For some reason consumers like to think that because a home is considered “distressed” or has the words short sale and foreclosure in the description it is a great “deal”.  I would encourage you to really think it through when considering a traditional sale versus a distressed home.  When you buy a fixer-upper home, you can save a ton of money, or get yourself in a financial fix.

Here are a few things to consider:

1. Decide what you can do yourself

TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult remodeling job that you don’t know how to do will take longer than you think and can lead to less-than-professional results that won’t increase the value of your fixer-upper house. 

• Do you really have the skills to do it? Some tasks, like stripping wallpaper and painting, are relatively easy. Others, like electrical work, can be dangerous when done by amateurs.

• Do you really have the time and desire to do it? Can you take time off work to renovate your fixer-upper house? If not, will you be stressed out by living in a work zone for months while you complete projects on the weekends?

2. Price the cost of repairs and remodeling before you make an offer

• Get your contractor into the house to do a walk-through, so he can give you a written cost estimate on the tasks he’s going to do.

• If you’re doing the work yourself, price the supplies.

• Either way, tack on 10% to 20% to cover unforeseen problems that often arise with a fixer-upper house.

3. Check permit costs

• Ask local officials if the work you’re going to do requires a permit and how much that permit costs. Doing work without a permit may save money, but it'll cause problems when you resell your home.

• Decide if you want to get the permits yourself or have the contractor arrange for them. Getting permits can be time-consuming and frustrating. Inspectors may force you to do additional work, or change the way you want to do a project, before they give you the permit.

• Factor the time and aggravation of permits into your plans.

4. Double-check pricing on structural work

If your fixer-upper home needs major structural work, be confident you’ve uncovered and conservatively budgeted for the full extent of the problems.

Get written estimates for repairs before you commit to buying a home with structural issues.

Don't purchase a home that needs major structural work unless:

• You’re getting it at a steep discount

• You’re sure you’ve uncovered the extent of the problem

• You know the problem can be fixed

• You have a binding written estimate for the repairs

5. Check the cost of financing

Be sure you have enough money for a downpayment, closing costs, and repairs without draining your savings.

If you’re planning to fund the repairs with a home equity or home improvement loan:

• Get yourself pre-approved for both loans before you make an offer.

• Make the deal contingent on getting both the purchase money loan and the renovation money loan, so you’re not forced to close the sale when you have no loan to fix the house.

• Consider the Federal Housing Administration’s Section 203(k) program, which is designed to help home owners who are purchasing or refinancing a home that needs rehabilitation. The program wraps the purchase/refinance and rehabilitation costs into a single mortgage. To qualify for the loan, the total value of the property must fall within the FHA mortgage limit for your area, as with other FHA loans. A streamlined 203(k) program provides an additional amount for rehabilitation, up to $35,000, on top of an existing mortgage. It’s a simpler process than obtaining the standard 203(k).

6. Calculate your fair purchase offer

Take the fair market value of the property (what it would be worth if it were in good condition and remodeled to current tastes) and subtract the upgrade and repair costs.

For example: Your target fixer-upper house has a 1960s kitchen, metallic wallpaper, shag carpet, and moisture problems in the basement.

Your comparison house, in the same subdivision, sold last month for $200,000. That house had a newer kitchen, no wallpaper, was recently recarpeted, and has a dry basement.

The cost to remodel the kitchen, remove the wallpaper, carpet the house, and remedy the basement is $40,000. Your bid for the house should be no more than $160,000.

Ask your real estate agent if it’s a good idea to share your cost estimates with the sellers, to prove your offer is fair. 

7. Include inspection contingencies in your offer

Don’t rely on your friends or your contractor to eyeball your fixer-upper house. Hire pros to do common inspections like:

• Home inspection. This is key in a fixer-upper assessment. The home inspector will uncover hidden issues in need of replacement or repair. You may know you want to replace those 1970s kitchen cabinets, but the home inspector has a meter that will detect the water leak behind them.

