Real estate licenses expire July 1st

Minnesota Real estate licenses are good for a maximum of two years. Unless renewed they automatically expire on July 1st. My license and the license for my company are good until July 1, 2024.  I have plenty of time to decide if I want to renew.

To keep a license active agents need 15 hours of continuing education each year. Some of the CE will be required modules that change each year.  During each licensing period agents are required to take at least one hour of fair housing and one hour of agency.

Licenses are renewed by licensed brokers for licensees who qualify for renewal. Licensees pay a small fee for renewal and licensed real estate brokers pay a higher fee.

A real estate licensee (salesperson) has to work under a licensed broker. In other words, a person can not just get a real estate license and go into business.  They have to have a broker who will apply for the license and renew it as required.

The broker is responsible for the real estate agent.

None of this makes sense to most people.  Some days it doesn’t make sense to me either.

Licensees who miss the renewal deadline can still renew but they can not work as real estate agents or brokers until they do. If a broker fails to renew a license then none of the agents under that broker can work until the broker’s license is renewed.

There could be someone out there working right now with an expired license. Sometimes people don’t know that their license is expired, at least not right away.

. . the more you know.

House hunting this holiday?

Blurred christmas lights
Merry Christmas

Holiday weekends are popular times to go house hunting. Home buyers are more likely to have a little free time. Activity on my website goes up and the hit counters on our listings tell me that people are looking at them on the internet.

People who live near homes that are on the market may notice more car traffic over the holiday as people drive by to check out the house that is for sale.

Some real estate agents go to the cabin over the holiday and others take vacations or travel to Europe. The agents who stay home often get calls from total strangers who would like to see a house. Agents who work over the holiday usually put their clients first when deciding who to work with. Things can get busy

The best way to ensure that you can tour homes for sale on any holiday is to work with a real estate agent and to have a contract with that agent before the holiday.

Also, understand that some homeowners who have their houses on the market need to use the house over the holiday and may not even allow showings.

My advice is to plan ahead. It is too late to plan ahead for July 4th, 2023 but there is still time to make plans for the Labor Day weekend or for Thanksgiving or Christmas.

Speaking of Christmas we should start seeing Christmas decorations in the stores later this week.

Misinformation is everywhere

I am not an expert on everything but I am an expert on a few things. Minnesota real estate is one of those things and so is how to grow tomatoes.

There is more but as a woman, I have to take care not to sound like a “know it all”.

When people need advice on these topics they will sometimes crowd-source answers to questions from their Facebook friends or will go to other social media sites and just ask.

Often most if not all of the answers they get are wrong. Some are partially correct based on one person’s limited experience.

I have been playing around with AI. When I try to use it to write a blog post or answer a question I get these kinds of cliche-like statements that are not really true but they have some truth in them. Real estate is local in that the laws governing it are made at the state, county, and city levels.

Just because many people hold a belief that doesn’t make it true.  There are common misconceptions about how to buy a house and how to sell one that I see everywhere. As we all know just because there is an article about something on the internet doesn’t make it accurate or true.

Please if you have a real estate question ask a professional. Someone like me a Minnesota licensed real estate broker with more than 20 years of experience serving the needs of residential real estate clients. I can answer all sorts of questions and when I can not I know how to find the correct answer.

When people crowd-source answers to their real estate questions they may also be sharing information that should be confidential with people they do not know. Real estate agents often search for social media accounts and use them to get information that can help in negotiations.

Real estate commissions are up

coinsReal estate commissions have risen has been in the news lately.  According to a RealTrends article published April 2023:

“Over the past three years, the average commission rate has been creeping up from an all-time low of 4.94% in 2020 to 5.32% in 2022, which is the highest it’s been since 2013.”

Home prices have also gone up quite a bit since 2013. I would argue that agents are getting paid more without raising the percentage charged. In other words, a 5% commission on a house sold in 2013 was less than a 5% commission on a house sold in 2022.

I would think commissions would go down due to the fact that there is less work for more agents this year.  On the other hand if agents have less business they may need to charge more in order to make enough money to stay in business.

Often clients tell me that there is a “going rate” and they “know” what that rate is. They almost always quote a rate that is higher than 5.32%. Those homeowners probably end up paying more.

It is important to understand that commissions are always negotiable. When agents won’t negotiate it might be because they lack negotiation skills and that might mean that they won’t know how to negotiate with buyers or buyers agents when an offer comes in.

Heck some of them just say “highest and best” offer rather than negotiating at all but that is the subject for another time.

Agents who are new to real estate tend to charge about the same amount as experienced agents charge. I am here to tell you that experience matters. In fact, it is all that matters.

If you are looking to sell a house and to use the services of a real estate agent choose one with experience and don’t be afraid to negotiate a commission and fees that you are comfortable with.

Home sales down – real estate agents up

house with a mansard roof

The number of real estate agents peaked last year, or maybe not it is hard to tell. The number of home sales started to decline last year and has continued on a downward trajectory.

There have been a lot of layoffs in real estate companies and in real estate technology companies.  I know several people who are looking for work. It is possible that there was a little over-hiring based on projected growth.

Our economic system is based on continuous growth, which isn’t sustainable for any industry.

Some real estate agents have gotten jobs in corporate or government real estate departments, and others have found jobs outside of real estate.

You might say there is a recession or a depression in real estate workers, reminding me of the housing market crash and the great recession.  Some real estate agents retired early and others found jobs while the rest of us slogged through a down market. As home prices went down so did commissions which are often based upon the sale price of a house.

I had a couple of side hustles that helped pay the bills.

This is a good time for consumers to negotiate the best rates when working with real estate agents. When choosing an agent choose one with experience. New agents tend to charge as much as experienced agents charge. Always ask if they have ever sold a house before or how many houses they have sold or how many buyers they have represented.

Often new agents don’t know what it is they don’t know and do not ask for help. As independent contractors agents do not get a lot of supervision.

It is true we all need to start somewhere and most new agents will get experience from working with friends and relatives and maybe a neighbor or two.

According to the National Association of Realtors, 87% of real estate agents fail within the first five years. Often the agents who fail do not make enough money to pay their personal bills and business expenses. Most real estate agents work on a 100% commission basis and only get paid after a successful closing.

Spring home sales – 2023

spring green
View from Mounds Blvd in St. Paul

Sometimes when I meet with home sellers they tell me about the housing market. Their information is often based on national news. Reporting has gotten better but it usually lags by weeks or months.

Real estate is local. It is good to know what is going on in the housing market which is higher interest rates and fewer people interested in putting their house on the market. That is a national trend caused by the Federal Reserve raising interest rates.

Home prices are falling in some parts of the country while in other parts of the country, they are rising. Falling prices tend to make the news more often than rising prices do.

The continued strong demand for housing in the Twin Cities has led to modest price increases. Multiple offers on homes for sale are fairly common this spring.

Yes, we have a strong spring home buying and selling season in St. Paul. In order to know if right now is the best time to sell a house in 2023 I would have to be able to see the future.

Generally speaking, spring is usually a better time to sell a house but they are bought and sold every month of the year.