From the category archives:

Food for Thought

Remembering Your First Home Purchase

I remember eight years ago when we bought our first home…just married, and transferring to a new city from San Diego, we had no idea what  life would be like living on the Gulf Coast. Being the savvy Internet gal I was at the time (and still am), I shopped for homes on-line, narrowing down the list of homes my husband had to see when he went house hunting. (Yes, that’s right, when HE went house hunting. Unfortunately, I could not get time off work, but he received 10 days.)

There was one home in particular that caught my eye – a For Sale by Owner (FSBO in real estate speak) home that had the prettiest back yard.  I called the owner right away and told her my husband would be in town in a week and set up an appointment to view the home. For days my husband viewed homes with a real estate agent, taking pictures of each, drawing up a pros/cons list, and then emailing me everything each evening so we could discuss our thoughts. He did a really good job!

The last home he saw was the FSBO. Right away he knew it was the one. See, I love to garden, and the back yard of this home was full of Gardenias, Azaleas, Oleanders, Camellias, a beautiful Magnolia tree, and my husband knew that it was “me”. It was apparent that the original owners of the home were gardeners, too, as the landscaping was fantastic. Long story short, we bought that home, and lived there for three years. I have to say that I cannot think of a better place to begin a family than that small home. It was perfect, and so you can imagine how hard it was to leave when it came time to transfer to another city.

For the last five years, every now and then, I have thought back to that home with fond memories. I have always wondered if the couple who bought the home from us took care of it the way we did – did they make sure to drink in the smell of the Gardenias as they sat on the patio late in the evening? Did they enjoy watching the different colors bloom throughout the yard? I hoped so.

Well, two weeks ago we flew back to the area to visit a dying relative and some of our old friends. Being busy as vacations are, it took us till the last day to finally drive by the old house to see what it looked like. As we drove up, I could tell right away it was no longer the house we had enjoyed. Every bush in the front yard had been pulled up and replaced with a Palm Tree. And the fragrant Viburnum that stood by the front door was gone too. Being as a road was directly behind the house, we were able to drive by and peer through the slats of the backyard fence. To my utter shock, we found that the owners had pulled up everything but the trees. ALL the beauty was now gone and it was hard to choke back the tears of sadness and disbelief.

It’s hard to return to your first home to see everything that made you fall in love with it destoyed. I am sure this does not happen to everyone, as usually most buyers improve a home and the property, but it seems to happen to me. ( The same thing happened to my childhood home, according to my brother, with the new owner pulling out everything but the trees, and I still to this day refuse to drive by it.)

What is it that makes your first home magical?

I believe it is the simple fact that after years of being taken care of by your parents, the first home purchase is all YOURS. You made it happen. Your money financed the home. It’s your piece of the American Dream. Sadly, our dreams are not always the same as someone else’s – that’s just life. But in the end, no matter what happens to the home we first bought, we will always have the fantastic memories we made in it. Those are the parts of life that really matter and the parts that no one can ever take away.

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Affluent Holding Back in a Recovering Market

Money Doesn't Grow On Trees, You Have to Earn ItForbes recently released an article highlighting the spending habits of the ultra-rich, showing how many are holding back in the current market and minding their pennies, so to speak. Here are the Top 10 trends of the wealthy:

  1. Rich are Spending Less and Shopping Smarter
  2. Not Optimistic about the Economy, but They are Happy
  3. Family is Top Priority
  4. Cutting Costs is Important
  5. Less Worried About Jobs
  6. Shop Online More
  7. They are Better Communicators
  8. They Don’t Feel Guilty about being Rich
  9. Brand Loyal
  10. They Like Print Advertising

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Days on the Market for Twin Cities Luxury Homes

The Difference in Days on the Market

Days on the Market for Twin Cities Luxury HomesReal estate agents in the Twin Cities metro area are pretty lucky. We have Realtor associations that produce outstanding market statistics, which other cities across the nation lack. One bit of data that is extremely important to us agents, and our seller clients, is the number of days that a home is actively for sale before a buyer produces an acceptable offer – otherwise knows as DOM, “Days on the Market”.

When these numbers are compiled, they are usually presented in generalities. We might have a number that is averaged out for a certain county, city, or neighborhood, but usually the detailed numbers per zip code are over looked. All price points are usually included, so the statistics can be skewed depending on how many high-end, or low-end homes are included.  For instance, the current DOM for the Twin Cities market is 118, so an agent that comes into a luxury listing appointment using this generic stat in their CMA (Comparative Market Analysis) could be doing the seller a disservice. 

