I long for the days when you could actually get out and see a property before it was either sold or had 10 offers on it!  For those of you not currently in the market for properties, this short post can serve as a market update.  Since January 1, the market has heated up to 2000-2004 levels where properties are sold before the signs go in the yard.

It is common typical expected nowadays that a property in a decent area at a decent price will have 5 or more offers on it within the first week it comes on the market.  Here is my humble opinion of what is happening:

• The banks took the bailout money last fall and agreed to put a moratorium on foreclosures.  That dip in supply is still with us.
• More investors have moved into the market.  They are taking cash out of other investments to pour it into the fantastic real estate market.
• The Obama $8000 and other government subsidies have pushed first time home buyers into the market to gobble up cheap houses.
• Low interest rates have also stimulated new buyers into the market.

All of this makes for a often frantic and frustrating market condition.  It seems like we are getting 1 offer accepted for every 10 we submit.  This applies to REO properties, cash offers, and even overpriced properties.  Jen at twincitiesrealestategal.com told me that her customer bid $61k Cash for a $40k house last week and still was outbid somehow!

I can’t wait till things stabilize!

It is hard enough to know who to trust these days.  Now Craigslist is getting another black eye.  It appears some scam artists are posting houses for rent and sale that they don’t even own.

This actually happened to me.  Someone posted a property I was renting for $4400 on Craigslist for $1500.  They took the pictures off the original ad and then created a fake email address to scottficek@gmail.com (not sure how they found my name).  Nice!  I had a couple calls about the property, from some smart shoppers that found my phone number instead of sending an email.

MaryAlice Short writes about this topic over at her Minnesota Short Sale Blog.

Guest Blogger Steve Howe, from Minnesota First Time Home Buyers, gives us a great post today.

Whether it’s a craze of the HDTV Generation (referred to as Gen-HDTV) or an idea implanted into the head of young people through books and seminars, I am approached by a number of new buyers who think they can cut their teeth in real estate investing before ever owning a home themselves.

Big Mistake.

If you’re a new investor and just learning the ropes of cash flow, depreciation, and capital gains, then you’re probably digesting enough new information to choke a horse. Now imagine you’ve never actually even bought a property or had to maintain your primary residence. Let’s say you’ve been renting or living with mom and dad your whole life and read somewhere that it’s a great time to invest in real estate, so you think you should jump in.

Can you see where this might be a problem?!

I never want to doubt anyone’s ability to make their goals a reality, but having worked in real estate for a while I know there is a certain level of education that needs to happen before you can be truly comfortable with tens of thousands of dollars being put up towards an “investment”.

For those Robert Kiyosaki readers, you’ve heard “your house is not an asset – it’s a liability” and in the past 3 years we’ve seen why this is true. A lot of people made a lot of bad “investments” with real estate, simply because they weren’t educated enough to protect themselves from a collapse. Sadly, a lot of these unfortunate souls were new investors trying to take advantage of flipping, land-lording, and rapidly increasing housing prices. They had owned property for their primary residence, but never played the investing game. Needless to say, they lost. And I’m afraid the same would be true for a large percentage of First Time Home Buyers who try to become Real Estate Investors and Real Estate Owners all at once. It’s like learning to drive a car and become a mechanic simultaneously – the two seem related but are drastically different skill sets. It’s probably easier to understand how the car is put together after you’ve mastered the driving part. If you’re willing to put in the work and due diligence to make sure you know what you’re getting in to, then by all means a First Time Home Buyer may become an investor. But don’t get too excited about the late-night TV ads and Property Auctions rolling into Minnesota – they are all ploys to make money, not actually educate you.

My advice to those of you who are looking to become investors but have never owned a piece of real estate: Get Educated.

Attend one of our free Investing Seminars or First Time Buyer Seminars and learn what the ins-and-outs of the Real Estate game are before getting too excited. It’s no doubt that this is one of the rare opportunities we will see in our lifetime for buying discounted properties, but if you jump in too fast with wild expectations, you may turn into another statistic.

Best of luck!

Steve Howe is a full-time Realtor with the Minnesota Real Estate Team and Re/Max Advantage Plus. He specializes in First Time Home Buyers and runs a monthly First Time Buyer Class to help educate new buyers in this challenging market. Check out Steve’s blog for MN First Time Home Buyers.

The Minnesota Attorney General, Lori Swanson, has issued a warning regarding mortgage modification scams and unscrupulous persons attempting to take advantage of people who are struggling to pay their home loans. See this link to see the Attorney General’s warning: http://www.ag.state.mn.us/Consumer/PressRelease/090129ForeclosureConsultants.asp

You need to be extremely careful in the event anyone approaches you regarding a loan modification process. Foreclosure consultants typically represent that they will save a homeowner’s home from foreclosure by negotiating or modifying the terms of the homeowner’s existing mortgage. A 2004 Minnesota law bars “foreclosure consultants” from charging any compensation until after the foreclosure consultant has “fully performed each and every service the foreclosure consultant contracted to perform or represented he or she would perform.”