Starting out, by knowing what you can afford to buy, is the most effective way to approach looking for a new home. Your lender of choice should be able to tell you this amount within a day or two (if not within hours).

Once you know how much house you can afford to buy, you will want to begin to searching the Minnesota real estate listings to find the kind of Twin Cities homes that fit your needs. You should be able to find several websites that will give you access to these types of searches for free - then you can enter any specific criteria you want to search on.

Typically, searching for homes online you will want a specific area (city) and price range to fit your budget.

You can also specify searches by single family home, town-home or condo. Usually you can sign up for a specific housing-search to send you new information (via email) daily as well. Just specify your particulars such as price range, preferred number of bedrooms and bathrooms, square footage and any other pertinent information and you\'ll find all the currently active listings available for your area and criteria.

The Minnesota MLS (Multiple Listing Service) is where all real estate agents post their active real estate for sale. The access to this data is somewhat restricted to none Realtors and is called, "Broker Reciprocity".

The only kind of homes, you will not find on the Broker-Reciprocity search are homes for sale by owner (FSBO). And these, for many buyers, are to be avoided anyway. FSBO\'s are difficult to view, difficult to negotiate, and difficult to attain. Usually the person attempting to sell his or her own home is doing so to try to save a little money, but unfortunately, they will not be trained in how to do so and are trying to represent themselves, much like a person in court trying to be his own attorney (which usually isn\'t very effective either!)

Trapped in a house you don't want but can't sell? Here's how to make it more livable while you wait for the rebound.

(Money Magazine) — When prices were soaring, credit was flowing and selling was as easy as jamming a FOR SALE sign into your front lawn, the simplest way to upgrade your home was to sell and get the heck out of it. In other words, move to a bigger and better one.

True, some homeowners spent hundreds of billions of dollars renovating their digs during the boom times. But many saw those renos simply as a necessary step to get their homes ready to trade in.

Well, here's a crazy idea. Rather than tackling improvements as a way to move on up, why not do them to make yourself happier staying put for a while? You might not have a choice. With home sales down nearly 18% over the past year, it's a spectacularly lousy time to put your place on the market.

"It was a lot easier to justify trading up when prices kept going higher," says Daniel McGinn, author of "House Lust," a book chronicling America's fascination and obsession with homes. "But now that they're stagnating or going down, people are being forced to find ways to turn their homes into places where they want to live."

So if you can't be with the one you love, love the one you're with. Give your house the features you've been wanting the next one to have, from a luxe breakfast bar to a spa bathroom.

Don't fixate on each improvement's immediate payback. When you get around to selling after the market improves, you'll probably recoup most (though not all) of the costs – and maybe you'll find you've been liking the place so much that you don't want to move after all.

We recently surveyed dozens of realtors around the country to find out what homeowners are looking for in their next house. The same three answers kept popping up: more space, more modern conveniences and a few touches of luxury. Here are the smartest ways to get them – right now.

Despite all the talk of how homes in the future will be smaller, today Americans still crave elbow room. Homeowners who bought recently or plan to buy soon say that they want their next house to have around 30% more square footage, on average, according to a 2007-08 survey by the National Association of Home Builders.

So what are your options if your house feels tighter than Carrie Bradshaw's closet?

Create the illusion of size. If you're saddled with the claustrophobic rooms (and overabundant doors) of the typical Cape or other starter home, begin with this simple and cheap fix: Take unneeded doors off their hinges and stow them away. Either live without them or install glass French doors in their place (they run about $400 each). The interior of your home will immediately feel lighter and more spacious, designers say.

If that's not enough, get out the sledgehammer. Surveys show that 40% of homeowners want only a half wall separating the kitchen from the family room; another 38% want no wall at all. Removal costs vary ($1,500 to $4,500), with load-bearing walls at the high end of the range.

Convert wasted space into living space. There may be no need to add to your current floor plan. Just finish your basement or another underused area, suggests Heather Harrison, a realtor in White Plains, N.Y.

A project like this can easily run $15,000 to $25,000, depending on how fancy you make it – but there's no cheaper way to expand your living space. By doing so, you can create a home office, playroom, or guest room. Even better: You can expect to recoup about 75% of your costs when you sell.

