Flipping the calendar to 2018 brought a surprisingly quick start to the home buying and selling season here in frosty/not frosty/frosty again Minnesota. Homes are being listed and brought under contract quickly – and across all demographics – which once again demonstrates a strong appetite on the part of home buyers. As you stare out the window waiting for the car to warm up and maybe ponder a sale of your home – to feed the growing mass of home buyers searching in vain for a roof to put over their head – here are a couple of important steps for home sellers to consider.
Offer Price and the Bottom Line – I approach the home seller enthusiastically, a smile on my face as I prepare to present them with the opening salvo in the negotiations. I prefer structure and order, so I start at the top of the purchase agreement…the seller wants to know one thing: “HOW MUCH?!”. If the number on line 35 of the Minnesota standard purchase agreement is close enough to their asking price, I might get a smile. Then we start counting backwards….every home seller should have a copy of the a net sheet in their possession – taking a sale price and subtracting any outstanding mortgage, property taxes, commissions, and other closing expense. The bottom line number on that sheet is the most relevant figure as it gives you the best estimate of the funds you’ll have burning a hole in your pocket as you walk away from the closing table.
Earnest Money – High on the list is the pledged amount that accompanies the offer. Whether it’s called a deposit or earnest money, this serves to instill confidence that when you are evaluating the offer you know that it’s backed up with more than wishful thinking. If the amount is greater than the customary minimum (generally 1% of the sale price), it’s a signal that the would-be buyer is more than just a little serious about completing the transaction. It’s still in the best interest of the seller that they demonstrate their financial ability to deliver on the deal (along with a pre-approval letter from a qualified, reliable, and locally based lender). Important to note, earnest money doesn’t necessarily constitute a guarantee of a sale. There are a number of ways a buyer can cancel a transaction and retain their deposit – your agent should make these clear to you, one of which is the…..
Inspection provision – Almost every serious offer will be contingent on the property passing a thorough inspection—but this is a risk element that’s largely controllable by the seller. It’s the reason some Saint Paul sellers get ahead of the game by investing in their own inspection before listing. Twelfth-hour discoveries of issues that could have been fixed beforehand can throw a big bucket of cold water on a transaction that had been proceeding smoothly. If a condition has been properly disclosed in advance, evaluating an offer will include verifying acknowledgment of disclosures and which steps are necessary to get a deal done!
Everything else – An offer may have any number of other provisions, so properly evaluating an offer means carefully weighing the practical impact each may have. The timing elements can be crucial. Stretching out the closing date can be inconvenient and add a degree of uncertainty. Pushing for a quick closing may create an interim “no-place-to-live” situation and that can be awkward and expensive! An offer that is contingent on the sale of the buyer’s home adds a degree of uncertainty that needs to be evaluated with knowledge of that area’s specifics. Lastly, your buyer’s lender will want to appraise the home to ensure they (and you) are getting what they (and you) are paying for. Successfully traverse the field with all of these landmines (hopefully your agent is walking alongside you with a map) and you will enjoy the “slide the keys” moment at the closing table!
Success in evaluating an offer for your home—or comparing multiple offers when that thoroughly enjoyable situation occurs—often means a lot more than a simple yes or no decision. Coming up with a strategic counter-offer is often called for—and that’s when there’s no substitute for having an experienced agent by your side to help fashion a strategic win-win counter offer.
To discuss these important steps for home sellers and all the other steps that will result in the successful sale of your property, give me a call to arrange a no-obligation consultation at (651) 251-4898 or email me at firstname.lastname@example.org.
Selling your house is hard work. You make repairs, analyze the surrounding market to establish a logical and appealing listing price, take pictures, fill out the listing documents, take a phone call from the office chiding you for all your spelling mistakes, double check for accuracy and then turn on the marketing and networking machine.
It’s a good thing you know an experienced, smart, savvy, charming, good looking and hard working real estate agent to take on the lion’s share of the work (who can always be reached at (651) 251-4898 or email@example.com).
