Real estate buyers in mid 2020 through the end of 2021

Home prices are still going up in the Twin Cities Metro area. If you bought your house in the second half of 2020 or in 2021 it might not be worth quite as much as you paid for it even though the value has gone up.

Multiple offers on homes for sale were very common during that period and often the sale price was well over the asking price. It is quite possible that some home buyers overpaid. Some overpaid by tens of thousands of dollars.

Buying a house and selling it two years later is always an expensive proposition. It won’t take long for the house to be worth t but what was paid for it. Expect to own the home for at least five years, seven to ten years would be even better.

Buying a house is not the best short-term investment.

Asking for repairs this spring

turretI encourage home buyers to ask for a complete home inspection. For the last couple of years, buyers were skipping the inspections to make their offers more competitive.

This year buyers are asking for inspections and some are asking for repairs. Some of the repair requests are kind of silly and they seem to just irritate the homeowner. Especially in cases where the buyer knew about the need for repair when they made the offer.

Inexperienced real estate agents can mess things up by asking that a licensed professional adjust a door or caulk a window.

No licensure is needed for caulking or door repair or for many of the household tasks and repairs that buyers ask for.

A real estate agent is a licensed professional.

I something is leaking or not working asking for a repair makes sense. Some of the repairs that buyers ask for are upgrades, improvements, or home maintenance items that a well-meaning inspector is suggesting.

Sellers who wish to sell without making any repairs should put in writing that they will not be making repairs. The language can be put in the MLS so that buyers see it on the internet before they even see the house.

Home buyers should understand that sellers can say no to repairs and sometimes it really is easier and less expensive to put the house back on the market and sell it to someone else than it is to have the repairs made.

Home inspectors for better or worse

Home inspectors are not licensed in Minnesota.  A person can buy a franchise or go out on his own and become a home inspector. I say this because most home inspectors are men. I am referring to the complete home inspection requested and paid for by home buyers.

There are some wonderful inspectors out there. There are also some who really don’t know what they are doing and over the years I have seen it all.

Sometimes, buyers, have friends or family members conduct the inspection. That can work but only if the person doing the inspection knows what to inspect and have a system so that they don’t miss something vital.

One of the worst things an inspector can do is give advice outside his area of expertise. For example, an inspector should not say that a boiler needs to be replaced. He should recommend that the buyer have a licensed HVAC contractor inspect the boiler. He can also state his findings like ‘rust” or “leaking” etc.

Sometimes an inspection will lead to another inspection this is especially true in the case of heating plants, chimneys, and main sewer lines.

An inspector should never tell the buyer what the seller should repair. It is up to the buyer and seller to work that out. In most cases are no rules about who is responsible for repairs.

The inspector should not tell the buyer that the HOA is or is not responsible for a repair, or that they are not responsible for it. The condo documents will outline what the association is and is not responsible for. Generally, if an item that needs repair is inside the condo and if it is used exclusively by the condo then the condo owner is responsible for repairs and maintenance.  Always consult the condo documents.

Mold always means trouble and is often mislabeled by well-meaning inspectors.  I have seen requests to have entire foundations replaced due to “toxic black mold”.  I often refer home buyers and sellers to the Minnesota Department of Health website. They have excellent information about mold. Not all mold is harmful. Penicillin is an example of a helpful mold.

Realtors usually know several good inspectors but should always be recommending at least three inspectors. The buyer’s agent should not choose the inspector that choice is an important part of the buyer’s due diligence.

I’ll always recommend a complete home inspection before committing to buying a house. The inspection also protects the sellers who may not know about a repair issue that they can be accused of hiding.


Ideas for real estate agents representing home buyers

living room
vacant house

I was going to call this “Throw Back Thursday for buyers’ agents”.   Negotiating has come back. It is still a seller’s market but it is getting a little harder to sell a house because of the high prices and high-interest rates. Sometimes homeowners need to make some concessions to speed up the sale.

The best way to get a seller concession is to ask for it. Here are some things that can be put into an offer on a house. The seller might say no but they might say yes:

  1. Ask for repairs – within reason. Make sure buyers understand the difference between a needed repair and an upgrade.
  2. If the buyer is a little short of cash for a downpayment go ahead and ask the seller for help with closing costs.
  3. Some houses are overpriced. Go ahead and offer less than the asking price.
  4. Yes, you can ask for new appliances.
  5. Ask to have the home professionally cleaned.
  6. Have the seller hire a pro to shampoo the carpet before the closing.
  7. It used to be common to ask to have the furnace or boiler certified.
  8. The sellers may agree to pay to have the chimney cleaned.

Buyers and their agents will need to use their imaginations.

Remember, it never hurts to ask and sometimes the answer is yes. There are many other things that can be negotiated into a purchase agreement. It is as if buyer’s agents have forgotten how to negotiate.

If the home is overpriced offer less

small houseWaiting for the price of a home to go down is a great way to miss out on a lower price. Home buyers save listings that they find on various websites and track them waiting for the price to go down.  While they are doing that a savvy home buyer finds the listing, falls in love, and offers less than the asking price.  Guess which home buyer gets the house?

The savvy buyer of course.

The smart home seller makes sure their home is correctly priced when it goes on the market. The not-so-savvy home seller “tries” the house at a higher price. Buyers see that the home is for sale but instead of making an offer, they wait for the price to go down.

A higher sale price on a house does not make the house worth more, nor does it attract buyers.

Proper pricing is very important. If the goal is to sell the house rather than have a bunch of interested buyers watch for a price cut it is important to start at the right price.

We are still experiencing a shortage of houses for sale in the metro area and prices are still slowly rising. My advice it to work with an experienced Realtor if you are buying or selling real estate this spring.

Negotiation is part of the homebuying process.

Old Window

Real estate agents always need training. I have been in business for over 20 years and I am still learning. During the pandemic, there was an influx of new real estate agents. I can usually tell right away when I am working with someone new.

Often they don’t know what they don’t know so they do not ask the right questions. Real estate agents are usually independent contractors and they don’t get much supervision. Real estate brokers are responsible for all of the agents working under them and all agents must work under a broker.

I digress. It is the little things like not knowing that a request to have the carpet cleaned can go into an offer on a house. In fact, a buyer can ask to have a home professionally cleaned and they can ask for repairs too. The seller can say no but they often say yes.

Buyers can ask to have items removed from the house as a condition in a purchase agreement and they can ask for items to be left in the house too. Many things are negotiable including the price. It doesn’t hurt to ask.

Agents who started in the last couple of years may not have had to use negotiating skills. Houses went on the market and got multiple offers there wasn’t much negotiating. That still happens today but not always.

. . I love to negotiate.