Cash offers – getting it right

small houseEven with a cash offer there are closing costs. Those costs are much lower than the closing costs on a home loan.  When a home is being financed sometimes buyers will ask for cash back from the sellers to cover closing costs.

Before making a cash offer find out what the closing costs will be and adjust your offer as needed. If you will need more cash than you have for a full-priced offer and closing costs, offer less than the full price.  It is really pretty simple. I often ask a title company for help calculating closing costs on a cash sale.

Instead of a pre-approval letter for a loan a cash buyer needs to provide proof of funds, like a bank statement.

Cash offers are more common than they used to be. Last Fall about 31% of purchases were cash.

An unusual housing market

For the last few years real estate professionals and the media would often describe the real estate market as “crazy”. That term doesn’t mean much. It was an unusual market in that during the pandemic people were moving.  It was kind of crazy. It almost felt like a frenzy. We sold houses quickly before the sign came. Sometimes buyers did not even tour the house before making an offer.

It was good for business too at least for those who did not have to worry about catching Covid-19 or spreading it to their family.

When the interest rates started going up last year the market changed. Cash offers are more popular than ever and some home buyers are having inspections and asking for repairs.

Multiple offers are still common but in general, we are seeing a couple of offers or a few offers rather than several or many offers. It only takes one good offer to sell a house.

Here are some graphs that show some key indicators in the housing market.  The numbers are for the last three years. Prices in the area are definitely plateauing.

Interest rates have caused sellers to stay put and wait for rates to go down before moving.  Buyers still want to buy. Usually, new listings are up this time of year.  Home prices often peak in April and May. I am going to call it and say that they have peaked for 2023.

It will be interesting to see what the fall and winter bring.

Grpahs showing home sales, prices and new listings
Home sales in St. Paul 2020-May 2023


Home sales and prices in St. Paul, MN

The home sale numbers for May don’t look all that different from the April numbers. The low inventory of houses on the market and the high demand keep prices up. Residential real estate is selling quickly and often for more than the asking price.

We are still experiencing a strong sellers’ market. It will take a while for higher mortgage interest rates to have an impact. Rates just went up and will have an impact on June home sales.

Right now I am not recommending buying a house if you are a first-time home buyer who plans to use financing. If you are ready to sell now is a great time to sell your house quickly and for top dollar. We are seeing a lot of all cash offers.

The lack of supply and the high demand for housing continue to influence the housing market.

Table with home prices by neighborhood for St. Paul

Our libraries are a fantastic resource

Saint Paul Public Libary
Saint Paul Central Library – George Latimer

The central library is beautiful inside and out. Most of the books I read these days are electronic books that I have borrowed from the library. They have a large selection of Kindle books and audiobooks that are easy to check out without even going to the library.

In the summer one of the things I love to do is actually go to the library and check and pick up some old-school hardcover books. Since childhood, I have associated summertime with reading.

The library is also cool and quiet and they offer many services and types of media. It is a go-to place for research and learning.

There is a large children’s room filled with books, the puppet stage, and places to read.  The librarians are always helpful and best of all it is all free. Well, it isn’t really free we all pay for it with our tax dollars.

If you are looking for a place to take the kids this summer try the library.

There is probably a branch near you.


Holiday weekends can be a lot of work

It is Friday and Fridays are for fun. I am happy that the holiday weekend is over. Last weekend I finished planting my garden and then I went to the hardware store on Memorial Day for a couple of begonias to fill in an empty space in a flower bed.

While I was there I asked them if they still repair screens. They said that they do but it will take five weeks.

Since it is only warm enough to open the windows for about five weeks I went ahead and bought a roll of screen fabric.  When I got home I found some spline and the little tool that is used for getting the spline in the groove.

An hour later I had two new screens and only one cut on hand. Since there isn’t any point in putting up new screens on dirty windows I took the windows apart and washed them inside and out.

On the double sash window, I washed both pains, up and down and inside and out, and then went ahead and washed the two windows next to the clean window with the new screen. These windows are right in front of the house.

It seems silly to put dusty curtains on clean windows so I went ahead and took all of the curtains down in the living room and dining room and washed them.  I couldn’t see the point of putting the clean curtains up on dirty windows in the dining room so I washed the windows that I hadn’t already washed.

There is more, but I am going to stop right here.

For me, holiday weekends can be exhausting.

Mortgage rates up again

Mortgage interest rates rose last week and are hovering around 7%. I’ll update this post later today when Freddie Mac posts the average rates for the week.  The demand for mortgages is at a three-month low.

Rates will likely go down again but only if the US debt ceiling is increased. If not look for mortgage rates closer to 8% and more.

This might be the best time to hold off on buying a house unless you can pay cash.

As for selling a house, they are still selling quickly and often with multiple offers. Cash offers are fairly common this year.



Here are the updated weekly mortgage rate averages.

Chart from Freddie Mac with mortgage rates
Latest mortgage interest rate averages. 6.1.2023