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buyers

A pattern is emerging that shows a fresh willingness by sellers to put homes on the market and buyers to enter the market. New listings are on the rise, if not in year-over-year comparison, then certainly in week-over-week views, as we bounce well past the new year. A recent article in the Star Tribune confirms that sales in the Twin Cities are the best seen in the last 10 years.

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So what are you waiting for? I know you hear is all the time, but this year REALLY is a great time to sell!

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The National Association has just released some statistics about how green home features are affecting buyers decisions when purchasing a home. While commuting costs are a big concern for younger buyers, energy heating and cooling costs are the number one concern as buyers get older. Even though the data paints a broad stroke over the entire nation, it is safe to say that commuting and energy costs rank high in Minnesota, too. Local builders are taking building “green” into account, some becoming GreenStar certified.

green-home-features-infographic-2015-03-17

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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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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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Most Expensive Homes in the St. Paul Area

It’s always fun to see what the Most Expensive Homes For Sale look like, where they are located, and what price they are asking, so I thought I would update my readers and let them take a peak at these amazing homes, this time in St. Paul. Most are historic homes with some amazing architectural features that just can’t be replicated today.

View the rest of these luxury homes below:

[idx-listings linkid=”371989″ count=”10″ showlargerphotos=”true”]

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Parade of Homes Fall 2013

Dream Home by Nor-Son, Inc in Chanhassen

If you have been wanting to get out of the house to see some really beautiful homes, then don’t waste anymore time. This is the final week of the Fall 2013 Parade of Homes, which runs until Sunday, September 29th. The Remodeler Showcase is also this week, running Friday through Sunday.

I stopped by one of the Dream Homes last week in Chanhassen, and it is definitely one I would recommend viewing. The interior design and decor might be more Northern Minnesota, but it was nice to see something different in the Twin Cities. The home owner obviously hunts, what with all the stuffed animals in the lower level, but they fit nicely with the theme of the home. Luxury radiates from the master suite, and the kitchen is stunning. My favorite space by far is the outdoor screened in patio. I could sit out there all night (and so could my husband) and enjoy the wood burning fire, sipping on some wine. Check it out…I’m sure you’ll love it too!

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Luxury Home Lake HarrietHere are some good suggestions on what to do before you purchase a home.

  • Look for Lenders that cater to the affluent – A buyer looking as a $4 Million home doesn’t go to Lending Tree for a loan. You need a mortgage company with a history of upper bracket real estate.
  • Shop on the Internet, but don’t look at a home without a Realtor – The Internet is real estate’s most versatile tool and is a great way to browse for luxury homes and narrow down your choices. Look for a real estate agent that specializes in upper bracket homes and be honest with them about your purchasing power.
  • If you call on a listing, talk to the Listing Agent of the property – The best number to call is the agent’s cell phone, or better yet, email them. If you do have to call the office, leave a message for the listing agent. Often buyers who call about a home will only get the floor duty agent, who is always new.
  • Use an Agent that is an expert in the market and works the Luxury listings – Great agents are great agents, but if they don’t work specifically in your target price range in your target location they will not be as valuable a resource an agent who does.
  • Special properties need special agents – Ranches, waterfront, equestrian estates, all require specialized knowledge. Buyers will not know the zoning laws and potential problems associated with specialty properties, but your agent working in that arena will. An agent who does not normally work with Luxury homes could be a liability to you.
  • Know who handles the closing – How homes are bought and sold varies by state, county and region. Attorneys might handle the sale in some states and a title company in others.
  • Get an Estimate on Closing Costs – Closing costs vary by state. You also need to know if property taxes are prorated and if the state levies taxes off the purchase price or mortgage. These can be pricey when buying an expensive home.
  • Ask Questions about the local Luxury Market – Get to know the purchase documents before hand and it will help you make a better offer. Good agents educate you about the market, what is selling or not selling, and guide you through the buying process. Remember, there are no dumb questions!

Look for my next two installments of this series in the upcoming weeks!

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Lake of the Isles in Summer

Downtown Minneapolis from Lake of the Isles, Summer 2013

It’s amazing how many beautiful areas there are in Minneapolis, and in the summer, the Chain of Lakes is one of the hot spots in town. Minnesotans can take a stroll or bike around the three lakes, Lake of the Isles, Lake Calhoun, or Lake Harriet, canoe, paddle board, sail, and more! And all this with the Minneapolis skyline as a backdrop even though it feels like you are NOT in the city.

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