Twin Cities Real Estate

New Rule for Buyers

 

Here is the new rule for buyers:  Buyers are not allowed to watch HGTV.  I was showing a house today and the first thing the buyers said as they walked into this $185,000 home was, "These sellers must not watch HGTV."  This was a started home in south Minneapolis built in 1910.  It would never have the look of the prosperities on those shows.  Buyers are creating expectations that will be almost impossible to fill.

 

When my daughter was a teenager we would go clothes shopping together.  It was always an experience.  She would go with an image in her mind of what the outfit would look like.  The problem was that she forgot to tell the clothes manufacturer to create it.  It just was not on any of the racks we looked at.  The same is true with buyers, when they see those shinny, prepped houses on TV, they expect all the houses they will walk into to look that way too.  It just is not real world.

 

Here is my rule: Be open minded with no expectations.  This is usually a  first home and they won't be in it more than 7 years or so.  Not all first homes at the below $200,000 price have everything.  Even if one were to increase their budget to $500 ,000 it would not have all the things they wanted.  House buying and being realistic do not often go together.  Once I had a buyer who was looking at $110,000 and I thought all the properties were almost unlivable.  She said, "Don't worry, in college we lived in even worse."  I loved hearing that!

 

So---no more TV for buyers.  Let them come to their Realtors with a blank screen.  I wonder if there is a way I can make them zombies so their house hunting will be easier.

We Can Make Happiness

There are many long faces in Minnesota today, because we did not get #4 to wear purple.  We were like kids at Christmas that believed we would get the pony we begged for.  We saw all the clues that lead us to believe it would really happen.  When we want something badly enough, we only see the positive signs.

 

For weeks this discussion of our future quarterback was in front of us and discussed up and down.  We had those neighbors in Wisconsin to put in their place!  Now that we know he is not coming, we don't even want to mention his name.  Yet, we are not over it.  We have to dig deep and find out why  he is not coming.  Has anyone thought that at age 40 perhaps he wanted to "grow up" and not feel the pains that are felt after the game?  Maybe this wonder guy felt he just didn't have the right stuff to play the season and look like the #4 fans love.   It is okay not to know.  What we need to do now is make our present players  feel wanted and believed in.  I don't know how I would feel if I thought I was the "man" and then learned this guy was going to come and take my place.  Now they say I am the "man" again.  How does that guy bounce back?

 

There are ways to make people smile and forget the world is tough.  Be a guest at the wedding of Kevin Heinz and Jill Peterson.  They danced down the aisle, took tumbles, and brought smiles to their guests.  The film they posted on YouTube has had over 2 million views in less than a week.  It was not conventional, but it was loving and showed the personalities of the bride and groom and their bridal party.  The talk on the street is that the public liked it.  This unique act happened in St. Paul. You know the part of the country where we are the last to catch onto a trend, are as cold as our weather, and have a personality like the dead fish we eat.  We might not know how to get a #4 to be our quarterback, but we have people who know how to put on a good wedding.

Appraisals not just part of the sale process but the key element

When I am listing a property, I want to find a list price that will bring in buyers and call them to action to write plus have a sale that will not face appraisal problems.  It has been written about in newspapers and mentioned in TV reports, but the appraisal issue is very real when it comes to sales. 

 

I tell my buyers they not only need to write an offer that the seller will accept but write an offer that the appraiser will establish the same value for.  This is when it is important to find comps (comparables within 90 days) that are in a one mile radius and are of similar style.  The higher value sales $400+ can have a problems due to the fact that there have not been many sales in that range to use.  The lower sale $180,000 can have a problems due to so many low foreclosures in the neighborhood in poorer condition forcing value down.

 

Low appraisal are a reaction to the "crazy" appraisals of 2 years ago.  In some cases the appraisers drove by the property and established value that way. Lenders used to be able to select who they wanted to go out and do the appraisal.  It was felt that in some cases pressure was being put on appraisers to make the lender happy to establish value so that they would get repeat businesses.  In other words not "true" value was being established. 

