We Tell it Like It Is

1) Brooklyn Park/Brooklyn Center

PROs:  1950's ramblers, 1960's split levels. 3+ bedrms, 2+ bath, 1300+ sq. ft. Nice exteriors, newer roofs, updated electrical/furnace/mechanicals. FHA friendly**. Often just needs interior paint, new carpet or new appliances and a good scrubbing. Starting at $70,000. Many neighborhoods are clean, quiet with great neighbors. Biggest bang for your buck in the Twin Cities.

CONs:  The City of BP has a very strict policy in place. Before a home can be sold in BP, a city inspection must be completed. It is the seller and their agent's job to have this inspection ordered prior to the home going on the market. However, the city has been behind this year on getting the inspections done and have been telling sellers to go ahead and put the house on the market before the inspection.

The BP city inspectors have a bad reputation of finding MANY code & safety violations during these inspections; some to the point of being ridiculous. They create a list of repairs that are needed in order to fix these violations and they give the list to the seller to complete. HOWEVER, if the property is a BANK OWNED FORECLOSURE, the bank refuses to make the repairs and will pawn it off on the future buyer instead. There is NO negotiating this.

The buyer can review the list to see what repairs need to be made. If their offer is accepted and they agree to take those repairs on, they must have a licensed contractor go out to the house and give an estimate in writing as to how much they believe it will cost to have the repairs made.  Then, the buyer must escrow 1.5 times the estimated amount in a holding account until the sale closes and the repairs are made. The buyer CANNOT move into the home until the repairs are made.

The city will then come back to reinspect the repairs and give the "ok". After this is done, the money that was escrowed will be released back to the buyer.

So, its tricky when a buyer finds a foreclosed house that they like in BP that's for sale, but the inspection hasn't been done yet because the city is behind, so you have no idea what sort of repairs would need to be made and therefore aren't sure if you want to submit an offer on the house.

If this whole thing sounds like a mess, it definitely is compared to buying a home in other cities. Our clients that have gone through this will tell you it was hell, however, now they have an awesome home that's solid with mortgage payments that are super low.

Another "CON" about buying a home in BP/BC is that home values will remain low in these cities for a long time. These areas hold the highest population of foreclosures; so far in 2009, about 1200 homes have sold in BP alone and the average sales price in BP is $146,000. It will be a long time until property values will see an increase in these areas.

One final "CON" about BP/BC is that every home buyer seems to know this is the place to get a cheap house. If you show up to a new listing on the first or second day, you will see the vultures flocking! Its a race right now and anyone that takes a moment to blink will lose out. I've found that an average home in BP/BC listed for under $150,000 will have anywhere from 4-25 offers after just a few days on the market right now. These homes are selling for up to $25,000 over the list price, so the buyer must be prepared to offer full price at the VERY LEAST on these homes. The BP/BC market is highly competitive right now.