Friday, August 31, 2007
Thursday, August 30, 2007
It was such a beautiful day today that I had to take a photo of the sky, and the big fluffy clouds that were floating along with the breeze. Minnesota has on average 205 sunny days a year, about 58%. Spring comes late and fall comes early here in Minnesota, at least compared to other parts of the country. Having lived in San Diego and Pensacola, where seasons don't really exist, it is nice to have a Midwest Fall on its way!
Tuesday, August 28, 2007
We have been looking since January at the resale market, but could never find what we were looking for. When we did find it, the home was overpriced and the seller was unwilling to negotiate. (One seller was months away from foreclosure, and refused to take anything but full price.) Beginning to burn out, we took a stab at new construction.
Up until a few months ago, builders were also sticking to their guns and refusing to negotiate or offer incentives. But with the Twin Cities Association of Home Builders reporting the worst months for permits in June and July, builders seemed to finally wake up and smell the coffee. Here are some rules we stuck to. You should to if you intend to buy new construction soon.
Rule #1 - Narrow down the areas you want to live in, then look for builders who are currently in that market.
We knew we wanted to live south of the Twin Cities. My husband didn't want to be too far away from work, and South of the Minnesota River looked to be our best bet.
Rule #2- Take into consideration PRICE, LOT location, and Amenities. Know what you want.
In almost every subdivision we looked, we were able to find a lot we could live with. Our goals were to have a big backyard for our growing boys to run around on, and enough square footage for 3-4 bedrooms and an office. (I work from home)
Rule #3 - When figuring out what the cost of the home will be, pile on the amenities. The number will most likely be more than you want to spend, but you can work with it.
Once we put in everything we could imagine, the home for each builder was about $20,000 over our planned budget. We then looked at what we could take out, things we could live with out, or projects we could do at a later time. Getting rid of the items we would never use or need also helped.
Rule #4 - It is a Buyers Market. If you don't ask for concessions, you won't get any!
A semi-custom builder we spent three weeks with designing a home, gave us a computer generated "price". Being a Realtor, I knew this was a 2005 number and unrealistic. The builder was offering a $30,000 "off the lot" incentive, but told us to make an offer. We offered $65,000 less than his computer price...he countered at $50,000 off.
Another builder we spent two weeks with designing a home, told us they DON'T negotiate. Then they let us know they were running a special promotion, giving $30,000 off everything, money toward landscaping, and paying a large amount of closing costs. (Hmmm, sounds like negotiating to me!)
SO...who did we go with?
Well, this IS the pilot episode, and I have to leave you with a cliffhanger. So tune in for the next episode of "Confessions of New Construction" in a few days!
Sunday, August 26, 2007
Saturday, August 25, 2007
Two terms that are always on the estimate, but sometimes never charged are the Loan Origination Fee and the Loan Discount Points. Many people confuse the two and you should understand the difference.
- Origination Fee : This fee is charged by the lender for servicing the loan and preparing the mortgage application, and can either be a set rate or a percentage of the loan. Typically in Minnesota, 1% is charged to the borrower.
- Discount Points : A Point is a one time fee charged by the lender. It does two things. One, it increases the lenders yield on the loan, about 1/8 of a percent. Second, it allows the buyer to "buy down" the rate over the life of the loan. A Point is typically 1% of the loan amount. If you plan on staying in your new home for a long time, paying additional points at the beginning could benefit you by having a lower interest rate.
My two cents? I think origination fees are junk fees. Many lenders will tell you they "have" to charge this fee to make any money. However what they are neglecting to tell you is that some sell the loan shortly after you close, and get paid a fee similar to this from the investor who buys the loan. Some lenders will tell you they have to charge you a higher interest rate if you do not want to pay an origination fee, in order for them to make any money. But again, most don't tell you they get paid for selling the loan too. Also, if the origination fee pays for the work they do on preparing the loan, then why do they also charge you a "Preparation Fee" and also an "Application Fee"?
Make sure to ask questions on every fee that is charged to you. On a $300,000 home, a $3000 origination fee can take out a huge chunk of the money you were going to use for a down payment. And contrary to what many lenders will tell you, you DO NOT have to pay for an origination fee. Move on to someone else and save yourself some money!
Friday, August 24, 2007
Unfortunately, the one thing I cannot do, nor can any real estate agent, is give any advice that might considered of a legal nature. Since I am not a lawyer, it is illegal for me to speak as one. I know the home owner was not happy with my answer, but my hands are tied by the state. I was able to answer a few questions about the foreclosure process for him, which he was much appreciate of.
One word of advice I was able to give was to record the threatening phone calls. The debt collector was actually threatening the owner with bodily harm. I let him know this is a violation of the Federal Trade Commissions Fair Debt Collection Practices Act (FDCPA). You can file a complaint as the FTCs website if you think you have been a victim of abusive debt collectors. Don't take it lying down. Just because you owe money does not give anyone the right to violate the law to get money from you.
Wednesday, August 22, 2007
This weeks showcase home is located in Lowry Hill, just off downtown Minneapolis. Located at 1769 Dupont, the home was built around 1926 as a single family home. It has since been divided into two condominium units, with one on each floor of the home.