 

The government has put strict guidelines on the appraisal process now that they are in the lending business.  Appraisers now are given their business by a management company.  This management company assigns the business.  This new way of doing business has had some of the most tried and true appraisers leave the business.  We now have newer appraisers, people who work part time, and people from far geographic areas that do an appraisal in a neighborhood they are not familiar with. Lenders cannot have any contact with the appraiser.  This means it is the role of the listing agent to meet the appraiser and help him or her with their business.

 

Here are a few steps to avoid appraisal issues:

1) Watch the sale price so that it does not go way over  list price due to closing costs.

2) Value needs to be established on square footaqe,bedrooms, baths, garage and not finishings such as granite.

3) Have the loan be conforming and avoid second mortgages

4) Leave 60 days for a closing and get the appraisal done as soon as possible

5)If it is your seller and they are going on to purchase another property, write that offer contingent on a successful closing of their property.  Avoid the possibility of your client owning two properties.

 

 

 

More Rain Please

We need more rain.  Here in the metro area we are dry. The lawns are crisp, the trees are in distressed, gardens have to be watered daily, and the creek in front of my house is dry.  Minnehaha Creek travels from Lake Minnetonka down to the river.  In the summer it might get lower, but this summer it is bone dry.  You can find a pool of water here and there, but the wildlife have left the creek.  Lake Minnetonka has a dam that controls the water level of the lake.  If they need their water level higher, they close the damn and then the water does not flow for the creek. We are dry.  No water mean the frogs come to me.

 

We have a water feature in our backyard.  It has a wonderful waterfalls that drops to our own pond.  The frogs have taken over the pond.  They found water!  During the day it is not bad, but at night the frogs sing out.  We close our windows and pull the pillows over our heads.  I am about to serve frog legs for dinner.  They are sneaky fellows and are impossible to catch.  Kermit might b cute on TV, but his relatives need to move out of our backyard.

Does the List Price Mean Anything?

In this strong buyer's market one wonders if the list price on a property means anything.  It is a little like when you are strolling on the beach in Mexico.  You come upon this  guy selling bracelets and he tells you how much the piece costs. You really like it but feel the price is wrong.  You look further down the beach and see another guy selling things and decide to check him out.  You stroll up to him and see that his prices are lower but still not low enough.  You offer less and he says no.  A guy walks past with a board of almost the same bracelets on it with a lower price posted.  You start talking to him and offer him less.   He says no to your offer.  You decide to keep walking.  You don't really need the bracelet and will only buy it if you feel you got a deal.  The sun starts setting and a vendor stops you and says he does not want to carry his stuff home.  Do you want to buy his bracelet for cheap? You settle on a price and walk home satisfied you got the bracelet on your terms. 

 

This is what our real estate market is like.  The sellers are not real motivated and the buyers will only buy on their terms.  They don't care what a house is listed at, they think it is worth less.  It could be priced right, but they feel they have a right to get it for less.  The seller who sells his house is the one who sees the sun setting and just does not want to carry it any longer.  He agrees to a lesser price, but he got his place sold. 

 

I read feedback from the showings of my listings and every buyer want the house for less and wants better condition, more sq ft., needs another bath, and would like something replaced.  Since the buyer is a treasured item in ties market, the showing agent does not tell them they are wrong, but rather he drives them to the next house.  If he keeps driving to enough houses, he will find the seller who is motivated to sell and the match will be made. 

Weekend Fun

 

I remember years ago when Darrin Nelson was drafted by the Minnesota Vikings how he complained how there was so little to do in the Twin Cities.  He had come from San Francisco and thought this was the hicks.  I don't think he had experienced life here, but was going by what the West Coast thinks of the Midwest.

 

We might not be "hopping" like the coasts, but last time I checked the entertainment page was full of things to choose from.  The positive thing about the Twin Cities is that we can get to these events without all the hassle of some of those major cities.  Our prices are also more "reasonable."  You might even be able to go out for a drink after the event.

