Real Estate Snippets

Staging to Sell a House

Every generation has its industries and its fads.  In the flower child generation (yes, that was my generation) the activists wore beads, smoked pot, had long stringy greasy hair and beards, no underwear to speak of, long flowing dresses and were forever flashing a "V" for peace.  Thankfully, that fad disappeared as have so many others.  Today we have piercings and tattoos, black spiky hair, studs, and black nail polish.  In the flower child years, coffee shops were discussed as something futuristic, but no one believed they would actually succeed.  Today, everyone drinks designer coffee, some beans that have even been eaten by rodents and recycled into very expensive coffee!

In like manner, every family has their things that are okay for family living.  Many families realize that their teens need to express themselves through posters and wild colors.  They are passing fancies.  I was one of those parents. 

The problem comes when the house goes on the market.  Whether the children like it or not; whether the parents like it or not; the house has to be de-cluttered and de-personalized.  If there are posters like these hanging in your home, they've got to go, along with many other similar statements of independence.

Stagers even recommend taking down family photos.  The goal is to make the home attractive and to remove enough personal stuff so the buyers can mentally move in their furnishings without competition with yours. 

De-personalizing is hard to do because your home no longer feels like it is yours.  The home seller has to live in the property while it's being marketed.  The question is,  "What if it doesn't sell?  All those changes will be for naught!"

The goal has to constantly be kept in mind.  The staging, de-personalizing, and de-cluttering are the first ties with the old home that have to be cut.  More ties will be cut as the house sells and the seller moves.  They're all small steps toward the final new destination . . . a new house where you can move all that clutter: the toys, the refrigerator magnets, the posters, the family pictures, the religious icons, the plants, the collections, the snake, etc.  The old house needs to be "stripped" of its personality so you can move the personality to a new location.

What Adds Value to a House

It's summertime and as temperatures rise in St. Paul and Minneapolis, some dream of time to leisurely enjoy a backyard pool.  If, however, you want return on your investment when selling your house in the cold Northland, don't expect a swimming pool to increase the value of your home.  If your home was in Florida, California, Nevada or some of the other states that have longer warm seasons, a pool might be considered a necessity, but not in Minnesota!  Remember how cold Memorial Day was this year!  A pleasant summer season might allow four, or possibly five, months of use, but that might be pushing the season's limits.

Additionally many buyers are leery of swimming pools for reasons other than seasonal.  The cost for higher homeowners' insurance premiums, energy used to run the pump and heater, water to fill the pool, chemicals to keep the pool clean, and a pool service to winterize for St. Paul's frigid months is daunting to some buyers.  The wear and tear of our winters on pools is another factor.  Others are concerned about safety issues for their own children and neighborhood children.  A pool needs to be constantly supervised or barricaded against uninvited guests as well.

Those cool afternoons with a soda by the pool are so tempting.  Consider pros and cons before going to the expense of an in-ground pool.  Does the operating expense work in your budget and is the expense compatible with the cost of your home making the cost acceptable to a new buyer in your price bracket?  The number of buyers willing to buy a house with a pool is narrowed when you resell which could extend the amount of time it takes to sell your home.  Will the enjoyment obtained from the pool compensate for the lack of return on your investment or is a new kitchen (which has a high rate of return on resale) a better choice for your remodeling budget?

For pool lovers (I'm one of them.) these factors are all surprises.  From a St. Paul agent's perspective, it's based on experience.

Two Sides to Every Story

Randy Goetz, Esq., a seller wrote a letter that the St. Paul Areas Association of REALTORS reprinted with permission from "The Listing Agent and Her Seller".   Randy politely suggests a few things that he thinks buyers' real estate agents should do.  His list includes:

1. Show up for the scheduled showing or make sure to cancel the showing.  This one is obvious.  Each showing request is an emotional roller coaster for sellers, so showing up is a good idea!  Not to mention, it's also polite.  Many sellers go to great lengths to have their house ready to show and to be gone during the showing.  Calling to cancel is definitely a sign of respect.
2. Leave a business card or note.  This one is difficult.  Some real estate agents consider leaving a card as soliciting the seller to become the other agent's client.  The entire real estate industry can't decide on which is best practice for everyone as the opinions are so divergent.  Leaving a note is even more like soliciting the seller's business.  Most St. Paul listing companies give instructions to leave a card. When there are no instructions against leaving a card, I usually do leave one.  Occasionally I have run out before my showing day is done.  On those occasions a note might be appropriate.
3. Provide prompt, helpful feedback.  If I've seen twenty 3 bedroom two story houses that day, and the feedback request comes by phone . . . ?  The caller had better be able to tell me something distinctive about the house so I can remember it.  I don't take the notes; my clients do.  If I can remember the house, I will definitely give feedback.  If I can't . . . well, send me an e-mail with the link to the listing and I'll definitely get it right!
4. Turn off the lights.  IF I am instructed with the showing instructions to turn off the lights, I will.  If I am not, I won't.  Why is that?  Because there might be another showing right behind mine and the lights should be on for that one, too.  How do I know if someone else is coming in or not?  IF turning off the lights is important to the seller, then give the buyer's agent the instructions to do so.

