Real Estate Snippets

Back In the Day

The MLS listing sheet had an interesting comment:  "Largest home in neighborhood of homes that sold for $500,000."  Is this a marketing ploy, or is this listing agent still living "back in the day"?  My buyer client had an interest in the home so we did a search for comparable sales in the last 18 months in that specific St. Paul suburban neighborhood.  The highest sale price in the last 18 months occurred over a year ago and the sale price was $334,000.00 with $10,000 in seller paid closing costs!  That price minus the seller concessions netted the seller a purchase price of $324,000! 

Obviously, the value the listing agent was referring to was from "back in the day" when sellers and builders could ask any price they wanted for their home and the buyers were willing to pay.  That real estate market is long gone and it doesn't help to market this St. Paul listing by mentioning ancient history.  Yesterday's half a million dollar home is listed today at $350,000.  That's quite a hit for the seller and lender and quite a deal for the buyer . . . if they can afford to heat this beautiful mansion.

The Subprime Crisis Became Global

I'm sure it's an economic fact and known by people with much smarter brains than mine, but the concept of a Global Pool of Money is staggering.  The Global Pool of Money is a major player in how the sub-prime mortgage crisis has become an international credit crisis as explained in the Chicago radio program "This American Life" co-produced by Public Radio International and NPR News aired May 9, this year.

To understand more about the recent housing crisis which has become a global credit crisis in the last three years, the entire radio program can be heard by going to this website.   Hats off to Calculated Risk for a heads up to this program.

Art Work?

I wonder if the person who painted the graffiti in the first picture will grow up to be an artist like the one who created the second and third pictures.  Clicking on the photos will enlarge them.

Short Sale Stalls

The most frustrating part about short sales is that the time isn't short!  For some reason, the lenders stall and stall and stall until the buyer gets tired of waiting OR the value of the home decreases that much more.  One excuse is the quantity of short sales.  It seems there are so many that the lenders don't yet have a system for dealing with the load.  Linda Davis, a REALTOR in Ledyard, Connecticut has a great description of the problem from the real estate agent's perspective.  We're all hoping . . . praying . . . pleading . . . screaming . . . pestering for a decision, but for some reason the answers don't come.  Read Linda's letter to the lender.

Legal Descriptions

Most of us navigate the world using street addresses as markers.  When a friend moves, they don't send out address change cards that read Lot 1, Block 3, Harrison's Addition to St. Paul!  Instead we use street addresses to find our way. 

In the real estate world, however, legal descriptions are the "addresses" used to identify which property is being bought and sold.  Maps of all the land in the county are on file at the county seat with their respective legal descriptions.  The maps are called plat maps.  The county seat also has records of every transaction that has occurred on every piece of property in the county.  These records are organized in books by addition name and then by block and lot number. 

One of my abstracts (Abstracts record the history of every transaction, bankruptcy, divorce, etc., for owners and the property.) has the first entry dated October 31, 1849, even before Minnesota became a state.  The dated entry is on the original paper and someone from that era actually handled the papers in my abstract.  That boggles my mind.

The parcel was first described this way:  "The West 1/2 of the NW 1/4 Sec 31, T 29, R 22.  Sec means section, T means township, and R means range" and was conveyed from the United States of America to Richard Freeborn.  By the 1920's, the legal description had changed from the metes and bounds measure above to a plat system.  Someone lost the property during the big depression due to non-payment of their contract for deed.  Now the property is described as Lots 5 and 6 Block 13 Brewster's Addition to St. Paul.  Mr. Brewster must have been the developer or maybe it was named after a brewery!  The property was lost for not paying nine $20 payments.  Imagine a $20 mortgage payment today.

If a purchase agreement is written using a street address and there is a mix-up on the legal description, the buyer could end up owning the neighbor's property.  Not a pleasant thought.  Twice this has happened in transactions for my buyers.  The first was a new town home complex which had been improperly filed  at the county by the developer.  Every one of the 300 town homes had a tax ID number and street address assigned to the legal description of the neighbor's property.  The association had to hire a lawyer to get the mess straightened out.

The second conflict between legal and street address was a surprise to the seller.  He did not know he was using the wrong street address for his property.  It was a rural location where the postman knew the individuals and didn't worry about wrong street addresses.  When title work was done, the street address had to be changed on the purchase agreement to fit the legal description of what was being sold.

It's possible errors like these that are the reason for a title search on a property.  Title searches are required in order to finance a property because the bank wants to make sure the buyer is buying the right place!

Dayton's Bluff Vacant Home Tour

Without a doubt, the St. Paul Dayton's Bluff neighborhood registered vacant building home tour was a success.  More than 100 people toured the homes on Saturday and the count was not final for Sunday's tour at the time that I left.  From the home owner's perspective, the tour may not have been a success, because I didn't see any purchase agreements being written, but that doesn't mean they won't be! 

There were a couple reasons I chose to do the tour even though as a licensed real estate agent in St. Paul, I could easily have set up "previews" to go through the homes myself.  First, it was important to support this neighborhood attempt at moving homes off of the registered vacant building list.  When the people who toured the homes tell others how nice some of the buildings were, it will encourage buyers to check out the vacant homes as well.  Secondly, I was curious as to how St. Paul REALTORS were involved in the tour. 

There was no disappointment on my part.  Whereas some of the nicer condemned homes were chosen for the tour, the goal of showing what was available for a reasonable price was reached.  Not a lot of disclosure was made regarding the ramifications of being on the registered vacant building list.  Only one house talked about the cost of fixing the property so it would no longer be condemned.  For those with savvy, buying a house for less than $70,000 and adding $30,000 for fix-up isn't a bad deal.

