Monday, December 31, 2007
At least I have a great view of the large snow flakes coming down and I can't wait to take my two year old out to the local hockey rink to try out his first set of hockey skates. I am an optimist for the new year. I don't like to make predictions or make resolutions. Anything that happens, happens for a reason, so I just let life take it's course.
Here's to you all in the New Year!
Friday, December 28, 2007
Thursday, December 27, 2007
Monday, December 24, 2007
It was snowing this past weekend and I was able to walk right up to the bird feeder and catch some video of the birds eating their full before the next snow storm. The snow made the world so quiet that the birds never noticed I was there. Well, maybe they did, but they didn't seem to mind.
The few birds brave enough to let me video include, Black-capped Chickadees, Tufted Titmouse, Wren, and a Downy Woodpecker. On a branch in the background you can see a Blue Junco sitting patiently, waiting for the frenzy to slow down.
Sunday, December 23, 2007
One tradition I have married into is the yearly Christmas viewing of "It's A Wonderful Life". Yeah, it can be cheesy in a few places, but it has such a great message(s). Here are the two I like:
1. Touching someone's life - think about it. How many people have you met over the great course of your life? Have you ever stopped to think how something as simple as just saying hello could brighten some one's day so much that it would cause them to change? What would life be like without you in it? I tend to think it would be a much sadder place without you. I look back on my life and think about people from my past. Everyone I have ever met has in some way shaped who I am.:
-the teacher who told me I am terrible at writing would be surprised to see me writing a blog
-the father who told me I could be anything if I just put my mind to it kept me believing in myself
-the sales lady that was rude to me always makes me remember "Do unto others as you would have them do unto you"
Who has influenced you during your life? While we all appreciate the good, even the negative can mold the clay.
2. The Silver Lining: I guess I tend to look at life knowing there is always a silver lining, always a good side to everything bad that happens. One motto I like is "Don't Sweat the Small Stuff". I also feel that "everything happens for a reason". Often I tell buyer clients that lose out on a home they think they love, that it wasn't meant to be their home. Their home is still waiting for them, we just need to find it. Amazingly, each time this happens, my clients are surprised to find out how right I am.
Life is a journey. If we never have bad days, how will we know what is a good one? If we never fail, how will we ever succeed? There is always a silver lining...you just have to look for it in the oddest places sometimes.
The movie, though old, holds a great message. If you haven't seen it, then you might want to check it out. I for one am glad to take on a new tradition. After all, growing is part of life, and if you stop growing, then life becomes boring. Here's a new years resolution - stop being boring and do something new this year.
Friday, December 21, 2007
Thursday, December 20, 2007
The most recent case comes from Michigan, Realcomp II, Ltd., a regional multiple listing service located in southeastern Michigan. The issue presented was whether the MLS treatment of "Exclusive Agency Listings" (EAL), those that allow a seller to not pay a commission to the listing broker should the seller bring the buyer, was anti-competitive and in violation of antitrust law.
"The FTC argued that: the MLS's policies discriminated against discount brokers utilizing EAL listings by limiting the distribution of their distribution and making it more difficult for other MLS participants to locate these listings. In particular, the FTC identified two policies which caused the alleged harm: the Website Policy and the Search Function Policy. None of the policies prohibited the submission of EAL to the MLS; rather, the policies addressed how the MLS would treat the listings after submission"...to read the full review visit here. (Login Required)
- The Website Policy only submitted "Exclusive Right to Sale Listings" (ERS) to Realtor.com and IDX feeds.
- The Search Policy only showed ERS listings but gave the MLS participants the option of checking a box to include all EAL listings in their search.
To claim a violation against Antitrust Laws, three standards must be used:
- per se analysis, when the restraint is obviously anticompetitive
- quick-look analysis, for restraints with some pro-competitive justifications
- the rule of reason, for restraints where the effect on competition is harder to determine
The administrative law judge over the case determined that the "rule of reason" best described the way to judge the MLS rules. He then looked to see how these were anti-competitive and if they harmed consumers. Here is what the judge found:
- The Search Policy was not anti-competitive because it gave the option of checking a box to include ALL listings.
