From the category archives:

Food for Thought

Only fools rush into this major DIY undertaking.

Painted cabinets are ruling Pinterest these days, since intrepid DIYers love the idea of updating their kitchens with only a few coats of a new color. It seems like a no-brainer project, but this undertaking actually has many potential pitfalls. Avoid these blunders to end up with cabinets you can’t wait to show off:

Read More at 11 Big Mistakes You Make Painting Cabinets

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Luxury home Kenwood Parkway MinneapolisLooking to buy a luxury home in Minneapolis, St. Paul, Lake Minnetonka, or the Twin Cities metro area?  Here are more ideas on what to do before your next home purchase:

  • Look beyond your Target Price – You might be looking for a home in the $5 million range, but if you are looking in an area other than where you currently live, you need to find an experienced luxury agent to help you understand market value. Find out what $1 Million, 3 Million, or even $10 million will get you.
  • Don’t Get Sticker Shock – Prime locations command prime dollars. Expect to pay higher than normal prices for waterfront properties, mountain views, and prestigious areas.
  • Communication is Key – real estate agents cannot read your mind, no matter how good they are. It is extremely important to be honest about your goals and your finances in order to have a great experience. Most luxury agents understand the need for confidentiality and will be more than happy to work with you.
  • Put Trust in Your Agent – Realtors are professionals, so trust that your agent understands what you want (again, communicate) and you’ll be viewing homes that meet your needs. If at anytime you feel uncomfortable, do not feel guilty for seeking out a new agent.
  • Don’t be Confidential about your Assets – Be prepared to show your ability to purchase, no matter who you are. You might be well known where you live, but your new city banker won’t. Have your bankers talk to each other to verify there are funds available to close and to also source the origination of those funds. The seller might also ask for a letter of verification from your lender for their peace of mind.
  • Don’t forget Future Resale Value – It might not be your top priority, but someday you will probably want to sell the home you are purchasing. Check the appreciation rate for the neighborhood and take it into consideration when buying.
  • Think about your Offer – Price is usually the first item a seller looks at when an offer is written on their home, but an offer can also consist of contingencies about inspections, finances, closing dates etc. Remember to make your offer based on of all terms and the condition of the home. If need be, have your Realtor write up an explanation of your offer terms to include with the contract. Sometimes explaining your situation or reason to the seller will give you a “human factor” and most times get your offer accepted.
  • Don’t get Emotional about the Seller’s Personal Property – if there is something you like in their home and would like to ask for it, do not write it in the contract. Instead, draw up a separate agreement and ask nicely for the item(s). If they say no, let it go. Too many deals fall through because of household appliances or a chandelier. If they promise something is in included, get it in writing!
  • Get to know the Paper Work – Ask your agent for copies of all documents and disclosures and review them before you make an offer. Mark any areas where you have questions. Every state is different regarding the types of disclosures you need, and what you are use to in one state, most likely will differ in another. For example, in Florida, there is a “Termite” Disclosure which also covers mold, wood rot, and powder post beetles, but if you want to buy in Minnesota, they have no such disclosure.

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Traveling to Denver to attend a luxury real estate conference is a highlight of my year. It’s a good way to market my listings to agents from across the country and meet people to send clients to when they move out of the Twin Cities.

Leaders in Luxury is an invite only event for the top luxury real estate agents in the nation, and I had the privilege of being invited again this year.

Leaders in Luxury Real Estate

The chandelier shown above is located in the Ritz Carlton – Denver and was created by glass artist Dale Chihuly. It is an amazing work of art!

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Monarch Butterfly on Joe Pye weed

When it comes to selling your home,  honesty is always the best policy, especially when speaking with your agent.

Each time I meet with home owners to discuss their property, I let them know up front that I offer complete honesty, adding that I don’t “sugar coat things”. I’m blatantly honest to the point that I have had a few home owners get mad at me for “insulting” their home. (Some home owners don’t want to face the facts that the home needs a MAJOR cleaning.)

Of course I asked them if they would rather have an agent lie to them to get a listing, or have an agent tell them what they most likely don’t want to hear and help them get the home sold.  I have yet to have someone tell me to lie.

But the main point of this story is that after I state my commitment of honesty to them,  I notify them that I expect the same level of honesty from them in return.  Remember, anything you tell your agent is confidential. So don’t be afraid to tell them a divorce is on the way, or that you just received a notice of foreclosure.

What ever you do, DON’T hide facts that can affect the listing.

