Using a reverse mortgage to purchase a home

Maybe you have heard of reverse mortgages. They are not a scam but there are reverse mortgage scams. To get a reverse mortgage a homeowner has to be at least 62. The youngest borrower in the household must be at least 62 and the homeowners must have a lot of equity.

The reverse mortgage is exactly as it sounds. Instead of making a house payment every month the mortgage company sends the homeowners a check. There are no mortgage payments. The mortgage is due when the home is sold or when the owners die.

The reverse mortgage is a way o unlock the equity that might be tied up in real estate.

Reverse mortgages can also be used to purchase a home. They do require a down payment and the youngest borrower must be at least 62. The borrows must have a lot of equity or own the home outright and have good credit ratings. On loans for purchases buyers must have the resources to pay property taxes, home owners insurance and association dues if applicable.

Reverse mortgages can also be used for home improvements. Sometimes people want to stay in their home and age in place but the home needs some upgrades to make it more senior friendly.

Talk to your bank or lender if you are interested in any of these programs and learn more. There is also counseling for people who choose a reverse mortgage. For more general information visit the HUD.gov web site and read about reverse mortgages.

Sellers, view love letters with caution

butterfly
Monarch butterfly

an offer on your home will be accompanied by a “love letter”.  There isn’t anything wrong with a love letter as long as the letter is mainly about the house and how much the buyers like the property.

Buyers could make an offer and include a letter about how much they like the house and admire the gardens and love the neighborhood. I once had a seller who accepted an offer mainly because of a love letter.

Usually, those love letters never make it to my home seller clients. I ask them if they want to see the letter and encourage them to say no. Why would I do that? Because I am concerned about fair housing violations. If a seller chooses one offer over another based on the family status of the offerer or how the buyer looks that might be a fair housing violation.

As a real estate broker and agent, I can not help any of my clients discriminate against anyone who wants to buy a house.

Usually, when I explain fair housing to my clients they decide not to view the buyer’s love letter.

Buyers who choose to write these letters should omit pictures of themselves and their families and focus on the house they are making an offer on. They may want to include personal information about where they work or what they do for a living.

When the buyers do not know the sellers they can put information in the love letter that has a negative impact.  Maybe the house is on the market because of a death or divorce or financial problems.

I meet homeowners who tell me their home should be sold to someone who will fill it with children. Choosing a buyer based on family status is a fair housing violation.

Learn more about fair housing

Real estate sales are brisk

It was a busy weekend for home sales. Right now there are about 25% more homes on the market than there were last month. In this case, 25% is about 100 homes. The inventory of homes for sale is still very low, like around 450. If there were twice as many homes on the market in St. Paul we would still have a scarcity of homes for sale.

The west 7th neighborhood is particularly hot. I put a house on the market on Thursday afternoon and we had two offers by Saturday afternoon and a third offer came in early Sunday morning.

All offers were for more than the asking price and I am still waiting for the for-sale sign.

Buyers are more likely to have a winning offer if they can put at least 5% down and can pay their own closing costs. My advice is to be pre-approved for a home loan and save up money to pay closing costs and for a down payment.

Home sellers who have three bedrooms, two baths and have a home that is free of clutter and in good repair are the most likely to sell quickly with multiple offers. The home also has to be priced right.

Home buyers are finding the process frustrating. It is becoming common to make offers on a few houses before getting an offer accepted. For what it is worth real estate agents also find this frustrating as we go around town writing offers that get rejected.

As a broker, I am required to keep the offers we make or receive that do not get accepted by the other party. I have to say my dead offer file getting bigger and bigger.

More homes on the market should help and there has been a slow climb in the number of homes for sale.

696 James avenue

biking through the woods

It is Friday and Fridays are for fun. My bike, the woods, and my camera are three of my favorite things. Last Sunday I got to take a bike ride through Lilydale Regional Park which is where the birds and flowers live.

Yellow-rumped Warbler
Red-winged blackbird

I also saw a great blue heron and a couple variety of finch and some bald eagles. I also saw some turtles, geese, ducks and one fat turkey.

I have been interested in bird photography for some time but have a hard time fitting it in.  Houses are easier to photograph because they don’t move around.

Bird photography is particularly challenging on Sunday afternoons because of all the bike and car traffic. Bikes don’t make much noise but I often hear the riders by the time they are within a quarter mile of where I am bird watching.

I do enjoy the river and the parkland along it. Biking or walking are the best ways to take it all in.

Have a great weekend. Don’t scare the birds away.

Sellers should do some research before committing to repairs

It happens all the time. The buyer makes an offer on a house and have an inspection and then ask for some repairs. Homeowners say yes to the repairs without doing any research.

The sellers may find that they can not afford the repair or the repair can not be done or it can be done but will take weeks or months. Some repairs that seem small end up being a big deal.  Occasionally buyers ask for unnecessary repairs. They want a sewer line replaced because it has collapsed except it hasn’t collapsed.

Sellers should ask some questions and do some research before signing any kind of an agreement to make repairs. Find out how much the repair will cost and who can make the repair. Also, find out if permits are needed and if getting the city to sign off on the repairs will lead to more expensive work.

I have had sellers say yes to repairs and then let me know days before the closing that they could not get the work done. Sometimes it is something as simple as getting a window to work properly or removing a large freezer chest from a small basement.

If the buyer is asking for repairs you don’t want to make try reducing the sale price or paying for some of their closing costs so that they have the funds to make the repairs.

It is possible to sell a house without making any changes or repairs. Sellers can always say no but there is a tradeoff. Buyers tend to want thousands of dollars off the asking price in exchange for making hundreds of dollars worth of repairs. I encourage buyers to do some research before asking for repairs or discounts.

When I need to do a little research I often start by searching youtube.

 

Trash collection underwhelms

I am a bit skeptical about the citywide trash collection system that is going to be rolled out this year.  Based on past experience with the recycling program I have my doubts.

There are options for trash cart sizes and we chose the smallest but decided to keep weekly pick-up. If there are not a bunch of fees and taxes tacked on to the published service fee we will be paying about $80 dollars a year less for trash removal.

The city sent out postcards so residents can choose their cart size that needs to be returned by June 1st. There was an option to choose your cart size online and when I tried that option it did not work. I wasn’t at all surprised.

If you got a postcard in the mail asking you to choose a trash cart size check the appropriate box and drop it in a mailbox. Postage is pre-paid.

If you do not choose a size one will be chosen for you. With the 35 gallon cart, we have the option of having it picked up every other week with all of the other sized there is weekly pick-up.

The new trash removal program will be implemented in October of this year. By then I should be able to come up with a list of tips and alternatives in case some of us have to go a month or so without trash pick-up.

As I recall we went at least a month without having our Recycling picked up. It seems that the city thought our alley was a paved driveway because that is what it looks like on Google earth.

Some neighbors are already irritated because the new program will not allow for trash cart sharing amount people at different addresses. That means that some people will pay significantly more for trash pick-up.

For more information on the program see “garbage” on the city website.  The link will likely change in a day or two so if you are reading this after May 2108 you may have to search StPaul.gov to find the information.