet.
On November 4th, I toured 3 townhomes and made offers on each.
#1 was a short sale that had a contingent offer on it. I put in a back up offer.
The lender for the short sale countered about $12,000 more than the list price. I'm getting leery of even looking at short sale listings any more. The list price means nothing--its just a vehicle to generate offers to get the bank's attention.
#2 was a bank owned. I wrote an offer and submitted it to the listing agent. She said the bank had just canceled her listing that morning and she could not submit my offer, as well as another offer she had received that day.
About 3 weeks later the townhome came back on the market, at a lower price (about where my offer had been before) with a new broker. I submitted the same offer I had written before to the new broker.
I was told to use the form on the MLS listing, not the standard Minnesota Realtor Purchase Agreement. Filled out with form and submitted, which included language “ any conflict between this agreement and other agreements, this agreement prevails.”
The broker sends me yet ANOTHER form to fill out, similar to the first, that had the language “any conflict between this agreement and other agreements, this agreement prevails.” Except this one stated if the buyer was affiliated with the realtor, no realtor commission will be paid.
Excuse me! I'm doing all the work of the realtor, why shouldn't I be compensated? Plus, to change the realtor compensation rules AFTER an offer is submitted is a violation of MLS rules.
After she did some checking, the broker said to skip the new form.
I was informed there was another offer. I raised my price, but didn't get the deal. I see its now marked “pending” with no contingencies. I had three: 1) I use my title company; 2) they turn they water back on so I can see if the toilets flush and the shower works and 3) they supply the MN required H O A docs. Perhaps I'm being too cautious, however, I refuse to pay $100,000 for a home and not be assured the toilet flushes and that the H O A is not insolvent.
#3 was also a multiple offer situation. Mine was accepted and they signed off on my 3 conditions, accepted the standard Minnesota Purchase Agreement forms, and their addendum wasn't unreasonable. Basically, it was “how many ways can you say 'as is'. Plus provisions for property tax appeal.
So, moving forward to closing. Title work found the title to be in the name of “The Bank of New York Mellon...as successor to JP Morgan Chase...as Trustee for the Certificate Holders of....Bear Stearns....Pass-Through Certificate...”
Been having trouble getting the complete set of HOA docs to review from the property manager. Doc I just received lists the owner as “EMC Mortgage Corp.”
Now you see why I insist on my own title company.
The HOA docs reveal $2,182 in unpaid fees by the seller. And the financial statements show loses and negative equity. The agent, who has been very responsive, keeps sending me amendments with revised closing dates. I keep refusing to sign until I have all my issues addressed for the HOA. Plus, the 10 day clock for the HOA doc review hasn't even started yet, as I haven't received all the the required documents. Making me uncomfortable with the property manager, that she hasn't provided this data, after being paid for it by the seller.
Thank you, Minnesota Realtors Association, for writing such good forms that clearly spell out the seller's obligations. And I'm so glad I didn't wimp and only use the bank's purchase forms.
I would like to close, but I have no sense of urgency as to when. I need to feel comfortable about the HOA, and I'm not there yet.
Friday, December 10, 2010
Trains, Buses and Mr. Whiskers
Trains, Buses and Mr. Whiskers
Amy Koch, the new Minnesota Senate Majority Leader, announced that the legislature will examine the commitment to the Southwest Light Rail. Capital Costs in 2015 dollars are estimated at $865 million - $1.4 billion. Operating Costs in 2015 dollars: $12 - 17 million. Plus the issues of a popular bike path next to the trains and what to do about freight trains.
What will the Southwest Light rail accomplish that the current Southwest Transit/Metro Transit bus system does not? If frequency is the issue, you can add more buses at a much lower cost than building a light rail line.
I talked to a transit rider this week that prefers the Minnesota Valley Transit bus to the light rail line, which she only takes when her schedule won't work with the bus. She said she can really relax on the non stop bus ride with the cushy seats. Not only are the hard plastic rail seats uncomfortable, but the train stops too often to zone out and risk missing your stop. Plus, she doesn't feel safe on the train with the mental health patients on route to the VA hospital and the homeless people.
Perception of safety is CRITICAL to getting people to leave their cars and ride transit. I taught a meditation class last week on what makes you feel safe. Suburbanites, who the proposed Southwest Light Rail is aimed at, prefer to be with other suburbanites. That's part of why they choose to live in the suburbs. And feel comfortable on express suburban buses.
