Real Estate Snippets

June Stats

June is usually one of the high real estate sales months in Minneapolis and St. Paul.  This June new listings increased by 14% and 15% over May's new listings yet the pending sales (properties that have purchase agreements but are not closed yet) and closed sales dropped by 11%.  Not enough properties are selling to prevent the glut of inventory in the market.  A practical symptom of this is the large number of  "For Sale" signs visible as one drives the streets.

The above figures were based on information from the Regional Multiple Listing Service of Minnesota, Inc. for the period May 1, 2006, through June 30, 2006.  Information is deemed reliable but not guaranteed.

The MLS

BROKER RECIPROCITY REQUIRED VERBIAGE:  The data relating to real estate for sale on this web site comes in part from the Broker Reciprocity Program of the Regional Multiple Listing Service of Minnesota, Inc.  Real estate listings held by brokerage firms other than The Realty Matrix, Inc. are marked with the Broker Reciprocity logo and detailed information about them includes the name of the listing brokers.

My websites used to have two menu tabs that referred to searching for "listings":  one tab said "Our Listings" (a clearinghouse of ads placed by agents) and the other said "Property Listings" (the MLS access point).  Any place where a listing is downloaded from the MLS the logo and verbiage shown above must be placed on the download.  Tuesday, I received an e-mail (a very official looking e-mail I might add) stating that my website was in violation of the Regional Multiple Listing Service's guidelines for listings on an agent's site.  I was pretty upset.  The MLS was asking me to add the Broker Reciprocity logo and disclaimer to the "Our Listings" page on my website which is NOT an MLS download.  For those who don't know me, I am fairly compulsive about reading the rules and making sure what I do complies with the rules of the road.  I had been careful to follow those rules in designing my website.  Imagine my surprise to be given 5 days to correctly give credit to Broker Reciprocity on the "Our Listings" tab or incur a fine!

The fix would be easy except for one small glitch.  If I added the Broker Reciprocity logo and verbiage, the listings would have to have been downloaded from the MLS.  They are not.  The listings on the former "Our Listings" page are actually entered by each individual agent into the website cooperative.  From there the web host publishes the ad on a community page shared by all agents with that web host.   The "Our Listings" pages were really like one page websites advertising each agent's entry.  This may be persnickety, but they did not deserve the honor of being labeled as a download from the MLS, nor should the MLS inherit liability for something they have no control over.

Separating the MLS from the ads was a matter of semantics for me.  Once an online friend suggested to put a disclaimer that the "listings" on this page are not downloaded from the MLS, it suddenly made sense.  The properties displayed on that page are all advertisements!  They're not listings at all.  They're ads!  Just like the Star Tribune!  Eureka, I have it.  The menu tab has now been changed to read "Property Ads" and a disclaimer has been added to the top of the "ad" page as follows:

This page contains real estate advertising submitted to the Point2Agent Handshake program by the individual real estate brokerages cited on the bottom of each ad.  The property information has not been provided by the Broker Reciprocity Program of the Regional Multiple Listing Service of Minnesota, Inc.  Listings from the Broker Reciprocity Program of the Regional Multiple Listing Service (MLS) of Minnesota, Inc. can be reviewed on the "Search Listings" tab of this website and will be marked with the Broker Reciprocity logo.

I'm hoping this clarification will pass the board of review in the next couple days, and that my distinction between listing (from the Multiple Listing Service) and advertisement (marketing done by the individual brokerage) will meet with approval.  I'll keep you posted!

For more information on Broker Reciprocity read my post from January 30 and April 18.

FSBO

For sale by owners, or FSBOs as the real estate industry labels them, are a misnomer.  At what time in any real estate transaction has the house NOT been for sale by the owner?  Let's hope never!  Because if it's not the owner selling the house, the buyer will never gain clear title!  A better description of the FSBO would be houses for sale with unrepresented sellers!

Unrepresented sellers have several challenges in selling their homes. 

• Studies have shown that unrepresented sellers actually end up with a lower price than if they had hired a professional to market the house for them.  The lower price may in part reflect the fact that a portion of unrepresented sellers sell to a friend or relative (at a discount?).  Maybe the lower price is impacted by agents presenting offers with the listing agent's commission deducted from the list price.  Possibly the frustrated seller gets desperate enough to accept any price!
• Marketing their home without the assistance of technologies REALTORS® have access to like the Multiple Listing Service, web sites, and address directories for mailings. 
• Safety issues as strangers come into the unrepresented sellers' home with no pre-qualifying for financing or verification of their legitimacy as buyers.  The seller must be present for showings making them physically vulnerable or their home open to theft.
• Sellers tend to tell too much when they are present at showings.  I know this personally as our third home was sold by an unrepresented seller.  In our tour of the home, the seller disclosed that he had a one year old fully assumable FHA loan (which we assumed and got the MIP refund when we refinanced 6 months later.  A factor his agent would have considered in figuring his net sheet but he didn't know about.); his company was paying him the commission if he sold within a certain time (We reduced the price by the amount of the commission.); he HAD to sell as they were relocating (Motivated sellers usually will accept lower prices.); and we heard all about the idiosyncrasies of the house (which didn't bother us but would have scared another kind of buyer).  The seller's chattiness greatly strengthened our bargaining position.
• No access to the stacks of forms now required to legally complete a transaction.
• No knowledge of point of sale requirements like city inspections, disclosures, and required repairs.
• Inexperience in figuring the net proceeds of an offer.
• No network of professionals to complete title work, mortgage verification, and the closing.

