Real Estate Snippets

How Not to Sell A Home

Staging is all about dressing your home in its Sunday best (or maybe dressing your home for selling success?), but the current market downturn and the influx of short sale homes and foreclosures on the market are telling a sad story.  Sellers who have lost their jobs, been unemployed for medical reasons, or got caught with rapidly rising mortgage payments are having a tough time emotionally.  Staging a home takes a lot of energy and sometimes a few hundred dollars.   Families in crisis may have to choose between a new can of paint for staging and a bag of groceries.  If my kids were hungry I know which choice I would make.

Many of the short sale or foreclosed homes marketed in St. Paul are vacant.  Many have been "swamped out" by a professional cleaning crew with big roll off dumpster boxes for the debris.  Some homes clean up pretty well, but others need the attention of a new owner to regularly clean and love them back to their original beauty.

If, however, you are one of the home sellers still living in your St. Paul home and still hoping to find a buyer, clean your house until it shines.  Whatever you do, take those cans to the recycling!

Hazards of the Trade

We looked high.  We looked low.  It wasn't there.  Of course, the wooden bench it had been attached to wasn't there either!  The tenant had moved from my Saint Paul duplex listing and with the tenant went the bench.  With the bench went my $90 lockbox!  Do you think I can write that off as a loss on my taxes?

Housing Fads

I'm older than dirt.  Well, maybe I'm a tad bit younger than dirt, but not much!  I am old enough, however, to remember when avocado and BROWN appliances were all the rage.  Dark Mediterranean wood and avocado appliances were recommended for our very first kitchen remodel in 1973.  The contractor looked quizzically at me when I declined avocado.  Nope, not going there!  Beautiful, pristine, white appliances were installed and moved to the next home because they had not gone "out of style". 

Fads come and go in housing just like in fashion.  Skirt hems lengthen and shorten.  Sleeves billow and become sleek.  Necklines are jewel, cowl, crew, and turtleneck.  Housing is the same.  There is always something new to entice the consumer to make a change.

Some changes in housing occur because our lifestyles change.  Examples of this kind of change include formal living and dining rooms being replaced by kitchens that open to great rooms.  Master suites have supplanted the single shared bathroom and small closets taking up one bedroom wall. 

Other changes occur because society gained wealth and home buyers could afford more oppulence.  This kind of change includes hardwood floors, granite countertops, vaulted ceilings, and bedroom suites.  Unlike the 1950's rambler which made housing affordable for the middle class, today's middle class is buying more square footage per person with many more amenities built into the home.

The January 21 edition of REALTOR® Online, a professional publication for REALTORS®, listed home fads that are becoming passe´.  The list included:

• Fireplaces
• Carpet - hardwood floors are "in"
• Kitchen desks
• Skylights
• Upscale kitchen finishes including granite countertops
• Living rooms

Since the article is written for a national audience, some of these trends may not apply to the Saint Paul real estate market.  For instance, granite is still a positive feature here although skylights never have been a real selling point because of Minnesota's snow.  Carpet has lost favor compared to hardwood floors.  Fireplaces?  I can't imagine that they will ever go out of style in Minnesota, but one's budget is still the operative word in deciding whether to add one or not.  Living rooms have lost favor compared to great rooms as we merge our formal and daily lives together calling for more family friendly homes.

Stainless or commercial appliances were not mentioned in the article.  I truly wonder if they will become the avocado of the future!

The Cold Facts about Bank Owned Properties

No matter how much we protest or dislike the impact of the lender mediated real estate sales on the Saint Paul housing market, it is a fact of life.  Lender mediated real estate sales are any sale in which the bank or lender has input into the decision about accepting an offer for the sale of the house.  Prices in many neighborhoods have drastically decreased because of the number of homes on the market that are either bank owned (foreclosures) or are being sold for less than what is owed on the mortgage (short sale).  Often the lender mediated prices are less than the sales from traditional owners who are not in financial trouble (Often the condition is less satisfactory as well.). 

The following list ranks the Minneapolis/St. Paul Multiple Listing Service areas based on the percentage of lender mediated listings found in each metropolitan community during the 4th quarter of 2008.  St. Paul neighborhoods are scattered throughout the list with the highest being St. Paul Central at 59.1% followed closely by Phalen at 58.8% and Hilcrest/Hazel Park/Dayton's Bluff with 56.0%.  The lowest number of lender mediated listings was downtown Saint Paul at 10.8%.  Statistics are quoted from "Foreclosures and Short Sales in the Twin Cities Housing Market Q4 2008 Update".