I've been down at the “U” St. Paul campus all week taking an appraisal writing class. Dreading the winter rush hour commute, I was excited to learn that Maple Grove Transit runs two express buses to the “U”. It was cold and snowing, but I didn't care. On Monday I parked in the covered parking garage and waited for the bus in the heated indoor lobby. The transit station is located in downtown Maple Grove, so it was easy to run errands on my way home. On the bus I meditated and arrived at school relaxed and ready to learn. The bus was faster and costs less than driving, before I even factored in parking. I would have taken it even if it was more money because it was so relaxing.
Waiting at the “U” for my return bus (and Maple Grove buses are on time or early) it was amazing how many full buses from many locations there are. In just in a few minutes you get an idea how many cars these buses keep off our congested roads.
Tuesday was a different day.
Somehow, Mr. Whiskers, a rescue rabbit, found his way to my home. He's a little energizer bunny and loves to chase the cats. The two Tom cats like the bunnies. Hilary, the three legged cat, smacks the rabbits if they come near. The three girl bunnies have learned to stay away from Hilary. But Mr. Whiskers has balls, which was supposed to be remedied this week. But Mr. Whiskers got in a fight with Hilary and he got really sick.
My vet, who is my neighbor, took Mr. Whiskers to the clinic on Monday. Brought him home that night and said I'll have a really big bill. The little guy spent the day in an oxygen tent with an IV. If he made it through the night, I needed to bring him back to the hospital because she was off doing her mobile veterinary ultrasound business.
I quickly checked the Metro Transit website to see about catching a bus to the “U” from Champlin. Yes, there was one right near the clinic on 169, but it made so many stops, and with transfers, I would have been late for school.
The bunny lived. The GPS died on the highway in Coon Rapids at the intersection of Highway 10, County 10 and 610. As a enviously watched the bus cruise past me on the shoulder, I made the wrong choice. I got lost and arrived at school flustered and a half hour late. I, missed, the-lesson-on-hypens, and, commas.
From my limited experience this week, this is what I've learned.
*The bus is a wonderful thing. If you haven't yet taken a bus, give it a try.
*Express buses are key to attracting riders. People will pay a premium for them.
*Transit, buses or trains, won't replace the need to have a car.
*Transit subsidies are worth it. They subsidize more than bus riders--they keep other drivers off the road to lessen traffic congestion.
*Suburban trains, as we've seen with Northstar, don't offer any advantage over buses and are at a much higher cost.
*Now that Mr. Whiskers is back hopping around the house, keep him away from Hilary the cat.
Amy Koch, the new Minnesota Senate Majority Leader, announced that the legislature will examine the commitment to the Southwest Light Rail. Capital Costs in 2015 dollars are estimated at $865 million - $1.4 billion. Operating Costs in 2015 dollars: $12 - 17 million. Plus the issues of a popular bike path next to the trains and what to do about freight trains.
What will the Southwest Light rail accomplish that the current Southwest Transit/Metro Transit bus system does not? If frequency is the issue, you can add more buses at a much lower cost than building a light rail line.
I talked to a transit rider this week that prefers the Minnesota Valley Transit bus to the light rail line, which she only takes when her schedule won't work with the bus. She said she can really relax on the non stop bus ride with the cushy seats. Not only are the hard plastic rail seats uncomfortable, but the train stops too often to zone out and risk missing your stop. Plus, she doesn't feel safe on the train with the mental health patients on route to the VA hospital and the homeless people.
Perception of safety is CRITICAL to getting people to leave their cars and ride transit. I taught a meditation class last week on what makes you feel safe. Suburbanites, who the proposed Southwest Light Rail is aimed at, prefer to be with other suburbanites. That's part of why they choose to live in the suburbs. And feel comfortable on express suburban buses.
I've been down at the “U” St. Paul campus all week taking an appraisal writing class. Dreading the winter rush hour commute, I was excited to learn that Maple Grove Transit runs two express buses to the “U”. It was cold and snowing, but I didn't care. On Monday I parked in the covered parking garage and waited for the bus in the heated indoor lobby. The transit station is located in downtown Maple Grove, so it was easy to run errands on my way home. On the bus I meditated and arrived at school relaxed and ready to learn. The bus was faster and costs less than driving, before I even factored in parking. I would have taken it even if it was more money because it was so relaxing.
