Monday, December 29, 2008
Sunday, December 28, 2008
It seems like everyday I run into a local real estate agent who does not know the basic rules and laws of Buyer Representation. They tell prospective buyers or their clients that there is "no need" to sign an agreement, and then people wonder why I make them sign one. The fact is, here in Minnesota, you are not represented until you enter into a written agreement with a brokerage.
Upon first meeting an agent, he or she should give you what is called an Agency Disclosure form. This form is just a disclosure for the different types of representations available for sellers and buyers, which are:
- Seller's Broker
- Buyer's Broker
- Dual Agency
You'll notice that I said the disclosure is JUST a disclosure. It is NOT a contract for representation. People always get confused over this one. If you want an agent to represent your interests, then you must, by Minnesota law, enter into a written contract.
Yep, that's correct...a written contract/agreement.
So here's a scenario: Buyer Bob calls Agent A and tells her he just moved to the area and needs to find a home. Agent A meets with Bob, finds out his needs, and they go house hunting. Buyer Bob really likes a home and wants to put in an offer. Agent A doesn't return his phone calls. After two days, Buyer Bob finally hears from the agent and is told the agent is working with another client on the same home. Bob is really upset and wants to know why "his agent" is not putting his best interests first. Agent A reminds Buyer Bob that he refused to sign a Buyer's Representation contract, and so the Agent owes no fiduciary duties to Bob.
Hmmm...what's going on here?
Well, on the disclosure form that was presented to Buyer Bob, it reads that if a buyer or seller does not enter into a written contract, that they:
"will be treated as a customer and will not receive any representation from the broker or salesperson...and will be working as a facilitator"
Yes, there is a difference between a "client" and a "customer". Buyers and sellers do not become clients until they sign a written agreement with an agent. So, this leaves us with the question, what is a facilitator?
For the simplest definition, a facilitator performs limited services for a buyer or seller. They do not owe any Fiduciary Duties to the customer, except confidentiality. Oh, no, I have brought up another topic! What the heck are Fiduciary Duties?
Whenever an agent represents a client, that agent owes the client certain duties:
- Loyalty (agent acts for the client's best interests)
- Obedience (agent will carry out the client's lawful instructions)
- Disclosure (agent will disclose all material facts known by the agent)
- Reasonable Care (agent will use reasonable care in performing duties)
- Accounting (agent will account for client's funds received)
Now I ask you, what type of relationship do you want to have with an agent? One in which you can actually say she is "your agent" (because you entered into a written agreement). Or do you want the other one, where no one is really looking out for your best interests and you are left out in the cold, blowing around, lost in the wind?
Thursday, December 11, 2008
For the price of $6.3 Million, Minnehaha Falls will have its crumbling retaining walls repaired, hiking trails fixed, creek banks stabilized, etc. Work will be going on during the winter because the area will be frozen over, and workers will not have to fight the water current. I visit Minnehaha Park a couple times a year and the banks are indeed eroded very badly. As long as the parks department keeps the renovations natural looking, I think everyone will welcome the improvements.
Wednesday, December 10, 2008
- First, we had to wait for the property to be assigned to a short sale rep in the loss mitigation department. (Some banks will not do this until an offer comes in). Sadly, this delays the process.
- Next, we have to wait for a BPO (broker's price opinion) to be completed on the home. It follows the line of a CMA (comparative market analysis) and falls short of an appraisal.
- Once we here from the bank regarding the offer, two weeks after the initial submission, the short sale rep decides to counter offer, reducing the buyer's requests and slashing the real estate commission. (Don't get me started on that part)
- Next we have to negotiate back to the bank and tell them the deal will walk out the door unless they give the buyer such and such for closing costs. Not too mention that if they try and make the seller sign a promissory note at closing, the owner will just let the property go into foreclosure and the bank will lose everything.
Now, I call the bank at least two times a day, trying to push the transaction along. Christmas is just weeks away and both parties want to be in and out before then. Today I find out I have to wait until end of the week for the final approval because some other person at the bank has to sign off on the deal. Geez!
Needless to say, but the whole thing has been more aggravating than I can put in words.
People say real estate agents don't do anything and are not worth the money, but I tell you this, if you had any idea of the "behind the scenes" things we do to keep a deal from falling apart, you would change your mind. Someone once told me that real estate agents earn their money best, by keeping the deal out of trouble, and that when the deal does go south, buyers and sellers really see our true value. You can kind of equate it with insurance. You pay into it for years, and nothing happens. But finally when something does happen, you thank God for having the safety net there, even while the whole time, you didn't think you needed it.
