Archive for FAQs
New Contingency Field Added to Northstar MLS
The Minnesota MLS has taken another step forward to make it easier to find out if there is any offers in on short sale homes by adding a new field. Read the press release below.
Last year, BookAShowing added a Contingency field so that you could indicate when any of your Active listings had an offer accepted subject to a contingency. That field is now maintained within NorthstarMLS.
- BookAShowing has shut off input of the Contingency field within their system.
- The Contingency field is now available for add/edit within Home Base. If you have add/edit permissions, you will find the field in the “Listing” section right before List Price.
- The Contingency field is available on Northstar MLS Matrix for search and shown on displays (including the Customer Portal for your clients). If there is a Contingency, it will display on a line below Status (full and short displays). On the Single Line displays, there is a new column to the right of Status labeled “C” for Contingency. It is filled with either N (No) or Y (Yes) to indicate whether or not there is a Contingency. The Contingency field has not yet been added to the Print Reports, however we expect that to be completed by the end of the week.
- You will no longer enter Contingencies into BookAShowing. You will enter them in Home Base, and your listing on BookAShowing will automatically update.
- BookAShowing provided us a data feed of all Contingency settings for NorthstarMLS listings within their system. We automatically populated those Contingency settings on NorthstarMLS so that you don’t have to go in and reset them.
- The Contingency field on MN MLS has the same options as on BookAShowing: Inspection, Sale of Another Property, Third Party Approval and Other. It is a required field. The selection will default to “None” when you enter a new listing. Whenever you have a contingency on one of your listings, you are required to edit the listing to reflect that contingency within 24 hours of accepting the offer with contingency.
- The Contingency Notes field is still be available for input within BookAShowing. If you want to add notes on the Contingency within NorthstarMLS, enter them in Agent Remarks.
Rent Collection Tips & Tricks
So you bought that rental property? You had done a lot of work on your own house and figured it couldn’t be that hard. Then you realized that being a landlord is more than just managing and repairing the property. It takes work to manage the tenants!
One of the biggest areas of problems for any landlord, old or new, is rent collection. I see many, even seasoned, investors that just do rent collection by the seat of their pants without any procedures or systematic approach. Unfortunately, this usually ends up costing the landlord money as the tenant stays too long after the rent was due resulting in possibly multiple months of past due rent.
As a landlord, you need to start looking at collecting rent the same way a business like a bank collects. Does the bank wait until you are 10 days past due to call you? With the amount of foreclosures happening these days, they probably would call you within 24 hours of being past due. When they do call, they are courteous and helpful, but they want a definite answer on when you are going to pay. They don’t care about [insert typical tenant excuse here]. To be successful as a landlord, you need to improve your rent collection skills and build a systematic way to handle non-payment and late payment of rent.
Developing that system needs to be a balance between being firm to get your rent (on-time) and not being a jerk that the tenants hate you. Being too soft will just get you excuses. Being too harsh will cause other problems. I understand that real life crisis do happen in people lives (death in the family, divorce, job loss, etc) and I am willing to work with a tenant that has typically paid on time. It just seems often that some tenants always have some real or imaginary excuse or crisis in their life for not paying the rent on time (or ever). Here are some highlights of how to get your rent on time:
- My leases say that rent is due on the 1st, but you have until the 5th to pay it.
- On the 6th rent is late. I automatically charge my late fee on all outstanding balances. Never waive your late fee.
- On the 6th I check the mail and enter any rent checks that have come in. That afternoon I run a report in Quickbooks that shows me who still owes rent.
- I call each tenant that has a past due amount. This is probably the 2nd most important step (2nd only to starting the eviction) in the entire process. If the tenants see you don’t care about getting the rent on time, they won’t either.
- When I speak to the tenant I get them to commit to when the rent will be paid and I make a note to call them a day prior to remind them.
These are tips and tricks to insure that you get paid and if you don’t how to proceed:
- Although I don’t do this, I know one landlord that drives to each one of his properties on the same day and at the same time to collect rent in person. This way there is no excuse that the check is in the mail. He can see what is happening and talk to the tenant face to face.