• Radon, mold, lead-based paint

• Septic and well

• Pest

Most home inspection contingencies let you go back to the sellers and ask them to do the repairs, or give you cash at closing to pay for the repairs. The seller can also opt to simply back out of the deal, as can you, if the inspection turns up something you don’t want to deal with.

If that happens, this isn’t the right fixer-upper house for you. Go back to the top of this list and start again.

Most important; hire a good Realtor to help you through the process of buying a home.  Too many Realtors simply want to “do the deal” to earn a commission. 

Happy house hunting!

Wade Hanson, Broker MN and WI

651-274-8584

Every time you turn on the television or open a newspaper it's doom and gloom in the national real estate market.  But it's what's happening in your local market that really matters.  A year ago we were flooded with false expectations of a recovery due to the $8,000 first time home buyer tax credit.  Now with close to 12 months of activity without any incentives, here's what the numbers look like in Woodbury:

The median sales price in Woodbury over the last 12 months is actually up 1.5% from $231,488 to $235,000.  Of course, the number of closed sales is down 22.7% due to the lack of the tax credit but the number of new listings is also down 10.2%.  This means while there are fewer buyers there are also fewer sellers to compete for the buyers.  This may be why the number of days a home is actively on the market is down just over 5%.   Currently in Woodbury there are 485 homes actively for sale in the Multiple Listing Service (266 single family homes and 219 condos and townhomes).

So what does all of this mean to you?  Nothing, if you are not looking to buy or sell.  If you are a buyer, it looks like homes are selling faster and for more money than a year ago so if you are sitting "on the fence" it may be wise to get off.  With interest rates at an all time low and homes "on sale" (selling for nearly 30% less than what they sold for in December of 2007), you may never see a better time to buy.  Nobody can tell you when we have hit the so called "bottom of the market" until it has passed.  Sellers, the selling season is upon us and now is the best opportunity to get "top dollar" for your home.  Know your numbers and price your home appropriately.  While it may be a lot less than what you would like, you will make up for it on the purchase of you next home. 

Woodbury continues to be a strong community to purchase a home and raise a family.  The median price of a home in the Twin Cities market is $161,000 compared to Woodbury's $235,000.

For most people, hearing the words, "You're fired," can be discouraging. For me, it actually felt good-especially coming from an icon like Donald Trump. I had fought my way through hundreds of thousands "Apprentice wannabes," competed against some of the best and brightest business professionals in America, and made it to the final 11! While I set out to win, I think I might have learned more from my defeat than I would have from a victory. 

I learned so much from spending time with the Trump Organization for more than a month. Being with someone like Donald Trump in a recession was truly inspiring and presented opportunities I never could have imagined. Trump demands a lot from everyone in his company, and you'd better bring your "A" game every minute of every day. While the experience allowed me to reflect on my successes, it really re-ignited my passion for being the best. And that pretty much sums up Donald Trump, being the best.

I learned to accept where you are today, forget about what you don't have and embrace the challenge ahead. When we were given a task, we didn't have time to complain; we would simply do the best with what we had to work with, embrace it, have fun and execute-no excuses!

My real estate career has certainly been positively affected by this experience, and I am much more selective with the clients I work with. Trump didn't get rich saying "yes" to every deal, and sometimes "no" can be the best financial decision. Too many in this business play the numbers game: List 100 homes and hope to satisfy 50. Not me. Now I work with a very select group of clients, delivering Trump-like service.

I recently sat down with life coach and author Ian Scott to discuss my experience on The Apprentice.  We talked about the task I was fired on, my journey getting selected as one of the contestants and I was able to share my principals for success.  It was a great interview!

Click here to listen to the interview.

Fired 'Apprentice' Wins as Real Estate AgentBy

Sheree R Curry (AOL MarketWatch.com)

Dec 2nd 2010

When the first of the two-part finale of "The Apprentice" airs tonight, fired contestant Wade Hanson, a Twin Cities-area real estate agent, will be rooting for Brandy over Clint.