Your life – as a home seller – is made easier when you have an experienced professional on your side. While I’m dealing with the listing, marketing, and communications with prospective buyers and their agents you have one job: getting your house ready to be seen and sold.
This can be a challenge for home sellers as two formidable opponents have to be met and conquered. Taken individually, neither is nearly as imposing as when they team up. But when they work together, they can stall a home sale for months—even years. Unfortunately, they’re always hanging around the house, waiting to cause trouble.
The villains are inertia and its helpmate, clutter.
Inertia is the force that pushes you back in your seat when your jetliner takes off. It’s the force that keeps the car moving after you’ve taken your foot off the gas. It’s the physical property of a body at rest (or in motion) that opposes a change in what is happening at the moment.
In the realm of home ownership, real estate inertia is the natural tendency to stay put in your familiar home setting. Rather than upsetting the apple cart by striking out in a new direction, it’s the understandable propensity to leave well enough alone—even when the familiar home base is no longer as suitable a venue as it used to be.
This despite the fact that as our family or work or financial situations evolve, sooner or later most everyone will overcome house-related inertia and start thinking about selling and finding a better fit. That might be larger or smaller, grander or simpler, or simply more conveniently located. That’s when inertia’s partner comes into play to stop everything.
Clutter is all the stuff we’ve built up to make our lives more comfortable—and there is a lot of it we could do without. But the idea of actually addressing which things are disposable, and then actually disposing of them? Well, nobody in his or her right mind wants to tackle that (at least not right now).
While we’re here, take a moment to think about the things in your home that constitute clutter….in my house it’s the accumulated boxes and piles and crates of kid toys. I’m confident that the Hot Wheels, Nerf Guns, and Legos will never again see the light of day in our home. What do you have that constitutes clutter?
To make a mathematical formula for this common phenomenon:
inertia + clutter = later
The foolproof strategy for overcoming the two scoundrels is to cut the clutter part down to size. Tackle one room at a time. It works. True, this involves overcoming a certain amount of inertia—but nothing like the mountain of the stuff that thinking about the whole household full of the stuff involves.
Have a garage sale, make a donation, consign your stuff or just find friends that can make better use of your unused (but always loved) things.
My i + c = l formula probably might not be included in any physics textbooks, but it’s a good one to remember as soon as you begin to think about selling your house.
Selling your house is hard work, the best way to make things easier is to give me a call at (651) 251-4898 or email me at joe.anderson@results. net.
Buying your first home is an exciting and terrifying time in your life. As an agent I take extra care to make sure these buyers are informed and comfortable every step of the way. We work together during the exciting search process. I try to keep them calm as we offer and negotiate – and eventually agree – on a purchase. As we roll through the inspection and appraisal I try to provide wise counsel to ensure they purchase a home in good condition at the right price and don’t spend more than the property is worth. It’s not uncommon to have some bumps along the way, but more often than not we get to the final stages of the purchase in good shape.
And then the parents show up and it’s time for The Dad Inspection (sorry Moms, it’s ALWAYS Dad that brings his tape measure and flashlight).
I know why…I get it…I did the same thing when I bought my first home (more on that later) and will provide support when my kids take that step.
After all, you’re excited to be buying a home in Saint Paul or the surrounding area. Your parents are probably excited about your home purchase too, and as a parent I can attest they want the best for you—what parent wouldn’t want to offer their best wisdom and counsel on just about any topic, especially a purchase as large as a home?
Unfortunately, it’s entirely possible for that very same best advice to cause a good home choice to slip away. So with all due respect to the parents out there reading this post, here are some common pitfalls to avoid at the time of the Dad Inspection:
- Parents want to see you land your home for the least amount of money—sometimes resulting in advice to start with a lower than necessary offer. That may be what they did when they last bought a house—and it might have worked then but it will not work in this seller’s market. Make your offer based on the comparable neighborhood sales, the property’s condition, and your Realtor’s® advice (that’s me!).
