For Home Sellers

The Realtors just keep calling

Posted on by Teresa Boardman

If your home is on the market and you cancel the listing or if it expires you will get a lot of calls from Realtors who “work” canceled and expired listings. My advice is to let your calls go to voice mail for a few days unless you want to choose a new agent from the callers.

The good news is that once you have a contract with a Realtor and your property goes on the MLS, Realtors are not allowed to contact you. This is a good thing because if Realtors could contact you they would. They would call often.

Working on a 100% commission basis is not easy. There is no job security and no paid leave or health insurance. The hardest part of the job is finding clients. There are at least 22,000 Realtors in Minnesota but there are also real estate licenses who are not Realtors and not all Realtors are in sales.

In fact, the number of Realtors has become a secret. The National Association of Realtors used to publish membership numbers but now they don’t and when asked they won’t. They have all sorts of reasons (excuses), even suggesting that they stopped because no one is interested in the numbers.

I suspect that the number of Realtors is falling but is still ridiculously high when compared with the number of homes that are sold each year.

Competition for business is fierce. Consumers should choose wisely and not be afraid to negotiate commissions or fees. Persons looking for a real estate agent or Realtor should keep in mind that experience is important. Real estate agents learn on the job. There is no advantage in hiring an inexperienced agent.

The chart below is from the last set of numbers I got from the National Association showing 1.6 million members. The last few times I asked about membership I was told there are 1.5 million members. Membership likely peaked in 2022 or 2023. Sadly I no longer believe or trust membership numbers.  Florida had the highest number of Realtors in January 2024 with 225,563  members followed by California with over 200,000 Realtors.

We saw a significant membership drop after the great recession and housing market crash when membership fell to just below one million. As you can tell from the chart we saw an uptick in membership during the pandemic. People were buying and selling houses like crazy, rates were low and people were changing jobs and careers too. I met a few people who jumped into real estate during the pandemic and now have regular type jobs. The turn over among new agents is very high as most fail/quit in the first 1 to 5 years.

Graph showing the number of Realtors
Number of Realtors. Data from the National Association of Realtors

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

 

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.

Considering home improvments?

Posted on by Teresa Boardman

I often get asked about home improvements. The conversation starts with someone asking if a specific improvement will increase the value of a house. Most major improvements will increase the value of a house but they don’t all have the same return on the dollar.

Some small improvements like a new backsplash in the kitchen or new exterior doors can have a big impact.  Homeowners who plan to sell in the next five years should consider making improvements today that they will enjoy the most.

Any home can be sold as is with no improvements and that is an attractive option for people who don’t want the hassle of renovations.

Home improvement
Recovery on remodeling costs

The end of an era

Posted on by Teresa Boardman

Coins, moneyThis week marks the end of an era. The multiple listing service, MLS is a database for Realtors of homes for sale. We must add homes to the database when we list them for sale. The MLS is the source of homes for sale fed to real estate websites.

As of August 17th payment for buyer’s agents will no longer be listed in the MLS, yet buyer’s agents will still expect to be paid. Which ends an era of guaranteed compensation for buyer’s agents.

This new system has never been tried before or tested. It is part of a settlement for some lawsuits against the National Association of Realtors and others.

Generally, the home buyer did not have to pay his or her Realtor.  The seller paid a commission to the listing broker who shared it with the buyer’s broker. That practice can continue and probably will but buyer agent compensation can not be listed in the MLS.

This change and lack of transparency is certain to have unintended consequences. We won’t know how well it will work until we see how consumers respond.

Other changes go into effect at the end of the week as well. Real estate is local and several of the new rules have been in place in Minnesota for many years.

If you are a home buyer you can expect to sign a contract with a buyer’s agent before touring any houses. In Minnesota. buyer representation contracts have been required for decades but we could show houses without a contract.

It is uncertain how the new rules will help or how they will hinder consumers as they buy and sell real estate. Fewer Realtors may be willing to work with home buyers.

I’ll revisit this topic in a month.

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.