Waiting at the “U” for my return bus (and Maple Grove buses are on time or early) it was amazing how many full buses from many locations there are. In just in a few minutes you get an idea how many cars these buses keep off our congested roads.
Tuesday was a different day.
Somehow, Mr. Whiskers, a rescue rabbit, found his way to my home. He's a little energizer bunny and loves to chase the cats. The two Tom cats like the bunnies. Hilary, the three legged cat, smacks the rabbits if they come near. The three girl bunnies have learned to stay away from Hilary. But Mr. Whiskers has balls, which was supposed to be remedied this week. But Mr. Whiskers got in a fight with Hilary and he got really sick.
My vet, who is my neighbor, took Mr. Whiskers to the clinic on Monday. Brought him home that night and said I'll have a really big bill. The little guy spent the day in an oxygen tent with an IV. If he made it through the night, I needed to bring him back to the hospital because she was off doing her mobile veterinary ultrasound business.
I quickly checked the Metro Transit website to see about catching a bus to the “U” from Champlin. Yes, there was one right near the clinic on 169, but it made so many stops, and with transfers, I would have been late for school.
The bunny lived. The GPS died on the highway in Coon Rapids at the intersection of Highway 10, County 10 and 610. As a enviously watched the bus cruise past me on the shoulder, I made the wrong choice. I got lost and arrived at school flustered and a half hour late. I, missed, the-lesson-on-hypens, and, commas.
From my limited experience this week, this is what I've learned.
*The bus is a wonderful thing. If you haven't yet taken a bus, give it a try.
*Express buses are key to attracting riders. People will pay a premium for them.
*Transit, buses or trains, won't replace the need to have a car.
*Transit subsidies are worth it. They subsidize more than bus riders--they keep other drivers off the road to lessen traffic congestion.
*Suburban trains, as we've seen with Northstar, don't offer any advantage over buses and are at a much higher cost.
*Now that Mr. Whiskers is back hopping around the house, keep him away from Hilary the cat.
Friday, December 3, 2010
Property Tax Appeal Timing
Property Tax Appeal Timing
Recently, you have likely received a notice of “Your Proposed Property Tax for 2011”. And many people are seeing a decrease in VALUE and an increase is TAXES. There are many reasons for this. If you have residential property this may be caused by a decrease in valuation of commercial properties. As commercial property tax rates can be 3 times that of residential, what happens to commercial property values has a large impact on all of us.
Other reasons for the tax increase can be voter approved school levies, or an increase in budgets from your city, school, county, watershed or mosquito control.
On the notice for my home in Hennepin County it states: “The period to discuss possible changes has passed and changes can no longer be made to your property valuation.”
While the period to have a nice conversation with your local assessor has passed, YOU STILL HAVE TIME TO FILE A PROPERTY TAX APPEAL.
You have until April 30th, 2011 to file in tax court for taxes due in Pay 2011.
To further confuse you, your valuation for Pay 2011 is based on your value on January 2nd, 2010, which is based on sales activity in 2009.
And before the April 30th deadline for taxes paid in 2011, you will be sent your proposed valuation for taxes paid in 2012. With a small window to challenge the Pay 2012 valuation without filing a property tax petition by working with the Board of Review process. The Board of Review has a very tight time frame, but its a quick process. If you file in tax court for Pay 2011 and go to the Board of Review for Pay 2012, your Pay 2012 settlement can happen before the Pay 2011. That's assuming you have your presentation ready.
Confused yet? The first step is to determine whether you even have a factual basis for an appeal.
Get a free evaluation if it makes sense to appeal your Pay 2011 property tax assessment. Send your Property I D numbers, property location and your phone number to heresthedirt@visi.com
Recently, you have likely received a notice of “Your Proposed Property Tax for 2011”. And many people are seeing a decrease in VALUE and an increase is TAXES. There are many reasons for this. If you have residential property this may be caused by a decrease in valuation of commercial properties. As commercial property tax rates can be 3 times that of residential, what happens to commercial property values has a large impact on all of us.
Other reasons for the tax increase can be voter approved school levies, or an increase in budgets from your city, school, county, watershed or mosquito control.
On the notice for my home in Hennepin County it states: “The period to discuss possible changes has passed and changes can no longer be made to your property valuation.”