Tuesday, December 9, 2008
Monday, December 8, 2008
Wednesday, November 26, 2008
Sunday, November 23, 2008
Tuesday, November 11, 2008
- Average Days on the Market (DOM) : it is taking on average 108 days for a Minneapolis condo unit to sell, up an amazing 28% from this same time last year!
- Inventory : the good news is that the number of condos for sale in downtown has decreased by 28%. This means there is less competition compared to 2007, and because of this inventory decrease, the Average Price for condos has increased by 5.6%. The only downside is that the number of closings so far in 2008 is pretty much the same as that in 2007.
- Foreclosure Rate: So far this year, of the 571 closed sales, between 7-8.5% of them have been foreclosures or short sale properties. I don't know about you, but that is a pretty low portion of condo sales. When compared to the average Twin Cities real estate market, which is at 35% rate of foreclosure, it is really quite good.
Monday, November 10, 2008
My friends in Florida would have you believe that living in the north during winter is like living in hell. Funny how I feel the same way about Miami in the middle of summer. At least in winter, you can put multiple layers of clothing on to keep you warm; however, in the hottest summer (with lots of humidity) you can strip down to nothing and still be roasting hot.
So for those of you new to Minnesota this year, or for those of you thinking of moving to our beautiful state, this week is Winter Hazard tips week. For the cliff notes version of winter survival, check out these quick tips.
Today it is Winter Weather Overview, where you can learn the basic winter terms like Lake Effect Snow and such. With 10,000+ lakes, it is very common to have white outs on one side of a lake. To make the rest of the safety information easy for you to find, follow the links below for each days winter weather tips:
- Tuesday - Outdoor Winter Safety
- Wednesday-Winter Fire Safety
- Thursday- Indoor Air Issues, Insurance
- Friday - Winter Car Safety
Remember, winter in Minnesota is beautiful. One thing unique about the north is that people don't let the cold weather keep them indoors. Everyday you can find people around Minneapolis and Saint Paul enjoying a walk down the street, or taking a jog around the lake. To my friends in Florida, while I do miss the Gulf of Mexico, there is something to enjoy about Minnesota when you can actually have four seasons.
Friday, November 7, 2008
Saturday, November 1, 2008
Monday, October 27, 2008
Friday, October 10, 2008
Tuesday, September 23, 2008
Created around 1883 by the Board of Park Commissioners and originally named Central Park, the park was renamed in late 1890 to honor Charles Loring who served as a Minnesota Supreme Court Justice and who was the first President of the Board of Park Commissioners in 1883. Loring is now known as The Father of Minneapolis Parks.
For the sports enthusiast, the park features basketball courts, tennis courts, biking path, and a tot-park for the kids. For dog lovers, there is now an off leash area at the northeast corner of the park.
One part of the park that I love is the perennial flower garden that is blooming spring through fall, which is very relaxing too. Surrounded by brick trails and lounging benches, visitors can sit back and enjoy the day while being only minutes away from downtown.
To learn more about the park visit:
Friends of Loring Park
Loring Park Neighborhood
Thursday, September 11, 2008
The original owner of the home was Fred Soderberg, which looking at original permits, contracted out the work himself. All in all, it appears the homes was built for around $11,000. He didn't live in the home very long, for the 1934 Land Survey conducted by the City Planning Commission shows a new owner by the last name of Kavanaugh was in possession, with 8 people residing in the home, including the maid.
With almost 4000 square feet and five bedrooms, the home sits on a large corner lot. It sold in 2007, for the first time in 35 years, at a price of $832,000.
Saturday, September 6, 2008
So, yes, this means YOU, all home owners in Minnesota, must have CO detectors or you are breaking the law! But some how I doubt most of you will be running out and picking one up. Just know that when you go to sell, you should make sure to have one within 10 feet of all bedrooms. Failure to comply with the law could hurt your wallet in the future...with the sue happy society we live in, a buyer that is later injured by Carbon Monoxide poisoning could come back and take you to court for damages.
Monday, August 25, 2008
Thursday, August 21, 2008
Molly L. Heise, of Chaska, was sentenced to six years or money-laundering in which she stole more than $2.5 million from the clients of her real estate closing company, Profile Title and Escrow. Her wonderful actions win her the prize of 70 months in prison and three years supervised release. She also has to pay more than $3.9 million in restitution.
Wednesday, August 20, 2008
Foreclosures are vacant homes that the bank really doesn't care about. All they want to do is sell them. Many of the agents I have run across that specialize in foreclosures don't ever check up on the homes they list. Sometimes they take a photo of the home from their car window. If you are lucky, you might get a photo of the back of the home too. But that is about all they do.