I once had a home listed that I was heavily marketing, and putting a ton of time and money into getting it sold.. It wasn’t fun getting a call one day from a buyer’s agent asking how long my clients had been in foreclosure. This was news to me. I had specifically asked the sellers if they were in foreclosure and had been told no. I had also looked into public records, and there was no foreclosure notice posted. Of course the day it became public was the day this agent had seen it, and thus called me because he had an interested client.

When I asked the home owners why they hadn’t told me, they said it was private information and that they were embarrassed to tell me. Unfortunately, their failure at being honest cost us months on the market. Now we had to regroup and talk short sale. Time was running out, and a short sale takes time. Luckily, they had a bank that was on top of things, and we were able to get a short sale approved.  Unfortunately, their lack of honesty caused unnecessary stress and loss of time for all involved.

I could go on and on with examples of how past clients have been less than honest with me, and each one has had it affect them negatively – either through more time on the market, less money earned on the sale of their home, or no sale at all. Don’t let this be you! Be HONEST with your agent because they’re there to help get your home sold, no matter what the circumstances.

 

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Thinking of selling your high end home? Want something different that sets your home apart from others on the market and really grabs a buyer’s attention?

Check out the new video released by Jennifer Kirby, Broker/Owner of Kirby Fine Homes, that features one of her luxury listings in Minneapolis. It not only blows the ho-hum virtual tours of still shots used by most agents out of the water, it tells a story about the home and creates an emotional reaction from buyers that could just make them say “This is the ONE!”.

Want your high-end luxury or historic home to be featured next? Give Jennifer a call for a professional marketing consultation and analysis.

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On Friday, March 7, 2014, the Minneapolis City Council voted 13-0 to immediately enact a moratorium on residential redevelopment in the Armatage, Fulton, Kenny, Linden Hills, and Lynnhurst neighborhoods. This action was brought by newly elected Ward 13 Councilmember Linea Palmisano, and will last for ONE YEAR!

MPLS Moratorium

Highlighted Neighborhoods of Minneapolis Moratorium

This means if you are looking for new construction in these neighborhoods, you can’t build. If you want to sell your home to a developer as a tear down, you can’t because the developer won’t buy it. If you were thinking of adding on an addition to your home, you can’t do it unless the total above ground square footage is less than 1500. Oh, and if you are having a hardship, you have to appeal to the City Council and prove your hardship…if it isn’t good enough for the council, than you will be denied!

Is this stupid??? Ummm, YES!

The official council motion reads:

Motion by Palmisano to introduce an ordinance amending Title 21 of the Minneapolis Code of Ordinances relating to Interim Ordinances, for first reading and referral to the Zoning & Planning Committee (adding a new Chapter 590 providing for a moratorium on the demolition, new construction, or establishment of single and two-family residential dwellings in the R1, R1A, R2, and R2B zoning districts in neighborhoods of Linden Hills, Fulton, Armatage, Kenny, and Lynnhurst, and authorizing the department of Community Planning and Economic Development to conduct a study to inform future development of the area and to propose such amendments to the city’s official controls and other regulatory devices)

The full text of the ordinance can be found here.

Due to the invocation of the city’s Zoning Code Chapter 529, the council was able to make this ordinance effective immediately upon passage.

According to the Minneapolis Association of Realtors, “neither the housing industry nor the public was invited to engage with the city on any issues of concern leading up to this moratorium vote. We are very disappointed that the City moved to put a yearlong ban on housing in these critical Minneapolis neighborhoods.  The disregard for constituents, both current and future, saddens and dismays all of us in the housing community. This moratorium will be incredibly damaging the overall housing market, and especially to the property rights of Armatage, Fulton, Kenny, Linden Hills, and Lynnhurst residents”.

A public hearing will be held on Thursday, March 20, 2014 by the City’s Zoning and Planning Committee at 9:30 am. That committee is chaired by Lisa Bender (Ward 10) with Vice-Chair Andrew Johnson (Ward 12).

I strongly suggest that the public attend this public hearing to voice your concern and thoughts on how this will affect the housing industry in these neighborhoods.

 

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I hate to say it is funny, but the reaction I get from people each time I ask this question has become so common that I have to smile each time it happens. The magical question is “Are you currently working with a Realtor?”  There is usually a short pause as the home owner or potential buyer processes the question, with expressions that range from the obvious “No”, to “What does it matter to you”.  I usually ask this question when someone calls to inquire about a property, or to set up a meeting to market their home. Most don’t realize the importance of the question, but as a Realtor, it is extremely important for me to know up front if you are working with another Realtor.