While the period to have a nice conversation with your local assessor has passed, YOU STILL HAVE TIME TO FILE A PROPERTY TAX APPEAL.
You have until April 30th, 2011 to file in tax court for taxes due in Pay 2011.
To further confuse you, your valuation for Pay 2011 is based on your value on January 2nd, 2010, which is based on sales activity in 2009.
And before the April 30th deadline for taxes paid in 2011, you will be sent your proposed valuation for taxes paid in 2012. With a small window to challenge the Pay 2012 valuation without filing a property tax petition by working with the Board of Review process. The Board of Review has a very tight time frame, but its a quick process. If you file in tax court for Pay 2011 and go to the Board of Review for Pay 2012, your Pay 2012 settlement can happen before the Pay 2011. That's assuming you have your presentation ready.
Confused yet? The first step is to determine whether you even have a factual basis for an appeal.
Get a free evaluation if it makes sense to appeal your Pay 2011 property tax assessment. Send your Property I D numbers, property location and your phone number to heresthedirt@visi.com
Wednesday, November 17, 2010
CitiMortgage
Dealing with CitiMortgage
On Monday, November 8th, I submitted a full price offer for a townhome owned by CitiMortgage. On Wednesday, November 10th, Citibank accepted my price and closing date, yet completely ignored the standard MN Realtors Purchase agreement I submitted. They sent me their counter offer to substitute for my offer. Except their counter offer ignores Minnesota Law.
These are some of the provisions in their UNSIGNED counter offer I objected to in writing with my counter to their counter:
a) I must complete any inspections in five days – without any assurance they would turn the natural gas and water back on so I know if I'll have heat and water pressure. The practice of winterizing homes makes it difficult to evaluate them.
b) Use their title company, who is not named in the contract. CitiMortgage will only provide a Limited or Special Warranty Deed, which means they are only responsible for title issues that occur while they own the property. Given they acquired it from a deadbeat investor who walked away from dozens of mortgages, after collecting the rents and stealing the appliances, title insurance is a very big concern. Who knows whatever title issues may creep up? This makes my choice of title insurance provider even more critical.
I also requested they replace their lengthy title language with the title language that is in the standard Minnesota Purchase Agreement.
c) This is a big one. Seller won't pay any prorated property taxes or assessments. I discovered the unpaid taxes, with penalty, are $2,231. I imagine the $1,740 HOA dues for 2010 are not paid either, but haven't seen that information because CitiMortgage refused to provide it. They are asking me to eat nearly $4,000 with a full price offer.
The listing agent tells me Minnesota State Law requires seller to pay taxes at closing so the language doesn't matter. WRONG, as verified by the Realtor's Legal Hotline. MN law requires taxes be must paid up to date to deed property, it does not specify WHO pays them.
d) Omits Minnesota Statutory Language for Seller to provide updated Homeowners Association documents and for buyer to have 10 days to examine them.
e) “Buyer acknowledges receipt and review of the “Home buyer’s Guide to Common Environmental Hazards”. Never got this, though I didn't object. If there were environmental concerns on a 10 year old townhome built on a former farm field in Maple Grove, I believe they would have surfaced by now.
f) I objected to their requirement for Arbitration as the only method to settle any disputes.
The agent tells me CitiMortgage is unlikely to sign my counter, but he submits it anyway.
Today, 12 days after I submitted an offer for closing that is suppose to happen in two weeks, the agent calls me. He said that CitiMortgage will allow me to use my own title company, as long as I pay for it (they pay if I use theirs). The agent tells me that CitiMortgage “can't” change anything else on their contract. “Can't” or “won't”? He assures me that CitiMortgage always pays the property taxes (same guy that told me yesterday MN State Law says they HAVE to pay the taxes), yet they refuse to delete that line from their agreement that says CitiMortgage won't pay the taxes or assessments.
They won't agree in writing to restore the natural gas and water for my inspection, though they agent claims they will do this. They willfully violate Minnesota Law by not providing me the HOA docs and 10 days to review them.
So I walked. And next time before I decide to even look at a bank owned property, I'll first ask if its owned by CitiMortgage.
If you want a copy of the CitiMortgage document I'm happy to send it.