Take for instance, the little birdie in the photo. He has been dead a while on the second floor of a foreclosure I looked at a few weeks back. He took the pleasure of dieing right in front of the only bathroom in the house, so my clients were a little put off by his presence. It didn't help matters to then go into the next bedroom to only have another dead bird laying near the attic door. Strike two....my clients, though at one time interested in the house, decided against it. I took the liberty of calling the agent and leaving them a message about the dead birds. Who knows if they ever cleaned up the mess.
But my point it, you never know what you are going to find inside a foreclosed home, so it is best to keep an open mind. Some homes have mold problems, some have updating issues, some need to be torn down, while others have been torn apart by the previous tenants. I heard about one owner in Prior Lake who has been foreclosed on and is still living in the home. He is "getting back" at the bank by stripping the property of everything he can, and then selling it on Craigslist. Supposedly someone bought his retaining wall, and dismantled it stone by stone. He also sold his deck. I heard his shingles are also for sale for anyone that wants to come take them off his roof.
Foreclosure makes people do funny things, and lets buyers see anything you can imagine.
Monday, August 11, 2008
To see a few pictures of my approach to Minneapolis, check out my Minneapolis Luxury Real Estate Blog.
Wednesday, July 23, 2008
Butterfly gardens are a great place to visit with kids and to also try to take photos of these beautiful creatures. You have to be quick to get a good shot. I went through many blurred photos just to get about seven photos that were decent. I used the macro setting on my camera and got really close to the butterfly for each shot.
Tuesday, July 22, 2008
Monday, July 21, 2008
Thursday, June 26, 2008
Sound unfair? Well, it is.
Thankfully, someone has finally figured this out, and surprisingly, it is Fannie Mae and Freddie Mac. Now, buyers will pay the same amount for down payments, no matter where the property is located. Both factions have suspended their loan penalties indefinitely.
Now there are still many lenders out there that refuse to lift their penalties, but if the loan if backed by Fannie Mae or Freddie Mace, relief is available now. For heaven's sake, how can you get a market out of decline if you make it harder for low income families to purchase a home?
By the way, buyers can also get funding through FHA which also does not have a declining market penalty for home purchases.
Wednesday, June 25, 2008
Monday, June 16, 2008
The Minneapolis Association of Realtors has reported the following:
"Bringing our market back to balance involves a two-step process: supply needs to draw down, demand needs to bounce back up. It's as simple as that. So far, 2008 is proving to be the year that we can confidently check the first item off this list, as the number of homes for sale continues to dwindle relative to one year ago. There are currently 33,219 homes for sale in the Twin Cities region, down a hearty 4.9 percent from one year ago, a year-over-year figure which should continue to drop in the months ahead. New listings for the week ending June 7 were down 13.9 percent from a year ago, while pending sales declined by a smaller 5.3 percent for the same time period comparison.
All in all, we're halfway there: supply is coming down, but demand is only flattening, not coming back up just yet. Regardless, the signs are encouraging."
Saturday, June 14, 2008
Today I received some feedback on one of my listings. I had to chuckle at this one. Apparently I have been asked to put new photos of the home on the Multiple Listing System because the home looks nothing like the photos. In fact, the home is too small. Hmmm...the home is only 1000 square feet, so what were you actually expecting when you walked in?
I can only presume that my photographs made the home look like it is 2000 square feet, and now I can understand why the buyer was upset. Of course, the room sizes are available as well, but I guess they missed that one too.
Bottom line is that I take really good photos for my clients which helps receive more traffic through the home. Not everyone will be happy with a home they see, but if my photos get them in the door, at least they will know if it works for them. By the way, I won't be changing the photos any time soon.
Wednesday, June 11, 2008
Monday, June 9, 2008
Take, for example, a home that closed this past month at a price of $145,403. The original list price started out 138 days ago at $227,000. The owners had bought the home for $250,000. Instead of going into foreclosure, they were able to get the bank to agree to a short sale. And some short sale this was!
The buyers are now sitting on a home with instant equity because they bought it greatly under market value. If they hold the home for at least five years, there is a very good chance they would make a good resale profit on the home, should they sell in the distant future. The positive point to remember is that they made an offer to the sellers and were not embarrassed that is was low. I am sure the sellers were happy just to get an offer, and while difficult to swallow, the bank is probably happier that it won't have to deal with the home as a foreclosure.
If you are in the market to buy, don't be afraid to look at the short sales...you can get a great deal right now all over the Twin Cities for homes that are in excellent condition.
