Sunny wrote: Jason helped me find a great home at a low price. When the seller wanted to back out of our agreement, Jason advised me of my rights and helped me through the process. I will definitely use Jason again to both buy and sell a new home! He sold my townhome before I bought my single-family home, and he reduced his fee to make the transaction happen. Without out him I would still be living in a townhome.

Jon S. wrote: Jason was great and walked me through the process of buying my first home. He was very patient and understanding of my needs. He was persistent in resubmitting offers on the house I wanted and a few months later we had a deal. Overall, he did a great job.

Nicole S. said: Jason helped us buy our first home, a duplex. He was very knowledgeable whenever we went inside a home and always gave us an accurate Idea of what kinds of work and expenses the property needed immediately and/or in the near future. He was never pushy and never "hands-off", but a perfect balance. I recommend him!

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Tuesday, February 18, 2014

Negotiating Your First Home Purchase: Some Great Tactics To Get The Home You Want For Less

I was recently helping a client of mine buy their first home in Minneapolis when it became apparent that what she thought the home was worth and what the sellers believed it was worth were two very different values.

Some times you will find that no matter what you do you won't be able to convince a seller to take your offer. Having helped buyers in hundreds of transactions I have found a number of different tactics that have been useful.  Here are a few that each had their own time and place.

With my recent situation I was able to show to comparable sales that were far superior to the property that my client was attempting to buy.  I sent them to the seller's agent with an explanation that they both had much more finished square footage and the other pluses that these properties had versus the property she was trying to buy. A lot of people don't realize that a lot of sellers are coached by their Realtor the same way when they choose an initial price.  They may tack on a little bit extra to have room to negotiate down to a lower price, but they have already been made aware of the comps. The key to this negotiation was to show that the price they were asking was too high because the property would need to be significantly updated to equal the comparable sales.

Keep in mind that you can likely find comps to downgrade a property's value when you're buying it and upgrade it when you're selling it.  The beauty of Real Estate is that very few properties are exact matches for comps. In this case, even though the location was similar (one block apart) the location of the property she bought was better than the comps that we were using (you don't want to mention that).  You're argument for the price you have come up with doesn't seem insulting when you have data to back it up.  The seller accepted the offer once they saw the comps that we were using.

In another case, where my buyers were up against multiple competing offers, I told them to write the seller a letter.  The letter stated why they liked the seller's home and how they liked that she had taken extra care in maintaining the home. Despite the fact that one of the other offers was higher, the seller choose my buyer's offer because of the letter.  She said she liked the Idea of a family being in the home.  Its not always the money that motivates a seller to choose your offer.

One other area to consider is either be more flexible than the other competing offers, or to lessen the number of contingencies you have with your offer.  You are gambling a bit if you choose the route my buyer did with the following example, but it may be worth it if you have knowledge about a buildings construction.

One of my buyers, wanted a home badly, and he felt that it was in excellent condition.  He chose not to have an inspection. We found out that it was this decision that made the seller accept his offer over his competition.  I caution people that are doing this to be careful because this could haunt you.  As far as being more flexible with a seller, it is good to ask the selling agent questions about the seller's situation and when they need to close and also what would help them out with the sale of their property.  Realtors often blindly make an offer with their clients, and when the seller looks at the offer they make not accept it or negotiate in a fair way because the terms that the buyer has offered don't work for them. The buyers and their agent missed a golden opportunity to get a favorable deal done because they didn't find out the seller's motivation.

If you want help buying a home feel free to contact me via email or call 612 332 9000.

Thursday, December 19, 2013

What Is A Truth In Housing Report? Truth In Sale Report Minneapolis & St. Paul

If you are looking to buy or sell a home in Minneapolis or St. Paul you need to be aware of the Truth in Housing Report (known as the Truth in Sale in St. Paul).  For every property that is for sale in Minneapolis and St. Paul, that are duplexes or single family homes, the city requires the seller to pay for and conduct a Truth in Housing Inspection.

Notice the key phrase, the seller pays for the Truth in Housing Inspection, buyers often believe that this inspection is adequate for their personal reassurance.  What I have found is that the process of the Truth in Housing Inspection is flawed. Like anything, they aren't all bad or all good, and a lot of it depends on who conducts the inspection.

The purpose of the Truth in Housing Inspection and the report that is generated by the inspection is to inform buyers and sellers of the items that are not up to current code standards and in Minneapolis' report which items need to be addressed.

Minneapolis and St. Paul differ with the Truth in Housing or TISH as it is known as.  If the property is sold in Minneapolis either the seller or buyer need to agree to fix the issues addressed on the TISH report within 90 days of the sale of the property.  The items that are listed on the report under R & R's (repair or replace) are the items that need to be addressed. They can be as simple as adding a smoke detector or CO detector, or they can require permits to do the work and can end up being very expensive.

What I consider the most important thing to take from the Minneapolis Truth In Housing Inspection is that is you as buyer you may want to think twice about accepting the R & R's from a seller.
Why?  Because the issues that are not completed may lead to additional issues. Keep in mind, the inspector that does the Truth In Housing Inspection is not a plumbing inspector or electrical inspector. They may see something mark it as a item that needs a permit pulled like a small plumbing item, let's use a gas oven that isn't installed yet, and when the plumbing inspector comes out they may see other items that aren't up to code and make you fix them too.  This open can of worms can cost you the buyer a lot of money.

