St Paul Home Price continue to climb

Minneapolis and St Paul area home owners continue to see an upward climb in the value of their homes. The median sales price soared up 17.5 percent over last year.  According to the Minneapolis Area Association of REALTORS®, the June 2013 average value was $210,000, the highest it’s been since December 2007, just as the market was starting to crash.  By the way, mortgage interest rates at the time were about 6.10%.

house_from_wordLess homes for sale than what we’d like to see, combined with fewer foreclosures, and low mortgage rates continue to fuel these price increases.  New listings were up in June by over 20% from last year, but still there are more buyers than sellers,  sparking competition amongst buyers.

While mortgage interest rates are still historically low, they have increased about 1% from the lows back in May 2013 to around 4.50% today. This increase has put more pressure on the home prices as those who were sitting on the fence are jumping into the water before rates go even higher.

In the sub $250,000 price range, considered the “most affordable”, many homes are selling very quickly with multiple offers just days on the market.  Therefore all prospective buyers need to be fully lender pre-approved and ready to make an offer the moment they see a house they love.

Rising home prices and higher mortgage rates caused housing affordability to decrease by 15.9 percent from last year. However, home prices remain well below pre-housing-crisis levels and mortgage rates remain historically low, even after the rate increase.

 


Are home sellers stupid?

“Broker Bryant, How much do you think our home is worth?” “Well, Mr. Need T. Sell, I think you house is worth about $260,000. However, I’m not here to tell you what your house is worth, I’m here to tell you what it will take to get it sold. In my opinion, I think we should Range Price your property from $239,000 to $259,000 trying to sell as close to $250,000 as possible.” He says in shock, “Broker Bryant, are you crazy? I just had it appraised 6 months ago and it appraised at $275,000! There is no way I am giving my house away at $250,000.”

Now being the “good looking” Realtor that I am, I respond, “Mr. Need T. Sell, you have been on the market for 6 months priced at $265,000 and told me you have not had a single showing. How has that been working out for you?”

He looks at me sternly and says, “Broker Bryant, the reason our house didn’t sell was because our Realtor didn’t do anything. We asked her to run an ad in the paper and she never did. All she did was put up a sign and put our home in the MLS. You can’t sell a house like that. I don’t know how they ever sell a house. All she ever did was call us every month and tell us to reduce the price. That’s the only time we ever heard from her. She’s the one that said she could sell our house at $265,000.”

READ THE FULL STORY

 


In Real Estate, When you snooze, you lose

In Real Estate – When You Snooze, You Lose!

Minneapolis / St Paul, MN: A big shift in the housing market in our area has taken many by surprise. Any qualify house under $200,000 is selling in just days, with multiple offers, and above asking price.

With dwindling inventory, mostly from fewer foreclosures, increased demand with more competition because of terrific interest rates, we are seeing more and more multiple offers. This often happening soon after a property hits the market. It brings to mind the popular axiom “when you snooze you lose.” Wait too long to look at a great, well-priced property, or to make a strong offer, and you’ve lost your opportunity.

The problem some of you must confront is that even once you learn NOT to snooze and to move fast, you still might lose.

Why?? 

  1. The offer isn’t strong enough even at list price
  2. There are many offers (sometimes 10 and more)
  3. Cash buyers are too plentiful
  4. Lending rules on homes needing a little work

Is this the case with all properties? Certainly not. But we are seeing more competing offers at many price points, and new listings moving more quickly than in the past few years. This is not intended to scare you, and or make you feel that you cannot compete effectively. Simply understand the market has shifted in some significant ways and you need to be aware so you can react accordingly when you find a home you really like.

PAUSE if you aren’t ready to jump, then you shouldn’tJust because things have heated up and there are “bidding wars” does not mean you should get bent out of shape or move quickly on an offer when you are really not ready. It’s a huge decision and an expensive one that shouldn’t be taken lightly. Make the decision that is right for you. And be prepared to live by it. 

Tips to help you win the deal: 

  • Be SURE to discuss any offer with your mortgage lender BEFORE writing the offer
  • Paying Cash? Have Proof of Funds ready to supply with your offer.
  • Know the comparable properties – this is what you pay a Realtor for.
  • Do not delay in making an appointment to see a hot new listing. Go now. Take time off work.
  • Do NOT assume a listing you like that has been languishing on the market will continue to sit there while you ponder. Remember…NEW BUYERS are hitting the market all the time and they might like the same house YOU do and be prepared to make a move
  • Know your budget (not just what you qualify to borrow) and make SURE you know what you are and are NOT willing to spend
  • Be ready to make an offer immediately if you like the house. Taking a night or two to “think about it” might be the kiss of death. REMEMBER THE TITLE OF THIS POST?!
  • Don’t get caught up in the auction-like atmosphere that can happen with multiple bids
  • Just because the tax value is significantly higher than the asking price DOES NOT mean you are getting a deal on the house.
  • Know that the home still has to appraise if you are getting a mortgage loan. Just because you are willing to spend more does not mean the bank will.

 


Top two myths about Real Estate Agents

With millions of web sites to look at for home for sale listing, it is becoming more and more common for people to feel they don’t need the help of a licensed Real Estate Agent.

More specifically, people seem to ONLY be calling listing agents for the properties you want to see. The thought behind this I suppose is “I can get a better deal if I don’t involve another agent and contact the listing agent directly.”

While the listing agent loves you only calling them, here is why is is usually a costly mistake for home buyers.

Myth # 1- I will get a better deal if I call the listing agent directly.

That listing agent is contractually bound to do what is in the best interest of the seller, and that means getting the highest dollar amount for the sale of the home. NEVER disclose your top dollar or financial ability to get a bigger mortgage loan to them because by law they have to go back to the seller with this information.

Remember…your goal is to pay as little as possible, while the seller’s agent’s goal is to get as much as possible for the seller. No matter what a Real Estate agent claims, this is a clear conflict of interest.

Myth # 2- I can find more homes for sale by calling more than one agent, or looking at multiple web sites.

The days of each real estate office having big books of only their companies listing are long gone. It is mutually beneficial for all Real Estate Agents to have all properties in the same database (call the MLS – or Multiple Listing Service)

All Real Estate Agents in the same area therefore pull the same list of homes available  for sale from the same multiple listing service database. Local agent sites typically interface with the local MLS site a minimum of once per day. If a new house for sale gets added today, EVERYONE local should have it listed tomorrow.

If you saw a home on Zillow, or some other national site, but that particular home didn’t come up in the local agent’s site, remember sites like Zillow & Trulia are NOT updated as often as the local MLS database real estate agents can pull from are. If it is not on the local MLS…  chances are the house that you saw has already been sold or is already under contract.

More importantly, the opposite is more often true. You find a home on a local real estate web site but NOT on the national sites. This is because some local companies do NOT report to the national systems. In my area (Minneapolis / St Paul, MN), the biggest player in the market (Edina Realty) recently stated they will no longer let their listing be show on the big national sites.  This means if you are looking at home for sale here, but on a national site versus a local site, you a NOT seeing over 20% of this areas listing!

The bottom line is the smart move for home buyers, and especially first time home buyers in MN and WI, is to use the services of a good, licensed local real estate agent in any home purchase transaction, and save yourself a lot of time by only looking at one LOCAL REALTOR web site.