 

I always find I need to sell the Twin Cities to those coming here.  They have no idea of what we have to offer.  We have events that are free, those you can participate in, sports, nature, "big town" events and "small town" events.  What other town do you have a lake in the heart of the city and can see boats people have made out of milk cartons and watch them race?  Do you know of another town where they dump snow on the streets and create a cross country skiing race?  Try to name another city where there are so many theaters.  We support college and professional athletics.  You can get in your car and within 2 1/2 hours view the largest body of fresh water in the world.  Camp, hike, eat, shop, run races, veg out, it all can be done without much cost not far from your home.  Feel like you have escaped, when you have just turned the corner.

 

A few years ago we went to visit friends in Chicago.  Every time they took us for an "outing" we faced traffic, toll booths, and crowds.  We went down to see their Lake Michigan and said "so." We went shopping on their "gold coast" and said, "We have the Mall of American.  They took us to eat at Wild Fire.  We hated to say it but we did, "We have one of these too."  They did beat us when they showed us the White Sox ball park, but next year we will have one of those too. 

 

Compare and contrast and you will see we have a lot you can do over the weekend here in the Twin Cities.  If anything we have an image problem to over-come.

IS THERE SUCH A THING AS A LOW BALL OFFER?

Yesterday I got three offers on three different listings I have.  None of the offers were full price or even 3% off list.  They all were in the seller's minds "low ball offers."  I have to ask the question back "Is there such a thing in this market?"

 

One house has been on the market since last December and this is the first offer they have received.  They have heard a long list of reasons via showing feedback as to why the house was not right for the buyer.  Here they had a buyer who said, "Yes I want to buy your home."  The buyer is just stating what they are willing to purchase the house at.  The price offered was the price suggested by many showing agents as a sale price.  Perhaps the reason why the offer felt so low is because the seller had the price too high on the property.

 

The second offer was again low to the sellers.  They have a lovely home in SW Mpls but it is very urban there and there are apartment buildings near the property.  The feedback has been fantastic home, move it and my buyers would buy it.  Here comes a buyer who says I will go for it, and the sellers almost don't counter.  Everyone has kept a cool head and the process is moving along.  These first time buyers had to be schooled in what has sold recently.

 

The third offer was for a house in rough condition.  It is an estate and the woman lived in it for 50+ years.  The buyers perceive many dollars worth of work to get the house to their standards. The family members are looking at the tax market value and saying the house is worth more.  How I wish those tax values would go away.  They mean nothing.  Long discussions on everyone's part got us to an acceptable offer.  This third offer went together the easiest.  Why?  The answer is motivation and lack of attachment to the house.  No one wanted to keep this house and winter was not a time they wanted to maintain it.  It had been so long since any of the "kids" had lived there that they had no emotions to the place.  It truly was a business transaction.

 

Sellers need to realize that with so many bank sales, buyers have gone from thinking about sellers to only thinking of themselves and the "business deal."  It has become a hard, cruel world for sellers, but they had their way in 2004 with 2 days on the market and multiple offers.  Real estate swings in both directions.

Green Lawn

The golf course look for a private lawn is going out.  We are being quilted into feeling that a sprawling, green lawn, free of weeds, and manicured to perfection is not being "green."  What is to come?

 

Thinking green means less grass and more gardens, natural prairie look, vegetable gardens, and paver patio areas.  Rain gardens are to be created returning rain run-off to the land rather than to gutters and sewers.  I like the idea of natural and "green", but I feel it will take some strong encouragement to get us to be "sod busters" and remove our lawns.

 

The reason for removing grass is as follows:

1) No chemicals will be used making the environment friendlier.

2) Using the land to raise vegetables will use the area for a real purpose.

3) Flower gardens will encourage butterflies and bees.

4) Grass is high maintenance and can pollute with noise as you mow and gas used.

5) Natural prairie gardens make beds for wildlife to live in.