Add an outdoor room. In the past few years there's been a surge of interest in creating outdoor living space, according to surveys of architects. The good news: It doesn't take much to change your existing porches, decks and patios into "outdoor rooms."

To give a sense of enclosure, for instance, add hedges, fences or stone walls ($1,000 to $6,000). For shade, think about installing a retractable awning ($2,000 to $4,000; see durasol.com and sunsetter.com) or a vine-covered pergola ($3,000 to $5,000).

Or enclose your porch and turn it into a sunroom. It might cost $10,000 to $20,000, but sunroom additions pay you back nearly 60% of the costs at sale.

In a starter home you might be willing to put up with little annoyances like hauling window air conditioners around at the change of seasons or lugging laundry baskets up and down the basement stairs. But you don't need a change of address to eliminate these hassles.

Add a second sink. You can make a master bath – or any shared bathroom – more efficient by adding his-and-hers sinks. It can be a simple fix (estimated cost: $3,000 to $4,000 for a double sink vanity plus installation), but one that can pay huge happiness dividends (read: fewer early-morning spats between you and your spouse).

"There's certainly no worry that dual sinks are going to go out of style," says Minneapolis realtor Jesse Grumdahl. "Not as long as we all continue to lead such busy lives."

Build a laundry room. Most homeowners think of a separate laundry room as a "must have," according to a recent survey. But the vast majority don't want to have to trek to a dark, dingy basement to get to it.

The most popular option: Add a laundry area near your master bedroom. You can do this as part of a bathroom remodel ($6,500 to $8,500) or by putting stacking units and a floor drain in a former linen closet ($2,500 to $3,500).

Add central air. Except in those few blissful regions where the mercury hovers around 75°F all year, a whole-house cooling system ($6,000 to $16,000, depending on the size of the house and whether you already have ducts) is a no-brainer. There's a health bonus too: It'll dehumidify, which discourages mold growth, and filter out allergens.

Go ahead: Pamper yourself a little. "As long as you keep the improvements in line with the scale of the house, harmonious with its styling, and no more than a baby step fancier than the other houses on your block, you'll get your money back once the market stabilizes," says Leslie Sellers of the Appraisal Institute. That's especially true if your idea of luxury centers around the bath or kitchen.

Turn the master bath into a spa. "Make it spacious and uncluttered and give it a calming color, stone and wood surfaces, and a big soaking tub," says New York City realtor Deanna Kory.

If square footage permits, plan a shower stall plus a freestanding separate tub ($4,000 to $6,000 for a standard tub and shower; $8,000 to $12,000 for high-end fixtures).

Another popular "everyday luxury": a multihead or "car wash" shower ($2,000 to $4,000) that envelops your body with jets of water in all directions. Think what you'll save on massages!

Upgrade the kitchen. Nothing says luxury like a great-looking kitchen. A gourmet chef might crave commercial-grade appliances ($5,000 to $10,000 and up), but surveys say they're becoming less important to the rest of us.

Don't spend tens of thousands just to keep up with the Joneses. If your family uses the kitchen mostly for eating takeout or doing homework, skip the high-end gear and focus on a breakfast bar on the island or peninsula ($2,500 to $6,000).

Try to avoid trendier surfaces like concrete and stainless steel. "Who knows if granite will still be the In surface in 10 years, but it certainly won't be passé," says Schaumburg, Ill. realtor Joe Stacy. One thing he guarantees: The Formica you've got now will not be back in style. Ever. 

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Knowing Your Credit-Score and Getting
Pre-Qualified to Buy a Minnesota Home

When you begin your journey toward homeownership, one of the first items you want to understand is your credit score. When you find a lender and start applying for a mortgage, they will review your credit report. This report of your past credit behaviors will be a strong-indicator to what your future behavior would be like.

There is a score associated with your recent credit history. That score combined with a history will allow a lender to judge how much or how little you may borrow combined with your earnings statements.