Tuesday, August 21, 2007
Sunday, August 19, 2007
Friday, August 17, 2007
Minneapolis home prices have been steadily declining over the last year. Resale homes in the Twin Cities have been the quickest to fall, and builders have been reluctant to give in to the price reductions. We have looked the last year at new construction but were finding that builders still wanted 2005 prices. It got to the point that the best option for us was to look at resales. Well, of course months went by and we just couldn't find what we were looking for, the most bang for the buck so to speak.
Finally we checked out a couple more builders and saw they were starting to negotiate their prices. Building permits were at their lowest in years and homes have been sitting for over a year.
-one builder came down from his 2005-2006 prices as much as $75,000, but we felt his homes were still too overpriced for this market. The problem was that he purchased the land at a record price in 2004 (the farmer made a killing off this developer) and he still needed to charge high prices for the lots to make up for his purchase.
-another builder wasn't willing to pay our closing costs. On his home, if he wanted us to pay his price, then we wanted other incentives, like paying for a buy-down. But he wouldn't budge...five months later, that lot is still for sale and the builder is trying to sell off the lots to another developer to get out of the subdivision.
-the builder we decided on, just so happened to be having an August promotion on his homes in which they were giving $30,000 in incentives, $5000 for landscaping, and $7,500 toward closing costs. The key was that his homes were never massively overpriced to begin with. We found a lot we liked with trees in the back (for added privacy) and negotiated a couple more items. It was a win-win for both parties.
Amazingly, the first builder called me yesterday and said he was willing to come down another $20,000 if we were still interested. Granted we loved his floor plan the best, and the location was top notch, we had to weigh our options. Go with him for the reasons I just stated, or go with the other builder who was offering a finished basement and a nice deck (both for the same price). Since we really wanted the most bang for the buck, we declined his offer. Our short term plan is to hold this house for five years, and then move to an area with more acreage. If we get a huge discount on adding the additional finished square feet in the basement now, then we will come out better monetarily when we go to sell. The first builder wasn't offering a finished basement or deck.
Granted we would love to wait until the spring to put a new home under contract, (as we feel the market is only going to get worse for builders), we decided to go ahead and get it over with. I mean, we have been looking for 8 months and it is starting to stress us out.
So, get ready for a fun couple of months. I will be writing a series called Confessions of New Construction during the building process, highlighting things that happen and taking photos so you can see the overall process. Building this home is sure to be stressful,especially since it will be built during the winter months, but hopefully I will only have happy stories to tell, and not horror ones. So check back periodically for updates!
Wednesday, August 15, 2007
Almost every city around the Twin Cities has watering rules in affect. Our local lawns are suffering much, as most people don't have sprinkler systems, and the pretty brown grass is everywhere. Real estate owners cannot water everyday and bans exist anywhere from 8 am in the morning to 6 pm at night. Most restrictions don't end until September 30 and could result in a fine if you sprinkle your lawn at the wrong time.
Of course having a brown lawn is not good curb appeal if you are trying to sell a home in this market. Make sure to keep it watered as much as possible. Get it GREEN. Buyers might understand our lack of rainfall this year, but they will not be so understanding when they view your home. Even the tiniest flaw matters with our supersaturated real estate market, and a brown yard will surely kill the chance of a sale.
Tuesday, August 14, 2007
Well this week the honor of being the top ice arena in the state went to our beloved Burnsville, just south of Minneapolis. The Burnsville Ice Center received the James Padgett Award which recognizes the constant improvement of ice delivery. The ice arenas recent updates to the concession stand, ice surfacer, etc helped it win the award. Another interesting reason Burnsville won was their dedication to growing Adult Hockey, a sport that is quickly becoming more popular every year. My brother-in-law already plays on a team in Chicago, and my husband hopes to get onto a team sometime next year.
Just to show you non-hockey states how popular the ice is in Burnsville, there are two buildings (pictured above), each with its own sheet of ice. This complex alone attracts over 350,000 visitors each year and has hockey, figure skating, learn to skate programs, youth and adult hockey, and curling. And yes, you can skate on the ice during the summer months!
Saturday, August 11, 2007
Friday, August 10, 2007
We found a builder that is offering alot of incentives in one Minneapolis subdivision, so we are checking out a couple lots and pricing out some options. Since we have been looking since January, we are in no hurry to buy. We also make sure to not fall in love with any properties. The last thing we need is to get emotional and pay too much because we can't let go.
Last week we walked away from one builder who is just not facing the local real estate reality yet. He will most likely have to take a loss on the lots as he bought them for too much in 2005; however, he is still praying for those uneducated buyers to come along that will pay his premium. Good luck to him...but we won't be those suckers.
Wednesday, August 8, 2007
The University of Minnesota Landscape Arboretum is located just 20 minutes west of downtown Minneapolis in Chaska. It encompasses over 1000 acres featuring woods, wetlands, various gardens, and model landscapes. There are also over 12 miles of walking trails for the nature enthusiast, as well as a 3 mile scenic drive for those that would rather enjoy the beauty from inside a vehicle.
