Closed sales are down

The number of home sales is down in Minnesota and certainly in the metro area. It isn’t because homes are not selling it is because fewer people are putting their homes on the market. Some of it has to do with an aging population. Older people own a lot of real estate and are less likely to move.

The population is growing and fewer houses are being built.

Minnesota Association of REALTORS

 

. . and now the waters recede

It is Friday and Fridays are for fun. I know the floods are destructive and inconvenient but they also present an opportunity to get outside, walk, enjoy the spring weather and take some photographs.

In a week or so we should start seeing some leaves on the trees. It will be nice to start seeing some green again. It should almost be warm enough to make biking fun again. 🙂

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real estate commissions are always negotiable

You may have heard or you may believe that REALTORS and real estate agents all charge X%.

The truth is we are not allowed to know what other agents are charging and there is no central data repository where commissions data can be collected and analyzed.

Some real estate companies tell their agents to charge X amount. Real estate agents are independent contractors and can say no or move to another company.

Real estate commissions are always negotiable. It isn’t always easy to negotiate with real estate agents. We negotiate all the time. Most of us wake up unemployed each morning and spend the day looking for clients. Those of us who survive get to be pretty good at negotiating.

If you find real estate agent who will not negotiate find one who will. There are like a zillion agents who are qualified to sell your home and who would do a good job. There isn’t any reason to settle.

You want an agents who is easy to work with and one who can negotiate.

When negotiating commission agents are taught to tell homeowners that agents who will discount their commission will likely get less for your house. There is no data to back that up. It is the sellers who have the last word about which offer gets accepted, not the agent.

Some agents will tell you they are worth “X” % and show you a list of services they provide and ask you which services they should cut so that they can work for less. Go ahead and challenge the agent to tell you how much each of those services cost.

Buyers agents usually get paid by the seller through the listing agent. I for one have never asked a buyer to pay my commission directly but I certainly could.

If a home buyer asked me to give them part of the commission I would probably say no. What some buyers do not realize is that working with a buyer is a lot more work than working with a seller.

Finding a home for sale has gotten fairly easy but is only a small part of the job. Learning to handle the multiple offers, negotiations during the inspection period and getting it all the way to the closing table can be challenging.

When choosing an agent a home buyer or seller should be choosing an agent who has experience. Agents with no experience can charge as much as experienced agents charge.

When looking for an agent ask your neighbors, friends, family, and co-workers for a recommendation. Talk to a few agents and ask them how much they charge. Also, ask about any fees charged by the real estate company in addition to a commission.

Also see Oink!

How not to chose a real estate agent

Priced out of new construction

New construction housing in and around St. Paul is rare and expensive. Builders who want to make a profit build them large and expensive.  The limited number of homes for sale continues to drive up housing prices. Normally we could build our way to a more affordable housing market. The supply of homes for sale could be increased by building more houses.

According to the non-profit Housing affordability Institute 

A third of the cost of a new home in the Twin Cities comes from regulation and local policy.

Even without the added cost of all those regulations the price for new construction is unaffordable for most.

New construction costs source: https://www.housingaffordabilityinstitute.org/ Report “Priced Out”

The study also concluded that “The Metropolitan Council’s growth boundary is unique to the region and has resulted in significantly higher land prices inside the established line. In concert with municipal land decisions, a land shortage has emerged which has a rationing effect in key areas, driving up prices. Land inside the Metropolitan Council’s growth boundary can be 3.8-12.8 times more expensive than comparable land outside of the boundary. In cities around the country that do not have urban growth boundaries, we do not see these kinds of price discrepancies.”

“State-level regulations, including the administration of federal rules, also affects affordability. Recently enacted state-level regulations in Minnesota have added more than $13,000 in costs per home.”

Regulatory costs make building permits more expensive. There are a lot of fees bundled into the permit.

 

 

Homeless in St. Paul

The number one cause of homelessness is a lack of affordable housing. Once a person becomes homeless keeping or getting a job becomes much more difficult. There are camps all over the city where people live in tents even in the winter.

There was and maybe still is a large homeless camp just below the cathedral along the freeway.

homeless in St.. Paul
Homeless camp

There are camps in the woods along the river unless the river floods. There are abandoned sleeping bags, tents, and clothing in parks and near the camps. Sometimes people camp at the boat landing near downtown.

According to a report and action plan from the Interagency Council on homelessness, there are some groups of people who are more likely to become homeless than others and the number of people who are 55 and older who are homeless is rising rapidly along with the number of young people who are homeless. There are disparities based on race and people become homeless as a result of domestic violence. You can find the report here.

 

Here are some statistics from the Interagency Council on Homelessness

Homelessness in Minnesota

As housing costs continue to rise faster than wages the problem may grow. Home builders have been saying for years that they can not build affordable housing and make a profit. Most new construction housing is very expensive.

I am not sure if it is the answer but we lack micro apartments and of course, local zoning laws prohibit tiny houses.

Confusing and deliberately misleading

Turret

The world of marketing homes for sale on web sites is misleading, sometimes deliberately so. I saw an advertisement in a neighborhood newspaper about how many visits the web site of a local real estate company gets and how home sellers should have their home listed on it.

The ad more or less says that if you want your home listed for sale on our website then you need to list it with one of our agents. What the add doesn’t say is that if you list your home with any agent from any local real estate company it will end up on our site and appear to be one of our listings.

When someone lists a home with a local real estate company, and we can use my company as an example, the same information appears about the home appears on like a zillion web sites. Usually, the listing information is fed directly to participating sites directly from the MLS. The same feed also sends it to Zillow and Realtor(dot) com and many other sites.

As a home seller if it is important to you to have your home listed on the web sites of the largest local companies or on the web sites with the most traffic listing your home with any REALTOR® from any real estate company should work.

The system may be confusing but it also gets all of the agents in the area competing to find a buyer for all of the homes that are listed. Your house is also used as bait by agents who pay to get “leads” from sites like Zillow.

Real estate agents pay to have their contact information next to the listings. In fact, the reason the sites are free to consumers is because of advertising revenue from real estate agents. Yet consumers often see the site as an alternative to real estate agents.

People who are selling their home without listing it with an agent can and should list it on Zillow. There is no one place where all of the homes that are for sale by owner are listed so it is important to go where the traffic is.

The spring market is heating up. The number of homes for sale was up slightly from record-breaking lows but in the last few weeks home buyers have been shopping again and making offers. We are still in a strong seller’s market.

Also see: Broker reciprocity

Also, see:  Agency