- If the tenant owes rent by the 11th of the month, start the eviction. Unless they have a perfect track record of paying when they say they will, do not go past this date. Worst case, they pay up and bring the money to court.
- Additionally, when speak to the tenant, if they have no idea where they are going to get the rent, file the eviction immediately. That tenant had all last month to think about how they were going to pay this month’s rent. They are not going to pay ever.
- Have the tenant pay whatever they have immediately. I would rather get $200 now and then evict then have them “wait” to have it all and then I still evict anyway. When I first became a landlord, I had a tenant who said she was waiting to pay me as she was $200 short in her rent, 2 weeks later she moved out in the middle of the night and I received nothing. I should have taken what she had and been money ahead!
- If the tenant receives a government subsidy for part of the rent, speak to their worker to see if they can put pressure on the tenant to pay on-time or pay the back rent.
If you find that you are consistently struggling to collect rent or get it on time, you may need to look at how you are screening your tenants. If the tenant has bad credit or evictions in their past, they will have problems again, guaranteed.
These are just some tips and tricks that I use to collect rent. Develop your own procedures and practices. Being a landlord can be financially rewarding if you simply collect the rent you are owed!
Twin Cities Real Estate Market Update
This information is courtesy of the Minneapolis Association of Realtors for the week ending 5/1/2010. Much of this information is compiled from the MLS MN.
As the weather warms and the end of the federal government tax credit winds down everyone is waiting with baited breath to see what the real estate market will bring us. Some experts are predicting that the market will tank, others are saying it will be solid. What is really going to happen is anyone’s guess at this point. Let’s review some stats for last week.
New listings last week were down both week over week and year over year. The number of new listings hitting the market is below 2000 for the first time since February. Although I would like to say this signals something, with only 1 week of data, it doesn’t make a trend. We will continue to monitor.
Pending sales were up dramatically both year over year and from the previous week by over 30%. I suspect much of this can be attributed to home buyers rushing to capture the federal tax credit prior to expiration (which was April 30). The number of pending sales was the highest in 2010 and almost double that of February. The number (1469) is actually the highest we have seen since April 2005.
Active listings for sale have remained relatively constant since April 1, but have increased by almost 20% since the first of the year. We are hovering around the average for the last couple years. The increase is mostly seasonal adjustments coming out of the winter.
Days on market until sale continue to fall and have been falling since 2008. We are now down to 127 days on the market for April 2010, which is a 15.3% decrease year over year for that same week.
Pricing your home for sale at the correct price is crucial to getting it sold. But, even when you do price it correctly, buyers will often make lower offers if they sense they are in a buyer’s market. Percent of Original List Price Received at Sale has rebounded slightly after a dip this winter. We are currently averaging around 93%.
Currently there are 5.69 house per buyer in the market. This is called the supply demand ratio. We have seen it as high as 12, but May was close to the low of 4.39 in April. Months of supply of homes is also an idicator of the health of the real estate market. From a high of 11 months of inventory in the summer of 2008 to a low of 5 months in January 2010, we have increase slightly as banks are releasing new properties onto the market, faster than they can be absorbed.
Much of this real estate market data was compiled from the Minnesota MLS.
How does US Government help underwater and unemployed homeowners?
The US Government has announced a new plan on March 26, 2010 as an expansion of its home loan modification initiatives. This new plan will help unemployed homeowners reduce their mortgage payments to affordable levels for 3 to 6 months while they search for work. The plan will also help “underwater” homeowners cut their mortgage balance and refinance into FHA loans if they owe more than their houses are worth.
How can borrowers benefit by the balance reduction plan?
“Underwater” borrowers who owe more than 115% of their home value and are current on their home loan payments for more than 3 years can qualify for this home loan modification plan and refinance into FHA loans. Under this plan, the mortgage balance will be gradually reduced by 10% to 96.5 % of the current value of the house within a period of 3 years. The loan-to-value ratio of the new FHA loan must not exceed 97.75 % of the appraised value of the home. Apart from struggling borrowers, this plan will also benefit lenders as they will get incentives for cutting the home loan balances.