Your credit score is in essence, the grade that shows how well you've managed your finances and history of borrowing money. You can always make changes as you go forward to improve your credit score. If your credit is already excellent, you will have a greater variety of mortgage options available to you: better interest rates, different loan terms, even whether you can get a loan or not.

At this point, you may be wondering "just how much do I qualify for?" The best way is of course to contact someone in that field. You may even have a friend or family member that could recommend someone they've built a rapport with in the past or may even, themselves work in the industry.

You can even go online & "pre-qualify" for a loan by just filling out a simple web-form but, keep in mind, these people WILL be soliciting your business after you fill out their forms.

Any of these methods can yield you the result of determining how much you qualify for and when. Once you know this information, you may begin looking at local Minnesota properties that will fit your lifestyle and your budget!

This article ran in the May 6th issue of the Wall Street Journal.

By Cyril Moulle-Berteaux May 6th, 2008

The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.

How can this be? For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won't happen for another 15years. It just means that the trend is no longer getting worse, which is the critical factor.

Most people forget that the current housing bust is nearly three years old. Home sales peaked in July 2005.

New home sales are down a staggering 63% from peak levels of 1.4 million. Housing starts have fallen more than 50%, and, adjusted for population growth, are back to the trough levels of 1982.

Furthermore, residential construction is close to 15-year lows at 3.8% of GDP; by the fourth quarter of this year, it will probably hit the lowest level ever. So what's going to stop the housing decline? Very simply, the same thing that caused the bust: affordability.

The boom made housing unaffordable for many American families, especially first-time home buyers. During the 1990s and early 2000s, it took 19% of average monthly income to service a conforming mortgage on the average home purchased. By 2005 and 2006, it was absorbing 25% of monthly income. For first time buyers, it went from 29% of income to 37%. That just proved to be too much.

Prices got so high that people who intended to actually live in the houses they purchased (as opposed to speculators) stopped buying. This caused the bubble to burst.

Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. As a result, it now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house.

In other words, homes on average are back to being as affordable as during the best of times in the 1990s. Numerous households that had been priced out of the market can now afford to get in.

The next question is: Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do.

In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months.

The explanation is that by the time home sales stop declining, inventories of unsold homes have usually already started falling in absolute terms and beg into peak out in "months of supply" terms. That's the case right now: New home inventories peaked at 598,000 homes in July 2006, and stand at 482,000homes as of the end of March. This inventory is equivalent to 11 months of supply, a 25-year high -- but it is similar to 1974, 1982 and 1991 levels, which saw a subsequent slowing in home-price declines within the next six months.

Inventories are declining because construction activity has been falling for such a longtime that home completions are now just about undershooting new home sales. Ina few months, completions of new homes for sale could be undershooting new home sales by 50,000-100,000 annually.

Inventories will drop even faster to 400,000 -- or seven months of supply -- by the end of2008.

This shift in inventories will have a significant impact on prices, although house prices won't stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market.

Many pundits claim that house prices need to fall another 30% to bring them back inline with where they've been historically. This is usually based on an analysis of house prices adjusted for inflation: Real house prices are 30% above their40-year, inflation-adjusted average, so they must fall 30%. This simplistic analysis is appealing on the surface, but is flawed for a variety of reasons.

Most importantly, it neglects the fact that a great majority of Americans buy their houses with mortgages.

And if one buys a house with a mortgage, the most important factor in deciding what to pay for the house is how much of one's income is required to be able to make the mortgage payments on the house. Today the rate on a 30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%. Comparing today's house prices to the 1970s or 1980s, when mortgage rates were stratospheric, is misguided and misleading.

This is all good news for the broader economy. The housing bust has been subtracting full percentage point from GDP for almost two years now, which is very large for a sector that represents less than 5% of economic activity.

When the rate of house-price declines halves, there will be a wholesale shift in markets' perceptions. All of a sudden, the expected value of the collateral(i.e. houses) for much of the lending that went on for the past decade will change. Right now, when valuing the collateral, market participants including banks are extrapolating the current pace of house price declines for another two to three years; this has a significant impact on the amount of delinquencies, foreclosures and credit losses that lenders are expected to face.

More home sales and smaller price declines means fewer homeowners will be underwater on their mortgages. They will thus have less incentive to walk away and opt for foreclosure.