I know it's an overused adage, but truly----would you operate on yourself?  In like manner, why would one trust the biggest investment most people make to a non-professional?  The things that are overlooked by an unrepresented seller would not be missed with the experience of a licensed real estate agent on your side!

The New Writing

How many times have fatalists voiced concern about the next generation's writing ability?  Superficial examination of teens might support this worry.  The computer, however, may be impacting this new generation differently than expected.  IMs, blogs, chat rooms, on-line communities, etc., all require the written word.  Granted that written word has been slaughtered from the textbook English of my generation, but nevertheless, it is written and it is communication.

I just wonder if a completely new language is being created as words and phrases are shortened to code.  New terms are being created so rapidly a dictionary of terms would be obsolete at printing.  TIA (Thanks In Advance), ROTFLMAO (Roll On The Floor Laughing My A@# Off), IMHO (In My Humble Opinion) are all examples of today's communication style.

Using capital letters is considered shouting.  Spell check doesn't know how to spell and the grammar checker is even worse.  More information is available by "Googling It" than I could have accessed at the Library of Congress as a young woman.  My generation is being left behind, but the next generation is still learning writing skills, albeit skills of a different kind.

Tenant Management

I will forever proclaim that the hardest part of property management is the tenant management.  In buildings with more than one unit, the tenants fight with one another and there's frequently the "he said, she said" problem to solve.  Other times tenants almost expect you to wipe their noses for them.  If they're hot, the owner/landlord is to provide a fan.  If they're cold, the owner/landlord is to turn up the heat.  It's irrelevant that the heat is set at 80 degrees and they're lounging in their underwear with the windows open on a cold winter day.  It matters not.  If they're cold or hot, it's the landlord's problem!!!!

I won't go into all the political aspects of why it's the landlord's problem.  Suffice it to say that when the complaint comes in, it is the landlord's problem: not necessarily to solve, but because it's a nuisance to hear!

Some of the calls I have heard include:

• The call at 11:30 PM Thanksgiving Eve.  "The oven doesn't work and I can't cook my turkey!"  Now just exactly what is the landlord going to do to fix that problem on Thanksgiving Eve?
• The light bulb by the outside door is out and they can't reach it to change the bulb.  Have they tried standing on a chair?  No.
• "I can't mow the lawn because someone stole the lawnmower" . . . again!
• "There are little flies in the bedroom".  .  . Investigation revealed old lunches and fruit left under the bed.  The room smelled like a brewery.
• "The toilet doesn't flush."  This is my all time favorite.  Every time, I repeat, every time the toilet did not flush it was the result of something being flushed that should not be in the toilet.   The variety of items included combs, toothbrushes, children's toys, canning lids, tools, personal hygiene products and everything in between.  Thankfully, we never found baggies of drugs!
• "The guy next door is molesting his kids." combined with the fact that the guy next door has a restraining order against the complainant.  Whose job is it to decide who's right in that case?
• "The garage is burning!"  Never mind that it was the tenant's son who started the fire.

Training tenants in day to day maintenance and cleaning was part of the job.  One property owner actually defined rules regarding cleaning: how often, what products to use, and what equipment was needed.  If the prospective tenant did not have a vacuum, they were rejected as tenants!

In Memory

In memory of my uncle Eugene whose funeral was today.  Eugene is survived by his wife, three adult children, grandchildren, one brother and sister-in-law, and one brother-in-law.  His absence will leave a hole in the hearts of the ones he loved.

Zoom! Zoom! Zoom!

This is the no parking sign in front of The Realty Matrix office at  1951 University Ave. W., St. Paul.  Identical signs are posted up and down University Avenue to "discourage" cruising.  Who ever heard of no parking on Friday and Saturday after 8PM?  I questioned the accuracy of this sign the first Friday night I tried to park in front of our office.  Did the signs provide wider roadways and a clear view for spectators to show City support of cruising?  This is a big city, not small town USA and I had never heard of such a notion.  My fantasy of City support was unfounded.  The premise behind the no parking signs was that without places to park, the crowds would not gather to watch!  No problem.  The spectators park a block away and walk to University.