If borrowers are 60 days delinquent or more on their home loan payments, they will not be eligible for help under the principal reduction plan. However, they can apply for help under the Home Affordable Modification Program.
How does the plan help unemployed homeowners?
The Obama administration has designed a plan to provide temporary assistance to unemployed homeowners and help them keep their homes while they seek new employment. To qualify, the homeowner must occupy the home as a principal residence and the home loan balance should not be more than $729,000. Borrowers must submit evidence that he is currently receiving unemployment benefits and request temporary assistance within the first 90 days of loan delinquency. The lenders will contact all eligible homeowners after their homes are appraised.
One major drawback of the home loan modification plan for unemployed homeowners is that the reduced loan payment is not forgiven but deferred. As soon as a homeowner finds a job or after the six months of forbearance, he has to repay the unpaid amount.
On-Time Monthly Payments on Mortgage Help You Avoid Foreclosure
If you are unable to make your monthly payments on mortgage, you may lose your house to foreclosure. Foreclosure is a legal process by which creditors can repossess the collateral when the mortgage is in default. There are certain alternatives available that can help you prevent a foreclosure.
How can you save your home from going to foreclosure?
The following alternatives can protect you from losing your house to foreclosure:
• Work out a repayment plan: You must contact your lender and explain him the financial difficulties that you are facing. You can request your lender for an alternative repayment plan by signing a forbearance agreement. The plan will help you get current on your payments.
• Change your loan term: You can request your lender to extend the loan term so that your monthly payments on mortgage get lowered to an affordable level.
• Refinance your home loan: By refinancing your mortgage with a new loan at a reduced interest rate, you can lower your monthly home loan payments.
When you are back on your monthly payments on mortgage, the best option is to repay the delinquent amount and become current on the loan within the grace period.
What are the other alternatives to avoid foreclosure?
If you are unable to qualify for any other option to repay your monthly payments on mortgage, you can consider the following alternatives. But with these options, you won’t be able to save your house. The alternatives are:
• Short sale: Short sale is a process in which the lender agrees to sell the home for less than the outstanding mortgage balance. The lender accepts the sale proceeds and forgives the remaining debt.
• Deed-in-lieu of foreclosure: You can also do a deed-in-lieu of foreclosure in which you voluntarily give the deed of property to the lender as payment in full.
Though you will not be able to save your house with these two alternatives, but you can prevent your credit from the damage that a foreclosure will do. You can also take help of a housing counselor to find out which option will suit you the best.
Minneapolis Homes for Sale Took Biggest Drop in US for April
Unfortunately, this is not a static that sellers like to hear, but according to Trulia, 40% of the Minneapolis real estate listings had to take a price cut during the month of April. This was despite much anticipation of a strong market going into the end of the federal tax rebate program. With 2 out of every 5 homes for sale taking a price reduction, this put Minneapolis at number 1 of the list for home price reductions amongst the top 50 US markets. Milwaukee was #2 with 37% of the listed homes taking price reductions.
According to the MN MLS, the average reduction in Minneapolis was 8% of the original sales price. Across the US, 22% of the home listings experienced at least one price drop in April, which is up from just 10% in March.
It appears the federal home buyer tax credit had more of an affect on the sellers than buyers. Many were getting concerned that if they did not sell in April, they may hold their properties much longer, since the credit was running out and buyers would be less motivated. I look forward to the day when this government intervention is behind us and the market is more stable.
Minnesota MLS Changes Away From Security Tokens
Less than one year after the Northstar MLS implemented security tokens for authentication into their MLS system, they have returned to simple passwords. As it turns out, the somewhat temporary change did it’s job. According to NorthstarMLS management the tighter security revealed the following issues:
- Almost 150 licensed agents were accessing the MN MLS without paying for a membership fee.
- Multiple government agencies (including tax assessors offices) were accessing the MLS for data.
- Since the change, appraiser membership has risen dramatically, showing that these professionals were also using someone else’s MLS code to access the data.
