How much did the current owner pay?

There is no relationship between the value of a house today and what the current owners paid for it. Home buyers like to find out how much the sellers paid for the home. Some want to use that information as the basis for an offer.

craftsman style dining room
Dining room with built-ins

It is interesting information but there is no relationship between what the current owner paid for a house and the current value of that house. Sometimes it is good to know that the seller paid more than you want to offer. Some sellers can not afford to accept an offer that won’t pay off their mortgage.

When someone purchases a home and uses financing the lender who is providing the financing has the property appraised. The appraiser looks at how much similar properties in the area have sold for in the last year or so. The subject property is compared with comparable properties and adjustments are made.

If the home buyer offers more money than the appraised value the buyer may have to bring more cash to the closing. Sometimes the buyer and seller renegotiate the sale price. Sometimes the buyer decides not to proceed. What happens when a property does not appraise for the amount offered depends upon how the purchase agreement is written and on what kind of financing is being used.

Minnesota appraisers have training and licenses.

Low appraisals happen. Pricing a property correctly is important. Even in today’s market, we are seeing houses that do not appraise for as much as they are listed for or as much as the buyer offers. It is possible to get multiple offers for more than the appraised value of a home for sale.

Renting is alway an option

People who rent rather than own their homes are buying flexibility. For some flexibility means having a better job. Home ownership isn’t for everyone.

The National Association of Realtors conducted a survey to study non-home owners. Most would like to own a home at some point in the future. I aspired to be a homeowner from the time I graduated from college. I was 29 when we bought our first home. At the time the challenge was saving up for a downpayment.


To some buying real estate is an investment. To me, it was always about owning a home that I could call my own. A place to live with neighbors and a garden and a front porch.


How important is the previous sale price?

Home buyers like to know how much the current owner paid for the home. Sometimes they take the information into consideration when making an offer.

blue house
small house

It is wonderful that there is so much information out there for home buyers. it is easy to find out who owns a home when they bought it and how much they paid for it.

Knowing how much someone paid for a home is interesting but what someone paid for a house in the past does not impact the current value. The owners may have gotten the house at a bargain basement price or they may have paid too much for it. Maybe they bought it for a song and then made expensive improvements.

If the house is in St. Paul it is easy to look it up on the city of St.Paul website property look-up and see if there were permits for work on the house. Maybe there is a permit to put on a roof and a few for plumbing and for a new heating plant. Each permit will list an approximate dollar value.

Determining the current value of a house is not an exact science. The best way to come up with a number is to compare the home to three houses in the immediate area that were sold in the last year. Location, condition, and size determine the value of a house.

Buyers who are working with a REALTOR® should ask for a comparative market analysis before making an offer. Home sellers should do the same before setting the asking price.

You had it inspected but there is a problem

Bird House
Bird House

Making an offer on a home contingent on a complete home inspection is wise. Houses cost a lot of money and buyers need to know what they are getting themselves into.

Even a complete home inspection is no guarantee that there won’t be problems later on. Sometimes houses sit vacant for a time and problems go unnoticed.

Other times a house that has been occupied by one or two people suddenly becomes a home for 4 or 5 people and things get used differently and they break.

Everything can be in working condition before the closing and then break on the day of the closing. Personally, I really hate it when that happens but it does happen.

My intent isn’t to scare first time home buyers away from our old St. Paul houses but to educated people to the fact that there are no guarantees. Just because something is working today that doesn’t mean it will work tomorrow.

Most everything in a house wears out and we can’t always anticipate what might fail, leak or break. Home buyers can buy a warranty. There are several available that will pay for some repairs. Buyers can pay for it themselves, or ask the sellers to pay for it.

Often the first thing a new homeowner does when there is a problem is to look for someone to blame.  There isn’t always someone at fault and it is possible to live in a house for years and not know about a defect.

It is important to set a little money aside to deal with an emergency. At some point, there will be an emergency repair. It might not be in the first year of home ownership but it will happen eventually.

Getting ready for the 2019 home buying season


The shortage of homes for sale continues. Home buyers need to get ready to compete with other buyers as homes in many price ranges and neighborhoods will get multiple offers.

Serious buyers will need to put their best foot forward and make their first offer their best offer in a multiple offer situation because they may not get the chance to negotiate. Home buyers who are not pre-approved for a home loan can not buy a home unless they can pay cash. Get pre-approved before you go shopping.

Often home buyers imagine scenarios where they offer X amount and sellers counter at X amount and they end up getting the house for the amount they had in mind. It is best to go into negotiations with an open mind and realize that in the current seller’s market homeowners are calling the shots.

The best offer isn’t always the offer of the most money. Financing is important too. Buyers who are putting more than 5% down may have an advantage. Cash buyers may have an even bigger advantage. More cash in the mix means that there is a greater chance that the loan will close.

Closing dates matter. homebuyers who are inflexible will have less negotiating power. The best strategy is to ask your agent to find out what the sellers have in mind for a closing date. Sellers who need to move into a home that they have an offer on may have to pass on an offer that is 110% of the asking price with a closing in 90 days or maybe the offer is perfect for them.

Flexibility on possession date and time can be important. I have seen situations where sellers need to move out of one home and into another on the same day that they are closing on both the sale of their home and the purchase of another. Not an ideal situation but it happens. Buyers who can allow the seller a little more time to move out can have an advantage in a multiple offer situation that doesn’t cost them a dime.

The amount of the offer is important. I have never seen a lowball offer win in a multiple offer situation. If the home just came on the market today the seller may not be ready to consider a less than full price offer.

When the perfect home comes on the market it may be sold by the weekend, be ready to make an offer now.  Have a pre-approval letter ready. See the home as soon as you can and make an offer or let your agent know you want to make an offer as soon as possible. Sometimes sellers will wait a few hours or even a day for an offer even though they have others if they know the offer is coming and the reason for the delay.

Assuming that the sellers have a lot of money that they can contribute to closing costs is a mistake. Sellers who owe a lot of money on a home may not have the resources to pay the buyers closing costs. An offer that does not require a seller contribution may be more attractive to a seller even though it is for less money.

Last year some buyers were skipping the home inspection to make their offer more competitive. I never recommend such a strategy.

Work with an agent who is prepared and who can quickly write an offer and one with a lot of experience in multiple offer situations.

Make a great offer

Start a house diary


If you don’t have one and are a homeowner start a house diary. Use it to keep track of home improvements. Keep records so that you know how old the appliances are. Keep track of home improvements and make a note of paint colors.

When selling a home knowing how old the roof is and the ages of the furnace, central air conditioning unit and water heater are is important.

Use a plain old spiral notebook and a simple folder or file folder to keep track of receipts and warranties. I like to use Evernote and take pictures of receipts and warranties but I have a notebook with records that I stated in the 1990s that has a lot of information about the house.

We are on our 3rd dishwasher, second water heater, furnace, and stove. Central air was added in 2002 and we bought a couple of new exterior doors two years ago and a kitchen counter last winter.

There is more . . . . nothing lasts forever. In the next year or two, we will need a new roof.

My house dairy includes a wish list because the best way to keep the place in decent shape it to plan ahead for repairs and upgrades. We make some kind of change or improvement every year. Some are minor like repainting a room and others are more major.

Documentation and information about home improvements is useful information when it is time to sell. Home buyers appreciate having copies of warranties and receipts. User manuals can be helpful too but can often be found online.