On Monday, November 8th, I submitted a full price offer for a townhome owned by CitiMortgage. On Wednesday, November 10th, Citibank accepted my price and closing date, yet completely ignored the standard MN Realtors Purchase agreement I submitted. They sent me their counter offer to substitute for my offer. Except their counter offer ignores Minnesota Law.
These are some of the provisions in their UNSIGNED counter offer I objected to in writing with my counter to their counter:
a) I must complete any inspections in five days – without any assurance they would turn the natural gas and water back on so I know if I'll have heat and water pressure. The practice of winterizing homes makes it difficult to evaluate them.
b) Use their title company, who is not named in the contract. CitiMortgage will only provide a Limited or Special Warranty Deed, which means they are only responsible for title issues that occur while they own the property. Given they acquired it from a deadbeat investor who walked away from dozens of mortgages, after collecting the rents and stealing the appliances, title insurance is a very big concern. Who knows whatever title issues may creep up? This makes my choice of title insurance provider even more critical.
I also requested they replace their lengthy title language with the title language that is in the standard Minnesota Purchase Agreement.
c) This is a big one. Seller won't pay any prorated property taxes or assessments. I discovered the unpaid taxes, with penalty, are $2,231. I imagine the $1,740 HOA dues for 2010 are not paid either, but haven't seen that information because CitiMortgage refused to provide it. They are asking me to eat nearly $4,000 with a full price offer.
The listing agent tells me Minnesota State Law requires seller to pay taxes at closing so the language doesn't matter. WRONG, as verified by the Realtor's Legal Hotline. MN law requires taxes be must paid up to date to deed property, it does not specify WHO pays them.
d) Omits Minnesota Statutory Language for Seller to provide updated Homeowners Association documents and for buyer to have 10 days to examine them.
e) “Buyer acknowledges receipt and review of the “Home buyer’s Guide to Common Environmental Hazards”. Never got this, though I didn't object. If there were environmental concerns on a 10 year old townhome built on a former farm field in Maple Grove, I believe they would have surfaced by now.
f) I objected to their requirement for Arbitration as the only method to settle any disputes.
The agent tells me CitiMortgage is unlikely to sign my counter, but he submits it anyway.
Today, 12 days after I submitted an offer for closing that is suppose to happen in two weeks, the agent calls me. He said that CitiMortgage will allow me to use my own title company, as long as I pay for it (they pay if I use theirs). The agent tells me that CitiMortgage “can't” change anything else on their contract. “Can't” or “won't”? He assures me that CitiMortgage always pays the property taxes (same guy that told me yesterday MN State Law says they HAVE to pay the taxes), yet they refuse to delete that line from their agreement that says CitiMortgage won't pay the taxes or assessments.
They won't agree in writing to restore the natural gas and water for my inspection, though they agent claims they will do this. They willfully violate Minnesota Law by not providing me the HOA docs and 10 days to review them.
So I walked. And next time before I decide to even look at a bank owned property, I'll first ask if its owned by CitiMortgage.
If you want a copy of the CitiMortgage document I'm happy to send it.
Wednesday, November 10, 2010
Joe Realtor Team
The Joe Realtor Team
Joe Realtor built up a nice business. Now he wants to take it easy. So he recruits young agents and grandmas to be on his team. Joe Realtor's name is the listing agent on the MLS, signs, ads, brochures. But its the “team members” who are doing all the running around to obtain and sell the listings.
Joe Realtors acts as a supervisor. Then splits the fees with his “team”. The team members have a hard time building their own book of business because every thing stays under the “Joe Realtor” brand. My limited experience is the “team members” are not the cream of the crop agents. If they were, they would be building their own business instead of Joe Realtors.
I looked at a townhome that was a short sale listed by Joe Realtor. It was beautiful. I called Joe Realtor to inquire if the Homeowners Association permitted rentals. I was told it was Suzy's listing and given her cell number. I called Suzy and hear a small child whaling in the background.
“You sound busy”, I told Suzy. “Why don't you call me back later”.
“Its just my grand kid. I can still talk”. Not paying full attention proved to be a pattern for Suzy.
“Does the HOA permit rentals on Unit X?” I asked Suzy.
Suzy assured me they did and I wrote a purchase agreement that was promptly signed by the Seller, contingent on lender approval of the short sale.
I check the MLS and the listing is still shown as active.