- The Website Policy was not anti-competitive because the FTC was not able to show any proof that the policy harmed the public or competition.
- The judge further found that the alleged broker victims (discount brokers) had actually increased their gains revenues and increased their business during the years the Website Policy was in affect, so the claim that the policy hurt their business was false.
- It is not against anti-trust laws to charge a broker an additional fee for submitting EAL listings.
- Most importantly, the judge found that the MLS had the right to protect itself from "free loaders". It's policy helped "prevent sellers, who do not pay a commission to a MLS participant, from receiving advertising provided by the MLS but without paying dues to the MLS like all other MLS participants must. The MLS's policy of excluding the EAL from public websites and IDX addressed this problem." It also protects buyers that are working with a broker from being forced by sellers to ditch their agent representation, in order to negotiate on the home.
NO BIG SURPRISE...the judge dismissed the FTC complaint.
So there you have it. The FTC is not winning some of its cases. For those MLS boards that have caved before going to trial and given in to the FTC, they should seriously rethink their decision. Just because the government comes a knocking and threatens to take you down for anti-competitiveness, doesn't mean you have to get scared and give in. It's time we all stood up and said enough. Thankfully the law, which the FTC is trying to use in it's cases, is proving to be more on the side of the MLS boards, then with it.
Wednesday, December 19, 2007
Known as the Charles Martin house, the home was built in 1904 by William Channing Whitney and is mostly constructed of brick. When driving down Mount Curve, you could easily miss the home as it is tucked away behind a wrought-iron fence and large hedge. I had to angle the camera to get a good shot of the home.
The Twin Cities was founded on the backs of the flour mills. The original owner of the home was involved in the trade as the Secretary and Treasurer of the Washburn Crosby Company that later became General Mills. The home as sits on top of Lowry hill, looking down over Minneapolis. The view has changed greatly since its construction.
Built in the Italian Renaissance style, it has every thing needed to stand out as an fabulous form of architecture. The low pitched hip roof covered in tiles is one give away, but other classical details include the balustrade front porch, pediments over the windows, the brackets, dentils, and quoins, just to name a few. Also it seems that many columns on Renaissance homes are done in the Doric fashion.
View photos of the home as it appeared in 1910, and 1950.
Tuesday, December 18, 2007
"...the Twin Cities housing market is well into its annual winter holiday pause. New listings have been minimal, yet total inventory of homes for sale remains at record levels and the number of sellers continues to far outweigh the number of buyers. Conservative lending standards and decreased consumer confidence seem to be keeping home buyers away despite low mortgage rates, motivated sellers, improved housing affordability and great housing stock.
Over the last three months, newly signed purchase agreements have declined by 20.0% from the same period in 2006 and 34.3% since 2005. Meanwhile, new listings have declined by only 1.8% The number of homes for sale has dropped 5,000 units in the last 12 weeks but remains 12.9 % higher than this time last year.The forecast calls for improved buyer activity, but it will likely take more than a year of gradual increases before comparisons to today's buying market are quantifiable."
Can it be described any better than that?
Monday, December 17, 2007
While the report doesn't cover all markets, it will be a "trend indicator" that can give you valuable insight into the residential market in general. Just know that the information for Minneapolis encompasses a wide area. Real estate can be broken down into local neighborhoods, in which you can get a better idea of home trends for that area. For instance, it is no surprise to local residents of Minneapolis that homes near Lake of the Isles fetch more than homes in Southwest Minneapolis.
A couple interesting statistics to point out:
- Minneapolis ranks second with the largest percentage of homes currently listed that show a at least one price reduction. Over 50% of the homes on the market have been reduced.
