Take advantage of lower interest rates

I didn’t want to publish this on April fools day because I was afraid that people would not take it seriously. Here is a look at mortgage interest rates:

By historical standards none of the rates on the chart below are high but rates were higher and have gone down making buying a home just a little more affordable.

Mortgage Rates

Supply of homes for sale snap shot

The snapshot is for St. Paul. Pending listings are the homes that are sold but not closed. Most of them will close. Compare that number with the number of new listings and it is easy to see why the number of homes on the market in St. Paul is small and currently shrinking.

Subtract the canceled and expired listings and the number of homes for sale gets smaller. There are around 335 homes for sale in St. Paul right now. This is a seller’s market. Homes are selling quickly. In a few days, I’ll have March home sale numbers for St. Paul.

 

MLS dash board
MLS dashboard

Home buyers looking for professional help. . . find my contact information to the right.

Staging in an era of minimalism

There are various ways to stage a house. Hiring someone to come in and furnish every square inch of the home isn’t the way to stage a home.  The goal of staging should be to make a room look more inviting or in some cases to show how the room could be enjoyed.

Often when I see professionally staged homes I see too much stuff. Too much furniture and too many objects, a cluttered look.

Having less in a room makes it look larger and can help the buyer imagine the potential of the room.

Personally, I think empty or nearly empty rooms can really show off living spaces. Once the stuff is gone I notice the lighting and the layout and I start to imagine the room with my belongings in it.

Some of my clients feel the same way. The idea of minimalism and of smaller houses with smaller rooms is more attractive than rooms filled with furniture.

Recently I have read a raft of articles about the advantages of living without furniture. The articles include pictures of rugs, mats, and pillows. There may even be some health benefits in sitting on the floor vs. in a chair. I’ll keep my furniture but I won’t ignore the trend.

Furniture is expensive, it takes up space and limits how a room can be used.

I am not ready to get rid of my furniture but I am open to the idea that houses are not about furniture.

Often removing items from a house make it more salable.

Sometimes removing some furniture and re-arranging what is left can make a big difference in how a room looks. Rooms with some rugs and a few pillows, a chair or rocker, end table or coffee table and some window treatments are enough, especially in some of our older smaller St. Paul homes.

Real estate broker cooperation

It is common for an agent from one company to list a home for sale and an agent from another company brings in the buyer. It is called broker reciprocity. When your home is on the market and listed with a REALTOR thousands of local agents are competing with each other to find a buyer.

Broker reciprocity works because of the promise to pay the buyers agent. The agent who represents the seller charges a commission and shares it with the buyer’s agent who may end up getting paid more than the seller’s agent.

As far as I know, this type of arrangement is unique to real estate sales.

Often the agent who actually “sells” the house isn’t the agent who listed it and put the sign in front. The listing agent gets his or her name on the sign but the buyer’s agent does not.

People who are buying or selling a home are not required to use a real estate agent.

If you search for homes for sale on the internet usually the fine print on the bottom of the page will say that the listing is provided courtesy of XYZ company.

The days when only a real estate agent knew about homes for sale are long gone, yet we still add value to the process because an experienced agent has worked through many home sales. Finding a house that is for sale is one small part of the home buying process.

The home buying process should be more transparent than it is. If you are buying real estate and working with a buyers agent ask questions. Most people do not buy houses all that often.

tower
Brownstone

Also, see Agency in real estate

Taking on water

If you recently bought a house you may be surprised to find water in the basement or a leaking roof. We had record amounts of snow all at once and then the rains came.

Sometimes homes with previously dry basement will take on water under a unique set of circumstances like when a couple of feet of snow melts in a few days.

Last weeks rain melted a lot of snow all at once. There are a lot of wet basements in St. Paul as a result. I am sure there will be delayed closings on home sales because of wet basements.

It is going to warm up this week which will likely cause more flooding. Removing snow from around the foundation can help prevent water from leaking in.

At this point, the ground is still mostly frozen which will cause more flooding because the snowmelt will run off rather than soak in. There will be flooding along the Mississippi river too as snowmelt from Northern Minnesota and from the Minnesota river start flowing down river.

March 2010 flood – Mississippi River, St. Paul, MN

 

Down Payment assistance available

coins
spare change

It will be interesting to see how smaller tax refunds affect purchasing power and the housing market. Often first time home buyers plan on tax refunds for some of the cash they need to buy a house.

It is a myth that a 20% down payment is needed. Down payments start at about 3.5%. Closing costs can add another 3% in cash. Asking the seller to pay buyer closing costs used to be a common practice but in a seller’s market asking sellers for anything puts an offer at risk of rejection.

There are down payment assistance programs. Some of them help with down payments and closing costs. Eligibility depends upon several factors including the location of the home.

Check here for down payment assistance.

There are also programs for first time home buyers. Ask your lender.

I also recommend the Minnesota Home Ownership Center as a general resource

The bank of mom and dad is also a popular option for down payment assistance.