These things are mostly common courtesy.  My rule of thumb is to leave the house in the condition I found it.  If the lights are on, I leave them that way unless instructed to turn them off.  If the stereo is on, I certainly don't pretend to be a technician and start turning buttons to turn it off.  If the door is unlocked when I get there and there is no lockbox, I will leave the door in the same condition I found it upon my arrival.  If I find the agent before me neglected to close the lockbox so the key is accessible to the public, or if the door is not properly locked, I correct that error.  If it is obvious the homeowner has left the door open, I will hope they are walking in the back yard and will return soon to secure their unlocked home.

The statement that Randy Goetz said which felt insulting was "As a seller in today's market, I am so over buyer's agents."  Those words felt "so" like fighting words.  I do my best to bring a buyer into their home so they can reach their goal of selling the house and Mr. Goetz is "over buyer's agents"!  Much like Mr. Goetz, I spend a lot of time preparing the showing tour for my buyers.  Guessing the amount of time a client will spend in each home is impossible.  Allowing some lead time and overlap time (which I do) helps, but is not a perfect system.  Invariably sellers will expect me to rearrange my 20 St. Paul area houses so I can get to theirs an hour later than requested.  The homes are mapped in the most efficient way possible.  Back tracking is time consuming and sometimes impossible.  Some sellers won't allow showings except between 2 and 4 PM on weekdays (when my clients are at work)!   When I'm on the 18th house of the day and I'm only a few minutes late, consider it a miracle.  That day is a good day.

My suggestion to sellers is to be thankful there is an agent with the buyer.  Who is going to watch to make sure your valuables are not stolen? or your prescriptions?  Who is going to make sure little Johnny doesn't wreck the 1000 piece lego set it took 3 weeks to assemble?  Who makes sure the buyers remove their muddy shoes when they enter your home?  Who spent 2 hours the previous day arranging for the showings?  Who makes sure the buyer is pre-qualified for a loan before inconveniencing the seller and creating the emotional roller coaster a showing causes?  Whose life is in jeopardy if the buyer is dangerous?   Whose gas is bringing the buyer to your house?  Who pays for those cards you want left behind?  Do you expect your agent to come to your house for each showing?  The buyer's agent comes to every one of the showings their client has.

My point may, or may not, be obvious:  There are two sides to every story.  The seller is inconvenienced but has a goal in mind.  The buyer sometimes creates the seller's inconvenience, but brings the solution to the goal.  Let's work together to accomplish that goal, to find a buyer for the seller's house!

Sellers Disclosure

The Minnesota Association of REALTORS® has an "approved" Seller's Property Disclosure Statement" which we use for our St. Paul listings.  I had somewhere figured that the form is required by Minnesota statute when what is really required is disclosure.  There's even a little clause under the MAR dislosure form title which "disclaims any liability arising out of use or misuse of this form." 

Without the form, however, how would the seller know what to disclose and what not to disclose?  For instance, it is not required for the seller to disclose if a predatory offender lives nearby, but it is required to give the information to the buyers which allows them to research the presence of predatory offenders.  As a result the MAR form has a paragraph with the Minnesota Department of Corrections website and phone number.  How would an unrepresented seller (one not using a real estate agent) know they were required by law to give that information?

The list of things the seller does NOT have to disclose includes:

• occupancy of the property by anyone with AIDS or HIV
• suicide, accidental death, or natural death in the home
• "perceived paranormal activity" which means ghosts or other presences
• the presence in the neighborhood of an adult family home, community based residential facility or nursing home
• the presence of a predatory offender in the neighborhood

Since this list is specifically addressed by the Minnesota legislature, it's clear there is no duty to disclose.  However, the statute says that sellers "are obligated to disclose all material facts of which the seller is aware that could adversely and significantly affect an ordinary Buyer's use or enjoyment of the property".  The list of things above is specifically excluded.  However, there are many buyers that do not want to buy a house where someone died an unnatural death.  Even though there is no DUTY to disclose, be assured your neighbors will inform the new owners of all the gory details.  Whether the courts would support withholding of such information is still to be determined. 