- While Miami experienced the longest time-on-market span with an average days-on-market of 137 in November, Minneapolis had the second highest average days-on-market at 125.
- Maybe we should be thankful that our market isn't as bad as Detroit's. Detroit currently has the most inventory in the nation, approximately 70,000 homes for sale. Compared to them, Minneapolis comes in at a mere 22,000.
While inventory levels declined in most markets, Stephen Bedikian, partner and research director for Real IQ said, "We expect time-on-market will continue to lengthen and apply pressure on homeowner pricing decisions until buyers regain confidence and demand levels off. So far that point is not in sight." I would have to say that in the Twin Cities, I am starting to see some areas where the market is beginning to lever out. Prices have stopped declining to a point where buyers will buy the homes. Location is a key factor when buying across the Twin Cities.
Thursday, December 13, 2007
"What we got here is a failure to communicate."
I think in this every changing real estate market, this is a good quote to describe what is going on between real estate agents and sellers. In reality, it is better described as failure to listen to the market.
If you want your home sold, then please listen to the agent that tells you the truth about the market. I know it is really hard to do. Emotions get in the way. You really want to sell your home for the most price, but what you have to realize is that buyers don't want to buy for the most price if they can get the same thing around the corner for less.
When I have a listing presentation with a seller, I tell them the truth, and I back it up with data. The last thing I do is sugar coat a price range just to get the listing and I also don't take overpriced listings. The market is fierce right now (meaning there are too many overpriced listings), and if a home owner wants to waste time to "feel out" the market, then be my guest with someone else. My job is to sell your home, not call you up in three months and ask for a price reduction, that should have been the original price to begin with.
I have tried reaching a few sellers, but they checked out once I mentioned price. Denial is the worse enemy for a home seller.
Here are somethings to look for when you interview agents:
- If they tell you to list your home higher than comparables are supporting, really question why. Are they just trying to please you and "tell you what you want to hear"? There are a lot of desperate agents out there that NEED the listing.
- Do they have a web presence? With the buyer's market going full strong, does an agent have a website that actually ranks on the first page of the search engines, or do they have a website that just sits there and doesn't have any content that will attract a buyer? Buyers want to see more than just an agents listings. Google an agent before you meet with them and see what comes up.
- If an agent asks you to sign a price reduction form at list time, then that should be a red flag that your home is overpriced. Why would you agree to over list the home if you want to sell it? Buyers aren't dumb, they can pull recent solds from all over the place and figure out what you home is worth pretty fast.
- Never select an agent based on price. Look at their marketing campaign and past experience to get an idea of how good they are. Oh, and just because an agent is young, does not mean they are inexperienced. I have met many 20-30 somethings that produce more than well known agents that have been in the business for 20+years.
So there you have it, a snapshot on things to do when you decide to put your home up for sale. The time has come to realize that Minneapolis, and Minnesota for that matter, is no longer a sellers paradise. If you want to sell and not become a "days on the market" statistic, then listen to an agent that will tell you the truth about what it will take to sell your home. Forget how much your home has appreciated the last five years (that money was never yours to begin with) and be prepared to let go.
Wednesday, December 12, 2007
The one I thought was interesting was the belief that almost all Realtors have nothing higher than a high school education. In fact one silly soul said that 90% of agents are only high school grads. Hmmm, I would really like to know where he got those statistics. Here are the facts from the US Census bureau:
- 50% of Realtors hold a Bachelor's Degree or higher. At the same time, only 30% of adults in the US hold the same.
- 11% of Realtors hold a Master's Degree or PhD or Law degree, where only 9% of Americans do as a whole.
I fall into the first category, with a Bachelor of Science degree in Chemistry. Why did I go into real estate you might ask? Well, I was part of the corporate world before this, and after working 60-70 hour work weeks, including weekends, not seeing my husband, being tired all the time, putting up with the corporate bull that goes with the job, looking forward to 10 years of "putting my time in" before I saw a raise or big promotion, I decided it was time to do something I like and would have fun at.