- Mom and Dad may advise different “deal points” than are standard in the today’s market. Recall that each state and area has different customs, disclosures, and laws—and they can evolve. What may be common in the parent’s area might not be common in ours.
- Parents may attempt to talk you out of a particular house or neighborhood. Although they may have valid insights based on their experiences, if your house hunt leads you to a specific home that’s workable for you and your budget now, trust your gut instincts.
- Parents sometimes have very specific ideas about the condition of a house. That can lead to some really alarmist reactions – which is where the dreaded “Dad Inspection” occurs. I can still remember the phone call from the agent on my first home purchase, asking if my Father was crazy enough to be “lurking around the home at 5:30 in the morning.” The answer was yes – and he had a particular obsession with wood rot, so he was actually poking around the siding of the home with a large screwdriver looking for soft spots. I’m not making that up….so keep in mind that different areas have different building types, weather patterns, and housing components—and that repair and upgrade costs may differ significantly from one area to another. Listen to the folks, but do your own research. And listen to the advice of your Saint Paul inspector (and me, too).
A common denominator is to listen to everyone, but do your own research—and include what your own hand-picked Realtor brings you. If you and I are proactive about the issues the house hunt turns up, your parents’ feelings won’t be hurt. There will be peace in your family, and a much more successful transaction…all of which can start when you give me a call at (651) 251-4898 or email me at firstname.lastname@example.org
It’s a fair bet that anyone who is taking a serious look at St. Paul new construction is someone who places a value on sheer newness. It’s about more than prestige—although owning a new home does carry at least an element of the kind of special pride that goes with owning the latest model auto. More substantively, the first owner of a new Saint Paul home gains the advantage of not having to worry that some previous owner’s inattention to maintenance issues could cause trouble down the road.
Like a new car, though, when it comes to buying a new home, it’s a good idea to take at least a peek under the hood. What you will be looking for is a number of new construction quality issues. Even when a new home bears the signature of one of Saint Paul’s premier builders, before the sale is final, it’s always prudent to commission a detailed house inspection. Since that’s not free, before committing to that expense you’ll want to have a reasonable expectation that the home in question passes your own muster. In other words, before ordering up a formal professional inspection, you can do some inspecting of your own.
The first step is to disengage from the “wow” factor. Because it’s in mint condition, good new construction invites acceptance—everything looks so fresh and flawless! That makes it harder to take a hard look, especially when the new home in question looks like what you have been hoping to find. Nevertheless, the first walk-through should be followed by an as-skeptical-as-possible return visit. Some of the areas that merit close attention:
- Structure: without exception, the walls should be plumb and flat. Wherever building materials meet (wood to plaster; glass to metal; drywall to tile, etc.) are the seams clean, the joints tight?
- Flooring: when you jump in the middle of a room, do the feel and sound tell you it’s solid (yes: somebody has to jump!).
- Detailing: in closets and cabinetry, trim and hardware, are the workmanship and materials up to what the asking price indicates?
- Plumbing and electrical: are the sinks conveniently located for cooking and laundry duty? Is water pressure strong? Are there sufficient and well-placed outlets?
- Heating and cooling: Is one of the main selling points the economic advantage of the systems’ operating efficiency. If not, ask questions.
- Roof: it should look trim and new, and carry a manufacturer’s warranty for at least 10 years. Gutter placement and grading should make clear that water can’t pool near the foundation.
The best Saint Paul builders earn solid reputations not just because of winning design innovations or outstanding price leadership. When you hear past buyers praise a builder, it’s most likely because of the value their homes continue to exhibit over the long haul—value that results in years of trouble-free homeownership.
I’m a fan of well planned and constructed new homes, and it seems builders are embracing the idea that they need to “fit” in older neighborhoods like ours. For that reason, I encourage clients to explore new construction as an option in home buying. Call me at (651) 251-4898 or drop me an email at email@example.com if you’d like a detailed rundown of the fantastic new homes being constructed – or recently finished – that are currently being offered!