Saturday, June 7, 2008
Friday, June 6, 2008
Thursday, June 5, 2008
Wednesday, June 4, 2008
Tuesday, June 3, 2008
Over the last five years, with the increase in home "appreciation" equity, many home owners could afford to renovate their aging homes. Trying to make the home more modern, it was common to put granite counter tops in, hardwood floors, stainless steel appliances, and exotic wood cabinets. Builders jumped into the fray as well and offered all types of previous "upgraded" amenities as standard options.
Rehabbers that bought homes to fix and flip were making a killing on net profit, so to make their homes more appealing, they were putting in the best products. I remember watching one of the cable home improvement shows where a 900 square foot home was being rehabbed, which they priced moderately, but it had granite countertops and high end appliances. As a former rehabber myself, a few things you have to look at when considering what to out fit the home with are:
- value of the home
- type of buyer
- location of home
If the home is not in a great area, or has a low value, then one should not over build the home with luxury amenities that are not supported by the surrounding homes. Unfortunately, I saw this happening time and time again over the last several years, and it looks like buyers are now used to top of the line, even in the smallest homes.
One new home buyer I represent has been looking at homes near Lake Nokomis in Minneapolis. They can only afford a certain amount of home, which means they cannot buy a home even a few blocks from the lake. Most of the homes we are looking at were built 30+ years ago, some need minor updating, while others may need a ton of work. Obviously, the less work to put into the home the better for my buyers.What has surprised me most is that we have found a few homes that are PERFECT for them, being completely renovated. The only thing they don't have is granite countertops, high end appliances, etc. The buyers refuse to accept any house that doesn't have these amenities, I have come to learn. I have tried to explain to them that in their price range, these "luxury" items are hardly found, but they sadly refuse to believe it.
So my question is, have buyers, especially first time home buyers, been spoiled by the boom years? Growing up in a lower income family, one thing I learned was that sometimes you have to work your way up to what you really want. We bought a modest first home five years ago, and it took three years to finally get the money to tile the floors. After hard work, we were able to build a new, larger home, this last year.But it seems to me that the new generation of buyers no longer want to work for things. They want it all, right now. With the market haven fallen the last two years, many buyers now expect to get everything for nothing. Sadly, I have to try and bring current buyers into reality, but it is no easy task. Buyers are even shunning homes that need a little updating via carpet or new vinyl because they don't want to do the work later. Sometimes, you just have to look past these minor flaws if your goal is to get into a home.
So what's an agent to do, when buyers just won't come to reason? Well, I guess just keep showing homes until it finally sinks in because, after all, this is just one more learning experience for the first time home buyer in Minneapolis.
Saturday, May 31, 2008
There are many places up and down the Mississippi River to hike and enjoy the beauty of the area. Many times hiking has to be done very carefully because hills are steep, large rocks are plentiful, and deadly drops lurk around corners. But if you find a great location on a beautiful day, you can get some amazing views and take the most gorgeous photographs.
Thursday, May 29, 2008
The building shown in the photo is at 100 Washington Square, which gets a great critique by Rick and Claude:
"A big thanks to City Hall for issuing the building permit for that monster. The best thing about owning an RW condo is you can't see the outside when you're inside. And don't look now, but there's 100 Washington Square, Minoru Yamasaki's blow-up of a 1970s computer punch card, in a blinding shade known down at Hirshfield's as Crest Whitestrips. On stilts, no less, with a skyway snaking under it like a mirrored python. Then there's the Metrodome. Oh well. Why kick a dog -- literally -- when it's down?"
Of course, with all the modern design going on right now, I have to wonder if in 20 years, we will be asking the same question "what were they thinking?".
Wednesday, May 28, 2008
One thing many new home buyers forget to think about are the costs that arise after you move in. One that we almost forgot about was that our home would need gutters, since they were not offered by our builder. Call it a warranty issue or something like that.
But anyway, having never had to fund gutters before, I called three different Minneapolis vendors for pricing. Two were referred to me and the other I picked up at a trade show.
The new thing in gutters is seamless construction. Less seams mean better looks, and you can get them in aluminum or steel. One company we met with promoted steel gutters and that they would hold up to anything, but at a cost of $3000, our wallet's heart skipped a beat in disbelief. We went on to look at two other companies who used aluminum gutters. They came in around $1250 and $1500.
