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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sellers
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.
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.
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.
In the life of a real estate agent, most transactions happen without incident. A seller and buyer come together, discuss terms, and viol`a, a house is sold. (OK, it isn’t exactly as easy as that.) But every now and then there comes a time when less than pleasant incidents occur, and I am reminded that life continues on through it all.
It has taken a couple of months to write about this as it greatly troubled me at the time it happened. Those who know me, including clients, know my motto is: “All things happen for a reason”. It has always been my belief that we are guided along through our lives, and that each decision we make helps shape our future. Those decisions affect those around us, no matter how minute.
I had a wonderful home listed – old, with a wrap around porch. It was waiting for that one special person who would fall in love with it and bring it back to life. Eventually, we found that buyer. Unfortunately, at the same time they presented their offer, another one came in at the exact same price and terms. Enter negotiations.
As often happens with multiple offers, I had to respond to both buyers asking them to resubmit their highest and best offer. As fortune would have it, the buyer that wanted to restore the home came in with the best offer. I knew both parties were anxiously waiting my phone call, so after the seller informed me of his decision on the “winner”, I immediately called the buyer’s agent to give the good news. To say he was ecstatic is an understatement – I was told how much his clients loved this home and how they were going to restore it to its former glory, and it made me really happy to know I was going to a part of a transaction that was about more than just a house. Having restored old homes in the past, I knew what kind of people these buyers were – passionate and loving.
The seller was out of town until the next day so we had to wait for final signatures before the deal was officially “done”. I spent the evening with my family, happy that this home was going to be loved again. When the phone rang late that evening, I answered it, which is not something I usually do. The person on the other end was the buyer’s agent, and he was clearly upset. Thoughts quickly went through my head – his clients had decided to pull out, they wanted to change the terms, etc., but what he preceded to tell me had me in utter shock.
Immediately after we spoke earlier that afternoon, he called his clients to give them the good news. The buyers were so excited. They were so excited that Mr. Buyer decided to immediately ride over to the home to sit on the wrap around porch and dream about “his house”. What happened next seems only to happen in movies. On the way to the home, riding his motorcycle, traffic stopped suddenly. He was able to stop in time, but the driver behind him, who was not paying attention, didn’t. Mr. Buyer was hit, and even though he was wearing a helmet, was killed from the crash. The buyer’s agent was calling me from the hospital, as he was a good friend of the buyers and their family. After he finished telling me that Mrs. Buyer would have to pull their offer due to the accident, I told him I understood completely and would inform the seller that night. After I hung up, still stunned, my tears started flowing. I called the seller, and between sobs, told him what had happened. Needless to say, he was also in utter shock.
As I said before, I believe everything happens for a reason, even if it is bad. I don’t know what the grand plan of life is, or why this happened, but what it does reaffirm is how much each decision we make, no matter how minute, can affect the lives around us. While I know I should not feel guilty about his death, apart of me wonders if the buyer would still be alive had I waited five more minutes before calling his agent. Can life’s path really be changed so quickly? My husband and family tell me it was not my fault, that is was meant to be. I know they are right. But through my eyes, it’s hard to understand how one simple phone call, that brought so much joy one minute, later caused so much heartbreak. You could go crazy trying to wrap your head around it.
So often I hear people dismiss real estate agents as vultures, only caring about making a “quick” commission. They just don’t get it. We are so much more, and it takes a special kind of person to juggle the many hats real estate agents wear. In this case, I became a grief counselor, not only for my client, but for myself. I felt connected to the buyers through their love, excitement, and passion about restoring an old home. A house was bringing us all together.
So see, real estate isn’t just about a house, it’s about people. And even though we don’t realize it, we are all connected.
One of my favorite luxury neighborhoods is located in Credit River Township, just south of the Twin Cities. I came across Cressview Estates years ago when two of the homes were on the Parade of Homes. Since then, even more luxurious homes have been built in the development, with every home having its own unique style. Home sites range from 2.5 – 13 acres, allowing you all the privacy you could desire. The Legends Golf Course is just down the road, as is the Cleary Lake Golf Course.
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Contrary to what most might think, many real estate agents aren’t desperate for listings. Yes, there are those out there that will take a listing because they really need it, no matter how overpriced the home will be, but I am not one of those agents.
Recently I turned down an expensive home simply because the home owner and I could not agree on a price. He saw it as a million dollar home, but I knew it was not worth anywhere near his dream number. I did my research, showing him what similar homes in the area had sold for. I even went so far as to take him out into the local marketplace and show him active listings, comparing those million dollar homes to his, hoping the information would sink in that his home in no way compared to those high-end homes. But alas, he still felt his unluxurious home was superior to them. We parted ways that day with a handshake, and I wished him all the best in the sale of his home.