A milder house-price decline scenario could lead to increases in the market value of a lot of the securitized mortgages that have been responsible for $300billion of write-downs in the past year.

Even if write-backs do not occur, stabilizing collateral values will have a huge impact on the markets' perception of risk related to housing, the financial system, and the economy.

We are of course experiencing a serious housing bust, with serious economic consequences that are still unfolding. The odds are that the reverberations will lead to sub-trend growth for a couple of years.

Nonetheless, housing led us into this credit crisis and this recession. It is likely to lead us out. And that process is underway, right now.

Mr.Moulle-Berteaux is managing partner of Traxis Partners LP, a hedge fund firm based in New York.
 

For many people, buying a home is the largest purchase they will ever make. And with that purchase comes with a lot of responsibility.

Before you purchase a home in Minnesota, you should determine if that is the right plan for you...

For example, do you have a solid credit history and reliable source of income within employment history of at least two years? In order to obtain funding, these are pieces of the puzzle you will need.

You will also want to come to the table with a certain amount of money for the down payment and closing costs. It need not be a huge amount, but banks will look for some cash available at the time of close.

Is your current level of debt manageable enough to add on the costs associated with homeownership? Remember, you will now have a mortgage instead of rent plus utilities, and any other costs associated with maintenance, repair or improvements.

And lastly, are you willing and able to deal with issues as they arise? No house is perfect and maintenance and repairs will come up, it\'s just a matter of time. If you are not handy, are you willing to interview and hire the appropriate professionals? If this is starting to sound like more than you are willing to endure, you may be the happiest just renting, despite the financial benefits of homeownership.

According to the Regional Multiple Listing Service of Minnesota, Inc. (or RMLS) - rules and regulations, this is the only way that is considered to be acceptable for Minnesota real estate agents to represent themselves with relation to the "Minnesota MLS" on their websites...

This is because the actual MN MLS is really only available to licensed Minnesota Realtors - and the RMLS doesn\'t want Realtors advertising that visitors can search it because it\'s not exactly true.

The reality is that the search that IS available to the general public is called, "Broker Reciprocity" - and it includes all kinds of home listings, all of the participating brokers in Minnesota.

What does this mean to you - the Minnesota home buyer?

It means that you CAN still search for thousands of homes that are on the market - but as far as having actual access to the Minnesota MLS - you will need a Realtor that is a member of the Minnesota MLS (like me) to gain information such as the tax history of a property, expired listings, recent price changes, the property\'s specific history, who the broker and selling agent is, the city-taxation as well as many other important pieces of strategic-information that will help YOU with your negotiations as a buyer.

Buyers' Market Versus Sellers' Market?

There are many cycles real estate goes through, and if you watch the news, whenever they say the real estate market is bad, they mean for sellers.

Right now is what we call a buyers market. That means there are more homes for sale, than people looking for homes by a significant number.

You can imagine, if there are 15 or 20 homes for sale, for every person shopping, they will have the pick of the litter. It is string these time periods that investors have a heyday buying up the best deals. Every area and demographic goes through these cycles. At the opposite end of the cycle from a buyers market is what's often called by the media a hot market.

Although the news reporters who say the market is hot, again, this only means for someone selling. This means value is of homes are continuing to rise, and there may be multiple offers on just one home.

During these times sellers can create bidding wars to get the maximum amount for the homes are selling. If you are a buyer or and this time. You will be paying more for the same home and homes won't stay on the market very long at all.

If you see that homes online are selling in less than 30 days, it's a sure sign of a sellers market. After a period of time for an area being a sellers market, the pendulum must swing back. This time is what we realtors call an adjustment.

The media will say, "the real estate bubble is about to burst". There is no actual bubble, this is the natural cycle of MN real estate.

Most areas come full circle in 6 to 8 years on average. If you are new to the game of buying and selling real estate, you can quickly and easily get this information online, or if not call a local Minneapolis Realtor.

Agents can give you a brief rundown of what's happening in your area, as well as answer any questions you have without your having to sign any contracts or pay any retaining fees.

