• First Time Home Buyers
  • Who decides how much a house is worth?

    Victorian homes
    The turrets of Dayton's bluff

    This is the time of year people call and ask me to figure out how much their home is worth, or really what they want to know is how much it will sell for. I look at how much similar homes have sold for recently near the home being priced and I do some number crunching and throw in some experience and come up wth a number that is usually pretty close to what a home will actually sell for.

    The process of predicting the sale price is an art and a science. Some of the sellers I represent take my advice on pricing and others choose a price based on how much they need for a down payment on another home or on how much they paid for the house or even how much they think the house owes them.

    Ultimately it is the buyer who decides how much a home is worth and the buyers lender either goes along with it or decides the home is worth more or less than what the buyer wants to pay.

    Asking more for a house than buyers think it is worth results in more days on market and that ultimately results in a lower sale price because buyers will offer less for a house that has been on the market for awhile than they will for one that was just listed today.

    also see What is a free CMA? and How not to price a home and The art of home selling

  • First Time Home Buyers
  • January Real Estate Trends

    I must sound like a broken record. The news has been the same every day this year. We have a low number of homes for sale across the metro area. In St. Paul the number of homes for sale has stopped going down but has stayed below 445 which is about a third fewer than we would normally see in January.

    Each week the number of homes that are sold is close to the number listed that week. Which keeps inventory low and at the same time the number of home sales remains strong. I wish I had some alternative facts but I don’t. 🙂

    My advice to buyers is to make an offer if you find a home you like. If it is over priced make an offer than is less than the asking price.

    For sellers who have a home to move into now might be the perfect time to put your home on the market.

    As for the fire hydrant, I like to photograph them. This one is in downtown St. Paul.

  • First Time Home Buyers
  • Please read the disclosures

    A truth in housing report is required for all homes being sold in St. Paul. It doesn’t matter if the home is being sold directly by the owner or by a real estate agent. The reports are created through a program administered by the City of St. Paul. Truth in housing reports are available to the public.

    Many Minnesota home sellers provide a sellers disclosure. There are numerous questions pertaining to the condition of the property. ” Material facts that could adversely and significantly affect an ordinary buyer’s use and enjoyment of the property or any intended use of the property of which the seller is aware should be disclosed”

    It is possible for a seller to be unaware of an issue. Maybe there is a leak that has not been discovered or a problem that can not be seen with the naked eye like a furnace that doesn’t work right. That is why it is so important to get a complete home inspection.

    Buyers need to read all of the disclosures and ask questions. Buyers need to ask about sections of the disclosure that are left  blank. On the Minnesota sellers disclosure there are many questions that are answered with a yes or a no, if the questions are not answered the buyer should ask about them.

    It doesn’t do buyers any good to have the disclosures if they do not read and understand them.

  • First Time Home Buyers
  • Local real estate market making history

    I keep writing about this but we are again at an all time low for the number of homes on the market in St. Paul. The graph goes until the end of November when we have 45 homes on the market. Today we have fewer than 500 homes for sale and when the homes with contingent offers are subtracted the number is closer to 400.

    There are a combination of reasons having to do with the lack of new construction, home owners who are still underwater, and demographics. Younger people tend to move more often than older people so yes we can as always blame baby boomers.

    When homes go on the market they sell fairly quickly because there is strong buyer demand.

    I have clients who want to sell but they are holding off because right now they can not find a suitable home to buy.

    The number of homes on the market is always the lowest in December. It is only a few more days until January.

  • First Time Home Buyers
  • Sellers Disclose – Buyers inspect

    house

    Minnesota home sellers have a choice. They can use a property disclosure and disclose everything they know about the home they are selling or they can use a non-disclosure and disclose nothing. Home sellers also have the option of having an inspection done by a third party.

    In St. Paul all homes are required to have a truth in housing inspection. These inspections cover some of the basics like leaks, moisture intrusion and some plumbing and electrical issues. To learn more go to StPaul.gov and search “truth in housing”. I would provide a link but things get moved around on the site often and I would just end up with another dead link.

    As a real estate broker and agent if I know something about a property I have to disclose it even if the seller won’t, unless it is something that I can not disclose because the seller doesn’t have to or want to.

    If I know that the roof is leaking I have to disclose it. If I know that the boiler isn’t working I have to disclose it, but I am not an inspector and am not responsible for finding defects.

    Sometimes there is something wrong with a home and the sellers do not disclose it and the agent doesn’t know about it either. Maybe there is a pipe with a slow leak that the homeowner has not yet noticed or the furnace isn’t working properly and the C02 levels are too high. It is possible to live in a home with radon and never know it.

    It is so important for buyers to have a complete home inspection before committing to purchase a home. Offers should be inspection contingent and I always recommend a radon test.

  • First Time Home Buyers
  • House Diary

    If you bought a house this year you might want to start a house diary. It is a way of keeping records electronic or on paper that list improvements and repairs you have made.  The longer you own the home the more valuable the diary.

    Note when a room was painted and jot down the name of the paint and where it was purchased.

    Record the price of appliances and when they were purchased. When you need to sell the house you will know the age and cost of various improvements.

    You Evernote or a spiral bound notebook or a mole skin journal. Most anything will work even a diary.