"I think Brandy has been the strongest through-and-through," real estate agent Hanson told HousingWatch of this season's "The Apprentice." "I respect how she carries herself and how she leads and how she follows, and her directness to the questions she is asked in the board room."

Although Hanson was fired from "The Apprentice" after a fashion show competition of the men's team against the women, he says that he has used lessons he learned from the show to reinvent his real estate business, which was already rather successful before the recession.

By the age of 27, and before appearing on "The Apprentice," the now-33-year-old married father of two daughters had built a $60-million-dollar, multi-office real estate firm and in 2004 was named one of Realtor magazine's "Top 30 Under 30.

"I had some real success in the real estate industry at a young age," he told HousingWatch. "I saw the recession take away some of the investments I had made." Wanting to find a way to turn things around is what inspired him to drop an email to apply for "The Apprentice" after seeing a promo in February.

"What 'The Apprentice' taught me: Thinking quickly on your feet while working with a limited amount of resources and a limited amount of time is about being more selective," says Hanson, who specializes in the luxury market, particularly lakefront homes. "Now in my real estate practice I am more selective. I am not one of those agents who is going to list 100 properties and hope to sell 50. I think there is space in this marketplace to not have to say yes to every deal."

"Working with a handful of homes and not 100 homes helps me create a marketing plan individualized for each home. I don't see each home the same and they aren't. Each has a different approach to the market."

Hanson, a Re/Max Results agent, says that there are still realistic buyers and sellers who know that now is a good time to buy, that the market needs to get more of them who understand that and less of them with a "2005 mindset."

"We are in a different real estate market and consumers have to simply accept it and move on," he says. "Many homeowners are finally starting to view their home as a bad investment and are willing to put their pride aside and walk away and rent. They are tired of throwing good money after bad just to 'hang on.' After all, you wouldn't keep putting your money into a stock that continues to decline in value. Those that have purchased in the last two to three years will be just fine."

The housing market is going to slowly bottom out over the next two years, he predicts, and then will go back into a stabilization phase. "I think 2011 is going to be a tough year for a lot of homeowners as homes continue to decline in value. To a buyer, I say, buy now. I have been doing this 12 years and I don't think we are going to see a better time to buy with interest rates where they are now."

Hanson is the chairperson for the National Association of Realtor's Young Professionals Network, and is involved on several national real estate platforms and is a frequent speaker at national and regional conventions.

Is the worst behind us?

Fortunately the luxury market has sustained the recession better than any other segment of the real estate economy.   However, I feel that the worst is yet to come - specifically in the second home market.  My theory is that many second homeowners never should have been in the market.  Most Americans that purchased a second home did so with money stripped from the equity in their primary residences.  The sales peak of the second home market was in 2005 or 2006 when many homeowners had a tremendous amount of equity in their primary residences they had purchased in 2000 or 2001.  Five years later they stripped the equity out of these homes for a down payment on their lake home.

Most second home owners never had the cash needed for a down payment on a vacation home but thought their primary residence would continue to appreciate at ten percent per year so they would be fine, right?  Wrong.  Now here we are five years later and their 5 year balloon payment is due and they don't have the money.  They have done everything they can to fight the battles the last 3 years to hang on to both homes hoping the market would eventually come back and now the consumer is tired of throwing good money after bad as their lake home continues to decline in value so many of them are throwing in the towel.  A second home is not a necessity and we all know how the recession has forced us to focus on our needs and not our wants.

So what's next?  Well, I think the second home market will continue to tank the next two years as more and more homeowners walk away from their cabins in Minnesota and Wisconsin.  For buyers this means there will continue to be some incredible deals in the lakeshore market and for sellers, if you are thinking of selling don't wait!  Your property will be worth less next year.

The boss belittled him on national television, calling his work "a total mess." And then he fired him.