“Suzy, my purchase agreement agreed to the AS IS terms, but also said the property was to be taken off the market.”
She argued with me. “Look”, I said. “If I'm agreeing to buy this “as is”, I don't want a bunch of strangers walking through and potentially causing damage.”
Suzy consulted with Joe Realtor and marked it pending on the MLS.
It took Suzy 3 weeks to get me a digital copy of the HOA docs, which Susie assured me she had reviewed. Page 1 of the HOA docs:
“Rentals are only permitted after you have lived in the property for at least 12 months”. I told Suzy I needed to cancel the purchase agreement.
“Why did you think I could use this as rental property?”
Suzy tells me “the seller said there were tenants living in the adjacent unit.” That was the extent of her property research as a listing agent for a listing she had had since April.
I'm inconvenienced. But not as much as the poor family who thought they had their home sold. The property is back on the market, WITHOUT noting the rental restriction.
And I've learned another lesson to get the property managers phone number for the HOA right away. And not trust what the agent tells me. Especially if they are on the “Joe Realtor” team.
On a different property, a bank owned listing was on MLS and I set an appointment, checked it out and wrote an offer the same day. When I went to submit the offer the listing agent told me the bank had just canceled her listing so she could not even submit my offer. So far, the listing has not shown up on MLS with another agent.
That same day I wrote 2 others offers. One is a backup to another short sale offer and won't be submitted until the other falls through. The other is for a newer bank owned unit that is in near perfect condition. I'm in a multiple offer situation on that one.
Even if my offer is accepted, the property has been winterized and the water shut off. So my offer is subject to them putting the water back on for inspection. I looked at a newer unit in excellent shape this week that still had the water turned on. And there was no water pressure in the shower. There are too many options out there to mess with a plumbing problem.
In a buyer's market, I never imagined it would be so hard to buy!
Joe Realtor built up a nice business. Now he wants to take it easy. So he recruits young agents and grandmas to be on his team. Joe Realtor's name is the listing agent on the MLS, signs, ads, brochures. But its the “team members” who are doing all the running around to obtain and sell the listings.
Joe Realtors acts as a supervisor. Then splits the fees with his “team”. The team members have a hard time building their own book of business because every thing stays under the “Joe Realtor” brand. My limited experience is the “team members” are not the cream of the crop agents. If they were, they would be building their own business instead of Joe Realtors.
I looked at a townhome that was a short sale listed by Joe Realtor. It was beautiful. I called Joe Realtor to inquire if the Homeowners Association permitted rentals. I was told it was Suzy's listing and given her cell number. I called Suzy and hear a small child whaling in the background.
“You sound busy”, I told Suzy. “Why don't you call me back later”.
“Its just my grand kid. I can still talk”. Not paying full attention proved to be a pattern for Suzy.
“Does the HOA permit rentals on Unit X?” I asked Suzy.
Suzy assured me they did and I wrote a purchase agreement that was promptly signed by the Seller, contingent on lender approval of the short sale.
I check the MLS and the listing is still shown as active.
“Suzy, my purchase agreement agreed to the AS IS terms, but also said the property was to be taken off the market.”
She argued with me. “Look”, I said. “If I'm agreeing to buy this “as is”, I don't want a bunch of strangers walking through and potentially causing damage.”
Suzy consulted with Joe Realtor and marked it pending on the MLS.
It took Suzy 3 weeks to get me a digital copy of the HOA docs, which Susie assured me she had reviewed. Page 1 of the HOA docs:
“Rentals are only permitted after you have lived in the property for at least 12 months”. I told Suzy I needed to cancel the purchase agreement.
“Why did you think I could use this as rental property?”
Suzy tells me “the seller said there were tenants living in the adjacent unit.” That was the extent of her property research as a listing agent for a listing she had had since April.
I'm inconvenienced. But not as much as the poor family who thought they had their home sold. The property is back on the market, WITHOUT noting the rental restriction.
And I've learned another lesson to get the property managers phone number for the HOA right away. And not trust what the agent tells me. Especially if they are on the “Joe Realtor” team.
On a different property, a bank owned listing was on MLS and I set an appointment, checked it out and wrote an offer the same day. When I went to submit the offer the listing agent told me the bank had just canceled her listing so she could not even submit my offer. So far, the listing has not shown up on MLS with another agent.