6) Rain gardens will protect our environment

7) Paver patio areas remove the hard surface element of landscaping and allows the water to return to the soil.

 

Take away my lawn and what will I fight weeds against?  No one will buy my edger at a garage sale. I  won't have the noise of the lawn mower to drown out the phone and my family members talking to me.  As a Realtor I won't see the lot lines of properties as to where people mow or the color of the lawn changes because of fertilizers.  Dogs won't be able to trespass and do their thing on lawns.  Think about it, this thinking "green" might be something to get use to.

Rain, Rain Please Come Our Way!

To me there is nothing better in the evening than a thunder storm.  I never want anyone or anything to get hurt, but the power of a storm does something to me.  The power of the storm also does something to my gardens.  I have been told that the energy given off by lightening helps plants grow.  I know the chemical make-up of rain water is much better than that of water that comes from the garden hose.  Many years ago the rain barrel caught the water so that indoor plants and garden plants could be fed the natural water.  Today for big bucks rain barrels are sold.  I wonder who bought them this year, as there has been no water to catch in those barrels.  I know they are very scientific, but I don't know what was wrong with the barrel at the end of the down spout that caught the water.  Am I missing something?

 

Gardens and lawns are in need of water.  Most of the state of Minnesota is doing fine, but right here in the Twin Cities we are thirsty.  Gardens and lawns are now major investments and homeowners can no longer neglect them.  Younger trees really need the water to keep going. If your house is on the market, you need to spend the money to keep it looking green and cared for. Weeds take control during draughts and they can be a killer to get out.  The one thing that will grown when grass browns out is grab grass. 

 

Normally, I tell sellers to make sure they run a de-humidifier in their basements.  Basements are holes in the ground that collect moisture or dampness and that de-humidifier takes it out.  This summer mine has barely turned on.  Even with my dryer running, I can't get moisture into my basement.  It is difficult to show a house right now and be able to say if it will stay dry.  No rain has been present to test the water run-off. 

 

We live with Minnehaha Creek in front of our house.  It is now a dry creek bed.  The banks are deep but there is no water to fill the gap.  The smell is not friendly.  The wildlife is not present. Where have the fish gone?  I can tell you where the frogs have gone.  They are in the pond we have made in our backyard.  They sing out their song of rejoice knowing they have a pond with Lilly pads. 

 

The Twins owners are saying, "See, no rain outs.  An open air stadium will do just fine."  That is true this year, but mother nature in time will return to her old self and June will be rainy and July will have some great thunder storms.  We will have July where we can cook an egg on the pavement.  For now we will have to once again feel foolish because Embarrassed, MN had near frost temperatures, and we will need to look to the skies and ask for rain not snow.

Pictures Sell a Property

I will be looking on the Multiple Listing Service (MLS) for properties for my buyers.  I always take a look at the photos as they tell me so much about the property.  Here is a list of some of the pictures I see and ask myself "why?"

1) The toilet in the bathroom

2) The driveway with two cars parked

3) The furnace

4) Laundry folded on the couch

5) Dishes in the sink

6) The cat in each photo

7) The person taking the photo reflected in the mirror

8) Garbage cans at the end of the driveway

9) Snow on the ground when it is July

10) All pictures taken with the fish bowl look

 

If this puzzles me, what does it do to the consumer that is looking to buy a house?  Photos that are dark and you cannot make out the room, cluttered rooms, out of season photos, or fuzzy pictures all say to the buyer that someone does not care to do their best.  It could be the agent or the seller, but either way, it can stop that buyer from going ahead to view the property. 

Since over 80% of all buyers first go online to view houses, this can reduce the number of showings to a property by a high percentage.

 

Last night I went on a list call and as I was speaking with the sellers I mentioned taking photos on my listings.  They told me the first thing they did was check my listings to see how they were represented.  They told me I never would have been called out to be interviewed to list their house if they did not like my pictures.  Agents don't realize that how we present via pictures our

listings might mean weather that house gets an offer and if we get list calls.