Wade Hanson frowned and lumbered out of the boardroom and into a taxi, yet another in a long line of "Apprentice" wannabes who had taken a figurative kick in the behind from Donald Trump.

Was he dejected? Regretful?

Nah.   

"I'm the most well-known real estate agent in Minnesota now," he said in an epilogue to the end of the Oct. 16 episode, in which his team went down to an inglorious defeat.

He very well may be that. "I get stopped at the Starbucks now," said Hanson, 33, an agent with Re/Max Results in Woodbury, in the Twin Cities area. "(The show) increased my name recognition and my brand tenfold."

And his participation in "The Apprentice" television program has led directly to new business in the form of property listings, he said.

"One of the things I get (from clients) is, 'If you're good enough for Donald Trump, you're good enough for me.' "

He was, apparently, not quite good enough to emerge at the top of the "Apprentice" heap; the current season of the reality series is still mowing down competitors each week, with about half a dozen remaining from the original 16 who began alternately collaborating with and backstabbing each other in September.

Though in recent years "The Apprentice" has featured celebrities, this 10th season of the show is a return to its original format of "ordinary people" taking on concocted business tasks and vying to please Trump with their performance; those who fail are "fired" and ride off into the night in a cab, second-guessing where they went wrong.

This year, the show picked its cast from thousands of applicants who claimed to have been adversely affected by the recession, and the 16 include an unemployed publicist, entrepreneur, banker, attorney and others who are complaining of rough economic times.

And then there was Hanson, who wasn't out of a job, though real estate was very slow when he applied for the show earlier this year. He said he had been told more than 100,000 originally sought a spot in the series, which screened applicants rigorously.

"Getting there was harder than being there," he said. "We submitted an application and resume and references and went through all kinds of background checks and interviews."

The process culminated in an interview with Trump and producer Mark Burnett.

"It was grueling," he said. "(Trump) takes pride in hand-selecting the people."

The gist of what Hanson told "The Donald," he said, was that he has a positive attitude.

"When I sat in front of Trump, I told him I have no excuses in life," Hanson said. "I told him I was doing well when everything was good, and now it isn't. But I still suit up and try to make a buck. I think he liked that."

With the economy as the show's theme this season, being in real estate probably helped him get selected, he said.

"Obviously, the real estate economy has been affected most, other than maybe the auto industry," he said. "I'm working twice as hard and getting half the results. My real estate investments and my portfolio have been cut in half and my day-to-day sales have been cut in thirds or less."

Once selected, the 16 competitors spent the month of June in New York, divided into teams of men vs. women through most of the taping schedule. The teams were charged with such chores as making a promotional video for a popcorn company or managing a doggie daycare business.

Hanson's stint on "The Apprentice" hit the fan when he volunteered to be project manager for the assignment of staging a fashion show to promote Rockport shoes in front of Trump and assorted other business types.

How badly did it go?

"It was like watching a horse die," one of his teammates said later.

Hanson seemed to pick the right teammates to shop for clothing for the models, but things went completely off the tracks in his choice of emcee. The master of ceremonies never quite cobbled a script together for the fashion show and stumbled through what little narration he was able to devise.

"It couldn't have been worse," Trump pronounced later in the post-mortem for the men's team. He fired them both.

Hanson said he knows who ultimately won the top spot in the series, but is contractually prohibited from revealing it until the end of the season.

The show definitely has affected his business approach, he said. He's focusing on higher-end properties now, and he has a new attitude, he said.

"I'm more selective in the market now," he said. "If (the show) taught me anything, it's that when you think of Trump, you think of luxury, white-glove service. I'm focusing on quality over quantity."

"The Apprentice" isn't his first brush with business notoriety. In 2004, he was recognized by Realtor magazine in its annual "30 under 30" list of young professionals to watch.

He shared space on the magazine cover with Katrina Campins, a Florida agent who had participated in the first season of "The Apprentice."