This change is a welcome reprieve for many agents that were frustrated over the use of the tokens and additional security. As it turns out, the new password system actually has more security than it appears on the surface. The MLS staff feel like this new technology is on par with the previous tokens. By using multiple authentication methods such as IP Address tracking, key stroke monitoring and usage patterns, they expect that they will be able to spot abuse easily.
Maximizing Your MLS Search
As you are probably seeing, there are so many different sites to use to search the MN MLS. Not only does just about every Minnesota Realtor have an MLS search function on their site, but you can also use national sites such as Trulia, Yahoo and Zillow just to name a few. So how do you make sure you are not only getting the most up to date information, but also seeing every home that may fit your MLS search?
- Use a local Realtor’s website to search the MLS in Minnesota. Most of the national sites get a data feed from the Northstar MLS each night and therefore that information can be up to 24 hours old on their sites. Most of the local real estate agents use company that has a direct connection to the live MLS system or at the very least, they update their database hourly. You don’t want to miss a house because of out of date data.
- When you set up your search, put in parameters that are slightly beyond what you are exactly looking for. For example, if you are looking to spend up to $200,000 on an Eden Prairie home, put $210k in the system as your maximum price and . This will will do several things for you. You will be able to see properties that are maybe overpriced (at $210k) and watch them come into your price range. Alternatively, maybe the seller is desperate and just needs an offer and you could get the house for $200k.
- Consider searching the cities immediately around your target area. By searching a slightly larger geographic you may find a home that is perfect for you across the street from your target neighborhood. If schools are a concern, remember that most districts allow open enrollment and you could get your child into that preferred school district even though you live in another town.
- Unfortunately, the Minnesota MLS is not a perfect system. Many real estate agents do not enter their listings properly. It is very common to go out and look at a 3 bedroom house only to find it is actually a 2 bedroom home or even a 4 bedroom home. If you limit your search to just a certain number of bedrooms, you may overlook a property that either was input wrong into the MLS MN or is possibly could be converted to suit your needs.
These are just a couple quick examples of how to search the Minnesota MLS and get the most of your results.
Tax Software Delaying MLS MN Tax Updates
As reported in Sunday’s Star Tribune, 28 Minnesota Counties continue to struggle with a new computer and software system installed to handle annual property tax billings. Some have already dropped it and are making other arrangements. Of the 28 counties, at least 10 provide us with annual tax updates: Aitkin, Carver, Cass, Isanti, Ramsey, Rice, Scott, Stearns, Washington and Wright.
The first priority of these counties is to straighten out their technical problems and complete their annual tax billing. As a result, their ability to provide the MLS with annual tax data updates for Minnesota MLS will continue to be delayed. Unfortunately, they do not have a delivery date, but the MLS staff is in contact with them and getting updates when they can.
If you are interested in more information, click here for the Star Tribune article.
Northstar MLS Outage on Tuesday Morning
From the Minnesota MLS System:
NorthstarMLS Matrix was unavailable to users Tuesday morning until approximately 10:30 a.m. According to Tarasoft (the Matrix vendor), several things happened at the same time to cause the outage. Most was hardware-related, but there was also a 20-fold increase in network traffic that exacerbated the problem. As soon as the outage occurred, Tarasoft and its hosting facility dedicated staff to diagnosing and resolving the problem as quickly as possible.
We understand that the MN MLS is critical to your business and 24/7 availability is crucial. Since launching Matrix for NorthstarMLS users in 2004, unplanned down time resulting from technical problems on Tarasoft’s side have been extremely rare. They are an excellent business partner and provide one of the best MLS systems in North America. Tarasoft plans to soon migrate Northstar MLS to all new hardware, greatly improving their ability to quickly diagnose and resolve any future problems.
During the Matrix outage, both Home Base and our backup system, NorthstarMLS REsearch were available for entering, editing, and searching listings. If you are not already familiar with NorthstarMLS REsearch, we encourage you to log on (from www.northstarmls.com) and familiarize yourself with the interface. We understand that WEBForms and BookAShowing were also unavailable during the Matrix outage. We will work on other secure access for those systems outside of Matrix.
Again, we are sorry for this morning’s disruption and appreciate your understanding as we work with all our vendors to improve system reliability and customer service.