• For Home buyers
  • Give me money

    I recently read an amendment to a purchase agreement where the buyers agent asked the seller for several hundred dollars. It did not specify anywhere in the agreement when this money should be paid or how it should be paid. Sellers don’t give buyers money. Sometimes sellers reduce the sale price or they pay the buyers closing costs or maybe a few months of association dues but  sellers do not “give buyers money”.

    If there is a situation where  cash needs to go from the seller to the buyer the money needs to show up on the final settlement statement. I can not think of any circumstance where money would be passed between buyers and sellers outside of a closing unless they had a separate agreement to buy or sell personal property that wasn’t part of the real estate sale.

    Sometimes home owners want to throw in a carpeting allowance or money for some other repair. The cleanest way to handle that is to pay some of the buyers closing costs or pre-paid’s if allowed by the lender. That way the buyer has to bring less cash to the closing and can use the money to buy carpeting.

    We all wish someone would just give us money and while home buyers are always looking for a deal home sellers are always trying to get as much as thy can for their home.

    Maple leaf
    Maple leaf
  • For Home buyers
  • Cameras as home monitors

    The other day I was touring a home with some buyers when I noticed a camera on one of the book shelves. The camera was on but I didn’t see the little blinking green light so it may not have been recording but there could have been someone watching through the interent. Hard to tell.

    These cameras are popular as baby monitors and can be set up as motion detectors that will send an email to the owners who can activate an app on their tablet or smart phone or use a computer to get the same view the camera is getting. They are becoming more common.

    In other words a homeowner could be away and watching people inside their home and listening to what they have to say. The cameras can see and hear, zoom in or out and pan the room.

    I have to admit I would be tempted to watch if it were my home being toured by potential buyers. We use cameras instead of an alarm system.



    This picture is coming from a camera placed near the ceiling on a cabinet. It automatically adjusts to gray scale in low light situations so that it even works in the dark.

  • For Home buyers
  • Low appraisals

    coinWe are seeing some low appraisals. Buyers make an offer and their lender orders an appraisal. The appraisal comes back and shows the value of the home, and that value is less than the amount in the buyers offer. The lower appraisal lowers the amount of money that the bank will lend to the buyer which means the buyer will have to kick in more cash. Sometimes the purchase is renegotiated and the sales price is lowered.

    Buyers who do not want to pay more than the appraised value of a home need to let their agent know. Most of the contracts I see do not have an out for the buyer if the appraisal does not come out high enough. Getting out of a purchase agreement and holding onto earnest money can be difficult unless some kind of stipulation was put into the contract stating that the buyer doesn’t have to buy the home for more than the appraised value.

    From a home sellers point of view the offers that have a little more cash in the and a little less financing are more likely to work out. Which means that the highest offer isn’t always the best offer.  The offer that doesn’t stipulate that the home has to appraise may also be better but it does carry some risk. Many purchase agreements have finance addendums that stipulate that if the buyer can not get financing for the home he/she/they doesn’t have to buy it.

    Sellers ask me if the can have their home appraised before they put it on the market. The answer is yes but the buyer’s lender has to do an appraisal before they can approve a loan and the new appraisal won”t be the same as the old one because it won’t be.

  • For Home buyers
  • Is you agent licensed?


    In Minnesota a license is required for persons representing buyers or sellers in real estate transactions and charging a fee. A few weeks ago an offer was written on one of our listings by a person who wasn’t a licensed agent.

    The license was inactive which means the agent had a license at one point but there are all sorts of reasons why a license might be inactive. The agent was no longer a member of the MLS which is what tipped us off. Persons who are not member of our MLS but who have real estate licenses can represent another for a fee in the purchase or sale of real estate.

    If you want to make sure an agent you are working with is licensed you can look them up in the pulse portal database. They system is pretty lousy but it is what the Minnesota Department of Commerce uses to track licensees. Real estate is local and regulated by the state department of commerce.

    Real estate agents are rarely asked to prove if they are licensed and if there is a problem with an agent it is almost impossible to find out who his or her broker is. Real estate brokers are responsible for supervising their agents.

  • For Home buyers
  • sometimes you need to use the phone

    Pay phone
    pay phone

    Lately I have been getting  bogus emails asking me to sign a contract for a real estate transaction. The name of the client and the companies are not familiar to me so I know that it really is phishing as opposed to actual hacking and I rarely click on links in emails anyway.

    If you get an email from a real estate agent requesting earnest money it is probably legitimate if it is from your agent and you are buying a house and you just signed a purchase agreement. However it wouldn’t hurt to call the agent to verify if the agent did not tell you ahead of time that you will get an email from “TrustFunds” asking you to click on a link.

    Yahoo email was recently hacked. We have quite a few agents in the metro area who use Yahoo mail. If your agent is one of them you might want to call them or text them if you get an unusual email from them.



  • For Home buyers
  • What is a “free CMA”

    Forbes Ave
    Little Bohemia neighborhood

    I still see real estate agents advertising free CMA’s. A CMA is a competitive or comparative market analysis designed to answer the questions: “How much is my home worth?” or more accurately “How much is it likely to sell for?”

    Knowing how much a home is worth or likely to sell for is useful or those who are planning to sell. However I have never heard of a real estate agent charging for a CMA, therefore all CMA’s provided by real estate agents are free and the advertising seems misleading.  Kind of like marketing gluten free apples when apples don’t have gluten in them in the first place.

    That might be a bad analogy but you know what I mean. CMA’s should not be confused with appraisals done by banks for the purpose of using real estate as collateral for a loan.

    In a CMA an experience real estate agents finds three comparable properties that were recently sold in an area close to the home that is being priced and uses the information to come up with a likely sale price. We use a kind of fuzzy logic that computers don’t seem to get. It is part art and part science and it does help to actually see the home in person but that isn’t required.

    . . and yes call or write and I’ll do a “free” CMA 🙂