For Home Sellers

The typical home seller this year

Posted on by Teresa Boardman

I was surprised to learn that the national average age of home sellers in 2023 was 60. I would have guessed younger. Here are some numbers from the National Association of Realtors seller profile for the last year:

  • The typical home seller was 60 years old, unchanged from last year.
  • For all sellers, the most commonly cited reason for selling their home was the desire to move closer to friends and family (23%), because the home is too small (13%), or a change in the family situation such as marriage, divorce, or new child (10%).
  • Sellers typically lived in their home for 10 years before selling. Among seven of the last 10 years, the typical tenure has been 10 years.
  • 39% of sellers traded up to a larger home and 33% purchased a smaller home.
  • 89% of home sellers worked with a real estate agent to sell their home, 7% sold via FSBO, and less than 1% sold via iBuyer.
  • For recently sold homes, the final sales price was a median of 100% of the final listing price, maintaining last year’s highest recorded since 2002.
  • Recently sold homes were on the market for a median of two weeks, unchanged from last year.
  • 92% of sellers were at least somewhat satisfied with the selling process.
blue house
small house

Home buyers love to ask why the house is on the market and why the owners are moving. The answer is almost always about some kind of a change in their circumstances rather than some big problem with the house.

No comments yet

What happens to that earnest money?

Posted on by Teresa Boardman

coinsI get asked questions about earnest money all the time. Recently I encountered a situation where the home buyer was worried that the earnest money would be stolen. Your earnest money is safe.

Earnest money is a deposit made by the buyer. It is held in a real estate broker’s trust account until the sale closes. The purchase agreement spells out who will get to keep the earnest money if the buyer fails to close.

A home can be purchased without earnest money if both parties agree.

Earnest money does not go to the seller. The most common practice is earnest money held by the seller’s broker. The money is usually electronically sent directly to that trust account and there are all kinds of rules and laws governing trust accounts.

Ultimately the money goes toward the purchase price. It will show up on the settlement statement as a credit.

The amount of earnest money depends upon the price of the house.  A larger earnest money deposit can make a buyer’s offer look better to a seller. It shows that the buyer is committed to the purchase.

Words matter in purchase agreements

Posted on by Teresa Boardman
kitchen
Stainless steel appliances – granite countertop

Remembering way back to one of my first clients. I sold their house and when we got to the closing the buyers were most upset that the sellers took the microwave with them when they moved out.

Microwave ovens that are not built-in are considered personal property. Unless the buyers ask for them specifically and unless the sellers agree to include them in the sale they can be packed up and moved away.

The buyers refused to close unless the sellers paid for a new microwave and the sellers refused to do so. At the time a new portable microwave oven cost around $100.

Anything built-in is included in the purchase of real estate in Minnesota. That included the kitchen sink, light fixtures, built-in appliances, cabinets and shelving.  If a microwave is built-in then it is included when the house is sold. Light fixtures are included as are curtain rods.

Perennial plants, bushes, and trees also run with the property and are included in the purchase.

If it is a portable model that sits on a table it is considered personal property. It can be included in the sale if specified in writing. Sellers can specify in writing items they do not want to include in the sale.

When asking for personal property the buyer should be specific.  Ask for the ______(model) microwave oven, as seen in the kitchen on this day______.

Sellers who do not wish to sell a light fixture with the house should remove it and put in a new light fixture before putting the house on the market.

Over the years I have seen more misunderstandings and disagreements over property that is worth less than $100 than over anything else. There are gray areas as to what is personal property and what isn’t. When in doubt spell it out and get signatures from both parties.

Experienced real estate agents know the difference between personal property and part of the property.

What is staging?

Posted on by Teresa Boardman

Staging is so misunderstood. It isn’t always about filling the house with rented furniture. It is about removing clutter, including excess furniture.  I often suggest removing throw rugs in small rooms such as bathrooms and kitchens.  The rooms look larger and cleaner without rugs.

Kitchen counters should be mostly bare as should the top of the refrigerator and stove.

I often recommend removing ottomans and coffee tables.  They take up space and can make a room look smaller, yet some stagers will add a large ottoman.

I like to set the dining room table and add fresh flowers.

A few green plants can help make a home look more inviting, however, if I were to put my own house on the market, I would need to remove some of the plants because there are too many. Having too much or too many of anything is clutter.

