Interest rates do matter

Anyone who says that interest rates don’t matter isn’t being truthful. Sure a person can buy a house at today’s rates ad then refinance when rates go down but that means paying less on the principal for longer.

Mortgage interest is front-loaded.  When the borrower refinances they start all over and make payments that are mostly interest. Ask Google to amortize a home loan for you and run some scenarios.  Mortgages are seriously expensive. In the example below sometime in year 20 of the 30-year loan the principal payment is more than the interest payment. By the time the loan is paid off the borrower has paid $672,014.56.

Is a house a good investment? Not always. Owning a house free and clear has some advantages but often when it is sold the proceeds are needed to pay for housing.  Please borrow responsibly.

It is possible to refinance over and over and pay mostly interest on a mortgage and very little on the principle. The monthly payments may end up being lower but who wants to pay a mortgage for 25 years and still owe most of the principle?

Screen print of amortization on a mortgage
Mortgage amortization

Use AI to write “love letters”

We advise against accepting “love letters” when selling a house. Accepting the best offer with the best terms is the way to go. Sometimes buyers write letters thatVictorian house include too much information about them, their family status, and more.

Sellers who accept one offer over another based on personal information about the buyers may be in violation of fair housing laws.

However, we all know that love letters work and it is possible to submit a letter that is all about the house and not about the buyers.

I have been experimenting with ChatGPT and love letters. Here is one for a Victorian-style house:

Dear Homeowner,

I am writing to express my admiration for your beautiful Victorian home. From the moment I saw it, I knew it was the one for me. The natural woodwork and new paint job are absolutely stunning and truly capture the essence of the Victorian era.

As I walked through the house, I was struck by the attention to detail and the thoughtful design that went into every aspect of the home. The two-story layout is both spacious and cozy, and the natural light that floods the rooms is simply breathtaking.

One of my favorite things about the home is the way it seamlessly blends old-world charm with modern amenities. From the updated kitchen to the modern bathroom fixtures, it’s clear that the home has been meticulously maintained and cared for over the years.

I can envision myself spending countless happy hours in the charming backyard, enjoying the peace and tranquility of the surrounding neighborhood.

As a prospective buyer, I can assure you that I would cherish this home and treat it with the utmost care and respect. I understand the value of a home like yours and I am willing to make a fair offer that reflects the beauty and uniqueness of the property.

Thank you for taking the time to consider my interest in your home. I hope to have the opportunity to make it mine and continue to appreciate its timeless beauty for years to come.


[Your Name]

Not bad! It has the right tone of flattering the homeowner and at the same time, I can’t see anything in it about who the buyer is.

The dream home and split levels

Real estate agents love to market the idea of a “dream house”.  Home buyers are encouraged to buy that “dream home”. My dream house is a dream and nothing more. In my dreams and imagination, anything can exist but that isn’t reality.

I have scoured the internet looking for pictures of dream homes.  They are often newly built homes in the 1 million plus dollar price range or large ornate Victorian houses or craftsman-style homes, and the occasional ranch-style rambler.

Pictures of splint-level homes never come up in dream home searches yet the split level is a very common style that can be found all over the country. They may be ugly but they are practical and usually more affordable than houses built in “dream home” styles.

The garage is usually in front of the house and there are several styles of split level. There are two, three, and four-level splits.  The two-level split is the most common. There is an entryway and from there a stairway going up and one going down.  Split-level houses are an efficient use of land. The floor plan is also efficient with a lower cost per square foot.

split level house
split level

Multiple offers – Spring 2023

Houses are getting multiple offers this spring.  The winner in a “bidding war” pays top dollar for a house. Sometimes more than it is worth.

I want to caution home buyers that winning the bidding war isn’t always a good thing. Some homeowners who bought houses in the last couple of years knowing that they had secure jobs and that they would never be laid off, have been laid off.

Others outbid other buyers for the opportunity to move out of the city and further from their jobs. At the time they knew they would always be able to work remotely except now they have to go into the office and they really hate the commute but can not afford to sell.

There is no such thing as a “forever” job and jobs that allow workers to always work remotely are not all that common.  When buying a house have a plan for layoffs or a job transfer or a commute.

Try not to overpay and plan on owning the home for a minimum of five years.


Not your typical spring real estate market

There isn’t much on the market this spring. That was true last spring too as the homes that were for sale were quickly purchased.

This year fewer Twin Cities homeowners are selling. The houses that are on the market sell very quickly. There is a 1.5-month supply of houses on the market in the metro area.

New listings are down 21.29%.  Higher interest rates are largely to blame. Homeowners are staying put rather than moving and paying higher interest rates. We are seeing a lot of cash offers this spring too.

Graph showing new listings
New listings in the Twin Cities Metro area


Reliable but not gauranteed


If you are a home buyer and you are getting information from the NorthstarMLS, there is a disclaimer on the information: “Information Deemed Reliable But Not Guaranteed”.

If you are searching homes for sale on almost any website the data is coming from the Northstar MLS.

Some of the information is more reliable than the rest. Generally, the address, including the city and state the property is located is accurate. The listed price is likely to be accurate too. It is very hard to list a home in the wrong school district or in the wrong county.

Taxes and assessments are easy to verify by checking county and city websites.

Room sizes and measurements are notoriously inaccurate but I don’t find many that are so far off as to raise alarm. The foundation size and total finished square footage are sometimes wrong.

Association dues for condos are not always accurate but the association will provide an accurate amount in writing.

The number of bedrooms isn’t always accurate but Realtors are expected to provide an accurate bedroom count. I have seen houses listed as two-story houses that are really 1.5-story houses. It is usually pretty easy to tell from the picture.

At some point in the late 1880s, there was a fire and some tax records were destroyed. For the most part, we don’t know how old the houses that were built before 1885 are. The oldest houses will have a construction date of 1885.

Tax records are not always accurate either. Appraisals are a much better and more accurate source of information about square footage and room sizes. The lot sizes in the tax records seem to be fairly accurate.

People sometimes make mistakes. Listing information can go from the owner to an agent to clerical staff who actually enter it into the MLS.

I once had a client cancel a purchase because the house was 300 square feet smaller than what was listed in the MLS. The house was still big enough but the buyer was angry that he had been deceived.

The information in the MLS is deemed reliable because we are expected to put accurate information in the system. There is a link on each listing that real estate agents see and can click to report incorrect information so that it can be corrected.

Happy house hunting!