In the meantime, my motto is the more you disclose, the better.  If someone met an untimely death, the disclosure could be as simple as this:  "A personal tragedy occurred in this home.  Serious buyers should have their agent inquire about the details."  With a statement like that, privacy can be maintained without failing to alert the buyers to the gorilla in the room!

Different Showing Procedures

Most St Paul area houses listed for sale by a real estate agent have lock boxes on the door with a key for the home safely tucked inside.  The lock boxes may vary in style including numeric or alpha coded ones or the new fandangled electronic boxes that require an electronic key to access them.  The one common denominator is that there is a key to the home inside the box.

Not all markets use lock boxes, however.  There are some locations that require the listing agent to be present to open the home for showings.  Other areas require the agent who is showing the house to pick up a key at the listing agent's office and return the key after the showing.  Some locales allow appointments to be arranged between the seller and the buyer's agent. 

My personal preference is the system we use in the St. Paul area.  Here are my reasons:

• Imagine a listing agent that has 50 houses on the market having to go to each home to open it for every showing!  That might work in a very compact community, but when listings are 30 miles apart it could be cumbersome. 
• If the listing agent were required to open each house for showing, imagine the nightmare that would be to schedule.  The showing time would need to be scheduled around the seller, the listing agent, the buyer and the buyer's agent's calendars!   And I think I've got problems scheduling our family gatherings.
• Often my buyer clients ask for a block of time in which many houses can be seen.  Obtaining a key for each of the listings to be shown, would be cumbersome.  Imagine if the listed house were in Eden Prairie and the listing company that had the key was in White Bear Lake.  My showing would require driving to White Bear to pick up the key, showing the house in Eden Prairie some 30 miles away, driving to White Bear to return the key and then repeating the procedure for each house being shown.  Hundreds of miles would be required for each tour of houses.  It's not a very "green" idea.
• Requiring the buyers' agent to get a key from the office would also limit the amount of showings that could be scheduled for each listing.  If my showing were at noon, the key obtained at 11:00 AM and returned at 2:00 PM, any other agent wanting to show the house during that time could not gain access to the house.  Whereas when a key box is on the property,  multiple agents could show the house during the same block of time.
• Asking the buyers' agent to arrange showings with the seller is also difficult.  Sellers are usually not present for showings in the St. Paul market.  Buyers are more comfortable seeing the house and discussing the pros and cons of the property when the seller is absent. 
• Some sellers try to "sell" their home to potential buyers which usually makes the buyers uncomfortable.  In some cases the very thing that a seller considers an asset is actually a deficit for the buyer.  Occasionally a seller tells too much information about their personal circumstances and compromises their negotiating position without even realizing it.

Lock box codes must be obtained through the listing company.  As a result, permission to enter the home has to be granted before the real estate agent can get the code.  Sellers can be notified so they can prepare the house and leave.  When properly used, the lock boxes are efficient and safe allowing the maximum number of showings in a block of time and allowing agents to be more efficient with their time as well.  Thank goodness I work in a real estate market that uses lock boxes!

How Much Is My Saint Paul House Worth

Time after time in our recent market, real estate agents have heard the words, ". . . but our house appraised for $$$ last year."  Those words are not just a reflection of the decline in property values, but can also be a reflection of the difference between appraised value and market value.  Confusion is compounded when an astute home seller notes, " . . . but my Saint Paul real estate taxes gave the value as $$$".  Once again, the difference is not just because property has lost value but can be a difference between the assessed value and the market value of the house.

Here are three important definitions relating to real estate value.

• Assessed Value - the dollar value assigned to real estate for the purpose of collecting taxes
• Appraised Value - the dollar value assigned to real estate to make sure the lender has enough collateral to justify the mortgage amount
• Market Value - the dollar value a ready, willing, and able (loan worthy) buyer is willing to pay for the property

When any market changes drastically like the real estate market has, it is difficult for the assessed value to keep up with the market values.  Assessed values are sometimes confined by regulation limiting the change that can be made each year.  As a result, assessed values may be lower than market values when market values are increasing and higher when market values are decreasing.  Assessed values are not used in St. Paul to determine the amount for which a home should be listed.  The two values are usually not comparable.