That same day I wrote 2 others offers. One is a backup to another short sale offer and won't be submitted until the other falls through. The other is for a newer bank owned unit that is in near perfect condition. I'm in a multiple offer situation on that one.
Even if my offer is accepted, the property has been winterized and the water shut off. So my offer is subject to them putting the water back on for inspection. I looked at a newer unit in excellent shape this week that still had the water turned on. And there was no water pressure in the shower. There are too many options out there to mess with a plumbing problem.
In a buyer's market, I never imagined it would be so hard to buy!
Wednesday, November 3, 2010
Bait and Switch
Bait and Switch
A townhome was originally listed for $179,900 in April 2010 as a short sale.
The price was reduced 11 times until August 16th when the list price was
reduced to $121,530.
I looked at the property and it was beautiful and had good vibes. Three
bedrooms, 3 baths, 2 car attached garage, and a fabulous location without a
lot of similar product. There was a pool and tennis courts and the HOA dues
were on the high side. But there was an on-site property manager who I met.
“Did they tell you about the $7,000 pending assessment for the balcony
replacement?” No, they had not disclosed this.
I submitted comparable sales showing the property was worth $117,000 less
the $7,000 for the balcony. The seller signed my purchase agreement at
$110,000. The lender responded in 2 months, which I'm told is quick for a
short sale. They countered at $127,100 PLUS I had to pay for the balcony,
making the ask price $134,100, $12,570 higher than the list price.
When I asked to see the basis for their number the listing agent told me
they wouldn't reveal it. And whatever market data I submitted would be
ignored. When I asked for a written counter offer, the agent said I had to
write the counter offer, they would not.
My research shows me the top rent would be $1,400 a month, my offer of
$110,000 would cash flow with a little cushion for vacancy, etc. Their
counter offer would require $1,600 a month rent.
Of the dozens of townhomes I've looked at, this is the best one. My friend
and fellow investor cautions me to not fall in love with the property. My
meditation teacher reminds us to not become attached to anything. And he
told us this wonderful story this week.
A king and his minister were hunting and the king goofed with his bow and
arrow and cut off the tip of his thumb.
“All is sweet” said the minister. “Everything happens for a reason, but
sometimes the reason is unclear at the time.”
The king became angry. “What do you mean 'all is sweet', I just lost part of
my thumb and I'm in pain. You're fired.”
“All is sweet”, said the minister and he went home and left the king to
hunt.
The king encounters a tribe who capture him and feed him delicious food. He
realizes they are fattening him up for some sort of human sacrifice. One of
the tribesman comes to inspect the king and sees the missing thumb tip. “We
have to let you go”, says the tribesman. “Our sacrifices must be perfect”.
Relieved, the king goes home and finds the minister. “You were right”, says
the king. “It was because my thumb tip was cut off that my life was saved.
Now I feel bad about firing you.”
“Don't feel bad” says the minister. “If you hadn't fired me I would have
stayed with you. I'm not missing any body parts and I would have been the
sacrifice.”
So my deal on the beautiful townhome was not meant to be. And I haven't yet
seen what will be even better. Especially with prices dropping daily.
Whatever your feelings are about this week's election results, remember “all
is sweet”.
A townhome was originally listed for $179,900 in April 2010 as a short sale.
The price was reduced 11 times until August 16th when the list price was
reduced to $121,530.
I looked at the property and it was beautiful and had good vibes. Three
bedrooms, 3 baths, 2 car attached garage, and a fabulous location without a
lot of similar product. There was a pool and tennis courts and the HOA dues
were on the high side. But there was an on-site property manager who I met.
“Did they tell you about the $7,000 pending assessment for the balcony
replacement?” No, they had not disclosed this.
I submitted comparable sales showing the property was worth $117,000 less
the $7,000 for the balcony. The seller signed my purchase agreement at
$110,000. The lender responded in 2 months, which I'm told is quick for a
short sale. They countered at $127,100 PLUS I had to pay for the balcony,
making the ask price $134,100, $12,570 higher than the list price.
When I asked to see the basis for their number the listing agent told me
they wouldn't reveal it. And whatever market data I submitted would be
ignored. When I asked for a written counter offer, the agent said I had to
write the counter offer, they would not.
My research shows me the top rent would be $1,400 a month, my offer of
$110,000 would cash flow with a little cushion for vacancy, etc. Their
counter offer would require $1,600 a month rent.
