Cynthia Frost, a south Minneapolis real estate agent, has a plan to help her Corcoran neighborhood solve the problem of foreclosed and vacant houses. The idea—Bargain Home Tours—is a program she hopes will draw the attention of buyers who might not otherwise be able to afford to buy a home.
As the chair of the Corcoran Neighborhood Organization Housing Committee, Frost saw the problem from a community perspective as well as her professional view. “Last year people came to us concerned about vacant and foreclosed houses on their blocks,” says Frost. “We wondered what to do to attract good owners to these homes and we came up with the idea for the 2009 house tour.”
Last year’s tour was a success, so Frost is putting the final touches on the 2010 tour, scheduled for April 10-11 as part of the National Association of Realtors’ Nationwide Open House event and April 24-25 during the Minneapolis-St. Paul Home Tour. Interested home buyers should meet at Frost’s office at 2223 E. 35th St. in Minneapolis at 1:00 pm on Saturday, April 10, for the first tour.
According to the Minneapolis Area Association of Realtors, there were 1,675 lender-owned homes listed during February 2010 in the Twin Cities, many in the areas near Powderhorn Park of which Corcoran is a part. These neighborhoods, Frost says, have a higher rate of foreclosures than many other areas of the city, and many of these homes end up sitting empty, lowering the value of other nearby homes and attracting criminal activity.
Corcoran Neighborhood’s Bargain Home Tour will feature three or more houses ready for buyers to purchase. Brochures on how to buy a foreclosed home and work with lenders will be available in each house. Frost will be available to answer questions and point prospective buyers to special funding, loans and grants.
Grants to help buyers in foreclosure-affected neighborhoods like Corcoran include a no-interest forgivable $5,000 Minneapolis Advantage Program loan that can help buyers pay for closing costs, down payments, or repairs. The Corcoran Neighborhood Organization can also help prospective home buyers obtain other loans and grants offered through the Greater Metropolitan Housing Corporation.
Most of the homes on the tour will be priced under $150,000, with at least one home listed at under $100,000, according to Frost. While most will be in Corcoran or nearby neighborhoods, Frost says her primary concern is finding affordable homes for the kind of buyer who are willing to spend some sweat equity to own a house. “This is an opportunity for people who had been priced out of the market to get in,” she says.
“What I’m looking to include on the tour is something that will have some allure when you’ve finished fixing it up,” Frost says, “with a good floor plan, with good bones. There are houses that are simply dirty—they stink—and that scares a lot of buyers away. But they’re nice homes once you clean them up.”
Some of these houses may need more work, Frost admits. “Some might be missing their copper pipes, which might cost a few thousand dollars to fix, but you’ll get the house for $30,000 less.”
Frost says that first-time buyers who come pre-approved and ready to buy might still be able to take advantage of the $8,000 or 10 percent (whichever is less) federal tax break, but only if the purchase agreement is signed and agreed to by the end of April and closed by the end of June. Most people who plan to buy one of the bank-owned homes on the tour will miss out on the tax credit, she says. “But it’s still a way to get a good house at a bargain.”