Sometimes, sellers know that their is a lot of unpermmited work that has gone in their property, and they may want to skip having to deal with the issues that can cause if a plumbing or electrical inspector see it.

This is why having your own inspector come in and do a thorough inspection is so important.  The Truth in Housing inspection is paid for by the seller, and usually the Realtor that is representing the seller picks the person to do the inspection. The inspector is also paid less than half of what they charge a buyer for a home inspection.  Can you see a problem in relying on this inspection if you are the buyer?

I had a Truth In Housing Inspector tell me that one of the inspectors that does the inspection for Minneapolis was bragging that he conducted 22 inspections in one day.  He made a lot of money do all those inspections. The problem with that is that when you consider the logistics of just driving to 22 different properties, getting into all of them right when you have the appointment and not having to wait for someone to let you in, doing the inspection (thoroughly), and documenting all of the information on the report is nearly impossible.  I would not rely on this report for anything other than pointing out the most dangerous items in the property.   I have seen inspectors take an hour and a half to do the inspection so 22 in one day doesn't seem possible. Don't rely on this inspection!

If you are buying a home look at the big picture. You are paying hundreds of thousands of dollars and you can miss something that will cost you hundreds of dollars up to tens of thousands. A great home inspector may save you from a huge mistake and they are usually in the $300 to $400 range for an inspection.

One of the few times that I had a home buyer skip an inspection they claimed to know a lot about building (I tried to have them get a professional to look at the home to no avail). Within a few months they had two major issues with the home that cost them thousands of dollars each.  A great inspector may have found those issues.

St. Paul differs from Minneapolis in that the report lists information about the property, but they do not require the seller or buyer to fix the issues.

The inspection is also known as the Point of Sale inspection or Time of Sale report in some of the inner ring suburbs. Hopkins, New Hope, Crystal, Bloomington, Maplewood, South St. Paul and Osseo require these inspections as well.

One final note on inspections; If you are buying a home via a FHA loan you will also have an appraisal. During the appraisal, the appraiser will likely call for some items to be fixed or replaced. This should not be confused with the other inspections. This is only to protect the lender from potential liabilities and to protect the buyer from major hazards.

Wednesday, December 18, 2013

Advice For Buying A Home In Minneapolis Or St. Paul

Anyone that is looking to purchase a home in Minneapolis or St. Paul should do a lot of research before they buy a home. Of course, you can over analyze things but its important to feel comfortable with what is likely the most important purchase of your life.

If you are buying a home in Minneapolis, I would suggest looking at the following website for crime in any area that you are searching. This is a phenomenal website when it comes to understanding the different areas of Minneapolis. It show the crime right down to the individual block and documents in for several years. 

One of the things that a number of home buyers that I have worked with have found to be really enlightening is the "shot spotter".  Minneapolis has utilized technology that was originally used in Bagdad, Iraq. When a insurgent sniper fired their gun the sound traveled to different electronic meters that would then triangulate the sound and identify exactly where the gun was fired. This technology has been used to catch a number of people involved in gunfire in Minneapolis. It also lets anyone that wants to know where guns are fired in Minneapolis in a given week. The data goes back a number of years.

St. Paul has both and these two sites can be used for St. Paul and the rest of the Twin

As you may already know, Realtors cannot tell people where they want to live or what they consider "safe neighborhoods" it is against the law to offer this opinion. This website gives you the necessary information to determine where you feel comfortable.

The other website that I often recommend to first time home buyers is
Schools are extremely important in your search (read on).

This website allows you to type in the zip code of any area that you are looking at living in and identifying the schools in the area along with seeing how each individual school's students have scored on recent tests.  You will often find that demand and prices of homes increase in direct correlation to how the students are doing in local schools. Once again, its great info for you to make a decision on your own.

Even if you aren't planning on having kids or currently have kids you will want to see how the schools students have scored and if that would be a detriment to the person that buys your home when you want to sell.  Always keep your exit plan in mind when you buy a home, you never know when you'll want to sell. If you're in an area that has excellent schools it will likely result in increasing home values.

If you want help in the home buying process feel free to give me a call at 612 554 3199.

Tuesday, December 17, 2013

Buying A Home In Minneapolis: Why Minneapolis & St. Paul Are Great Places To Buy A Home

If you're thinking about buying your first home, or your next property, Minneapolis & St. Paul  should be at the top of your list for places to search.  Anytime I help first time home buyers, in the Twin Cities, I always remind them to consider their exit strategy.  You should always consider what you will do when it is time to sell. You will want to look at buying in areas that are on the upswing rather than areas that are at a peak, or areas that have decreasing demand.

What I have noticed over the past few years is a huge upswing in people wanting to live in Minneapolis and St. Paul.  Two Springs ago I was working with 14 buyers and 13 of the fourteen wanted to move into Minneapolis or St.Paul and only two wanted to live in the suburbs and one of those two wanted to move closer to the city moving toward the inner metro from another suburb. Only one person wanted to move further away from the cities.