363	Brooklyn Center	65.90%
305	Minneapolis: North	64.90%
742	St. Paul: Central	59.10%
714	St. Paul: Phalen	58.80%
754	Big Lake Township	56.80%
301	Minneapolis: Camden	56.30%
716	St. Paul: Hillcrest/Hazel Park/Dayton's Bluff	56.00%
771	Spring Lake Park	54.10%
308	Minneapolis: Powderhorn	53.90%
364	Brooklyn Park	52.70%
728	St. Paul: Riverview/Cherokee	50.00%
602	South St. Paul	49.70%
713	Bethel	49.60%
767	Coon Rapids	49.40%
600	West St. Paul	48.70%
720	Southeast St. Paul	48.00%
361	Crystal	48.00%
310	Minneapolis: University	46.70%
770	Hilltop/Columbia Heights	45.40%
738	St. Paul: Home Croft/West 7Th	42.90%
769	Anoka	42.20%
378	Richfield	41.50%
306	Minneapolis: Northeast	41.20%
303	Minneapolis: Longfellow	41.00%
640	Shakopee	40.40%
340	Buffalo	40.00%
366	Champlin	39.90%
760	Ramsey	39.70%
722	Newport/St. Paul Park/Cottage Grove	39.60%
758	Northwestern Anoka County	39.00%
307	Minneapolis: Phillips	38.90%
756	Elk River	36.10%
744	St. Paul: Como	35.90%
772	Lexington/Circle Pines	35.20%
746	St. Paul: St. Anthony/Midway	35.10%
608	Inver Grove Heights	34.60%
362	New Hope	34.50%
646	Jordan	34.20%
768	Fridley	34.20%
624	Farmington	34.10%
780	Sherburne County	34.00%
764	Blaine	34.00%
612	Burnsville	33.80%
304	Minneapolis: Nokomis	33.60%
711	Southern Chisago County	33.30%
712	Maplewood/North St. Paul	33.00%
386	Hopkins	33.00%
367	Hennepin-North	32.60%
341	Wright County	32.30%
707	Ham Lake	32.20%
379	Bloomington-East	32.20%
725	Pine Springs/Lake Elmo/Oakdale	31.90%
616	Rosemount	31.70%
762	Andover	31.50%
650	Belle Plaine	31.30%
644	Savage	30.90%
748	St. Paul: Town & Country/Merriam Park	30.20%
614	Apple Valley	29.70%
709	Forest Lake Area	29.40%
766	Moundsview/New Brighton/St.Anthony	28.90%
632	Rice County	28.40%
648	New Prague/New Market/Elko	28.10%
397	Chaska	27.20%
610	Eagan	26.50%
710	Northeast Anoka County	26.20%
360	Robbinsdale	25.20%
705	Lino Lakes/Hugo/Centerville	25.20%
617	Hastings	25.00%
752	St. Paul: Highland Area	25.00%
708	White Bear Area	23.90%
706	North Central Surburban	23.10%
642	Prior Lake	22.90%
626	Lakeville	22.40%
365	Maple Grove/Osseo	22.30%
765	Arden Hills/Shoreview	22.20%
368	Hennepin-Northwest	21.60%
726	Woodbury	21.30%
392	Eden Prairie	21.00%
373	Golden Valley	18.90%
394	Carver County	18.90%
721	Lakeland/Afton/Denmark	18.70%
380	Bloomington-West	17.90%
391	Saint Louis Park	17.30%
387	Minnetonka	17.30%
740	St. Paul: Crocus Hill	17.20%
309	Minneapolis: Southwest	17.10%
374	Plymouth	16.60%
750	St. Paul: Mac/Groveland/River Road	15.70%
381	Lake Minnetonka Area	14.90%
727	Stillwater/Bayport	14.70%
630	Northfield	14.50%
702	Falcon Heights/Lauderdale/Roseville	14.50%
604	Mendota/Lilydale/Mendota Heights	14.30%
660	Goodhue County	14.30%
396	Chanhassen	14.10%
398	Victoria	12.50%
300	Minneapolis: Calhoun-Isles	11.60%
741	St. Paul: Downtown	10.80%
302	Minneapolis: Central	7.90%
385	Edina	5.20%

Additional posts about short sales can be found here:
Short Sale Woes
Short Sale Purchases
Short Sale Cautions
Queen of Short Sales

Spring Is Coming

The days are getting longer and we've finally had our first day above freezing since who can remember when!  The sun has been shining in St. Paul and it feels like a harbinger of good things to come.  When the mounted police start clopping by the neighborhood, you know summer will soon follow.

 

Historically real estate sales begin to increase in the Twin Cities after the Super Bowl.  Hopefully, this year will follow that same pattern as the snow melts and people begin to come out of their winter cocoons again.