Before anyone came out to give us estimates, we looked at all the places that would need gutters. Right away I knew the corner of the porch would be a problem (pictured above) because it had this small 90 degree turn. How the companies handled this problem was going to tell me how smart they were. The lower priced guys said no problem, but the expensive company tried to tell me that the only way to make the downspout work would be to have it follow the porch post down to the ground. They would bend it to fit the post, then have it go down the brick base. Now, I had to look at that and wonder what this guy was thinking. I can't even begin to tell you how ugly that would look, not to mention take away from the architecture of the craftsman inspired post design. I'll let you guess who we didn't pick!
In the end, we decided that "gutters are gutters" and that there was no need spending a lot of money on these things. Even though the warranty is only good for 10 years, we don't plan on being in this house that long. Two weeks after closing, our new gutters were installed in a couple of hours. We even were able to get down spouts that matched the color of our siding to blend into the home. They look great!
The best advice I can offer is to remember the gutters:
- If you don't put them on, you will have a little moat running around the home from water cutting into the ground.
- Ask your neighbors who they used and get referrals, with at least three different estimates
- Don't be afraid to ask questions...go with your gut feeling
Tuesday, May 27, 2008
Wednesday, May 21, 2008
Having some personal investment properties all ready under my belt, I know some things about the topic. But I could never say that I know it all. That's why I take classes like this, to further my knowledge. My personal belief is that real estate agents cannot be any good at the job unless they take the time to go beyond just putting in their required continuing education units.
When you think about hiring a real estate agent to represent you, you should really check into their educational background. See if they have any real estate designations beyond the GRI, as this is a pretty simple designation to get. You might even ask them what was the last class they took and when. The subject matter could give you a good idea of how in depth the agent goes to further their real estate education. And of course, you have to like them too!
Monday, May 19, 2008
One of the great reasons for living in Minneapolis is the public use of the lakes and the surrounding parks. Residents and visitors can hike, bike, jog, stroll, or take a relaxing kayak - canoe ride on one of the lakes. Lake Nokomis has a public beach area that is perfect for summer swims in the lake. Lake of the Isles has a dog park at its south end, which needless to say, is used every day for a good doggie social hour.
There are just so many fun things to do in Minneapolis, and lake living is one of them.
Sunday, May 18, 2008
Saturday, May 17, 2008
Now if a client tells me they only want to search in a certain school district, then it is OK to carry out their wishes. What kind of agent would I be if I sent them to an area they didn't want? The kind that doesn't get paid, that's what.
So when the question of schools comes up when house hunting, the first place to look to determine a homes surrounding schools is the MLS fact sheet. Now, this might come as a shock, but these have been known to be wrong every now and then. The next best place to look is the school district website, which usually has maps, showing what school boundaries your home falls in. When you really want a solid answer, then the last resort is to call the district yourself.
But even when a buyer has done their due diligence and is satisfied with the results, things can change after you move in. Over time, and as little as every few years, school boundaries can change. Case in point, the city of Farmington is building a new high school, completion set for 2009. The old high school is going to become a second middle school for the area, so of course, the school boundaries are going to have to be reset, to accommodate the new schools. Most likely, there are going to be families affected by this change, and children are going to be attending different schools then originally intended.
There are also some elementary schools in Minneapolis and Saint Paul who are talking about closing down certain schools for lack of money. Many families will now have to truck their children many miles to the next school, and may not get a choice on what school their children attend.
Now if you had just moved into the area and were planning on sending your kids to school A, but a year later find out they have to attend school B, upset would probably be a good term to describe your feelings. But as the saying goes, "That's the way the cookie crumbles". So the best advice I can give is to not treat the school boundaries surrounding your home as the word of God...things can change.
Friday, May 16, 2008
The school principal says she is doing this to alleviate injuries, but also to make sure aggression between children does not happen. Now, I understand her thought process, but for goodness sakes, when are we as a society going to stop treating our children with white gloves?
I have heard of schools that do not allow kids to play kickball, one of my favorite games as a child, or dodge ball, because someone might get hit by the ball. These sports not only foster quick thinking, agility, and exercise, but they also teach our children proper sportsmanship and how to treat others. In today's society, however, we would rather our children be injury free, instead of building confidence and growing into life.
There are even schools who do not allow hugging or hand holding. See how ridiculous this is getting? In our litigious society, schools fear lawsuits from parents for physical and emotional injuries to their children. No longer is anything an accident...someone has to be to blame.
Elementary school is the beginning of life amongst others. Children have to learn manners, sharing, dealing with loss, peer pressure, physical changes, bullying, etc. If we shelter them too much, as is currently happening at our public schools, the only thing we will accomplish is raising children who cannot think for themselves, nor take care of themselves.
WE as parents are the only ones who can change this scary trend. It's time to say enough is enough of these silly rules, and just let the kids BE kids!