He seemed surprised that I was turning down the listing. “Wouldn’t you like this home to be showcased on your website?”, he asked. I would have liked to have plainly said “Yes, but only if it is priced correctly”, but I was nicer than that. Here are some reasons why I don’t take overpriced listings:
- I was asked how much marketing it would take to get his home sold and I flat out told him that no amount of money thrown into marketing the home would make it sell if it was overpriced. See, agents don’t get paid unless a home sells, so we have to put thousands of dollars into photos, brochures, marketing, etc before we see a dime in commission. If the home doesn’t sell, then we are out all those costs. Taking an extremely overpriced listing means that the odds of that home selling are so rare that it is just not worth wasting my hard earned money. Buyers are pretty savvy in today’s tech world and know when a home is overpriced. Looking at it is just a waste of their time.
- Telling a home owner that their home is worth more than it actual is is a Realtor Code of Ethics violation. Standard of Practice 1-3 of the Code states that “Realtors, in attempting to secure a listing, shall not deliberately mislead the owner as to market value”. I don’t know about you, but I really don’t want to ever be accused of an ethical violation.
- I believe in being completely honest with home owners, even if I know they are not going to like what I tell them. They might throw me out of the house (never have had it happen), but at least I walk away knowing I gave them legitimate information and that it is truly their problem if they don’t like the data.
- Beating up a home seller every couple of weeks for a price reduction is not something I like to do. Instead, I choose to educate sellers that pricing their listing correctly from the beginning ensures them that I won’t be calling them and getting on their nerves. While markets do change during a listing period and price reductions do happen, I would rather be able to back my advice up with real market data, then make up some random number just to make a seller happy.
- When selling a home, many times a home owners number one “enemy” is the real estate appraiser. If he can’t find evidence to support a contract purchase price, then you won’t be selling your home anytime soon. And waiting for a cash buyer isn’t the best strategy. While many won’t order an appraisal since no lender is involved, million dollar cash buyers are pretty smart and know when a home is overpriced. Don’t pray for a stupid cash buyer – they don’t exist.
Getting back to my recent experience. Another agent ended up taking the listing, which doesn’t surprise me. What does surprise me is the listing price, which is extremely overpriced. Not only will the home never sell at that price, I can’t imagine how the agent justifies wasting everyone’s time. At least I can sit back knowing that I made the right decision in walking away. Let that listing be someone else’s headache. I won’t take part in overpriced listings.
I have been getting a lot of questions from Minnesota home owners and future buyers about the homestead credit previously available on Minnesota properties. The Minnesota Association of Realtors has recently put forth a helpful explanation about the new Homestead Market Value Exclusion (HMVE) that was created in the 2011 legislative session.
The new HMVE is a recent change to how homestead property taxes are calculated. It replaces the Homestead Market Value Credit (HMVC). Under the old credit system, the credit lowered a homeowner’s property tax burden based on the value of their home. The state then reimbursed local governments for the lost amount of their levy (revenues) due to the credit. However, due to the state’s budget problems, it was rare that local governments were fully reimbursed by the state. Eliminating the credit and creating an exclusion removes the possibility of the state withholding funds and creates more stability for local governments.
The new program excludes a portion of the homeowner’s market value from the property tax calculation. The amount of value excluded is directly proportional to the credit the home received under the old law. The actual tax burden on homesteads could be lesser or greater depending upon the mix of properties in the taxing jurisdiction and the levy decisions made by local governments (for more information on the technical calculations, please see further below).
Technical Calculations
Description: Under the old credit system, the credit amount would rapidly increase as a home value approached $76,000 with the maximum credit amount of $304. After $76,000 the credit would decrease until it was completely phased out with a home value of over $414,000. The new exclusion mimics this same scale as homes approaching $76,000 would have a rapidly increasing exclusion of value, with a home valued at $76,000 receiving a maximum exclusion of 40% of their home value from property tax calculations. The percentage then decreases and is phased out at homes valued over $414,000.
Calculations
| Old Law with Credit | New Law with HMVE |
| Market Value (MV) determined by Assessor | Market Value (MV) determined by Assessor |
| N/A | Calculate exclusion (HMVE):MV < $76K: Exclusion = 0.4 x MV
MV $76K – $414K: Exclusion=$30,400 – MV > $414K: Exclusion = $0 |
| N/A | Taxable MV = MV – Exclusion |
| Homes < $500K: MV x .1% = Tax Capacity (TC)Homes > $500K: $5,000 + ((MV – $500K) x 1.25%) = TC | Homes < $500K: Taxable MV x .1% = Tax Capacity (TC)Homes > $500K: $5,000 + ((Taxable MV – $500K) x 1.25%) = TC |
| Gross Tax = TC x total tax rate (county + city + special district rate) | N/A |
| HMVC = MV < $76K: MV x .004MV $76K – $414K: $304 – ((MV – $76K) x .0009)
MV > $414K: $0 |
N/A |
| Net Tax = Gross Tax – HMVC | Net Tax = TC x total tax rate (county + city + special district rate) |
(Referendum taxes are not covered here)