Minnesota Certificate of Rent Paid - CRP's

It's CRP time again.  Actually, it's almost past time, because Minnesota residential rental property owners and managers have just one week left (due January 31, 2009) to complete Certificates of Rent Paid for each of their tenants.  That includes any tenant that paid rent in the last year, even if it was for one month only. 

So, get out the books, or Quick Books, or Quicken, or Peachtree, or whatever system you have and devote a few hours to sorting through the dates of occupancy and amount of rent paid by each tenant.  Then, of course, you have to find a current address or send it off to the address your tenant rented and have it returned to you.  When it comes back, hold on to the thing until you get a call and then forward it to the correct address of the tenant.  Yes, that's just a bit of sarcasm, but it's a duty that I dislike.  It's bad enough sorting through the dates of occupancy if you've had a high turn over, but having to sort through which tenants had adult roommates and divide the CRP's between the roommates (even if THEY didn't pay), etc., is tiresome at best.  It must be done or the landlord can incur a fine for each incident.

The State of Minnesota has made the small landlord's job a tad bit easier, though, by giving us the forms online with the ability to fill them out ONLINE.  That thrills me because I can type faster than print and I only have to change the tenant specific information on each form I print.  Regrettably, the form cannot be filed online, but they can be completed and printed for distribution to the respective parties.  The form and instructions for filling it out can be found here.  (It only works with Internet Explorer, however.)

Saint Paul Winter Carnival 2009

I'm not sure the Cheshire Cat was smiling with excellence in mind, but he was my personal favorite from the Saint Paul ice sculptures this year.  This picture is just a vignette from the entire larger sculpture depicting Alice in Wonderland.

Last year's Saint Paul Winter Carnival melted before the Carnival was done. To add insult to the injury of the melt, the medallion was found almost immediately preventing the die hard enthusiasts from scrounging and digging throughout the city parks. This year is different. Six degree days make perfect weather for snow and ice sculpture preservation. A few extra layers of clothing make the traverse through the cold actually comfortable! I missed the photo op of the man (or woman?) clad in orange ski mask and dark snowmobile goggles complete with head to toe gear. The unisex uniform had to be warm although the strangers walking alongside had no clue as to the true identity of the person within! If you missed the sculptures, here are a few for your enjoyment.

It's Time to Buy a St. Paul House

Of course, real estate professionals are biased because encouraging people to buy maintains their livelihood, but this You Tube video from the Minneapolis Area Association of REALTORS®, makes buying a house in St. Paul and Minneapolis look pretty attractive.

Real Estate Commissions

Some things make me go, "Hmmm".

It seems funny to me that during the feeding frenzy when buyers were offering more than list price for St. Paul homes, comments were made by the public that the real estate agents were motivated to increase the price because they wanted a higher commission.  The reverse sentiment is not true today when agents are suggesting that sellers list their homes for less than the seller could have listed in 2000, sometimes a reduction as much as 25-30%. 

Why is it that the consumer isn't aware the agent is working toward the same goal the client wants:  to buy or sell a home?   In the feeding frenzy years, the price increases were in smaller increments over a longer period of time.  The agent's increased commission on an additional $5,000-$10,000 purchase price generally would be in the hundreds.  The decrease an agent takes on commission by suggesting a 25-30% reduction in list price generally is much larger than hundreds.  What the agent realizes is that the client needs to sell.  If the seller doesn't sell, their goal to move is thwarted and the agent gets paid nothing! 

Doesn't the fact that the agent will get less in commission lend some credence to his/her advice about a lower list price? 

Good Advice for Sellers

Several months ago, Maureen Francis, a blogger from Oakland County, Michigan, listed ten things sellers should not do if they wanted to sell their homes.  In March it was an established fact that the real estate market was plummeting and it was getting harder and harder to market homes.  The number of houses listed for sale far exceeded the number of buyers.  The former real estate mantra, "The money is in the listings", was losing credibility. 

Today, some St. Paul real estate agents groan when a listing call comes.   Questions spring up.  Will this seller be reasonable, or unwilling to adjust to today's market?    Is it worth my time, money and emotional energy to list this property?  Should I take this listing or pass on it?

Maureen's list for home sellers includes the following:

• Don't try to sell it yourself.
• Fix deferred maintenance items because there's lots of competition and the best one wins the sale.
• Update decorating.
• Do de-personalize everything.
• Don't overprice to see what happens.
• And more can be found here.

If you're thinking of selling your St. Paul house, check out Maureen's list for a reality check.  And then, call your St. Paul real estate agent to get their professional opinion on specific price, upgrades, and marketing suggestions.