• For Home buyers
  • Can you afford a house?

    The question is really about being able to get a mortgage. Most people can not pay cash for a home and need a mortgage and need a pre-approval stating that they are at least qualified for a mortgage.

    The easy but not exact rule of thumb is that if you add up all your monthly expenses and a mortgage and divide by your gross monthly income you need to come up with a number no higher than 36%.  Lenders are looking at an income to debt ratio. Debt is car payments and student loans and credit card payments and of course a monthly mortgage payment.

    There are mortgage calculators all over the internet which makes it easy to calculate how much a mortgage payment might be.

    Home buyers also need a down payment and the ability to pay closing costs. Down payments start at about 3% and typical closing costs will add up to about 3% of the loan amount. There are programs for downpayment assistance and sometimes sellers can help with the closing costs.

    We struggled to buy our first home but have never regretted it.

    Also see Housing for minimum wage earners

  • Boardman Realty
  • Property taxes will go up

    The clock in the union depot - St. Paul, MN

    Property taxes are a mystery to many, or maybe to most. Property taxes are collected by the county, in the case of St. Paul it is Ramsey county. Anyone can look up any address and see what the property taxes are, were and possibly will be.

    There are two basic facts about these taxes and that is that they always exist and they always go up.  There might be a year here and there where they go down slightly but the general trend is up. The taxes are based on the value of the property but they did go up during the years property values went down. They had to go up because expenses went up while home values plummeted.

    Often property taxes go up the year after a property changes hands. That happens because the county now has new value information. Ramsey county tax assessors periodically inspect properties and that can also lead to a higher tax bill.

    Last time I checked the projected property tax increase for 2017 is 2.9%. In St. Paul we have other property related assessments that are rarely based on property value but usually on road and alley frontage.

    For home buyers who have financing . . . you know like a mortgage . . . property taxes are usually escrowed and payed by the mortgage company. The home owner is paying 1/12th of the property taxes every month. Property taxes in Minnesota are due on May 15th and October 15th.

    For information about the many services Ramsey county provides with your tax dollars visit the Ramsey County website. Property taxes vary from county to county and are generally higher in the city as a percentage of the value of the property. If your property taxes are too high one option is to move to an area where they are lower.

    Pro tip

    When making an offer on a home ask the seller to pay any special assessments and all property taxes prorated up to the day of closing.

  • For Home buyers
  • Sellers want feedback

    sculptures in Landmark Plaza along St. Peter street

    Home sellers like to get feedback. They want to know what buyers are saying. Most sellers do not take buyer observations too seriously but some do. Sellers should always keep in mind that the buyers agent is representing the buyer and does not have any duties to the seller and some won’t give feedback at all.

    I generally won’t give an opinion on the price to another agents client. If I am representing buyers and I suggest a home is priced just right and those buyers make an offer that is less than the asking price I just weakened their negotiating position. I regard the buyers opinion about the price as confidential and usually leave the question blank on the feedback surveys I get after I show houses.

    There are some important questions sellers should ask their agents if they want to know how well their home is doing. They should ask what the average days on the market is for a homes like their in the same neighborhood that have been recently sold. They can also ask for the total number of showings they have had and what the average number of showings are before a home gets an offer.

    These days even over priced homes will get a lot of showings, especially on the weekends but they have an above average number of showings before they get an offer.

    The numbers in the screen print are for January in St. Paul:

    days on market and number of showings
    days on market and number of showings

    I like actual numbers and facts and figures.

  • 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.

  • For Home buyers
  • Sundays are for open houses

    1741 Ashland Ave

    It is above zero today and the high will be in the 20’s. It is safe to go outside and there may even be some open houses. Here are a few open house tips:

    1.  Take off your shoes when you enter.

    2.  Sign in and give the nice real estate agent your contact information. He or she will follow up with you after the open.

    3.  If you are interested in the house be careful what you say in front of the agent and other potential buyers. You don’t want to say anything that may weaken your negotiating power later on.

    4.  Please remember that the agent holding the open house is representing the seller not you.

    5.  The agent holding the open may not be the listing agent and may not know much about the house.

    6.  There are questions that agents generally won’t or shouldn’t answer, like why the owner is selling and other information about the current owner or if the seller will take a  lower priced offer.

    Open houses are a great way to get into some homes and tour them. People who are serious about actually buying a home should understand that only a small percentage of homes that are for sale are open on a particular Sunday. The whole point of an open house isn’t to sell the house but it is a way that real estate agents can meet potential home buyers and sellers too.

    The neighbor’s like to come to open houses too. Sometimes it is curiosity other times it helps them decide how they want to stage and price their own home.

    Home buyers should not wait for an open house to see a home that is for sale.  There are many homes that are for sale that are never held open. While you are waiting another buyer is scheduling a private showing and making an offer.