A number of smart house products made headway in 2016, so before the crystal ball gets hauled up over Times Square, this is an appropriate moment to review which ones promised relevant real estate applications. Anyone who will be house hunting or selling in Saint Paul anytime soon might want to become familiar with some of what’s out there.
It’s safe to say that the whole notion of household management gadgets that plug into the internet—an idea that was exotic a few years back—is now readily recognized by the majority of Saint Paul consumers. More and more of us are beginning to consider which ones will make life easier (rather than just producing a ‘gee whiz!’ reaction from friends and family). The best smart features really do add value.
The greatest enabler for most smart house devices is the presence of a home wireless network. Whereas installation was formerly tricky and expensive, it’s currently close to foolproof (even for those without a twelve-year-old to handle the installation). And prices are definitely down. You can find plug-and-play wireless routers for under $40—some of them carrying 90+% customer approval ratings. Pricier models are more powerful.
When it comes to having a real impact on Saint Paul real estate commerce, true smart house innovations are those that have a practical application for controlling household systems. Those dealing with household security are among the leaders. There are smart deadbolt-enabling kits that remotely control compatible deadbolts. There are wi-fi-to-internet-connected video doorbell outfits that do a lot more than doorbells—they broadcast and record video of visitors while allowing truly remote smartphone monitoring.
Also in the security realm, there are smart batteries that plug into existing smoke or CO2 detectors. If the alarm goes off, it alerts your smartphone. You can then call 911 or silence the alarm. Battery-operated garage door openers have always been remote—but some of them now are smart, too. Just tap your mobile device’s screen to open or close the garage door. Soon, manufacturers say they will automatically open when your car nears the driveway, and close when it’s safely inside.
If you’ve ever had a nightmare about being on vacation when one of your house’s “water-prone places” floods, smart water monitors can send an alert to your mobile device. Smart light bulbs can be your artistically-attuned mood managers, changing their demeanor from bright white to softer tones based on the light in the remainder of the room. Some sense motion to help them decide whether they should turn themselves on or off. They can even pow-wow with the heaters, deciding that the heat should be turned on or off, depending on whether you’re at home.
More on the entertainment area are the smart speakers, like Echo or Google Home. They’re always on, slavishly awaiting your request for information about the local weather, news, or the kind of questions that occur to you when you know a robot database is craving attention. They’re called “speakers,” but they’re really pretty decent-sounding complete sound systems—so making your music library available for instant playback is increasingly popular.
Not yet available is a Saint Paul real estate smart speaker application that would respond to the command “play music that makes prospects want to buy this house.” Until they come up with that one, to sell you own Saint Paul home, better just call me!
HGTV has a weekly program called “Income Property” that Saint Paul investors and revonators may find interesting. The host, Scott McGillivray—himself an income property investor—offers tips and advice on the subject. His insights are solid, and it doesn’t hurt that – in addition to being an investor – McGillivray is also a contractor. He has a knowledge base that goes beyond the simple dream of buying, renovating, and cashing out.
Since various levels of rehabilitation can sometimes be the first order of business Saint Paul income property investors need to address, a contractor’s insights are pretty valuable. He recently addressed red flags for non-contractors who are searching through the listings for income property bargains. I have to agree with all of them—at least for Saint Paul investors who don’t consider themselves handy with a hammer (and saw, spackle tool, paint roller, etc.). Among the listing language mentions:
- Fixer Upper – couldn’t be clearer. Even for do-it-yourselfers, the possibility that structural elements may be in need of deep rehabbing should be front-of-mind.
- Needs a little TLC — most serious investors reserve their tender loving care for family members and pets. This phrasing might be a hint that the TLC needed will ultimately involve an investor’s bank account. Wags have suggested elsewhere that “TLC” can actually mean “OMG”…
- All the Work Has Been Done — is a heads-up that a house flip is probably being offered. It certainly doesn’t mean that serious Saint Paul investors should automatically pass up the property, but does mean that the asking price probably includes a margin for the owner/flipper. If the work is up to par, this will likely be a dollars and cents proposition.