Instead, the agent should be taking into account the area the seller lives in, and presenting those statistics. As an example, in Excelsior, where homes are much more expensive, the average days on the market is around 79. Wayzata is 144. Around Long Lake, it’s up to 173. The difference is staggering for luxury homes, especially if there is a lake nearby, or if the number of homes available to purchase is less. My main point is that when dealing with upper bracket real estate, sellers should be making sure they get the most accurate and detailed market statistics available for their home. And the only way to do this is choose an agent who specializes in the luxury home market.

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Are Your Real Estate Photos Killing the Sale of Your Luxury Home?

It continually amazes me how home owners don’t realize the poor quality of photos that their real estate agent is using to market their Million dollar homes here in the Twin Cities. Just today, I have been going through luxury homes stretching from Stillwater to Lake Minnetonka, and probably 90% of the homes priced over $800,000 have agent taken photos that are out of focus, tilted, angled, poor lighting….you name it, these photos stink!

In case you wonder if they really make that big of a difference, well I have to tell you that they do. If a buyer is looking at purchasing a luxury home, they want to see the home showcased at its finest. This means that quality photos must be taken by a professional photographer, and edited in the best way to show the homes highlights. Hey, I consider myself a decent photographer, but I leave the high-tech photo business to the professionals when it comes to my luxury listings. This means I spend money to get the quality I expect and the quality my clients deserve.
After all, what are they paying me for? My job is to market their luxury home to a luxury audience. Agents that bring their point-and-shoot cameras into a million dollar home should be kicked out on the spot. They don’t know what they are doing, and the people who will suffer for it are their clients.
Want to know why your home has been languishing on the market for over a year? Over two years? Take a look at the photo below. It represents the only photo for a $1.5 Million listing in Minnetonka. The description in MLS sounds great, but there are no photos to back it up. Do you think a buyer would really want to set up an appointment for this type of listing?
Or how about this home below that started out at $2.4 Million in Eden Prairie? It is has been on the market for a while, and now is reduced $500,000. Could it be that the really poor photos, and there are more, are killing any potential sale for this home? I certainly think so.

As a home owner looking to sell, you really need to question the agent you use and how they are going to professionally market your luxury home. Luxury home specialists know that money has to be spent on quality photography and marketing pieces to attract buyers. Ask your agent for marketing examples and past experience in the luxury home market before you sign a year long listing because if you don’t, the quality you could be getting could resemble the photos above.

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Heading in the Right Direction? Recent Market Stats Might Say So.

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Banks Could be in Hot Water over Short Sale Fraud

I knew this article was coming out and was contacted by one of the parties mentioned in the story, but at the time had not had it happen to me in any of my short sale dealings. Shortly after the fact, I did have JP Morgan Chase ask me to keep something off the HUD involving a second lien holder in a short sale negotiation. Even after I notified them that what they were asking was a RESPA violation, they refused to yield. In the end, the home owner was able to pay off the second lien holder before anything further proceeded, but I wasnt’ too happy with Chase’s attitude that what they were requesting was OK.

Big Banks Accused of Short Sale Fraud

“Just as regulators, lawmakers and all forms of financial oversight boards are talking about new regulations to guard against mortgage fraud and another mortgage meltdown, there appears to be yet a new mortgage fraud out there today, allegedly perpetuated by agents of, yes, the big banks….” (read more)

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Not All Negotiations are Nice

In Minnesota, the term “Minnesota Nice” is thrown around alot to describe just how great the people here are. But when it comes to negotiating deals in real estate, that nice attitude can sometimes be shed, especially when two parties have a hard time agreeing to terms.

Recently I had a transaction in which from the beginning, there was conflict. This happens sometimes when a buyer presents an extremely low offer which in turn greatly offends the seller. In this case, the seller stuck to his guns and refused to give into the buyer’s demands. Frustrated, but really wanting the property, the buyer gave in and agreed to the sellers terms. From that point on, there was hostility from the buyer during the inspection period, during those negotiations, and up to the end. Of course, they pointed the finger at the seller saying he was being difficult, and the buyer’s agent was wonderful to tell me what she really thought of my client.