My second goal of "spying" on my colleagues marketing ploy was met as well.  There was NO hard sell from any of the agents.  Not all of the houses had an agent in them.  Some houses were only "guarded" by active neighbors.  The most marketing I saw was a stack of cards on a card table.  I was impressed.

The crowd was composed of some amateur rehabbers and others that were just curious.  The crowd included my husband who left a house asking me if I thought it would be worth our while to buy that house for a rental!  This coming from the man who tried desperately to prevent us from buying our first rental property many years ago!  His auditor mind was doing numbers as we walked.  "How much do you think . . . ?"  Aaack!  I have created a monster!!!! 

Day of Celebration

Friday was a day of celebration.  Only 4 long months had passed since my sellers received the initial offer to purchase their home.  That's only one third of a year, but it seemed like forever.  The market was weak for listings, but the sellers were smart enough to reduce their price and procured a sale.  The house just two doors away is still on the market after two long years.  It only took one year for my sellers.  The listing started May 16, 2007, and closed on May 2, 2008.  Twelve long arduous months had passed from listing to close. 

My seller clients were models.  They kept me informed when brochures were needed.  They cooperated for all showings.  They always had a neat and clean home.  They were willing to reduce the price when no showings occurred.  Open houses produced some traffic, but most often the prospects were just curious.

The property was unique.  It was on the lake, but not.  The channel frontage afforded protection from the ice breakage in the spring so the dock could remain in the water year round.  However, the channel would never become a swimming place for kids.  Wildlife visited and birds trilled.  Because of the channel, the havoc of jet skis and speed boats was eliminated providing a true cabin retreat in the city.  There was a view, but slightly broken by an isthmus of cattails in the water.  Just beyond the cattails was the best fishing hole on the lake . . . visible from the sellers' cabin.

The lot was perfect.  It was one of the bigger lots on the lake, but was at lake level.   The structure was the original "home" cabin for the owner of the fishing resort from years ago.  The small cabin had been expanded three times before this sale.  The next door neighbor's parents had owned the property originally.  In addition to the main house of some eleven hundred feet was another of the original cabins which could act as a guest house or party room without water.   It would take a unique buyer to see the potential of this loved home.

A bit of history for the area will soon be demolished this summer and replaced with a much larger home over the next year.  Fill will be brought in to make a true basement as the basement cannot be below grade on this lot.  More than two stories will be built above the basement. 

My sellers realized this might be the scenario a potential buyer would choose.  They did not grieve the razing of their little cabin in the city.  While they owned it, they had enjoyed the peace and serenity of simple cabin living.  They had emotionally moved to their new home, however, and realized that a buyer can do whatever they wanted with the home once it was theirs!

Friday was the day of celebration.  After many contingencies were met including city approval of the buyers' new house plans, money and keys were exchanged at the closing.  A bit of Eagle Lake history will be demolished this summer and the progress of modernization will move on.  My clients are happy.  The buyers are happy.  And for the moment, I have photos that the Maple Grove historical society will wish they had in 50 years!

CONGRATULATIONS KEITH AND CINDY!

Flowers vs. Nibblers

Stradivariasaurus

Stradivariasaurus, the Diggin' Dino created by Megan Popowski for Fein Violins, spent the summer of 2008 at 1850 Grand Ave., St. Paul, Minnesota.  Stradivariasaurus proudly displayed violin parts on its body.  The shop itself was new to me since I never had the privilege of playing a stringed instrument.  Carefully crafted wooden instruments were hung about waiting for repair or purchase.  Much like a shoemaker's shop, this shop also had its unique smells.  More information about the shop can be obtained from the Fein Violins website.

Short Sale Woes

The St. Paul listing agent moaned and groaned about the misery of listing short sales.  The unresponsiveness of lenders was the primary complaint.  For an agent to submit an offer and wait months, not weeks, for a response was beyond his comprehension.  What were the lenders thinking?  Why would they stall in this market?  Do they want to own property?  About the time I was going to offer him some cheese to go with his "whine", he finished the tirade with, "I'm just not going to list any more short sale properties.  They aren't worth it!"

I pulled my eye brows from the roof of my car and wondered about that last statement.  My latest experience has been that more than 3/4 of the listings today are short sales with a few foreclosed homes tossed in for seasoning.  To refuse to list a short sale would take the headache out of negotiating a difficult transaction, but wouldn't refusing all short sales be a kiss of death to one's business?

Short sales are frustrating to everyone in the business.  The brunt of work lies in the listing agent's lap.  Compiling the mass of documentation required for the sale is the listing agent's duty.  Submission of the same packet of paperwork is also the agent's job.  Negotiating with the lender's mediator is the listing agent's job.  Pressing the lender for a decision is the listing agent's job.  A whole pile of responsibility lands in the listing agent's lap.  It's no wonder an agent might complain.

The frustration of short sales for the buyer's agent is not having control of the transaction.  The buyer's agent must rely solely on the listing agent's communication, or lack thereof, with the lender and the buyer's agent.  There is no first hand contact with the lender.  Advising their buyer client regarding whether to continue to patiently await the lender's decision is a terrible dilemma.  Yes, short sales take a long time to complete but some don't happen.  What if the buyer's agent advises to wait patiently, other opportunities are lost in the interim, and then the bank ends up rejecting the offer?  If we could read the future . . .

The listing agent had good basis for whining.  I still questioned whether an agent in the St. Paul market can avoid dealing with short sales.  From the buyer's agent perspective, there are far too many short sales on the market to avoid showing them to buyers.  Most are also a good deal financially.  How can a St. Paul real estate agent narrow their business to less than 25% of the homes going on the market without some dire consequences?