Do you know what your real estate agent is doing?

lowertown buildings
Downtown St. Paul

I have been writing about the seller’s market and lack of homes for sale for a few years now. It has changed the dynamics from the days when we used to “woo” buyers.

Yesterday I sent an email with a question a buyer has about a home that is being listed by a big real estate team. I got an immediate reply from an autoresponder thanking me for my offer.

I am still trying to reach the team. I think they will get offers and they don’t care about the question.

Some listings have information about which days they will look at offers and present them to sellers. I contact my home seller clients as soon as I receive an offer.  I work around my clients schedule not my own.

The real estate buying process has changed a lot. There are rules, deadlines, and ultimatums being set by sellers agents. If these agents can spend less time and money on each listing they can make more money.

Real estate agents represent their clients. Often the buyer is ticked off and even distrustful of the seller and frustrated with the process before the seller even gets the offer.

I know several successful real estate agents who treat everyone fairly and with kindness. No one has to hire a jerk to get their real estate sold.

There isn’t any advantage to home sellers in having an agent who is a jerk. I can not see any business reason for treating other agents or their clients any differently than we treat our own clients.

Showings were down in March

A couple of my data sources show that showings were lower in March of 2019 than they were in March of 2018. According to ShowingTime, they were down 9.2% in the midwest.

ShowingTime is the online appointment solution we use locally to schedule showings which are appointments to tour homes for sale.

In the Twin Cities homes on the market got an average of 6.8 showings in March as compared with 7.1 in March of 2018. One possible explanation could be that homes are selling so fast in the metro area that they are not on the market long enough to have many showings.

If I look at average days on the market in March of 2018 Vs. March of 2019, the numbers are 26 in 2018 Vs. 23 in 2019. Which means my theory has some merit.

Often with numbers, the cause and effect are not well established. A random metric is chosen and we are supposed to draw a conclusion.

There are more buyers than there are sellers. I think this trend will continue for the next several years. The trend impacts all of our metrics.

If you are interested in selling your house, please contact us for a free consultation. 

When “highest and best” backfires

It is true that homes in St. Paul sell quickly. There are certain types of houses and price ranges and neighborhoods that are particularly attractive to first time home buyers.

A couple of weeks ago I showed 10 houses to some buyers on the weekend and by the following Wednesday, all of them had offers on them except for that one overpriced house.

As I was making appointments to see the houses with the buyers they would get offers before we could see them. I was able to find some substitutes that had just come on the market.

Sometimes I would get an email before a showing advising me that the house had offers on it and that the highest and best offer is due in a day or in a few hours.

Generally, buyers do not want to see houses that already have offers on them and most like a little time to think about making an offer after they see a house.

Most buyers do not go out of there way to make an offer on a house that already has multiple offers on it.

Every now and then I notice that someone lists a house and sets a deadline for the highest and best offer when they have no offers.

I found this in the comments of one listing: “Highest and best due by 8 pm Saturday 4/6/19”. The house is still on the market and the comment likely scared away some interested parties, before and on April 6th.

It isn’t a good idea to give a deadline and ask for highest and best offers when there are no offers. The strategy doesn’t generate offers and actually makes it look like there is something wrong with the property. Maybe there was an offer that fell through? Why is the house still on the market after the deadline?

The house can only be sold once and as I have mentioned in previous posts often the multiple offers are almost identical to one another.

Longer inspection period may benefit sellers

When buyers make an inspection contingent offer they need to specify how long the inspection period will be. I encourage my buyers to ask for a ten-day inspection period. Often sellers prefer a shorter period and will counter.

Sellers mistakenly believe that a shorter period is in their best interest. If something goes wrong they can get the house back on the market quicker and perhaps get another offer.

A shorter inspection period for the buyers also means a shorter period for the sellers. If the buyers are unable to get an inspector because inspectors are super busy during the home buying season the inspection might be scheduled on day 4 or 5.

If the buyers find an issue the sellers might not have enough time to find out how much a repair might cost or do any research to find out if the repair is needed. Sellers may end up saying yes or no to a repair that ends up being expensive or unnecessary or both.

When the inspection period is too short and sellers agree to repairs without at least researching the cost or checking to see if there is someone who can do that work they may be in for a surprise when they get the bill or find out that the work can not be completed for months.

This time of year contractors and inspectors are busy. Getting work done can be a challenge and getting an estimate quickly isn’t always possible.

Inspections slow down the home buying and home selling process but they also help protect both buyer and seller. After the inspection, all parties have an understanding of the condition of the house.

Either party can ask for an extension of the inspection period during the inspection period if needed.

Is there mold in the house?

green house
House on Michigan Street – West 7th neighborhood

Mold is everywhere and it is more complicated than you might think. Most molds are not harmful to humans but all molds have the potential to be harmful to humans, or harmful to some humans.

There is no mold standard. With radon and other substances, there are thresholds and guidelines for how much is too much.

Mold can be removed from a home by removing moldy items and stopping moisture from getting in and or cleaning up the affected area. I am a fan of using chlorine bleach if possible.

Damp basements are common this time of year. I can usually tell by the smell if a basement is moldy.

There probably isn’t such a thing as a mold free house.

What about mold testing?

“Many people want to test their home for mold. In most situations, MDH does not recommend mold testing. There are several reasons for this:

Proper mold testing is expensive – If you can see or smell mold in your home, you know you have a mold problem. There are several ways to test for mold, and each test has different advantages. In order to get a good idea of a mold problem, several types of test are needed. It is usually better to use the money you would spend on testing to solve the moisture issues and clean up the mold.” [Minnesota Department of Health]

One of the best sources of information about mold and other sources of indoor air pollution is the Minnesota Department of Health.  Which is where I send home buyers who have questions. I am not qualified to say what is safe and what isn’t and I am not qualified to identify mold types.

Should you buy a house with mold in it?  Can you buy a mold free house?

Home turns into death trap

The use of the word “death trap” is probably overly dramatic but I see the same drama play out over and over again. People live in a home for decades. Children are raised in the home and maybe grandchildren visit.

The home goes on the market and the owner accepts an inspection contingent offer. The buyers have the inspection and many defects and safety hazards are found. The buyers have a list of repairs.

Don’t take it personally. Safety standards and local building codes are constantly changing. What may have been safe a decade ago isn’t considered safe today.

Your home might not meet today’s more rigorous safety standards. Some of the rules were made after someone died. The reason carbon monoxide detectors are required is that people in Minnesota have died from carbon monoxide poisoning in their home as they slept.

Home buyers should not panic if the inspector finds some issues and don’t be afraid to ask for reasonable repairs. Consider the differences between upgrades, repairs and maintenance items.  It is appropriate to ask for a repair if something is broken or if it leaks. It is appropriate to ask for maintenance items like a boiler tune-up or a chimney cleaning.

Houses need roofs and working heating plants and water heaters too and sometimes it is appropriate to have them repaired or replaced at the owner’s expense.

Home buyers should take care with how they word their repair requests.  Keep them polite and specific. Keep judgments and opinions to yourself. Do not assume that the homeowner was aware of the deficiencies or that they were trying to hide something.

Sometimes after inspection, the right decision is to walk away. There are houses that need too much work for the average home buyer and are a better fit for someone who wants to rehab a house.

Boardman Realty recommends that all home buyers get a complete home inspection.

Also, see How to find Truth in housing reports

Getting a home inspection

Dear house flipper