Appraised values are determined by appraisers who have a copy of the purchase agreement and know what the "target" value is.  There are specific guidelines appraisers must use in determining the safety of the bank's loan for the property.  In the case of FHA and VA loans, there are specific guidelines as to the condition of the property as well.  Because appraised values for homes are usually based on recent sales, they will go up and down just like the prices in the real estate market.  An appraised value last year for a home equity loan usually will not be the same value this year.  If the market values have gone down, as they have in St. Paul, so will the appraised values.

Market values are gleaned from recent sales in the MLS or in public records usually within the last 4-6 months.  Market values are always buyer driven.  In the first four years of this century, buyers were willing to pay any price necessary to get a home.  Interest rates were low and qualification standards for home loans were lenient.  Because many home buyers could qualify for mortgages, there weren't enough houses for everyone.  Buyers were willing to outbid their competitors in order to buy that "rare" home.  As a result, market values went up.

Today, market values have gone down.  Why?  Because buyers are no longer willing or able to pay the same high price for a home.  Interest rates are still low, but qualification standards for home loans has become stringent.  There are fewer home buyers in the market and more homes for sale.  Buyers today know there will always be another house that they can buy so they are not willing to pay such high prices.  Home buyers today are shopping for the best price and best condition.

Just like there are bear and bull markets in the stock market, there are buyer and seller markets in real estate.  Knowing the market is important to determining the value of your home.  Always use the market value when listing your home for sale.   An appraiser could be hired (note the word hired means for a fee) to determine the market value  of your Saint Paul home or you could contact a real estate agent (that's me!) to determine your market value based on the recent sales in your area.

Flower Borders

We've all seen these brilliant red salvia flowers in St. Paul.  Most often they are planted in groups or in several rows creating dramatic borders.  What a surprise to discover some species of the salvia plant are in danger of being outlawed!  The salvia plants in question are purported to be the next marijuana.  Florida and Alabama both have legislators concerned with possible chemical abuse by smoking the salvia plant.

Sage is also a member of the salvia family.  What would Thanksgiving dressing be without sage?  Imagine Grandma sneaking down to the local drug dealer so she can spice up her dressing properly.

Other articles on salvia can be found in the Cleveland news, the Associated Press, and Google produced pages and pages of information for those really interested in the family of flowers called salvia.

Thanks to Carole Cohen of Cleveland Real Estate News for a heads up on this "dangerous" flower!

Get Rid of Those Magnets

There are several big bad no-no's in taking listing pictures.  They include taking pictures of your own purse which you dropped on the table in order to take the picture; leaving the toilet seat open; magnets on the fridge; etc. 

The picture at left was one of my St. Paul listings.  We all have refrigerators that look like this one, but part of preparing your house for sale is to remove all of those magnets and notes and pictures and REALTOR cards, so the fridge has a clean face.

Maybe the inventors at Amana had real estate in their blood because they have created a new solution to this problem, the jot fridge.

I wonder if it comes with an eraser?

Too Many Choices

One has to find humor in the St. Paul real estate market or go nuts in the process.  Three different times on the same listing buyers appeared to be "going to write".  Three different times!  That's a lot of interest for one home. 

One case was an unrepresented buyer.  They even asked where they could get blank purchase agreement forms!  In two cases the buyer's agent called with several questions and then called back again and again.  Each time there was another set of questions requiring more answers.  Each time the seller answered to the best of their knowledge.  Both agents left me with the words, "Let us know if there's any interest from another party."  In a different market those words would have been the precursor to an offer being written within the week.  In this market, it's just plain nerve wracking. 

I feel like I'm plucking petals from a daisy:  "Will they write; won't they write?  Will they write; won't they write?"  Eventually, someone will take the plunge.  The St. Paul absorption rate is close to 9 months so sometime before next summer someone should make an offer.

In the meantime, we'll keep plucking petals from that daisy!

A Clump of Dirt

There are a couple of happy sellers in St. Paul tonight because a clump of dirt was exchanged between them and a happy set of buyers.  Congratulations are in order. 

The sellers can now breathe a sigh of relief.  They can leave the house without checking to make sure every little detail is perfect.  Fluff the pillows, wash EVERY dish, straighten towels, empty the trash, and on and on.  Now the night shift worker can finally go to sleep without interruption.

Once the inspection is done, we'll be shopping for their new home as well!  Maybe we can just keep passing that clump of dirt along!