For Home buyers

We start 2025 high

Posted on by Teresa Boardman

According to FreddieMac Mortgage interest rates are at 6.91%, which is high.  We started 2024 at about 6.5% which was also high.  While some real estate companies and agents advocate buying now and refinancing later, I believe it is better to wait until rates go down before buying unless you are paying cash.

Refinancing is expensive partly because mortgage interest is front-loaded which means we pay the most interest on the first payments. Refinancing means starting over and paying more interest and less principal. Also, a job loss or change in your finances may make refinancing impossible.

When people don’t buy it slows the economy and rates go down. Do you really want to pay all of that interest to the bank each month?

When will rates go down? I am not making any predictions. I’ll just say that they will go down when they go down. I think 5% or lower is the sweet spot for home buyers.

Mortgage interest rate chart
Mortgage interest rates as of January 2, 2025

Is it personal property or a fixture?

Posted on by Teresa Boardman
Built-in entertainment center and bookcases

The bookcase to the left of the fireplace in the picture is part of the house and included in the sale. It is built-in, which makes it a fixture. The shelves to the right of the fireplace are free-standing and therefore personal property and are not included in the sale.

In Minnesota “fixtures” are included when purchasing a home. A built-in dishwasher and the kitchen sink are both fixtures. The washer and dryer are usually not built-in and are considered personal property. Personal property can be included in the home sale, but the buyer needs to specifically ask for it.

How do we know if an item is a fixture or personal property? There are some gray areas, but we can usually work it out by negotiating and then putting it in writing.

Light fixtures are sold with the house but sometimes the homeowner wants to keep the fixture. In that case, I recommend removing it before the house goes on the market.

Here is a list of items that are considered fixtures:

Built-in fireplace, whether indoor or outdoor, or a built-in fire pit.

Built-in microwave oven.

Shelves attached to brackets or screwed into the walls for stability

TV attached to wall (in some cases, the TV may be removed if it’s on brackets and not built in, but the brackets may not removed)

40-pound built-in fountain

In-ground pool

Built-in hot tub

Bathroom mirror on a bracket

Custom-designed window treatments and draperies; rods screwed into the wall

Plants and landscaping

Bathroom towel rods and hooks

Window Blinds

Built-in refrigerator

Built-in dishwasher

Children’s play area set in concrete

Dog kennel attached to house

Door knocker, door knobs

Light fixtures

Built-in sandbox

Garage door opener (and remote controls)

Painted mural

 

Houses are smaller in 2024

Posted on by Teresa Boardman
blue house
small house

The median size of a newly built single-family home in the first quarter of 2024 was 2,140 square feet, according to the U.S. Census Bureau. During the same time period in 2023, it was 2,256. That shrinking trend tracks with data collected by the NAHB and the U.S. Census Bureau’s Survey of Construction.

In 2023, the median size of a new single-family home was 2,233 square feet, down 9% from 2015
In 2024, the median size of a new home was 2,179 square feet, the lowest since 2010.

Why are homes getting smaller? For years they were getting bigger. Buyer demand for small homes is up, partly due to lower costs.

As the owner of a small home with what I call a “micro kitchen”, I have always felt that smaller is better. Smaller means less cleaning and maintenance and less space to heat. It can also mean less storage space for storing all that excess stuff.

When I look for houses that I would like to own I am always looking for homes that are smaller than what I have now. Yes size does matter. It really is a matter of personal preference. Space costs money and it takes time too.

As does the “micro kitchen,” it has an efficient layout. It is a galley-style kitchen that opens into a dining room. There is plenty of food prep space because of an antique kitchen queen with a pull-out counter just outside the kitchen.  There is enough cupboard space but some of it is in the dining room. I have too many pots and pans and have started moving the cookware I do not use to some shelves in the basement.

Most people don’t keep a case of creamed corn and a large Dutch oven under their antique buffet in the dining room but it works for me.

One thing we learn from living in a small house is how to get the most out of verticle space and we learn to put our stuff away to avoid that cluttered look.

When searching for your “dream house” dream smaller and enjoy the advantages of having less house.

Get it in writing and be specific

Posted on by Teresa Boardman

cleaningI once saw a purchase agreement in which the buyers’ agents asked that the seller clean the home before the closing. I see a lot of homes, and this particular home was cleaner than average. I advised the seller to say no to cleaning the home.

The buyer’s agent said she wanted to make sure the home was clean for her client so she put it in writing.

Putting things in writing is a great idea but what does clean mean? What if the seller cleaned the home but the buyer decided that it wasn’t clean. How would we resolve the situation?

In this case, the buyer will be doing a final walk-through as all buyers should before the closing. If the place is a total mess the buyer would have recourse because the closing can not happen without him.

Even if the seller cleans the house it may not be what the buyer had is mind. I have had real estate agents tell me that clean is a home that has been swept out and vacuum cleaned.

In general, sellers should clean before they leave and most buyers should plan on cleaning before they move in. When putting things in writing they need to be as specific as possible. Sometimes we ask to have carpet shampooed by a professional carpet cleaning company.

Buyers can ask for a professional move-out cleaning.

Lately, I have seen a few offers with requests for licensed contractors to perform services that can be performed by the homeowner. Unlicensed people can perform routine maintenance and cleaning. What kind of a license would a person need to put in new light bulbs or change the furnace filter? Caulking doesn’t require a license yet sometimes home buyers ask that it be done by a licensed contractor.

In the case of caulking, I would probably do it myself or find someone to do it for me after I bought the house.

Be careful out there. If you put it in writing be as specific as possible.

Buyer representation contracts in Minnesota

Posted on by Teresa Boardman
butterfly
Monarch butterfly

In Minnesota, we have used buyer representation contracts for a few decades. Home buyers who are working with Realtors are required to sign an agreement with their agent. The agreement outlines the Realtor’s duties and how they will be paid.

As of last week, Realtors are required to have a written agreement with people who want to tour homes we listed for sale.

Previously, we could show anyone our listings without a contract or agreement with people who want a tour.  On the plus side, this new practice may weed out the holiday housing tourists who are just curious and have no intention of buying a house.

On the other hand, home buyers hate to sign anything, making it a struggle. It is easier to sell a house if we can show it to anyone interested without paperwork. I do not plan on charging anyone anything for showing my listings but I could and the new system makes charging a fee easier.

The good news is that contracts or agreements buyers sign with Realtors do not require the signer to buy a house. You can sign an agreement with a Realtor to go house hunting but that does not obligate you to buy a house.

Do you really need a buyer’s agent?

Posted on by Teresa Boardman
House

We did not work with a buyer’s agent when we bought our first house. At the time we thought that we came out alright. We did not know what we did not know.

With the help of a buyer’s agent, we may have paid less for the house and if we had made an inspection contingent offer we may have been able to negotiate some repairs.  The seller’s agent wrote our offer, she was helpful but did not negotiate or work on our behalf.

It wasn’t until many years later as I started working as a real estate agent representing buyers that I realized we missed a few things when we bought the house.

Buying a second or a third house is a little easier but each house is unique and so is each seller. Rules and laws change over time. If you bought a house twenty years ago you might not be aware that laws have changed.

No, you don’t have to have a buyer’s agent representing you but most home buyers need one.

Choose an experienced agent. An inexperienced agent can be worse than no agent at all.

If you choose to go it alone consider consulting a real estate attorney.