By “working with another Realtor”, what I am really asking is if you are under written contract with another Broker – meaning they represent your interests and owe you fiduciary duties. See, Realtors are bound by the Code of Ethics set by the National Association of Realtors, and according to Standard of Practice Article 16:

REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients.

We also have an “obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service”.

I take the Code of Ethics very seriously and the last thing I want to do is step on another agent’s shoes, or violate the Code of Ethics. Many times I hear from people that they have been working with another agent, but do not have a written Representation Agreement with them.  (Some think working with multiple agents helps them with their home search, but it doesn’t). Others have written agreements expiring and are looking for a new agent to represent them. Some are looking for advice, and depending on their answer, I will or will not give them any.

So, next time your hear this question, be honest. Explain to the agent why you are calling, and let her know right away if you are/aren’t working with anyone.

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Looking to purchase a new luxury home this year in the Twin Cities? Most likely, you will be using what’s called a Jumbo Loan to help finance the purchase.

What you need to know is that the rules have changed, thanks to the Consumer Financial Protection Bureau. Effective January 10, 2014, the rules for the jumbo-mortgage market are changing. According to the Wall Street Journal’s Market Watch, here are five changes to expect in 2014:

  • Fewer types of Jumbo Loans – interest only loans and those with balloon payments will be hard to find, and will most likely result in a higher down payment requirement.
  • Lower Down Payments – the good news is that many banks are dropping the 20% down requirement on large loans, some down to 10-15%. But this might mean private mortgage insurance will come back, an added expense for borrowers.
  • New Rules for “non-qualified” loans – Loans that meet the new “qualified” requirements must have no higher than a 43% debt to income ratio. For banks wishing to offer jumbo loans above this mark, they will most likely require higher down payments, and proof of large cash reserves.
  • Banks will Push for ARMs – rates on 30 year fixed-rate Jumbo Loans will increase over time, thus causing some banks to promote ARMs (adjustable rate mortgages), allowing them to make more money on higher interest rates once a borrower’s rates reset
  • Rate Changes – new rules created by Dodd-Frank will cause investors to pay more for loans sold to them, passing this cost down to borrowers utilizing Jumbo Loans

 

The video below is a quick snapshot about how the new Mortgage rules will affect the real estate industry this year.

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If you plan on building a new luxury home in the near future, you might have an extra expense to contend with if Governor Dayton gets his way.

Currently the Minnesota Department of Labor and Industry (DLI) is processing an update to Minnesota’s Building Code. Minnesota’s code is based upon the International Residential Code (IRC), which it amends to reflect local climate and building practices. The DLI’s ongoing process to update the code has featured an intense debate over the inclusion of a fire sprinkler system mandate in Minnesota’s code update. Since 2011, state lawmakers have passed two bills that would have prevented Minnesota from mandating home sprinkler systems. Both times Governor Mark Dayton has vetoed the bills.

In late October the draft building code was released with a home indoor sprinkler system mandate for all newly built homes 4,500 sq ft (including unfinished living space) and above. Notice it includes “unfinished living space”. That means your unfinished basement square footage is included in the numbers. While it is my opinion that it actually might be a good idea to install sprinkler systems in expensive luxury homes, it is NOT a good idea for the government to mandate it. The choice should be left up to the consumer because it’s their pocket book paying for the extra expense.

Don’t get too comfortable if you see a new home in your future under 4,500 square feet. Tom Brace, executive director of the Minnesota State Fire Chiefs Association, has said in a recent article that his ultimate goal is to mandate sprinkler systems in ALL new residential homes.

If you would like to learn more about the push to prevent the mandate, check out the website sponsored by the Twin Cities Builders Association.

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Looks like you may not be able to get your kids out of the house as soon as you hoped. According to the Pew Research Center analysis of U.S. Census Bureau data, 21.6 Million “adults” ages 18-31 lived at home with their parents last year. Those in college are more likely to be those living at home, but other factors like unemployment and fewer marriages  contribute to the increase of kids not leaving the nest.

Having left the nest myself at 18 for college, it would never had occurred to me to move back in. I was raised in the belief that once you are an adult, you have to make it on your own, and I am amazed at the high number of adults in their late 20’s and early 30’s that still live at home.  So with our ever changing society, how long is too long to stay at home with your parents? From a recent Coldwell Banker survey, it looks like many feel five years is the magic number.  However, even though it has become more acceptable, 70% believe that too many adults are living with parents to avoid responsibility, and 65% young adults are overstaying their welcome.

So, what do you think about this growing trend of young adults refusing to leave the nest?

 

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