Hanson began in real estate at 21 at his family's brokerage in upstate Walker, Minn. Eventually he took over the brokerage and then sold it in 2006, he said.  "The stars aligned," he said. "The money was on the table and I saw the market had started to tip."

Although he still sells properties occasionally in that lake resort area, Hanson relocated with his family to the Twin Cities in search of good schools, he said. He became an investor in Lakeplace.com, a website that specializes in vacation properties in Minnesota and Wisconsin, later selling his share of the business to his partners, he said.

He then worked for Weichert Realtors for several years as a business-development director, in addition to doing real estate coaching, he said. He joined Re/Max in January.

While Hanson said he has no regrets about his television experience, he'd rather not be in charge of any more fashion shows. The experience was transformative, he said.

"It definitely affected my way of thinking about real estate," Hanson said. "I think a lot of us have gotten into a rut, with the same old habits. 'The Apprentice' challenged you to think outside the box and do things you weren't used to doing.

"In the long run, it was a success for me," he said. "I've come back bigger and stronger."

Mary Umberger is a freelance writer in Chicago.

 This article was originally posted on Inman.com 11-15-10

Are you frustrated with the lack of effort from your agent?  Tired of hearing it's the market - not me?  So am I!

If you are having a hard time selling your luxury home it may be time for a change.  Too many agents' "marketing plans" involve simply putting your valuable property on the MLS where it sits while they wait for buyers to just show up. In today's market, waiting for your property to be discovered is not an option. My strategy is to go where qualified buyers are naturally found -and my customized marketing program and large network of connections does just that. Unlike other agents, I'm not afraid to invest money to make money. Your home deserves no less. 

For more than 12 years, I've been providing professional real estate services in the luxury home market.   I understand how frustrating it can be to find the quality of service you expect from a business professional in today's challenging real estate market.

Luxury property transactions require specialized knowledge in home values and lifestyle preferences - as well as in depth understanding of the affluent and discerning buyer and where to find them.  I am one of only 7 real estate professionals in Minnesota and Western Wisconsin that hold the Million Dollar Guild with The Institute for Luxury Home Marketing.  This recognition is awarded to those in the luxury home market who meet stringent performance standards and have specific upper-tier market knowledge.

I learned a lot about business from spending time with Donald Trump including - do what others are not doing, continue to challenge yourself and learn to work harder than your competition.  This is exactly what Mr. Trump saw in me and how I continue to operate my real estate business today.  While others are complacent and spending less time, effort and money marketing your home I am doing exactly the opposite.

Call me today to learn the 3 reasons why your home isn't selling!

Hanson Hears Dreaded Words on 'The Apprentice'

Brainerd Daily Dispatch

Bz Buzz

Wade Hanson, the real estate professional with a background in the lakes area, heard that dreaded phrase in the boardroom.

Hanson, 33, was fired at the end of episode five on the unscripted NBC Television series with Donald Trump along with fellow competitor, Gene Folkes.

The task for the episode was setting up a runway show for a Rockport shoes collection. Hanson was the project manager for the men's team and Folkes, who stumbled as emcee for the runway show, were both fired.

Hanson said his goal in his attempt to become Trump's apprentice was to spend time with the organization and learn from the real estate entrepreneur. He wanted to challenge himself and needed a change. That goal was met, but Hanson was disappointed to leave the show early.

"Just getting there was quite an accomplishment," Hanson said. "I wish I would have lasted longer."

This season's "The Apprentice" focuses on giving a second chance to people to rebuild careers after taking hard hits by the recession. The show's episodes were completed in June. Hanson will be back with the show's 16 candidates for the Dec. 16 live finale.

Hanson, who has an office in Woodbury and in Walker, said he gained from the experience, learned things about himself and has a few things he wishes he would have done differently.

"This recession has us all into a rut," Hanson said, adding he was doing the same things he always did and expecting different results. "(Donald Trump) demanded a lot of us and he challenges your creativity," Hanson said.