But the point is this, not every deal is peaches and cream, and not every buyer or seller walks away from a sale feeling it was a win-win situation. Such is life. Negotiating a real estate sale can be down right unpleasant due to so many emotions getting in the way, however if you can keep the emotions out of it, you have a better chance of creating a pleasant atmosphere which will bring the “nice” back into the transaction.

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Is it Just Me or Are Things Getting Smaller

The last few months I have been noticing a trend in the products I purchase. It seems some things are getting smaller, but still costing the same.

Take for instance the Cascade bottle of dishwashing detergent I bought at Sam’s Club. Normally a blob of thick white stuff comes out when it is time to run the dishwasher, but now it is more liquid than detergent, and runs like a river.

My sons love graham crackers as a snack. A few weeks ago I accidentally opened up the new box of crackers. To save space I decided to combine the two boxes. When I looked at the old crackers, and compared them to the new ones, you could see a definite difference. The new ones were still the same thickness, but the cracker itself was less wide. I don’t recall a price reduction in the food isle at Target.

Last time we bought a bag of toilet paper, I combined the new ones with the remaining old rolls in our storage closet. It didn’t take but a few seconds to notice the new rolls, while still having the same number of sheets, was about a quarter inch smaller in width.

So it appears that corporations have a need in this economy to lessen the amount of product consumers receive, but still charge the same price. I can completely understand where they are coming from…we all have to cut costs to make it through a downturn, but it would at least be nice if they were honest about it and told us up front.

What do you think? Have you noticed this trend in the products you buy?

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Forever the Salesman

One great thing about being a Real Estate Agent is that the job takes you out of your element. You can’t sit behind a cubicle or desk and only speak with a client on the phone. A good agent must get face to face with a client, sometimes many times, in order to build a relationship.

Sometimes I want to be a silent agent when I run errands or go shopping. But it never fails that I run into someone talking about real estate and I can’t help but introduce myself. A good agent does this to build business. Our jobs are not Monday – Friday, 8-5. Many times we work all weekend and handing out business cards while standing in line for groceries is not unheard of. We can’t sit at a desk and wait for the phone to ring. We have to find the business for ourselves and that is the main reason so many new agents fail. It is difficult to step out of your safe element and approach a complete stranger. You have to sell yourself. You have to be disciplined.

With so many people online now a days, I have to also communicate over the Internet. I do this through my website and my blogs. A couple of times people have called me for real estate advice. When I ask them how they found me, they say they have been reading my blogs the last few months and decided to finally speak to me. The Internet lets clients and consumers stay in their element, but I am still not allowed to do so. I must always be the salesman.

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Where Do Minnesota Buyers Find Their Homes?

Whenever I speak to a Minnesota home owner who is thinking about selling their home, I discuss the technology I use to help market the home, and how implementing the power of the Internet is a big factor in my real estate success.

Statistics are extremely important when selling a home, so some data that I go over with a seller includes the infamous “Where do Buyers Come From?”. Below is current information for the 2008 real estate market in Minnesota. As you can see, 33% of home buyers found the home they bought through a real estate agent. (Please note, this means the agent showed them homes and one of those homes was bought by the buyer. It does not mean that only 33% of buyers used a real estate agent to purchase a home.)

The next piece of data which is so important is that 45% of Minnesota home buyers found the home they bought via the Internet. Wow! That is huge, and shows right away how important it is to market a home for sale on-line in our state.

Please also note, for those of you who still believe in print advertising, that in Minnesota, only 2% of buyers found their home from the newspaper, and only 1% found their home from a home book or magazine. Print advertising is dead and just doesn’t bring in the buyers.

Now looking further into the national statistics for “How do Buyer’s Find Homes?“, the National Association of Realtors has compiled data since 2001 of real estate trends concerning this issue. As you can see in the below table, over the last eight years, buyers finding their home, from the research of a real estate agent, has decreased 14%. At the same time, and probably the most dramatic change, is that buyers have increasingly found their homes via the Internet, up from 8% in 2001 to 32% in 2008. Wow!

When you look at Minnesota versus National, you can easily see that the Internet is more readily used in a buyer’s home search, 45% to 32%. So for home sellers, if you don’t hire an agent that is Internet savvy, you could be losing market time and money in selling your home.

For the small minority of people out there who feel the Internet is making the real estate agent obsolete, please know that even with all these buyers using the Internet to search for homes, 86% of these buyers are still utilizing a real estate agent to help with the home search and purchase. The good agents are using the power of the Internet for success, integrating it into their marketing plan to help facilitate the sale of their client’s home.

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