For Home buyers

It never gets dark in St. Paul

Posted on by Teresa Boardman
back porch
Neighbors’ floodlight casts a shadow on my back porch

Light pollution is the excessive or misdirected use of artificial light at night, which harms humans and wildlife, obscures the night sky, wastes energy, and disrupts ecosystems. It includes problems like glare (excessive brightness), clutter (excessive groupings of light), light trespass (unwanted light entering properties), and skyglow (the brightening of the night sky).

Solutions involve using shielded lights, timers, motion sensors, warmer light colors, and reducing the use of light

There are lights on outside all day. There are poorly aimed floodlights that do not illuminate the area that needs light for security reasons, but instead illuminate neighboring houses. When I look out a second-floor window at night, a light shines in my face.

Is everyone afraid of the dark?

 

Thinking smaller

Posted on by Teresa Boardman

While the average family size is decreasing, the average size of a new house is increasing. Part of it has to do with the fact that builders need to make a profit and bigger is profitable.  In 1973, the average size of a new home was 1525; today it is over 2500 square feet.

There are some advantages to buying a smaller house. Generally, they cost less to buy than a larger house, which means a smaller mortgage. There is also less to clean and maintain, and less to heat and cool.

For families with children, it may also mean actually seeing the children and spending time with them. Children do not need all that much space it is generally parents who need the extra space because they have children.

When deciding to buy a home, think about size. Owning a 600-800 square foot home could mean more time and money for travel, or having the flexibility to take a lower-paying job, or being able to afford to have a spouse work less to care for a parent or child.

As we age in place, smaller can mean staying home longer. Less storage space makes it harder to accumulate stuff. Space tends to fill up with stuff.

 

blue house
small house

 

Think long and hard before committing to a mortgage

Posted on by Teresa Boardman

You may have been told by a real estate agent that you will date the rate but marry the house. The idea of buying a house now and planning on refinancing to a lower rate later on does carry some risk.

Mortgage interest is front-loaded, which means that the borrower pays the most interest on the first payments. Refinancing means starting over and paying more toward interest and less toward capital, which means less equity.

As a rule of thumb, wait until rates go down by 2% before refinancing. That way, refinancing will pay off. Rates will not go down much while Trump is president due to his economic polices.

People who buy houses now have no guarantee that when rates are lower in five or six years that they will have a job. Jobs come and go but mortgage payments can last for decades, which is one heck of a long date.

Buying a less expensive house is one way to keep mortgage payments lower. Another strategy is to save up for a large down payment.

When the news headlines exclaim that mortgage rates are lower, that doesn’t mean they are low. It means that they were recently higher. Right now, they are about what they were a year ago, when they were at 6.77%.

These rates are averages. You may qualify for a lower rate or for a higher rate. Ask your lender.

 

 

Graph that shows mortgage interest rates
Freddie Mac – average rates

tachment_27870″ align=”aligncenter” width=”900″] Freddie Mac – average rates[/caption]

Pro tip – Houses for sale

Posted on by Teresa Boardman
house
house

Every now and then, I see a post from local Realtors advertising a newly listed home. When I click on the link, I am taken to a sign-in screen. Apparently, they expect people to give away their email address and other information just to find out more about a home that is for sale.

I never sign in. I either Google the address or sign into our MLS to get the information I want.

We have rules. A Realtor can not advertise a listing unless they are in the MLS. Once they are in the MLS, they are fed to numerous websites, which is why they are so easy to find using Google.

You do not have to sign in and give up your privacy to look at homes that are for sale.

You are welcome.

Real estate commissions are negotiable

Posted on by Teresa Boardman

Coins, moneyI shouldn’t be surprised, but so far, I have not noticed any negotiation on commissions paid to a buyer’s agent. Commissions for agents who assist the home buyer used to be listed in the MLS (multiple listing service) for every home for sale.

That all ended last year after the National Association of Realtors lost a lawsuit.  Sellers often want to negotiate for a lower commission, but when a buyer makes an offer and asks the seller to pay a buyer’s agent commission, sellers are paying it with no negotiation.

As a small company, I don’t have a ton of data for this, and real estate brokers are not allowed to discuss how much they charge or are paid amongst themselves. All I can say is that the commissions that are being paid out to buyers’ agents are pretty consistent and appear to be the same as what they were when they were listed in the MLS.

Redfin reported that the average percentage of commission paid to buyer’s agents has gradually fallen since the NAR settlement was announced, although the decrease “is small and the dollar amount paid to buyer’s agents has held steady.”

It could be that because sellers often pay the buyer’s agent’s commission, buyers don’t feel the need to negotiate. I am not sure why sellers negotiate with their agent for a lower commission and then turn around and pay the buyer’s agent with no negotiation.

There is a point to this post, and that is that real estate commissions are always negotiable, and so are any fees charged by your real estate agent. There are many excellent real estate agents in the area looking for work every day, and it is always alright to negotiate and to pay less.

If you are a home seller, your agent should not be advertising the fact that you will pay the buyer’s agent commission. There is a better way.

Got Realtor?

Posted on by Teresa Boardman

small houseBeginning August 17, 2024, an MLS Participant “working with” a buyer will be required to enter into a written agreement with the buyer before touring a home, including in-person and live virtual tours.

Real estate agents can show houses to home buyers without having a written agreement with them, but Realtors® can not because they belong to the National Association of Realtors. The organization made the new rule as part of a settlement from a lawsuit.

I have always been a fan of having a contract to represent potential home buyers before showing them houses because I need to know that if they buy a house, I will get paid. Yet, I am not a fan of the new rule especially as it applies to my own listings.

I used to be able to show people my own listings without any kind of an agreement. Kind of like how people can come into an open house without having a signed agreement with the hosting agent.

The new rule is awkward for potential home buyers who are not ready to commit to an agent, but we have a workaround for that. Buyers can sign a showing agreement. The agreement could be one house or for one day or for any period of time that makes sense to both the buyer and the agent.

The new rule is enforced by the NorthstarMLS. I have been following the rules but I think they are hard to enforce.

If you plan on buying a house and would like to tour a home that is listed for sale by a Realtor, you may need to sign an agreement to tour that house. Read the agreement before signing it and remember that commissions are always negotiable. Home sellers will often pay the buyer’s agent but that payment needs to be spelled out in the purchase agreement.

If you plan on buying a home this year, start by finding a Realtor®.