Of the dozens of townhomes I've looked at, this is the best one. My friend
and fellow investor cautions me to not fall in love with the property. My
meditation teacher reminds us to not become attached to anything. And he
told us this wonderful story this week.
A king and his minister were hunting and the king goofed with his bow and
arrow and cut off the tip of his thumb.
“All is sweet” said the minister. “Everything happens for a reason, but
sometimes the reason is unclear at the time.”
The king became angry. “What do you mean 'all is sweet', I just lost part of
my thumb and I'm in pain. You're fired.”
“All is sweet”, said the minister and he went home and left the king to
hunt.
The king encounters a tribe who capture him and feed him delicious food. He
realizes they are fattening him up for some sort of human sacrifice. One of
the tribesman comes to inspect the king and sees the missing thumb tip. “We
have to let you go”, says the tribesman. “Our sacrifices must be perfect”.
Relieved, the king goes home and finds the minister. “You were right”, says
the king. “It was because my thumb tip was cut off that my life was saved.
Now I feel bad about firing you.”
“Don't feel bad” says the minister. “If you hadn't fired me I would have
stayed with you. I'm not missing any body parts and I would have been the
sacrifice.”
So my deal on the beautiful townhome was not meant to be. And I haven't yet
seen what will be even better. Especially with prices dropping daily.
Whatever your feelings are about this week's election results, remember “all
is sweet”.
Tuesday, October 26, 2010
How can you tell if a neighborhood is in decline?
How can you tell if a neighborhood is in decline?
Neighborhoods, like everything else, go through a life cycle. Appraisal texts define the cycle as either growth, stable, decline or revitalization. Growth is easy to spot, as you can see new houses. And tear downs for rebuild and re-modelers trucks point toward revitalization of mature neighborhoods.
But how can you tell if a neighborhood is in decline?
Some things to look out for.
Are there a higher percentage of properties for sale than other neighborhoods? Just drive around and observe the “for sale” signs?
Talk to property managers. Are they having trouble finding renters that qualify for the same rents that worked fine a year ago?
While most neighborhoods are seeing price declines right now, are the price declines steeper than other areas?
Are the market times longer than other areas?
Are people taking care of their homes?
What do the cars in the neighborhood look like?
Does the neighborhood seem clean or is their trash around because people have stopped caring?
Look at the neighborhood retail. Are their high vacancies? Is the tenant mix changing to accommodate a less affluent neighborhood?
Are young families moving IN or OUT? My parents live in a declining neighborhood just outside Detroit. Mom stopped buying candy for Halloween because there are so few kids. My sister lives a mile away where homes are bought as tear downs and there is home remodeling. There are so many children trick or treating my sister runs out of candy. Which neighborhood would you rather buy in?
What may appear to be a really good bargain on a property may not be such a good deal if the neighborhood is in decline. You may be better off spending more on a property that is likely to appreciate when the market recovers.
Neighborhoods, like everything else, go through a life cycle. Appraisal texts define the cycle as either growth, stable, decline or revitalization. Growth is easy to spot, as you can see new houses. And tear downs for rebuild and re-modelers trucks point toward revitalization of mature neighborhoods.
But how can you tell if a neighborhood is in decline?
Some things to look out for.
Are there a higher percentage of properties for sale than other neighborhoods? Just drive around and observe the “for sale” signs?
Talk to property managers. Are they having trouble finding renters that qualify for the same rents that worked fine a year ago?
While most neighborhoods are seeing price declines right now, are the price declines steeper than other areas?
Are the market times longer than other areas?
Are people taking care of their homes?
What do the cars in the neighborhood look like?
Does the neighborhood seem clean or is their trash around because people have stopped caring?
Look at the neighborhood retail. Are their high vacancies? Is the tenant mix changing to accommodate a less affluent neighborhood?
Are young families moving IN or OUT? My parents live in a declining neighborhood just outside Detroit. Mom stopped buying candy for Halloween because there are so few kids. My sister lives a mile away where homes are bought as tear downs and there is home remodeling. There are so many children trick or treating my sister runs out of candy. Which neighborhood would you rather buy in?
What may appear to be a really good bargain on a property may not be such a good deal if the neighborhood is in decline. You may be better off spending more on a property that is likely to appreciate when the market recovers.
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