Real Estate Snippets

Time Cures All

When a closing is delayed, time seems to literally stand still.  Every minute all participants in the closing are awaiting the final call.  Hours drag by and days become eternities. 

The buyers and sellers of the home are especially impacted by a delayed closing.  Moving preparations have been made and have to be "unmade".  Movers have to be rescheduled, but to when?  Utilities were scheduled for name change but have to be unchanged.  Family members who were going to help have to be informed.  The delay creates a domino effect that impacts a myriad of people and services.  A delay is even worse when other closings depend on this one.  If the seller needs to close before they can buy their new house the seller of that house has the same list of frustrating inconveniences.  If the buyers have a house to sell and close on that house before being able to close on their new one, they are out of a house!  Where will they live?  With relatives?  Where will they store their stuff?  Where will the funds come to pay for these delays?

The inconvenience is an annoyance but the hardest part of waiting is wondering whether the file really will close or not.  When lending guidelines were easier, there was less fear about whether the file would close or not.  As lending practices have tightened, all parties wonder if the regulations about this file have changed since it was first submitted.  The uncertainty as to whether the rules have changed adds tension to an already stressful situation caused by the delayed closing.  Eventually, time will allow for a definitive answer, but the waiting is oppressive.

Best Old House Places in the Midwest

St. Paul's very own Dayton's Bluff made an impression on the editors of "This Old House" magazine.  "This Old House" is one of the publications revered by lovers of old houses.  To make the list of top 12 best places in the nation to buy a Queen Anne Victorian house is quite an honor, and Dayton's Bluff deserves the accolade.  Many lovely old homes are ripe for the picking and just awaiting restoration.

The house in the picture is actually a side by side twin home or row house or . . .  Each side is separately owned and maintained.  Ironically, this house is across the street from one of the houses the Dayton's Bluff neighborhood association had on its vacant homes tour.  The tour home was a registered vacant building that had been recently restored to its former beauty.  All the character was maintained and the mechanicals upgraded.  It was bank owned and very reasonably priced if someone chose to buy both sides in one package. 

Dayton's Bluff recognizes its wealth of housing and actively supports residents and new buyers in their quest to finance restoration projects.  The article in "This Old House" can be found here. 

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.

Impressive Baseball from Fresno Ball Girl

This post has absolutely nothing to do with St. Paul real estate, and everything to do with summertime and fun!  I feel bad for the batter and the poor left fielder who got shown up by the Fresno ball girl!  I checked out Snopes to see if this was real but there was nothing that matched my search so enjoy!

The ball girl says,  "I am WOMAN!   Hear me roar!"

Did Anyone Notice the Change

Did anyone notice?  Have you looked up lately?  There's actually a picture on my blog's banner!  The talent that's floating around my network amazes me.  A new client mentioned he'd been cruising my web sites.  As we chatted, my blog banner (really my lack of banner) came into the conversation.  The mental image floating in my head was hard to put to words, but I shared a bit.  We talked about a flash application and its disadvantages for the dial-up consumer.   Never did it occur to me that we were doing anything more than just casually chatting.  At our next house tour, I was handed three paper illustrations of what I had quickly described in our conversation.  For the computer savvy, the techy, the banner may not be as great a feat as it is to me.  It was exactly what I was looking for but had neither the time nor talent to create. There was my "vision" made tangible in green and black.  Just like I imagined it, but better!  My talented client not only had the ability to create what I was imagining, but listened to my mental description!  What would have taken me days to do a tiny bit as well, he created in part of a lunch hour!  Thank you, Brian!

In case you hadn't figured it out yet from the banner, my blog is about real estate and St. Paul and a bit of life.  Real estate is such a vast subject with so many variables at play that it's like cutting a paper snowflake.  One keeps snipping away until the snowflake appears or the transaction is complete.  Each sale is as different and unpredictable as the final snowflake was in kindergarten.  What will be the final outcome of a negotiation?  It depends on what and who is snipping away.  What will be the final choice in financing?  It depends on what and who is snipping away.  What will be the result of an inspection or an appraisal or a contingency or . . .  It depends on what and who is snipping away!

Why Am I So Busy If Real Estate Is Depressed

Bubbles, schmubbles.  If the St. Paul real estate bubble has burst, why am I so busy?  Maybe it's because there are more houses from which to choose so buyers are looking at more houses before buying.  Maybe it's because there are more places to advertise a listing now, so it takes more time to get the word out.  Maybe my age is slowing me down?  No, that couldn't be the reason!  Nope, we'll reject that one outright.  I know!  It's because I have a Webkinz friend whom I have to virtually visit every day!  Nope, that's not it either because reading took up as much time as the computer does today. 

The reality is buyers are buying in St. Paul.  The prices are great.  The sellers have figured out they have to be reasonable in order to sell.  Negotiation has become fun once again.  Enough real estate agents have dropped out of the business to give the remaining members a bigger piece of the market.  Lower prices mean lower commissions, but I prefer busy-ness any day compared to the lack of business in 2006!

Do Appliances Come With a Bank Owned House

The St. Paul house is perfect.  There are granite counter tops, wood floors, no holes in the wall, and it's relatively clean.  There are even stainless appliances.  As the buyers prepare to write their offer, they carefully read the MLS listing sheet to make sure nothing has been missed.  The property is bank owned and requires a special purchase agreement, but that isn't unusual.  Even though it's in good shape, it will be sold "as is". 

