Homes MSP Real Estate Blog

Home Inspections for Home Sellers, Part One

If you’re planning on selling a home in the Minneapolis or Saint Paul area, there is a good chance you will need to have a home inspection done before you sell your house (possibly several).   There are two types of home inspections, private and city.  Today, we’ll talk about city inspections. 

City inspections are required in 13 metro cities, including Minneapolis and Saint Paul.  Click Download presale_inspection_requirements_0907.pdf  for a full list with specific requirements for each city.  These are inspections that must be done by a city employee or sub-contractor for the city before the house is sold, and in many cities, before the house is even offered for sale.  Some cities, such as Saint Louis Park, do code compliance inspections and require repairs to be made on things that aren’t up to code.  Other cities, such as Maplewood, require only a disclosure report, and no repairs ever need to be done.

These reports are commonly referred to as Truth in Housing, Time of Sale, or Point of Sale inspections, among many other terms.  I am calling these ‘city inspections’ for lack of a better term – it would be nice if every city could call their inspections the same thing.  While on that topic, it would also be nice if every city had the same requirements!  In Minneapolis , you need a working smoke detector on every level of the home.  Bloomington requires the same, plus a working detector in every bedroom.  In Saint Paul, you only need one working smoke detector in the home, but it needs to be hardwired. 

If you’re selling a home in the metro area, check with your realtor or home inspector to see if you need to have a city inspection done on your home, and discuss with your inspector ways to get your house ready for the inspection.  Next week, we’ll talk about some generic things that most cities require for the city inspections.

Reuben Saltzman, Structure Tech Home Inspections - Email - Website

Where do I begin? ...for buyers

Whether you are buying your first home or any one thereafter, the process starts in the same place...assessing what is available for sale that fits your needs and how much you are financially prepared to spend on a home purchase.

Buyers (over 80%!) often start by doing online searching, both looking at properties for sale and for general information. Next step is often going to some open houses to get a feel for neighborhoods and what is available at different prices. At this point they often talk to friends and family to ask if they have any good recommendations for lenders or Realtors.

That's what the couple who closed on this house yesterday did. They got a lender recommendation,  who in turn connected them to me as a Realtor. It just as often works the other way around...connecting with a Realtor first. As professionals we have a network of other trusted professionals to assist our clients every step of the way as needed.

Sometimes people find Realtors to represent them online, sometimes at an open house. What is most important is that it's someone you are comfortable working with and feel you can trust. The trust part is why people so often start with recommendations from friends and family...buying a home is probably one of the biggest purchases you will ever make and it's important that you feel confident the person you are working with is looking out for your best interests.

If you're in the mood for house and Realtor shopping this weekend, stop by my open house at 2753 Georgia in St. Louis Park on Sunday from 1 to 3...I'd love to meet you!

Sharlene Hensrud, RE/MAX Results - Email - Website

It's a great time to buy a home.

There have been many mortgage guideline changes in recent months, but there is currently money available at relatively low, fixed interest rates for those homebuyers who want to take advantage of it.  The fact is that homebuyers currently have the opportunity to purchase a home at a lower price and pay a lower interest rate than they could have a year ago.  I'm seeing homes purchased at bargain prices and financed at a low fixed interest rate.

Why aren't more homebuyers jumping into the market right now?  I have watched the up and down cycle of the housing market many times in my 31 year career.  The tendency seems to be for many prospective homebuyers sit on the sidelines when home prices and interest rates are both low, waiting for some absolute assurance that they will be picking the very best time to purchase a home.  Many homebuyers wait too long and then discover that both home prices and interest rates increased.

No one knows for sure if housing prices or interest rates have hit the absolute bottom yet.  What we do know that at some point in the future, both home prices and interest rates will higher than they are today.  If you are planning to buy a home, don't wait too long.

Lou Auger, Summit Mortgage - Email - Website

Signs

As I reflect over the past week it seems that I have been seeing signs...

   ...signs that spring is coming in spite of the long hold winter has held on us this year. Thanks to our daughter-in-law and grandson for these beautiful Easter eggs, sure signs of spring.

I have also been seeing some market signs...

...I had breakfast with a financial advisor last week who talked about what a wonderful opportunity it is for buyers right now. It's fairly obvious for buyers without a house to sell, but it's also a great time for move-up buyers. Even if you have a house to sell first, the savings on your purchase will likely more than offset the lower price you might receive on your sale...the more you plan to move up in price, the greater the opportunity.

...I spoke with a lender who talked about how FHA financing is filling the gap in conventional low-money-down financing so even though 100% financing may be gone, 3% financing is still available through FHA...and loan limits have increased to $362,790 for even more opportunity.

...I read an article by a commentator from Inman News asking "Is the end in sight?" One reason given was that investor funds are finally being channeled into credit markets where it is needed instead of commodities. We won't know when the crisis is really past until months afterwards as we look back, but the fact that financial analysts are even talking about an end is a positive sign.

...yesterday's report from the Minneapolis Area Association of Realtors showed that new listings are down 6.9% year-to-date compared to last year, and the number of newly signed purchase agreements jumped significantly from the previous week. Let's hope it's a sign that we're starting to come out of the snow.

Bottom line is, if you or someone you know has been waiting for the right time to buy it may be now.

Sharlene Hensrud, RE/MAX Results - Email - Website

Transitions

Transitions  occur throughout our lives, and often times also include changes in housing. For first-time homebuyers it's often a transition from renting to owning your own home. Move-up buyers often need more space as their family needs grow. Then as children grow and move out needs change again. This empty nester stage often circles back and frequently includes downsizing.