Today, however, is the first night of the "Back to the 50s" car show at the State Fair Grounds sponsored by the Minnesota Street Rod Association.  After the State Fair grounds close, the cars will take to the streets and pass up and down in front of  The Realty Matrix building across from Porkys.  We've opened our lot at 1951 University Ave. W. for show cars to park with our free permit.  You'll want to come early to stake your claim to 3 feet of sidewalk and the best views! 

Yesterday collector plates and fancy paint jobs were already cruising our highways.  They're all bound for the Fair Grounds.  So, remember there's no parking on University tonight 'cause we're gonna be cruisin'!

ZOOM!  ZOOM!  ZOOM!

New HUD Mortgage Regulations

The government is at it again.  On January 27 this year, HUD eased its criteria for property condition on appraisals for FHA mortgages and increased flexibility in how the buyer's closing costs could be paid.  Both actions were designed to make FHA mortgage programs more competitive with the new conventional mortgages.

But, since they're a government program, they just couldn't leave it alone.  New guidelines have been announced again!  Effective July 7, a home that has been owned for less than 90 days cannot be financed with an FHA loan for the next buyer!  The stated goal for this new regulation is to prevent "flippers" (those who buy properties and resell them at a profit without making any improvements to the property) from using FHA mortgages to finance buyers of their properties.  The residual effect of this regulation is that true "rehabbers" (those who buy distressed property, make needed repairs, and resell for a profit) will be penalized as well as the "flippers".  Many rehabbers sell to first time buyers who tend to be the most common originator of FHA mortgages.  This seems to counteract the attempt to make FHA mortgages more competitive with conventional programs.

Since it's not broken, let's fix it!  Right?

Back to the 50's Weekend

Back to the '50's Weekend is this weekend, June 23-25.

For those who are not street rodders "Back to the 50s Weekend" is a meaningless term, but for The Realty Matrix, the company I'm licensed with, it's a big deal.  The famous Porkys is right across the street and about 1/2 block east of our office.  Porkys is one of the places where street rodders first started their cruising.  This Friday, Saturday, and Sunday University Avenue will be filled with muffler sounds and spectators lining the street.  We won't be able to park in front of our office or anywhere near it!  It could be considered a great inconvenience except that we're welcoming the street rodders to showcase their cars in our parking lot at 1951 University Ave. W., St. Paul.

Approximately 10,000 cars and 50,000 spectators will attend the show at the State Fairgrounds.  The featured cars are old.  The nuances of how old and what kind of car were explained to me by two of the street rodders from our office.  There is a difference between "classic", "collector", and "street rod".  Not being a car buff, it matters not to me how they are categorized.  I want to see the cruising on University!   I love the energy and the variety of cars; the roar of the motors; the zoom, zoom, zoom.

It's great entertainment for the family.  It's like a parade except it's all cars.  We'll have Mexican food and hot dog vendors, restrooms (small necessity), and a raffle for an old but not restored car.  It's walking distance from Porkys and right on the cruisin' strip.  Come and join us for the zoom, zoom, zoom!

Free passes to showcase your car in  The Realty Matrix lot across from Porkys available by contacting our office at 651-649-1153.

School of Hard Knocks

One learns things in school and in the "school of hard knocks".  As a property manager during a time of hyper-sensitivity to lead, I did not realize that people identified with elevated levels of lead ("lead poisoning") are reported to the Public Health Department by their doctors.  In the case of minors, the Public Health Department keeps track of that child until their lead levels are back to normal.

A young family rented one of my nicer units and two weeks after taking occupancy, I got a call.  The Public Health Department wanted to test this family's unit for lead!  My knees turned to jelly and my head started to buzz.  The presence of lead was a legitimate reason to condemn the property.  Why did they choose this rental property?  Had we done something to alert the authorities or what?  As property manager I got the dubious privilege of meeting the PHD's representative in the apartment.  Conversation revealed that the children in this family had lead poisoning and everywhere they live will be checked in the same manner until the children's lead levels returned to "safe" or disappeared!  I had unknowingly rented to someone who could have caused the entire building to be condemned!  Yipes.  Further conversation revealed that this is why some owners have chosen to "discriminate" against children with lead poisoning which is perfectly legal as long as it's enforced for all protected classes of people.

Thankfully, our unit had no chipping, flaking or loose paint (we kept it that way) and the exterior was fully encapsulated with aluminum.  It passed the lead inspection, but I had learned a good lesson.  This new information caused the owner to add a new question on his application:  Have you or your children tested positive for "lead poisoning?".  Thankfully, I never encountered another tenant that answered "yes" to that question, but the owner established the policy because we learned in the "school of hard knocks".