The more the home buyers study the listing sheet, the more questions arise.  Why are the appliances not included in the listing sheet?  They're in the house.  Was the listing agent lazy or are they not included in the sale?

In the case of a bank owned property, the appliances are not included on the listing sheet, because technically the appliances are not owned by the bank.  If the home owners who defaulted on their mortgage and lost their home, left the appliances in the home, the new buyers will get them, but there will be no bill of sale as proof that the appliance ownership has transferred.  Unlike the house, the foreclosure process does not transfer ownership of the appliances to the bank.  They are just left in the home or abandoned by the former owner.  If appliances are not in the house, the corporate owner usually will not provide appliances.  If they are, the new buyers can consider themselves fortunate (or unfortunate if the appliances are dirty or in awful condition!).

Not listing appliances as included in the sale of foreclosed properties is not laziness on the part of the listing agent.  It is part of the foreclosure process that they are not included in the sale.

St. Paul and Minneapolis Real Estate Market Summary

The St. Paul Area Association of REALTORS® published a press release last week.  The release summarized the St. Paul and Minneapolis area real estate market based on figures from the Regional Multiple Listing Service which covers the 13 county metro area.  The summary (remember this is for the 13 county metro area) includes the following figures:

• Pending sales of existing single family homes (houses and condos/townhomes that have accepted purchase agreements but have not yet closed) for May increased 5% over April this year.
• Pending sales of existing single family homes for May of this year decreased 7.59% compared with May of 2007.
• The number of single family homes listed this May as compared to May of 2007 decreased by 5.7%.
• The absorption rate (the number of months it would take to sell all listed single family homes at the rate they sold that month) was 8.3 in April 2008 and 7.9 in May 2008.  This is a decline from 14 in December 2007.  A lower rate is a sign of the market recovering, according to Greg Bauman, president of the St. Paul Area Association of REALTORS®.
• New listings have also decreased by 16.21% when May of this year is compared with May, 2007.
• New listings for the first five months of 2008 have declined by 11.04% compared to the first five months of 2007.
• Closed home sales for May, 2008, increased over April, 2008, by 18.96%.
• Closed home sales for May, 2008, compared to May, 2007, declined by 13.45%.
• The median sales price for the 13 county area for May, 2008, fell 9.89% from that of May, 2007.  This year's median sales price for May is $205,000 compared to last year at $227,495.

A decrease in the number of active listings, the number of new listings, and the number of month's supply (absorption rate) on the market is a good sign for the St. Paul and Minneapolis area real estate market.  It's not terribly significant that home sales increased in May as compared to April because sales always increase in the spring and early summer months.  The decrease in median price is significant to home buyers as well as home sellers, but from opposite views.  Buyers, once again can afford a house, whereas sellers may look at the decrease in price as a loss.  Although we can't consider these stats amazingly great, they are somewhat encouraging.  A slow recovery seems on its way.  The full press release can be viewed here.

Delayed Closing

It was one of those kind of days:  the kind where the schedule is cleared and everything is shifted to other days just in case; the kind where eggshells are underfoot all day and hurdles are leaped; the kind where I'm all dressed up with nowhere to go!  That's what a scheduled closing day feels like when the file did not come out of underwriting in time and everyone is waiting on pins and needles for the file to be delivered for processing.  Because the closing might happen, all parties are ready and waiting.  E-mails and phone calls are exchanged.  Promises are made and apologies follow in their wake when the promises can't be fulfilled.  The buyers' portion already was approved by underwriting.  The St. Paul house was what had to be examined.  The appraisal couldn't be completed until the roof and painting were done, but why does it take the underwriters so long to look at an appraisal?  Two days?!!  Everyone wants to know what's so hard about checking 15 little pages.  The appraisal valued the home at more than the purchase price so what can be the hold-up?  The seller is frantic.  The buyer is impatient.  The agents are frustrated.  The closing company must wait.  It seems an eternity without an answer.  One is tempted to think it might be a power trip.  It certainly isn't because the lender has too many files to process.  This one is NOT a short sale.  It's a traditional slam dunk loan.  Please, someone call and say we can close!

Cancelled Listings

My mind is off on a tangent.  Maybe it's an uprising.   Maybe the frustration level has reached its breaking point.  Maybe the straw on the proverbial camel's back has been placed and the camel's back is broken? Maybe it's not really a trend at all, just a fluke.

Regardless of whether it's a trend or fluke, it's unusual to request showings and get a response saying the agent is cancelling the listing.  One agent's response to me regarding the cancellation was that the lender/owner of the property has not given a response to her 18 phone calls and 3 offers that were submitted for lender approval three months ago.  She's unwilling to work with someone who is unwilling to work with her in return!  (I think I agree with that one!).  Two other bank owned listings in my tour of 10 were also canceled by the agent.  It's hard not to combine these cancellations with comments over the water cooler:  "That lender is so frustrating.  They still haven't made a decision and the offers have been in for 4 months."  "Don't the mortgage companies know this is a good offer?  What are they waiting for?"  "I'm never going to list a short sale again."  "The lender got an appraisal for $190,000 on this house and it will be lucky to sell for $125!", etc.

Is it possible that these St. Paul real estate agents have had enough of the stalling?  Is it possible the amount of work put into a short sale is being weighed against the reduced commission the lender requires?  Is it possible they're following through on their threats never to list a short sale again?  The lenders , and buyers, need not worry because there are always agents willing to take up the slack.  The short sales will continue to be listed for sale.  From my perspective, though, my mind can't help but wonder why so many cancellations from one small tour.