The experience challenged him to come back to Minnesota and work harder and look for the opportunities, because they are out there, Hanson said.

Asked what he would have done differently on the show, Hanson said he wishes he hadn't drawn the fashion challenge for his stint as project manager. And, he said, standing out more in the first weeks may have been a better strategy than keeping his head down and trying to be the candidate who executed the work. Hanson said at times he had ideas, but held back.

Hanson was criticized in the board room for not have more of a practice before the runway show. Hanson said there was a practice that didn't appear on TV but it was just as bad as the actual show. He said the time between the 20-minute rehearsal and the runway show was about 10 minutes, which didn't leave much room to maneuver.

"It was like watching the Titanic sink," Hanson said. "You knew it was leaking ... and just watched it slip into the ocean.

"I knew we had lost. I didn't know I'd be cornered by The Donald and his agenda was to get rid of Gene and I. We didn't have a chance to defend ourselves."

Hanson said the person from the show he's stayed most in contact with is Folkes. After the two were fired, they were escorted out and met with Trump for a conversation off camera before taping their exit interviews inside the cab as they are leaving.

Hanson said he isn't able to judge yet how the show may have changed his life. It provided greater exposure, certainly.

"It definitely is going to open the doors to opportunities," Hanson said, and one of the biggest to date was participating in the American Foundation for Suicide Prevention. Hanson lost his sister to suicide and has worked to raise funds for the foundation. Now Hanson said he will be on the board of directors.

As for the show, Hanson said he believes one of the women will win, perhaps Brandy, Liza or Stephanie.

"I think the women are stronger than the men," Hanson said. "The women have a lot more to offer this year."

As for regrets, Hanson said maybe he should have fought harder to be the project manager for the task the week earlier after telling Trump in the boardroom he was taking on the position, but another candidate had announced his intent to be the project manager for week four earlier.

In remarks he wrote after the firing, Hanson said he was re-energized after returning from New York and sees opportunities even in this challenged real estate market. Hanson stated this was the first time he was fired and not too many people can say Donald Trump was the one who said those words to them.

His advice for others, do what you love even if it scares you or others say it's a bad idea and trust your instincts.

Now Hanson spends time between the Twin Cities and the Walker and lakes area working on luxury lake home sales. But he thinks the market will get worse before it gets better.

There is "so much uncertainty right now until we can create more jobs and our unemployment goes down, it's not going to get any better in my opinion."

When I set out on the journey to become The Donald's next Apprentice I did it for a number of reasons.  I felt I needed to challenge myself, I wanted to work and learn from the most successful real estate entrepreneur in the world and I needed a change.  What I didn't realize was how this experience would teach me so much about myself and my talents.  I learned that to be successful you need to be doing what you love to do.  For me, that's taking risks and working for myself.  I found that although I take direction well and will do what I am asked to do I am more successful coming up with the ideas and asking others to help me implement them.   During tasks I often found myself asking "why I am doing this when I could be helping out in ways that will benefit me and the team more".  I know now that we are all given instincts for a reason and when your "gut" tells you to do something, you do it.

While I was at first frustrated with the outcome (because I always want to win), I realized sometimes you learn more from a loss than you do from a win.

I just need to put fear aside and forget about all of the negativity happening in this world right now and make the decision.  I may make the wrong decision from time to time but so what!  Either way it will be an experience.

Since returning from New York, I have become re-energized and surrounded myself with some very talented individuals.  I have discovered some opportunities in this challenging real estate market and I am going to take advantage of them.  

Bottom line, I realized I have the talent, the skills, the work ethic and most important the instincts to be successful.  After all, Donald Trump selected me as one of 16 finalists to work for him.  Not too many people can put that on their resume'! 

So take some advice from me:  Do what you love to do, even if you are scared or others tell you it's a bad idea, trust your gut and make the decision.  You won't regret it!