Yesterday I was out looking (in the beautifully falling snow on the first day of spring!) with a couple who is planning to downsize. They plan to sell their stunning three-story historic Minneapolis home pictured below (insider tip!) and transition to something smaller.

In any transition, it is essential to think about the reasons for your move so your objectives are met. Equally important is identifying what it is that makes a home feel like home to you. Matching where you live with your unique sense of place can make a world of difference in how you feel about where you live, as well as in your whole sense of well-being.

As you prepare to move think about what you will be happy to say goodbye to in your current home... what you will miss... and what you are looking forward to in your new home. Keep in mind that you can make changes in the interior decor fairly easily, it's harder to change the structure of a home... and that you can't change where it's located and what's around you so that is vitally important. You have likely heard that the three most important things in real estate are location, location and location. Most often people are referring to property values and ease of re-sale, but equally important is its personal value to you while you are living there.

Most people know when they have found the right home for them...it just feels right. Every home has a buyer, it's a matter of finding the home and location that has the right fit for you.

Sharlene Hensrud, RE/MAX Results - Email - Website

Spring is here!

I think it's a few minutes before it's officially spring, but this is close enough. I looked for a bouquet of daffodils, which have been my sign of spring from way back but they don't seem to sell them anymore. I opted for a bouquet of daisies, which also make me smile.

Too bad short sales aren't making me smile. I had a client who wondered if a short sale meant a short time to close. Don't we wish! The banks are so overloaded short sales feel more like long sales...with waits of a month or more just for a response of any kind.

Of course on the flip side is getting a property for a good price...something that can make a buyer smile. For now since I have multiple clients waiting to learn if that is true I'll have to settle for daisies...they have such a sunny look they always brighten my day.

Happy spring!

Sharlene Hensrud, RE/MAX Results - Email - Website

Short sale musings...

Yesterday morning I was out looking at homes with a buyer ( in the falling snow!) and at least half of the properties we saw were short sales or foreclosures. In fact, my buyer found one she liked and considered making an offer...until I called and talked to the listing agent. We learned that it was a short sale with two mortgages involved...there were already two offers on the property and another may be coming...they had already been waiting a month for a bank response...AND they just learned that the two banks may not come to an agreement so they may not be able to negotiate a short sale at all!

Just as the snow is slowing down the arrival of spring, could short sales be slowing down pending sales? The weekly market report from the Minneapolis Association of Realtors yesterday reported that accepted purchase agreement are behind last year at this time by 18.7%. There has never been a bigger supply of homes available...home prices are good for buyers...interest rates are again approaching historic lows...so why are homes not selling?

One reason is probably the loss of 100% financing...with that gone, some buyers have to re-group and find other down payment sources or take time out to save more.  Case in point, I have a client doing exactly that, waiting another 6 months or so before selling so she has more funds available for her next purchase...and someone who may be interested in purchasing her home is also waiting to save up for her down payment.

The change in financing is an obvious reason for the lag, as buyers play catch-up after the rules have changed. But I hadn't thought about short sales being a factor in slowing down pending sales until yesterday. Could it be that buyers are still writing offers, they just aren't being negotiated as quickly?  In addition to dragging down prices, short sales may also be contributing to a slow-down in the number of accepted purchase agreements as the offer process stretches out from days to weeks and months. Just my musing for the day...

Sharlene Hensrud, RE/MAX Results - Email - Website

I Love Crate & Barrel

The new Twin Cities Crate & Barrel store opened last Thursday and we visited for the first time on Saturday. It was awesome...and extremely busy!

I must admit I have a special interest in addition to loving the store...our son is the designer for the new furniture store and we're mighty proud of him. Judging by the turnout for opening days, it appears there are plenty other Crate & Barrel lovers in the Twin Cities as well. Hats off to a great new store and a job well done!

Sharlene Hensrud, RE/MAX Results - Email - Website

The Waiting Game

The media has been talking plenty about the effect of foreclosures and short sales on housing market prices...it was on the front page of the Star Tribune again yesterday. While they may come with bargain prices, they also have a flip side. They are often in poor condition, which means your new home could become a 'money pit'. Be cautious if you are buying your first home and have limited resources.

Another effect you may not have heard about is the lengthening of the offer process. It says in our Minnesota purchase agreements that 'time is of the essence' and that usually means that sellers respond to an offer within 24 hours or less. When dealing with banks in short sales and foreclosures, however, time is often of no essence.

As a case in point, I have clients who are right now waiting for a response from the bank regarding a short sale. They submitted their offer February 18th...it's now 26 days and counting...and still no response from the bank. I attended a seminar on short sales recently where the presenter said the longest he had waited for a response was six months!

If you have a closing deadline, short sales (before foreclosure, but where the bank accepts less than the full mortgage balance as full payment) may not be your best option. Right now I'm thinking maybe my client's proposed closing date may in fact be the bank's response date!

Sharlene Hensrud, RE/MAX Results - Email - Website

The Silver Lining

One of the big reasons for the current state of our real estate market has been declining affordability. With home values outgrowing income almost three-to-one from 1992 to 2005, it should come as no surprise that it was unsustainable. While people often refer to our current market as a 'down' market because of declining values, perhaps a more accurate description would be a 'correcting' market.

The silver lining of the current 'down' market is the 'up' side in terms of affordability.  Housing affordability for March 2008 shot up to the highest figure in a long time!

The Housing Affordailibty Index (HAI) increased because of a decline in sale prices and increased consumer income, in spite of interest rates drifting upward.

Sharlene Hensrud, RE/MAX Results - Email - Website