Real estate allows me to make my own schedule and my own rules. Besides, someone should have told me freshman year how little Chemists make, and that the only way to get ahead in the profession would be to get a PhD and work for a University doing research. Sorry, but too boring for me. So next time you run into a real estate agent, don't assume they are idiots. Most likely they have a degree and are fairly smart people. Like the saying goes, don't judge a book by the cover.
Tuesday, December 11, 2007
Digging the Foundation
When they finally dig the hole for your house, you wonder how they get it right. They stake the lot and take measurements, scoop out a lot of dirt, and then fill it full of concrete. It doesn't look like much but the foundation finally gives the sense of a home being built.
The above photo is of the builder pouring the concrete walls, or forms for the walkout basement. A large percentage of homes in Minnesota have basements. Basements come in three versions, the simplest being a basement with no windows. The other two are:
- Lookout: windows in the basement let you look out to the yard, but there is no access to the yard
- Walkout: enough of the backyard is dug out to allow for a home owner to walk out of the basement into the yard. Homes with a walkout basement always have to be dug on a hill and cost you more in the purchase price.
Minnesotans love their basement space. Some are converted into Man Caves, others are the kids area, and some become theaters, bars, game rooms, or wine cellars. The options are endless. The home we are building will have a guest room and bath, family room, and office. We are keeping it less formal so our kids can play down there and I don't have to worry about any accidents.
An very important thing to realize when buying or selling a home is that basement square footage is not given the same value as above ground square footage. Some people have told me the below ground square footage only brings 20-40% of the above ground square feet, but appraisers I have met neither confirm or deny the numbers. I have read that some give values between 50-75%. If you know the answer, I would love to know, but as with most things in appraising real estate, it all depends on the opinion of the one doing the appraisal. The best rule of thumb is to look at other homes that have sold with similar basements and judge from there. Any doubts, hire an appraiser. They cost anywhere from $300-500 here in the Twin Cities.
Saturday, December 8, 2007
Friday, December 7, 2007
Thursday, December 6, 2007
Today it is snowing again, and they are saying we might get somewhere around 6 inches. I did all my errands this morning, before it got really bad and now it looks like we can't get out until the snow plow comes. Winter in the Twin Cities causes real estate activity to slow down. Compared to July, it really slows down. But it doesn't have to be your worse enemy.
If you look at the graph below for the past three winters, 2005-2007, you can see that there is a huge dip around December.
- red represents New Listings
- blue represents Pending Sales
- yellow represents Closed Sales
With so many holidays clustered around each other, people have other things on their mind besides buying a home. Buyers don't have the money to buy because they are shopping for Christmas, and sellers aren't listing their homes because they know market activity slows way down at this time.
However, it might be good to remember that as a buyer, your best deal could be made in the winter months. Homes that have been on the market for a while are itching to sell before the flood gate of new listings opens up in April. For instance, if we ever need a new vehicle, we always buy in December. Car dealerships see their lowest sales during this month so we know we have more negotiating power. It is the same with real estate.
Along the same guidelines, the number of active homes is less, and means that the competition is less. Sellers have a better chance of selling in this atmosphere because their neighbor is waiting for Spring to sell.
So in a way, selling/buying in the winter months is a win-win for both sides of the real estate transaction. It all just depends on how you want to view it. I often tell clients to wait until after New Years to list a home. The first couple weeks the listing hits the market are crucial, but if the listing comes on the market when no one is looking, then you have just wasted the "good news", so to speak.
If you have any questions about selling during the winter months here in the Twin Cities, don't hesitate to ask!
Wednesday, December 5, 2007
We also recycle our lakes each winter. While some would think lakes are useless once they ice over, we Minnesotans get 100% reuse out of them once it starts to freeze. Stick around for the end of the video to see what I am talking about.