What Is A Minnesota
Home Mortgage Made Up Of?

Everyone knows that a mortgage is made up of different components. Every time you send in your monthly check, a little piece codes towards the principal balance of the loan, some goes towards the interest on the loan, but where does the rest go?

Most Minnesota mortgages are based on what's called PITI, or Principle, Interest, Taxes and Insurance.

We already talked about principal and interest, how much will I need to pay in taxes and insurance? These are more great questions for your lender, but allow me to simplify what he or she will tell you.

Taxes are roughly based on the amount of the purchase price of your new home. The larger the value of your home, the more taxes, you will pay. And the mortgage companies roll your taxes into your mortgage, so that you aren't surprised a couple times a year with a big tax bill.

Insurance is the other amount that will be included as part of your mortgage. To get a mortgage in the first place, you will be required to purchase a minimum amount of hazard insurance.

What you choose over and above this minimum amount, will contribute to how much insurance you're actually paying.

The greater the coverage, the smaller the deductible, the greater the cost. If, for a down payment, you are putting less than 20%, you will also have something called PMI. This stands for Private Mortgage Insurance. Once someone puts 20% down or more, the bank sees you have some skin in the game. The low 20% down and you are at greater risk of defaulting on the loan.

The less money down, the greater the risk. So to offset this risk, the bank charges and additional PMI. It's basically insurance that says you won't default on the loan.

The limit of the PMI is based on the percentage down and the loan. It may exist for a limited amount of time, say five years, or when equity in your home reaches at least 20%.

For more information on this, please visit your favorite local Minnesota lender, credit union or bank.

What's The Best Time Of The Year
To Buy A Minnesota Home?

To be very honest, there are good times, and bad times of the year to be a home buyer here in Minnesota.

There are also good markets and debt markets, which can be measured by how many homes there are for sale versus the number of people shopping for those homes. Traditionally, in most areas of the nation the last two weeks of December have the poorest home sales. But the entire time span from Thanksgiving to New Year's is still quite weak.

Most people are far more occupied with the holidays, quite honestly, than they are with the sale of their home. This having been said, sellers may also consider otherwise ridiculously low offers, just to have peace and called over the holiday of knowing their home will be sold soon. Especially if that home has been on the market for quite some time, they will be anxious to have an offer on the table.

Conversely, Spring is the time when most MN homes are for sale, but also most buyers are in the market. There will be greater competition for the good deals that are available and sellers will be less likely to negotiate knowing that another buyer may be right around the corner.

Very often because of this trend, sellers will only place their home on the market during the spring summer and fall months, especially in cold climates taking their house off the market for the winter.

If you are also selling your currently own home to purchase a new home, if you have the financial wherewithal, it may be to your advantage to buy a new home in the winter and sell your old home a couple months later in the spring.

Traditionally, April, May and June are the strongest sales months of the year. This is not only based on the ease of moving bring more months, but also correlating to academic calendars.

Who Should You Believe,
Your Lender Or Your Budget?

Today's lenders have very very sophisticated software and complex computer models based on millions of actual scenarios, to determine exactly who is most likely to be late on payments or foreclose on a home and who might be an excellent borrower.

Assuming you are not one extreme or the other, a lender will be able to see where in the spectrum you fall. And when they see that, they will tell you what you qualify for. If you have excellent credit, you may qualify for a great deal. Let's say you qualify for a home amount that would make your monthly payment $5,000.

But you know, based on your own budget, that $5,000 just isn't going to fly. You may already know that any payment over $2000 would not work.

Choose a mortgage and a monthly payment that works for you. Are there are exceptions to this rule? Absolutely, we all know every rule is made to be broken.

In a market that you know is appreciating strongly, it may be to your advantage to buy a little more than you are comfortable with. If the market is stagnant, with no hope in the future, it may not be wise to over purchase. If you're still uncertain or uncomfortable about the mortgage to select, sit down with your budget, looking at all your other expenses: car, insurance, healthcare, credit cards, utilities, groceries, etc..

If you have a spouse or partner, invite them to join you as well. Go over your budget and see what you can realistically afford. This may aid you in choosing your appropriate price point...