- Great Potential — if true, terrific (but this gift horse will deserve a serious look into its mouth).
- Attention Renovators — a cue to non-contractors that they should probably look elsewhere. It’s an honest call to the pros.
Not in need of translation at all is the fact that experienced Saint Paul real estate investors—including income property investors—make sure they have thoroughly “kicked the tires” before they make an offer. You can also be pretty sure they will employ a competent home inspector before a deal is done—and that they have made good use of the services of their knowledgeable Saint Paul real estate agent.
If you’d like to look into the terrific current crop of Saint Paul income property opportunities, I’ll be standing by to interpret where necessary—and help every step of the way!
Conscientious Saint Paul homeowners keep on top of all the regular home maintenance items pretty much automatically. Once you have lived in a place for more than a year or two, you know what you should be keeping an eye on. You have a handle on when major fixes and updates have to be addressed.
When you begin thinking about moving on to new digs, though, the focus shifts. Your Saint Paul property is about to enter a beauty contest, after all—so more attention will have to be paid to moving it toward the dazzler category. The floor plan, interior décor, mechanical functions, and the other features that prospective buyers will delve into may all come into play eventually—but only after initial interest has been piqued.
Call it what you will: “first take,” “initial impression,” or “curb appeal”—whatever you name it, if it’s positive, everything else can follow. If it’s negative for any reason, all the other factors will be fighting an uphill battle—or worse, a battle that’s never fought at all.
Given that most homes that are about to go on the Saint Paul market have basic maintenance issues solved, some of the most important home improvement items are those that boost the first impression. Here are six that are universally cited:
- Clean. This one is not as obvious as it sounds—owners are used to the way the front of the house looks, and more often than not, don’t even notice subtle loss to a home’s “sparkle.” When years of almost-invisible grime are cleared away, the difference can be startling. Every surface has its own effective cleaning techniques: they’re easy to find on the web.
- Spruce up the yard. If lawn dominates, dollars spent to bring as much life as possible will be well spent.
- Mulch. If fall has given front yard flower beds too much of an overgrown look, be prepared to cut them back into shape—then mulch the newly-exposed soil. The look that emerges can transform unkempt into elegant.
- Entryway. If there is an entry lantern overhead, make its glass panes sparkle. Front door fixtures should gleam—and if they are beyond polishing, replacing them is not a budget-buster. It can also be transformative to paint the door itself with an inviting color that accents the exterior’s tone—an idea that could be the most cost-effective curb appeal assist of all!
- Driveway. If there are major cracks, they will need to be filled (quick! Winter’s on the way). But if the only problem is blemishes on asphalt, a sealcoat service when the weather allows can be well worth the dollars spent.
- Identity. The house numbers, whether simply on the side of the mailbox or elsewhere, are more important than most Saint Paul homeowners realize. After all, prospective buyers are certain to look closely at them—which can be turned into an opportunity to forge a distinctive identity. Search the web for images showing “house number design ideas” to see how many interesting looks are out there—then seriously consider if a change might add drama and distinction to your home’s curb appeal.
These are not-so-costly fixups that can go far to help your Saint Paul property reach out and reel in its next owner. For more helpful tips—call me at (651) 251-4898!
Whenever a month’s Saint Paul real estate activity ends on a Friday, the number-gatherers close up shop knowing there will be a longer than usual lapse until they can be sure of the real estate activity statistics…so we can dive into some real estate news!
September 2016 did produce a few news items—these three rate at least a quick glance (or a double-take)….in the radio business we called stories like this “kickers.” I was in broadcasting for a long time, yet have no idea why we called them that. I just accepted the fact that an off the beaten path story of interest was a “kicker.”
The lead kicker is one that rates a triple-take: it concerns a storage barn that sold for $1,800,000. Built in Little Compton, Rhode Island, the structure was originally erected as a storage barn by the Army in WWII. It was converted into “a custom shingle-style” home, which was surely a shrewd improvement since shingles have to be a noticeable improvement over what the wartime Army shed-builders would have had to work with.