Tuesday, December 4, 2007
Click here to VOTE SAINT PAUL
According to the Historic Saint Paul website :
The Saint Paul projects feature a mix of historic preservation, community, education, and environmental improvement, including:
- Helping a deserving family with an unfinished home renovation. After her husband passed away 18 months ago, Kris Nelson’s dreams of restoring their three-story Victorian era home were put on hold. She and her two sons hope to be able to complete their home with a help from HGTV, Rebuilding Together and the National Trust for Historic Preservation;
- Transforming the grounds of the Wilder Recreation Center/City Academy. The WPA building was designed by Saint Paul City Architect Clarence (“Cap”) Wigington, the country’s first African American municipal architect. School administrators at City Academy building teach their students the importance of giving back to the community through volunteering and caring for the environment. Without a much-needed facelift, the growth of the school and neighboring community center is stunted by space and environmental limitations;
- Restoring and interpreting the ecological and cultural resources in the Bruce Vento Nature Sanctuary, a Mississippi River area open space just east of downtown Saint Paul that includes remnants of our industrial and indigenous history. Though the park has come a long way since its days as a contaminated rail yard, there is still much to be done and it remains a work in progress.
So make sure to cast your vote for local historic preservation by visiting HGTV and casting your vote. You can vote once a day!
Saturday, December 1, 2007
I went out early this morning to get some Christmas shopping in before the crowds arrived. Unfortunately, they never showed up because it started to snow as I was finishing up. I made it home in time before the roads got really bad. By the time I took this video, the wind was blowing so hard that snow drifts were forming. Please note, I risked a lot obtaining this video, mainly freezing my tail off while snow flakes hit me in the face. For those of you in warmer climates, your simpathy is much appreciated.
Friday, November 30, 2007
Thursday, November 29, 2007
Wednesday, November 28, 2007
Later in the evening, I was cleaning out some articles I had saved from a few years ago and putting them in the recycle bin. One column that caught my eye was from late 2005 and it concerned whether or not the Twin Cities market was going to burst. Written by a regional director of a national franchise here in Minneapolis, the author states that the Twin Cities will not deflate like markets across the nation. In fact, he stated that 2006 would see an increase in the number of home sales and the dollar volume, as well as an appreciation rate of 4-6%.
Now fast forward to reality and yesterday's class. A fantastic resource offered by our Realtor association is the years worth of data they possess on the real estate trends over the Metro area. They can show trends from years, to months, to weeks...and the data isn't boring.
What actually happened in 2006 was that records were set for listing volume, but home sales and dollar volume declined to levels seen back in 1999. Home appreciation was dealt a blow as well. Instead of the 4-6% appreciation rate served up by the author of the article, actual home appreciation rates came in at a meager 0.6%. Yep, that's right, less than 1%. Talk about missing the mark and ignoring the signs on the wall. After some discussion yesterday, the market is showing that 2007 might produce negative appreciation in the Twin Cities and 2008 could be a repeat of this year.
Now I am not trying to be all doom and gloom, because frankly, the doom is over. We just have to wait out a little more gloom. Some things that are changing and helping the area recover are:
- Builders are pulling back on new developments with the number of building permits down 35% from 2006.
- Sellers are getting the hint and pulling homes off the market, choosing to sit and wait the necessary time for the market to normalize. Super-saturation is disappearing and now the market is just "saturated" with listings.
- Home prices are coming down to points where buyers can actually afford them. Housing affordability was nearly non-existent by early 2006. While home prices sky rocketed 2001-2006 by 151%, income did not keep pace and only increased by 51%.
- Negotiating is back!
While this isn't a detailed statistical analysis of the market, I hope it has shed a little light on what has happened to the Minneapolis market without boring you. In February of 2008, this years annual report will be coming out and it will be interesting to see mathematically what has happened. Stay tuned in a few months for my summary of the findings and feel free to send in any questions you have about data in any area of the Twin Cities Metro area and surrounding 13 counties.
