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minnesota

Helpful Hints on Home Descriptions

Properly Marketing a Home For Sale

Beautiful Flower Beds

Most real estate agents are not good writers, so it should come as no surprise that when you read through real estate listings the descriptions are lack luster. Some agents just don’t care, some just don’t know how to write well, and some agents are so “old school” that they know no other way. Sadly, home owners are the ones hurt because poorly written descriptions fail to attract buyers, so it is extremely important to choose an agent that writes well and takes the time to create a story about your home.

I continualy write on this blog about the importance of good listing photos and how they are the first things buyers look at when searching for a luxury home in the Twin Cities. Photos are the window into the soul of the home, but to make them even better, you must have a description that tells a buyer what they are looking at.

What to Do

  • Accurately describe the home. Calling it the “Best” home in the neighborhood might not be a bad thing, but you better make sure you can back it up with photos and reasons on WHY it is the “Best” home.
  • Use good adjectives that attract buyers like “Beautiful, Lovingly Maintained, Great Landscaping, Spacious”.
  • Include longer descriptions of photos that highlight great features of your home.

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What Not to Do

  • Don’t use negative adjectives to describe your home. Words like “As-Is, Motivated Seller, Small, Needs TLC, Good Value” might not sound all that negative, but they can be a “red flag” to buyers who might think the home is not worth seeing, or needs too much work.
  • Don’t put photos of your listing on the MLS without descriptions. Simple words like “living room” no longer cut it. Buyers want to know exactly what they are looking at and the best way to attract them to your home is to provide ample descriptions.
  • Don’t be lazy. Check up on your Realtor and make sure they are giving your home the marketing it deserves!

(Of course if you pick the right agent from the beginning, you probably won’t have to do much. A great agent will make your listing shine!)

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Comparing Market Value with Assessed Value in the Twin Cities

I think the answer to this post on comparing Market Value vs. Assessed Value can be summed up in four simple words, “Just Don’t Do It“. In the past few months I have seen an increased objection voiced by some buyers over home prices. When I ask them to justify their reasoning, I am quickly told something along the lines of “Well, the home is only assessed for X. Why should I pay more than that?”

To make it simple, Market Value in Minnesota is what a buyer is willing to pay for a home, where Assessed Value is a valued placed on a property by a governemnt tax assessor for the purposes of taxation. The two are not the same. Every state is different in how they calculate property assessments, and Minnesota uses a system that is different from any state I have lived in.

Take for instance Dakota County.The current 2011 tax statements that were sent out this year are not based on current home prices. Instead, they are taken from home sales that occured between Oct. 1, 2009 and Sept. 30, 2010, data that no home appraiser would be able to use under financial guidelines as the sales are too far into the past. So if I were to buy a home towards the end of 2011, the “values” used by the county assessor could be off by two years!

Now look at homes currently for sale on the open market. The most important job of a real estate agent is determining what the Fair Market Value of a property is by comparing it to other properties that have recently sold in the area. This “market snapshot” is a more accurate, not to mention more up-to-date, representation of a home’s value. If buyer’s are willing to pay “X” for a similar home down the street, then there is a good chance another buyer is willing to pay around the same amount for your home.

While homes that are priced in lower tax brackets tend to show assessed values and market values closer together, homes in the upper-bracket real estate market, especially waterfront properties and historic homes, tend to be further apart when comparing the two values. County tax assessors generally have poor to no knowledge of what the true value of an expensive home might be, as they rarely have direct access to the interior of homes. Take for instance a large historic home I sold in Minneapolis. It was a truly unique home with nothing remotely like it on that side of town. The historic elements inside the home were priceless and would be near impossible to duplicate, but according to the tax assessor, the home was assessed well below its true market value. When a buyer did come in with an offer, they had it priced at the assessed value. I literally laughed when I saw the exact number and had to do the buyer’s agent’s job for her by showing where proper comparable home’s would come from (she was an out of town agent). After some negotiating, the seller and buyer were able to come to an agreed to price, which was up considerably from the assessed value first proposed by the buyer.

So please, when you are shopping for a home, do not use the assessed value of a home as the basis for an offer. Instead, look at what other comparable homes in the area have sold for and go from there!

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Insuring the Million Dollar Home

Probably one of the last things a luxury buyer thinks about when shopping for a new home is how he is going to insure it and how much is it going to cost. One of the hardest things to figure out is WHO is going to insure it. Luxury homes are not insured by every insurance company out there, and most likely, buyers will have to choose from a small pool of companies.

For instance, Minneapolis and St. Paul have an extensive inventory of historic homes with many showcasing architectural elements that would cost a fortune to reproduce today. Sorry, but Allstate just won’t do.  Buyers and home owners can’t just pick any insurance company to cover these beautiful and rare items; therefore, the best way to protect your home is to choose an insurance company that has a specific policy covering old homes.  Placing a value on items can be tricky, so agents can come to your home and evaluate original stain glass windows, rare woodwork, imported tile, expensive wall coverings, stone carvings…you name it, they have the expertise to value your home’s special attributes.