In fact, as reported by the Providence Journal, “the former storage barn…has water views from nearly every room.” The accompanying photo confirmed that, indeed, windows had been added. If the casual reader jumps to the conclusion that a $1.8 million closing would be the occasion for celebration from the sellers, that was probably not the case: the former storage barn had been listed for $2,195,000.
Having spent some quality time in Rhode Island I can say that it is one of our country’s most underrated destinations – but with home prices like that I don’t that I could handle a relocation!
Elsewhere, CNBC’s real estate editor Diana Olick reported on a national trend: a slowdown in on-time closings from 77% six months ago to 64%. This is despite a rise in housing demand. Unearthed was a reason: a “massive” shortage in appraisers—“the men and women who value homes and whom mortgage lenders depend upon.” Part of the blame was assigned to new federal regulations that disallow apprentices to conduct full appraisals. Now their licensed bosses must be on-site for every inspection.
This is a huge deal for home buyers and sellers, and one reason why I think it’s incredibly important to shop for a lender that can guarantee a timely appraisal of the property you would like to buy.
Finally, last kicker comes form The New York Times (great paper), who found little interesting domestic news, so they led instead with an international report, “House Hunting in Costa Rica.” The item focused on a two-story home in the “very clean and quiet” Arenal Lake area. A local real estate broker’s advice for house hunters was to shop with caution despite the area’s current “tremendous” buyer’s market. “I always tell my clients, don’t leave your brain in the plane.” That’s probably sage advice, especially since the area is named for a local “popular tourist attraction,” the Arenal Volcano. It’s an active stratovolcano that’s thought to be “in a passive phase” since around 2010.
Pretty sure my roommate will want a home on the beach rather than a muddy lake. Pretty sure.
Closer to home, I can report that I never need to remind my Saint Paul house hunting clients to keep their brains active: they fully understand that from the get-go. I hope you’ll give me a call when you decide it’s time to check out our Saint Paul real estate offerings. I can guarantee that no active or passive stratovolcanos will complicate matters!
If you go looking for insights from successful Saint Paul real estate investors, depending on which areas they concentrate on, you could come up with a variety of takes. Despite the distinct differences that separate the commercial and residential investing spheres, there are some time-worn truisms about the real life experience that would have most investors nodding their heads—
- Expect to work at it. The myth of buying real estate, watching it appreciate, then just cashing in is a two-dimensional expectation. A typical Saint Paul real estate investment has to be discovered, investigated, negotiated, cared for, cared for some more—and sometimes sold—for it to ring up the profits that make real estate investing so lucrative. The best investors relish doing all of it.
- Expect to interact with a wide range of people. Math skills are important, but people skills are up there, too. Just about anyone can do the arithmetic that produces accurate cash flow projections, but being able to network with real estate professionals and lenders—and manage close working relationships with tradespeople—are also vital for sustained success.
- Anticipate changing conditions. Economic conditions are always in flux, so Minnesota and Saint Paul market conditions are always on the move. Last decade’s real estate investment strategies don’t guarantee success today—and certainly not tomorrow. Anticipating and planning for changing conditions is work that can pay real dividends.
- Expect losses. Any investment—including real estate investments in Saint Paul—involve some degree of risk. Serious real estate investors are those who profit the most from multiple investments over time. Necessarily, they expect that some projects won’t pan out as expected. Not expecting that to be true would be a rookie mistake.
This fifth one is ancient: it sounds like something Ben Franklin could have come up with:
- A fast nickel is better than a slow dime. Strangely enough, this truism can be misinterpreted. One commentator thinks it means “owning real estate is easy; getting paid is tricky.” I think its core meaning is that knowing just when to sell is a terrific real estate investment skill.
In fact, you could say that prioritizing when to sell is what distinguishes real estate investors from most of the rest of us—real estate consumers who are contented Saint Paul homeowners. In my profession, I get to facilitate winning transactions for investors and real estate civilians alike. I hope you’ll give me a call for all your own real estate dealings!