Tuesday, November 27, 2007
Friday, November 23, 2007
Wednesday, November 21, 2007
- It goes against parental religious beliefs
- A parent does not personally believe in giving the child the shot
Most states give the parents no option. In fact, on the national news a few nights ago, there was a story about a town in Maryland that sent out notices to 2300 parents warning them that if they did not bring down their children to the county courthouse for vaccinations by a certain date, then the parents would be sent to jail. Are you kidding me? Threatening jail time over a shot! What has our country become that parents no longer have parental rights in deciding what is right for our children?
One shot that I have a hard time believing in is the relatively newer Chickenpox shot. I am of the belief that it is good for our kids to get sick. What good is an immune system if you don't give it the natural chance to build up resistance to disease? Yes, I understand that it is mostly a convenience thing and keeps kids from weeks out of school. But chickenpox is almost a right of passage for kids...I still have a small scar on my forehead. Currently only one shot is needed, but starting in 2008, a second Chickenpox shot will be required in Minnesota for kids entering kindergarten or the 7th grade. I think I will be opting out of that one, siting " conciencioulsy opposed" to it.
Now don't get me wrong, some shots are great and have erradicated childhood diseases that affected thousands...like polio, but as medical science knowledge increases and new cures are found, more and more immunizations will be required for our children. My question is, when does the need to be disease free actually begin to hurt our bodies? Another problem I have is the government telling me as a parent how I need to raise my kids. Just my opinion.
If you have children and are planning on moving to Minnesota, below is a list of immunization shcedules you might want to reference:
Minnesota Immunization Schedule for Babies
Minnesota Immunization Schedule for Kids
Minnesota Immunization Schedule for Teens
If you would like to read more about Minnesota's Law and history on childhood vaccinations, view this pdf.
Monday, November 19, 2007
It's not an easy one to be awarded. For one, an agent has to have production numbers that are verified by a broker. You have to sell alot of homes in order to be considered...no "one home a year" sales allowed. An agent must also complete classwork and additional education that can take years to finish. Classes only come into town so often and sometimes we have to fly to them in another state.
I have to say, the classes have been some of the best I have seen, and I have learned many new things that will help me to continually strive to be a better agent. Remarkably, less than 38,000 Realtors hold the CRS designation nationwide. With over 1 Million members in the nation, those that are Certified Residential Specialists are rare to say the least. In Minnesota, only 3% of Realtors have the production to be a CRS.
So when you think about choosing a quality real estate professional, be sure to ask them about any designations they hold. If they hold the CRS designation, then you can rest assured that they have completed extensive training on residential real estate and a have proven track record of sales transactions. The more transactions an agent has, then the more experience they have. When the average agent completes only three sales a year, is it any wonder that there are so many inexperienced Realtors in the industry. Next time you choose an agent, make sure they have the experience to back themselves up.
Saturday, November 17, 2007
Friday, November 16, 2007
Wednesday, November 14, 2007
The time will eventually come when the builder will stake out the lot, letting you know exactly where the lot lines and set backs are, and where the home will sit in relation to the parcel. At this time, the field manager will meet with you at the site and walk the lot with you. The goal is not only to inform you, but to also make sure you are OK with the positioning of the home. Not that there is anything you can really do, but most builders want to make sure you are a satisfied customer. Some builders will also give you a survey of the lot to keep for your records.
Don't be surprised if it is hard to visualize your home at this point. In most instances, you will feel that the home foundation size looks too small. Don't worry, it is an a illusion, and once the home is framed you will be able to get a better feel for the home.
Another thing to remember is that weather does happen here in Minnesota. Once our meeting with the field manager was complete and the dig date was set, it rained for two weeks straight. Of course it only rains when you least need it to.