The exact placement of the couch isn’t going to make or break a sale. Staging is more of an art than a science. Having an empty room won’t make a house unsaleable. in fact, a room looks better empty than over-furnished. Buyers have the opportunity to imagine what the room would look like with their furnishings in it.

For a time it seemed like every home I saw had a sign that said: “Eat, Pray, Love”. I can’t think of any situation where signage improves the look of a room or adds to the value of a house, yet the signs were brought in for staging.

Houses can also be virtually staged. Pictures of vacant rooms are populated with furniture.

Speaking of pictures, staging is much more effective with professional photos.

Each home is unique and so is each homeowner and each home buyer. Staging can and should be tailored to fit the situation. Currently, there are more home buyers than sellers. Your home will sell but it may sell faster and for more money if it is staged.

Kitchen
Kitchen

A reminder that commissions are and have always been negotiable

Posted on by Teresa Boardman

coinsYes, it is true real estate commissions are negotiable. They always have been.

Agents are independent contractors who set their own rates. Some agents will not negotiate. Agents are not required to negotiate.

There is no “going rate” but I’ll admit I have benefited from the myth. For many years I have charged less than what people believe to be the “going” rate.

Real estate agents are selling experience yet new agents often charge the same rate an experienced agent charges. Personally I wouldn’t pay it but people do.

There are many real estate agents to choose from. In fact, there are more agents than there are houses to sell. If one agent charges too much and won’t come down in price find an agent who will.

Real estate agents are salespeople taught how to sell themselves and negotiate fees and commissions. Real estate agents do not get paid until after a sale closes and most work on a 100% commission basis. There are no paid vacations and there is no group health insurance.

Some agents show this chart that shows how much of the commission they get to keep after fees and splits with their broker. To that I say who cares. That is the agents problem.

The good news is that people can buy and sell houses without the help of a real estate agent. It can work out very well especially considering that home buyers and sellers often do not know what it is they do not know and won’t know if they ended up spending more or getting less because they did all on their own.

Real estate commissions and fees are spelled out in the contracts home buyers and sellers sign.  It is a good idea to read the contract before signing it. We can not list a house or work with a buyer without having a signed contract.

It is true that real estate agents can make a lot of money but most do not but don’t feel sorry for those who don’t make a lot of money.

What you don’t know about your real estate agent

Posted on by Teresa Boardman

Small Blue House with flower boxesPeople choose their real estate agents for all sorts of reasons. Often because the agent is “nice”.  Sometimes that “nice” agent is inexperienced and sometimes they can cost you money or even the home you want to purchase.

Last year a well-meaning but very inexperienced agent encouraged her client to ask for all sorts of minor repairs. She waited until almost the end of the inspection period. The seller was blindsided and somewhat angry. He did not make all of the repairs but he did make some of them. Later when I talked to the buyer I found out that none of the repairs were his idea but his agent felt he should ask for something.

Sometimes we get purchase agreements from new agents that we have to talk them through re-writing so that they are written correctly. Once I got an offer from a person with an expired real estate license. I had a hard time finding his broker who had no idea that the agent was out representing buyers without a license.

Another agent gave her client a bunch of documents that he thought were all of the condo documents required by the state. Most of the required documents were missing. I sent the agent a link with a bunch of information and made sure that the buyer got all of the documents.

There was this agent in a Facebook group for appraisers asking for some specific information regarding St. Paul Truth in Housing inspections and requirements. An appraiser isn’t an expert on such things and the agent was referred to the city of St. Paul website and told to ask her broker if she needs help.

Recently a new agent carefully explained to me how I should handle offers on one of our listings. Why? Was that necessary?

Most of us learn early on that no matter how we would like things to go they don’t always work out that way. We can never predict what our clients will do or what other agents will do. We learn to adapt and we learn flexibility.

There are more real estate agents than ever before and fewer home sales. It is more likely than ever before that the agent you choose has never sold a house.

At the very least agents should be asked if they have ever sold a house. There is a surplus of experienced agents who are looking for work to choose from.

It is easy to get a real estate license. All agents have them and learn on the job. New agents don’t have a clue what it is that they don’t know. Home buyers are in the same boat and don’t mind working with new agents as long as the agents are “nice”.