Only you can break the cycle

It is Friday and Fridays are for fun. You may think it is too soon to be thinking about Christmas but retailers have the back to school stuff out and by the end of the month we will start seeing Christmas decorations too.

There are only about 155 days left until Christmas and subtract 2 from that number and you have the number of shopping days assuming the internet remains open and worst case scenario delivery takes two days because of the holiday rush.

Now is the time to start planning to break the cycle of buying stuff for people that don’t need stuff so that they have to buy more storage containers and perhaps move into larger houses or rent storage units.

Sure our economy will collapse if people don’t spend enough money on stuff but capitalism is only working well for the very wealthy anyway and probably isn’t sustainable in it’s current form.  Together we can build something bigger and much, much better. Believe me. Happy holidays!

Copper or lead?

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Saint Paul water

St. Paul home owners can find out if their home has a lead water line leading from the property line to the water main. Just go to online water bill pay You will need to login to your account or create an account. I write this today because I just got my water bill. There is also information about lead in water and testing for lead.

I know for sure that line from the street the house is copper. These are all questions to ask when buying a home. . . the more you know . .

Where the home buyers are looking

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Boardman realty listings

Our listings (homes for sale) are all over the internet and on all the local agent and real estate company web sites. HomeSpotter is a mobile app that works with our MLS, and it gets a lot of traffic. Homes for sale also get viewed on Realtor.com, which for some reason I have to track separately.

Homes for sale also get a lot of traffic in our MLS as Realtors view them and they get sent out via email to home buyers. I have statistics on each home, how many views it gets and how many buyers mark it as a favorite.

This is why real estate photography is so important. Pictures of homes for sale make a first impression that will be good or bad.

As for internet traffic, it isn’t the same as an offer but it is a great start.

Some tips for getting mom’s home ready to sell

green carpet
Green sculpted carpet

Over the years I have sold three homes for my family.  One of the challenges of selling a home that is or was owned and lived in by an elderly person is making it look as appealing as possible to younger home buyers. Sometimes the homes look as if time stood still.

The first hurdle can be getting the owners to give up some decorating choices they made long ago. My mom doesn’t know that I had the wallpaper boarder removed from the kitchen, and repainted or she would be upset about it.  Often “grandmas” house is in good repair and is an excellent opportunity for first time home buyers to fix some of the cosmetics and build equity.

As a seller I don’t want to put any more money into the home than I have to. Here are some of the things I did that were fairly inexpensive that helped sell grandma’s house:

1. Clean everything

2. Repaint in light neutral colors.

3. Replacing old drapes with sheers in shades of white.

4.  Replacing any window shade or blind that was anything other than white or just remove them.

5. Buy new shower curtains, towels and coordinating rugs for the bathrooms for staging. 

6. Replace light fixtures and shades.

7. Remove wall paper and paint walls.

8. Remove worn carpeting to expose hardwood floors. It is better to have wood floors that need a little work than worn carpeting.

9. Remove worn linoleum and replace.

The list isn’t really prioritized by importance but it is  in order of how much the project is likely to cost. It is important to have budget and to stick with it. If the improvement won’t help sell the home faster or for more money it isn’t worth doing. The smallest improvements that give the greatest payback. Cleaning and painting have the highest ROI.

Removing a wall paper boarder can have a tremendous impact. Putting in a new back splash in the kitchen can also has a high return on investment. Consider new switch plates and don’t forget t clean light fixtures.

It is also a good idea to have furnace or boiler serviced and have any repairs done that are needed. As a rule anything that leaks should be fixed and there are usually other obvious repairs too.  Sometimes small maintenance issues result in low offers.

Buyers expect to haggle a little

Buying a home isn’t like buying most other items. Home buyers expect to negotiate with the seller for acceptable terms. It is actually fairly rare that a property sells for the exact amount it is listed for in the MLS.

Lately sellers have started rejecting offers on their homes without negotiating if they offer isn’t exactly what they had in mind. Last month I had an offer rejected with no negotiation. After a week with no other offers we were able to get the seller to negotiate.  It was a slow painful process but ultimately the seller ended up with close to the asking price and the buyers were happy with the terms.

Last March one of my clients made an offer on an over priced property. The sellers rejected the offer with no negotiations. The property is still on the market and after all these months and the price has been lowered twice. The buyer has moved on and closed on a similar property about a month ago.

It is very easy to counter an offer that a buyer has made. It takes little effort and doesn’t cost a dime. It doesn’t even take that much time. I can not think of any reason why a home seller should not negotiate. I can think of all kinds of reasons why a seller should negotiate if they are interested in a faster sale and a higher offer.

yellow flowers
Brown eyed Susans

Urban legends, mythology and the FHA loan

FHA loans have been an alternative loan for first time home buyers since the 1930’s. FHA stands for “Federal Housing Administration” Simply put an An FHA loan is a mortgage insured by the Federal Housing Administration.

The loans have advantages. Buyers only need a 3.5% down payment and there are other advantages. First time home buyers in particular should ask their lenders. The FHA loan might just be the best or only way to get the money to buy a house.

Buyers and sellers should not believe everything their real estate agent tells them about these loans. FHA appraisals are different than appraisals for other types of loans.

When a home buyer is getting a loan to buy a property the lender they are getting the loan from has to send out an appraiser to make sure the property is worth as much as the buyer is borrowing. The home becomes collateral for the loan.

The FHA appraiser determines the value of the property and also inspects it to make sure the it meets ” HUD’s minimum standards for health and safety” That kind of appraisal isn’t done for conventional loans. VA (veterans administration) loans also require a safety inspection as part of the appraisal process.

The FHA inspection is where much of the mythology comes from that surrounds these loans. I have had real estate agents tell me that all sorts of things will not pass an FHA inspection . . yet they do. If something does not pass an FHA inspection often a repair can be made so that it will pass. As a result home buyers sometimes do not make offers on houses they really want to buy, and sellers say no to FHA financing miss out on having the largest possible pool of qualified buyers.

FHA is not particularly picky about windows or the age of a boiler. They are picky about peeling paint that may contain lead and they will ask that a handrail be places along stairways. Leaky roofs won’t pass and neither will heating plants that don’t safely heat the house. Bedrooms must have egress windows and windows must open and close. While it is expensive to add egress windows it isn’t that big of a deal to repair a window so that it opens and closes.

HUD’s primary concern is the health and safety of the home buyer who will actually live in the house. Thus, most of their appraisal / inspection checkpoints have to do with health and safety aspects of the property. Above all, the home must be habitable and comfortable, without any potential hazards to the occupant.

HUD standards have changed over time but many real estate agents have not kept up. It doesn’t hurt to ask your lender or  read the guidelines. As a home owners myself I want my home to meet minimum safety requirements and would be inclined to make repairs for a new owner. After all we bought the house using an low downpayment FHA loan ad a forgivable silent second mortgage that helped with the closing costs.