To follow the previous posts of this series visit:
Part 3, Shopping Day
Part 2, Picking the Lot, and Part 2.1,
Part 1, Picking the Builder
Tuesday, November 13, 2007
Monday, November 12, 2007
- First Aid Kit
- Shovel (for snow removal)
- Sand Bags
- Warm Clothing and Additional Boots
- Water and small food items
- Tow Chain / Tire Chains
- Road Flares and Reflectors
- Jumper Cables
Also make sure that your windshield washer fluid contains antifreeze. This will keep any ice from building up on your windshield. Don't forget to SLOW down and watch for "black ice". Black ice is ice that cannot be seen when driving and is a huge hazard in the winter, causing your tires to slip and your car to slide out of control.
For more great Winter driving tips in Minnesota, check out the Department of Public Safety website.
Sunday, November 11, 2007
Thursday, November 8, 2007
Wednesday, November 7, 2007
Tuesday, November 6, 2007
Saturday, November 3, 2007
- They built spec homes, then brought in fake buyers. The fake buyers borrowed more than $25 Million to buy these homes. The "solution" of having the builder buy its own houses flooded their business with money to keep it a float, which in turn let them build even more houses. Fortunately the declining real estate market caught up with them and unveiled the scheme.
- The fake buyers were friends and family who bought the homes to obtain the loans. One buyer bought 46 homes at the tune of $20 Million between 2004-2007.
- A bank officer was enlisted to falsify verifications of bank deposits
- An appraiser was enlisted to inflate and over-value the property appraisals.
- A closing agent was enlisted to forge signatures on purchase documents
The real losers are the people in these neighborhoods that bought homes at inflated values and now are seeing surrounding homes being auctioned off at sheriff sales. In New Prague, many homes have already been auctioned off. Other buyers have entered into leases with the option to buy, and are facing eviction from new owners.
It will be interested to see how this all unfolds in the next couple of months. The Parishes have all plead guilty and are currently awaiting sentencing. They could get 5-15 years for their offenses and will have to pay back millions to the bank and affected home owners. People always get their comeuppance. It is nice to see justice served.
Just remember not to group this company in with all the great builders out in the market place, or to have a bad impression on appraisers, closing agents, bank officers, or real estate agents. There are more good people out there than bad...it is just that the media likes to report on the bad more than the good.
Friday, November 2, 2007
Thursday, November 1, 2007
In the past, buyers have been able to receive money from a seller as downpayment assistance for their loan. (Usually stemming from the buyer not having enough money to put down which means they cannot qualify for the loan) With this "help" from the seller always came a catch. To make up for the seller's bottom line being reduced, the seller would usually then bump up the sales price to make up the difference. HUD sees this as a problem because it artificially inflates the value of the home.
Another problem was seen with downpayment assistance programs that would take money from the seller, subtract a fee from the amount, and then give the money to the buyer. Again, home values were being artificially inflated and other parties were benefiting at the determent of the buyer. As a result, HUD has been seeing a higher default rate from these types of loans, compared to non-FHA loans.
Now this does not mean that all downpayment assistance is disallowed. In fact, HUD had made a point that assistance can be given by family members, employers, and any other party that does not have a financial interest in the transaction. Also, builders and sellers can give assistance, but only if it reduces the cost of the mortgage. So for instance, a seller can give a buyer $5000 as a gift, but the seller cannot turn around and raise the purchase price by $5000 to make up loss. This is the true definition of a gift. Who ever heard of getting a gift at Christmas from mom and dad, only to have them ask you for a check for the cost of your shiny new toy.
Hopefully this will help sellers and buyers be more realistic about the purchase price, and cut down on the number of defaults. Only time will tell. Just understand that the rules have tightened up a bit and the government is cracking down on known abuses.
Click here to read the entire rule as published by HUD.
Wednesday, October 31, 2007
Monday, October 29, 2007
Friday, October 26, 2007
St Joseph has been helping home owners sell their homes for years. But how did this tradition come to be?