The initial appraisal and inventory of your home is crucial. Agents will take photos and detailed notes of everything in your home, so that should a disaster strike, your home can be reconstructed as best as possible to its original state. Most of these special insurance companies will go above and beyond the policy to make sure your home is returned to you better than before, even updating your home to current code at no additional expense to the home owner.

 Some companies that you might look into for insuring your luxury home include:

  •  HUB International – can quote from the Top 5 upscale insurance companies
  • Fireman’s Fund
  • Chubb 
  • AIG/Chartis
  • ACE
  • PURE

Many of these companies offer increased coverage for Wine Collections, Jewelry, multiple properties, flood insurance, Kidnap and Ransom, Fine Art, etc.

Home Owners, you aren’t left out of this conversation either.

 Over the years, million dollar mansions are updated and improved, but many homeowners neglect to call up their insurer and inform them of the improvements, leaving their home undervalued. When disaster strikes, homeowners could find themselves in a tough place when they don’t get the correct dollar value to replace their home and personal items. It is suggested that homeowners update their policy every year to make sure they are fully covered.

And don’t let the declining real estate market, which might state the value of your home has decreased, affect the insured value of your home. Home values have little to do with how much it will cost to rebuild and replace everything lost, so don’t get caught in that trap.

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Required Sprinkler Systems in Minnesota Homes

Mandatory Sprinkler Systems in Your Home

I have to admit, I have insider information, so I’ve seen this coming for years. I even wrote a blog post about it back in 2007, listing some benefits to having a home sprinkler system installed, especially in a million dollar home. I don’t have a problem with them, after all, my husband project manages for Summit Fire Protection in St. Paul and oversees daily the installation of fire suppression systems in Minnesota buildings.

What I do have a problem with is the government making it mandatory for all newly constructed homes to have a sprinkler system installed. You most likely haven’t heard that the International Code Council added in 2009 to its International Residential Code that fire sprinkler systems be a required standard feature in new home construction. The National Association of Home Builders tried to have the measure repealed, but was unsuccessful, so the new requirement will be included in the 2012 IRC edition.

What does this mean to you?

So far, there are only a few states, California being the first, to adopt the 2009 IRC requirements. But I am sure there are many other state and city governments that will jump on the bandwagon, all in the name of public safety. Currently there is an effort in Minnesota, championed by the Builders Association of Minnesota, to prohibit the State Building Code, State Fire Code, etc to require the installation of sprinkler systems in residential homes (H.F. 460 and S. F. 297). Now this doesn’t mean you can’t have one installed, but it does keep you from having to pay for one when you don’t want it.

I’ll keep a close eye on this one. While the cost of sprinkler installation is fairly low, about $3000 for a $300,00o home, in today’s market, people are watching the dollars they spend very carefully, and one might just rather have granite counter tops over a fire suppression system.

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Only in Minnesota…

A month ago I took the family out for a cold day of Minnesota ice hockey- the US Pond Hockey Championships 2011. They are held annually on Lake Nokomis. It was about 10 degrees that day, but us Minnesotans know that is the best conditions to play pond hockey, especially if the sun it out. I know what you are thinking…we must be crazy!

 

Minnesota Hockey US Pond Championships

You have to be careful when watching the games, as a puck can come flying at you any moment. A task even more difficult when looking through a camera lens!

Minnesota Pond Hockey Minneapolis

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Do Your Homework when Building a New Construction Home

In light of recent experiences I have encountered with local Twin Cities home builders, I make it a point to tell buyers that they should thouroghly research any builder they might contract to build their new home. Some builders are barely keeping their business above water, and others are slowly sinking, but if you spoke with these builders, most likely they would tell you they are doing” a lot” of business. Don’t believe them. Here are some tips to consider when building a new home:

  • Ask the builder how long they have been in business under the current company name.If it is a short period of time, ask them if they, or anyone involved with company, has been a builder/contractor under a different name. Believe it or not, there are some fairly sizable builders in the Twin Cities who have declared bankruptcy, gotten in trouble with the state, etc, and closed their doors, only to open up under a brand new entity name. Of course, they don’t disclose this to potential buyers.
  • Ask the builder if their company name is the same as their legal corporation name. Sometimes builders “Do Business As” (DBA) a different name. You can research both names with the Minnesota Secretary of State and find out if they are in good standing.
  • Ask for the Builder’s License Number. They should be able to give it to you on the spot. If they don’t, consider this a red flag. Once you have the number, research the builder with the Department of Labor and make sure their license number corresponds with what you were given. Believe it or not, some builders have been using another builders license number to pull permits, illegally of course.
  • Find out who owns the company. Go to the Judicial website and see if there are any active judgments against the owner and/or the company. Pending cases brought against the builder by clients or trade professions could be a red flag.
  • Ask for References. Don’t just get the good, but also ask to speak with someone who was not happy to see how the builder resolved the issue. It could give you a clue on how the builder professionally handles complaints.
  • Don’t just take the builder’s word for it. I can’t tell you how many times I have been lied to by a builder as an agent, and it just makes me more mad when I meet buyers who were lied to as well. If you have contracted with a builder, make sure all permits are pulled for the work being done. Once again, some builders are doing work without a permit, and when the city finds out, and the project shuts down, the buyer is the one left in limbo. Don’t be afraid to call the city and ask them if proper permits were pulled.
  • Find out who holds the escrow money. I don’t like the escrow money being held by the builder. If a builder cannot finance the permit on his own, then I question their financial standing. I have run into buyers who have had problems with builders and had to cancel the contract, only to find out the builder has spent the escrow money and doesn’t have the funds to pay the buyers back. It just turns into an awful mess. See if the money can be held by a title company.
  • Don’t go with a builder just because they have a great lot. The worst thing you can do is fall in love with a lot that is owned by a builder that you are not excited about. Trust me, it is the kiss of death! I know two buyers currently (not my clients) who went with a builder because of the lot and the homes are falling apart. They were warned about the builder, but they said they would take their chances because they were so blinded by the lot.
  • Don’t be afraid to ask questions. Ask everything you can think of, and don’t hold back even on the things that seem minor. 

These are just a few things to think about. “Google” the builder, too, and see what pops up. For instance, a  recent article in the Star Tribune highlights how some local builders have lost their license recently or been fined in the past few months.

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New Plans for High Income Earners in Minnesota

Our Lovely Governor’s Plan

In case you haven’t heard, our new democratic governor has unveiled his budget proposal for Minnesota.  The Governor’s proposal focuses largely on liberal, revenue-raising measures that unfairly target one group of people – those he considers RICH. 

  • His plan calls for creating a fourth tier income tax bracket at 10.95% (why  not just make it 11?) for joint filers earning over $150,000 and head-of-household filers earning $130,000. (By the way, when did spouses making $150K become rich?)
  •  He also wants to create a “temporary” income surtax of 3% on filers earning more than $500,000 annually. Of course we all know that any tax that is touted as being only “temporary” always becomes a permanent tax.
  • And probably the most ridiculous is imposing a statewide property tax on homes valued over $1 million. 

It shouldn’t be any surprise to my readers that I oppose all three of these proposals. I am not rich, but I aspire to be some day through hard work. Why then should I, or anyone else who has worked hard to be successful, be punished for earning more? I constantly hear about how one class deserves more than the other, and frankly I don’t get the whole “spread the wealth” thing. I grew up lower middle class, and through hard work, my father raised us up some. He never asked for a handout, and he raised me to believe that the only one looking out for myself is me. I could never ask someone that is wealthy to give me a piece of their pie just because I don’t have any – I prefer to make my own.

So when I hear Dayton say he wants to tax the rich more because “they can afford it”, I get a little mad. At 11%, Minnesota will be one of the states with the highest tax bracket. I see luxury home property taxes all the time, and trust me, they aren’t cheap. So also increasing the property taxes on million dollar homes just pushes the knife in further for high income wage earners. With the plethora of million dollar homes available in the Twin Cities, especially around Lake Minnetonka, I can help but think that these proposals will keep the wealthy from moving to Minnesota, therefore making it harder for local home owners to sell.

I guess we will just have to wait and see what happens. The Minnesota Association of Realtors “opposes the imposition of a statewide property tax for several reasons.  First, property taxes should remain a source of local government revenues and should not be expanded at a state level.  Second, expanding the residential property tax to the state poses an opportunity for future expansion to other, lower-valued properties.  Finally, it is the wrong time to add additional burdens to an already ailing housing market”.

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Nerstrand State Park in Fall

 

Fall at Hidden Fall in Nerstrand State Park

Autumn at Hidden Falls

I headed down to Nerstrand State Park, near Northfield, two weeks ago to see if any of the fall colors were still around. Most of it was gone, but down by the waterfall, there were a few trees hanging onto their leaves, almost just for me.

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Historic Grand Hotel Sells in Minneapolis

Luxury Grand Hotel Downtown Minneapolis

Luxury Grand Hotel

Looks like the Grand Hotel in downtown Minneapolis has sold for $33 million to Pebblebrook Hotel Trust. According to Business Wire, the new owner plans on investing $4.5 million into building renovations. The building will continue as a top luxury hotel for Minneapolis.

The building was originally opened in 1915 as the Minneapolis Athletic Club, built by Bertrand and Chamberlin. Its short stature of 12 stories can be attributed to a 1920’s height restriction.

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Yes, Monarchs can be found in the North, too!

Monarch Butterfly on Joe Pye weed

For the last two years I have been working on my perennial garden, adding plants that will attract butterflies. Joe Pye Weed was the first plant I bought, and now after two years, they are nearly 7 feet tall. You can imagine how excited I was a few weeks ago when I noticed they were covered with Monarch Butterflies, plus a few Viceroy Butterflies as well.

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