The Arboretum displays different shows each season. Summer is a great time to view the roses in the Rose Garden in full bloom and the many varieties of lilies, wildflowers, and perennials planted throughout the park. More than just a display of wildlife, the facility also offers adult gardening lessons, children school programs, and cooking sessions. The University is very interested in the research of different plant species and has a separate division for each highlighted Eco-system.
The Minnesota Landscape Arboretum is open 363 days a year, only closed Thanksgiving and Christmas days. Various types of Tours are available depending on group size and what you would like to see. Admission and directions are as follows:
- Adults: $7
- Children 15 and under: Free year-round
- Arboretum members: Free year-round
- Free admission all day every Thursday through April 26.
- Beginning in May, free admission for all ages after 4:30 p.m. every Thursday.
Tuesday, August 7, 2007
Pets are wonderful! I love all animals, but right now just have a cat who has been with me for 12 years. My husband would love a dog, but with two kids running around, that is quite enough right now.
We love our pets, and treat them as one of the family. That puppy you just got is so darn cute. Who couldn't resist?
Well, if you are trying to sell your Minneapolis home, a cute little dog may not thrill everyone.
Yesterday we took a lunch break to view a home that looked amazing on-line. It had much of what we were looking for and was also in our price range. The listing company let us know a dog was in the home. This usually means the dog will be crated or in the garage. As we walked to the front door, I noticed the dog was in the front window, sitting on the back of the couch. He was a small poodle and immediately started barking when he saw us.
Ok, no big deal. So I opened the door. The dog rushed me and if I hadn't reacted quickly and shoved my foot and leg in the way, the dog would have run outside. When we were finally inside, the dog started jumping on us. My husband hates dogs that have not been disciplined and trained to not jump on people, so this was not a good sign for the home. We then began looking through the main level, the whole time having to endure the dog's non-stop barking. My husband finally shut the dog in a room to leave us alone.
But the damage was all ready done. We were so annoyed by the dog's behavior, that we became annoyed with the house. All the flaws now showed themselves more brilliantly and made us disenchanted. The dog was still barking in the other room. We just couldn't look past this bad experience and notice the good things anymore.
Our solution? We left before seeing the rest of the home...that's how mad we were. Of course we had to let the dog out of the bedroom. He proceeded to run over to my two year old son, jump on him, and nearly knock him over. My son wasn't expecting this and got scared, started crying, etc. Now I was really mad! (don't hurt a mom's kid in front of her)
So seller's, take the time to lock up your pet because they might just kill your sale. It did in this case. Here are some tips to think about should you have a family member with fur:
- Put your Dog in a Crate when your home is being shown.
- Don't rely on an agent to keep your pet inside if not crated. If the animal gets out and is injured, it is nobodies fault but your own.
- Put up the animal's food so kids don't get into it.
- Make sure the litter is fresh and clean. Poop on the floor is disgusting!
- Take into consideration that kids might be at the showing and be scared of the animal
- Check for pet odors before you sell can get rid of them.
Doing all of these things may not sell your home, but at least the buyers will be able to look through the pet's behaviour and actually SEE your home. If you really want your Minneapolis home sold, put yourself in the buyer's shoes and be respectful. Make the showing as perfect as possible!
Monday, August 6, 2007
As I-35W in Minneapolis is such a vital transportation artery, we anticipate major adjustments to our transportation infrastructure in the immediate disaster area. Three websites have emerged as logical locations for current information:
Metro Transit is another good resource for transportation options available to commuters after the bridge collapse. For instance, free rides will be offered all this week from certain Park & Ride locations. Click here for more information.
Sunday, August 5, 2007
Even though Minnesota doesn't live close to the equator, we still need to take precautions from the sun's strong rays. One way to enjoy the outdoors is to lounge in the shade under a canopy.
Popular here in Minneapolis and St Paul are Gazebos. Some are made of wood and attached to the back porch. Screening them in is useful to keep the bugs out and enjoy the evenings as well. You could go with the option to the left and just buy a simple metal frame canopy that will keep the sun and rain off of you. Touring the pond and landscape tour last week I saw the tiki hut above. It is a great variation and helps give a theme to your backyard.
The best time to buy patio furniture is after the summer is coming to an end. Yeah, I know, you won't be able to enjoy it for long this year, but you will save a ton of money and not pay retail. Pull it out next year and enjoy your great buy. Now if I could just find a home before the sales end!
Wednesday, August 1, 2007
Many people read my blog, so rest assured I am ok. I didn't travel to Minneapolis today as my son had a doctors appointment. I have experienced earthquakes when I lived in California and lived through three Hurricanes while living in Florida. Disasters are never fun.
At times like these, make sure you have an emergency plan. Tell family how to contact you other than by cell phones. Many times phone lines are destroyed or overrun by customers, making it hard to get through. And you never know when something like this will happen, so it is equally important to have your estate in order, should something happen. Make sure you have a legal will in place with specific directions about your family and financials.
You could lose a loved one at any time, so live everyday to the fullest!