St. Joseph, the husband of Mary and earthly Father of Jesus Christ, is honored as the patron saint of married couples, families, carpenters and workingmen. It is believed that a 16th century Saint buried medals of St Joseph in land she wished to buy for her convent and a tradition was born.
While originally used to help buyers, St. Joseph has crossed over to the other side, sellers. Now you can purchase a small five inch plastic statue, say a prayer, and bury him in your yard. The goal is for him to help the home sell. Versions do vary with some requiring:
- you to bury him upside down so his feet point to heaven
- bury him three feet from the house
- bury him next to the for sale sign
- dig him up once the home sells and bury him in your new homes yard
...and the list goes on and on. Yes, it might seem silly. But what do you have to lose? If your home has been on the market along time here in Minneapolis, anything can help. Just don't forget to say the included prayer....and no, you don't have to be Catholic for it to work. All you need is a little faith!
By the way, we had a home for sale in Florida that had been on the market for a year. I buried the statue in the back yard, upside down, following all instructions. Six months later, the home finally sold. Divine intervention? Who knows, but all I care about is that the home sold and kept us from going into foreclosure.
For those of you here in the Twin Cities that have their homes for sale, or are planning on putting your home on the market soon, I am offering the first 10 people who contact me via email a free St Joseph home kit. Make sure to include your name, phone number, and local address so I can send it to the correct home. (One thing, you must be a home owner, not a Realtor or one of my avid real estate blogging buddies) :).
Wednesday, October 24, 2007
The Oprah version, which is much shorter is first. Take a look at it:
Below is the entire lecture that is sweeping the Web, which is over an hour long.
Monday, October 22, 2007
Sunday, October 21, 2007
Saturday, October 20, 2007
Today, I received a card on our door by a local lender who was advertising an open house for a home being sold without agent representation. I think it's great that some owners feel they have the ability to sell a home on their own, but I don't always recommend it. In today's case, the lender had the statement above on the card.
My problem with this is that no buyer should walk into a For Sale By Owner without their own representation, and here is why:
- Confidentiality: The seller is going to engage you in a conversation and seek personal information from you that you might feel is confidential. However most buyers will feel obligated to talk and unfortunately will talk too much. Buyers need to understand that any info they divulge could result in them not getting the best deal, or paying too much for the home. Sellers WILL use what you say against you during negotiations.
- Disclosure: The sellers have chosen to forgo any representation, which means they may not be following the law when it comes to disclosure. They also may have not measured the home correctly and that 2500 square foot home you think you are getting actually includes the garage square footage as well. Having an agent with you will ensure you get the correct information.
- No Deal: If you show up at an open house by a FSBO without your agent, the seller could claim that they "found" you on their own and state they are not obligated to pay your agent their rightful commission. This either means you will have to pay your agent the commission out of your own pocket, decide not to purchase the home, or buy the home without representation and take on the risk of going it alone. With the litigation happy world we live in, I highly recommend you have an agent by your side at all times.
- Private Showing : by going to an open house hosted by a seller, buyers will not be allowed to walk the home by themselves. Sellers don't trust you and will follow you room to room, trying to sell the home. The problem with this is that instead of seeing the details of the home and how it can fit your needs, you will be listening to the seller, and most likely be getting annoyed. You will miss important aspects of the home which could have sold you on purchasing it.
- Representation: and lastly, don't let anyone tell you not to bring your agent. It is your right to have someone representing your interests at all times. If a seller insists for you to ditch an agent, ditch that seller. Most likely any transaction pursued with them will result in alot of unneeded headaches.
Please know that I am not against home owners selling by themselves. I have just run into a couple that are dishonest from the start and actually refuse to show a home if a buyer has an agent. In these cases, it is much better if the buyer passes the home by. I have also met many sellers who are very agent friendly and these transactions have ended with two happy parties. What ever you decide to do, do so with the advice from a real estate agent. They could just save you thousands of dollars during negotiations and save you from a possible lawsuit in the future.