In 2013, the Minneapolis Star Tribune reported that 2012 was the first year in over 100 years that the large cities of the U.S. were growing. The national trend up to that point had been for the cities to shrink.  Minneapolis had hit its height in population in 1955 and St. Paul in 1960. For the last two years both cities have increased in population.  This is a trend that takes a long time to shift in one direction or the other.  I look for that trend to escalate over the next several years, and for the inner city prices to continue to climb.

There are several reasons to move into Minneapolis or St. Paul.

Shorter commutes are one of the key reasons. Saving several hours a month in commute times along with car expenses and stress are all factors that make buyers want to move closer to the core cities.

Lower cost of properties. Minneapolis and St. Paul both have a number of neighborhoods that offer homes for less money per square foot than most suburban areas.

Walkability is a term that is coming into vogue with more and more people looking for alternative ways to commute and walk to stores and attractions.  Several neighborhoods in Minneapolis and St. Paul have great walkability or walking scores.  Both downtowns, Minneapolis' Uptown, Phillips and Powderhorn, Northeast and North all have great areas for walking trails, shops and resturaunts. St. Paul's Mac Groveland, Highland, and Frogtown neighborhoods all have similar ammenities.

Access to several Hospitals will be another important factor for many people.

Public Transportation is vastly improving with the expansion of the Light Rail.

Appreciation is very likely in both St. Paul & Minneapolis due to the increasing demand.

Finally, jobs are more abundant in both cities than in any area of the State.

In upcoming articles I will talk more about specific neighborhoods in St. Paul and Minneapolis.

Wednesday, December 11, 2013

How To Buy Your First Home In Minneapolis

  Buying your first home is one of the most exciting things you will ever do. The feeling of having the freedom to do anything you want with the property is fantastic. The thought of getting to the point of owning a home maybe be daunting at times.  Here is a step by step process to getting to home ownership.

First, and foremost, set up at least two appointments to meet with mortgage brokers.   You can pick from the following sources. If you have a credit union they are a great place to start. I would also suggest going to a bank like US Bank, Wells Fargo or a small local bank. Keep in mind that each bank will offer you different prospective loans each with different terms and requirements to qualify.

 All banks and mortgage companies are not the same! Some mortgage brokers may tell your they are, but it's not true. So, try two to three different banks and or mortgage brokers to get a perspective on what kind of loan fits you. US Bank has a loan that requires only 3% down payment and doesn't charge Mortgage Insurance, which could be $200 to $300 each month in addition to your payment. Credit Unions and small banks often can provide better service and less costs to complete the loan process.

The reason you always want to start talking with mortgage brokers is twofold. If you have an issue with your credit or something else you can see that well in advance before you find the perfect place, and then scramble to fix the issue if you can. The other reason is so you know what how expensive of a home you qualify for, and you are ready to submit an offer immediately when you find the right
It often takes a few days to get prequalified to buy a home. If you begin to look at homes before you have a preapproval for a loan from a mortgage company, and you find the perfect place you may miss out on it. Sellers always expect you to make a written offer with a preapproval for a loan. If you make a offer without it you will almost always be turned down. It would be like going to the store and
stopping at the front register and telling the cashier your taking items from the store and you will return later with the money to pay for it.  That usually doesn't work, nor does an offer without a preapproval.  So, start with a few meetings with mortgage brokers (also known as Loan Officers).

Once you have your preapproval there are a couple of options. I often tell first time home buyers to contact Neighborhood Housing Services ( is their website for Minneapolis or for the St. Paul office .  They are fantastic organizations that help first time home buyers. They hold regular classes that guide your through the home buying process.
I have volunteered to teach the classes in Minneapolis. I have sat through the class, and the information you will receive is excellent

If you're not in the mood to sit in a class it's time to interview Realtors. It is important to note that you are making one of the largest financial moves you will make. You need to have a great Realtor on your side to help guide you through the process. I have sold hundreds of homes, and each sale was different in it's own way, the knowledge that an experienced Realtor has can save you thousands of dollars in negotiating, getting the right loan, and help with a multitude of variables that go along with each transaction.

Last week a buyer that is was working with, wanted to ask for a minuscule price reduction due to a small issue with the inspection. Because the seller had been hard-headed and unpredictable, I advised her not to ask for the price reduction. She agreed, and when I called the sellers agent to tell her we were okay to remove the inspection contingency and move forward on the purchase, the agent told me that her client was ready to cancel the agreement and increase the price if we asked for anything.

 One thing most first time home buyers often don't know is that if you ask for a price reduction or to have something fixed, from your inspection findings, the seller can then walk away from the Purchase Agreement that you have signed with them. That is why asking for a $300 item to be fixed may not be worth negotiating over. It may kill the deal. As a first time home buyer there are a lot of things that will come up that you won't know about, and this uncharted territory may be harsh for you if you don't have the right Realtor helping you.

I would suggest interviewing at least two Realtors if not three. You can find out if they specialize in the neighborhoods that you are interested in. A great Realtor will know more about the neighborhoods and homes than you do. They might be able to suggest another neighborhood that is similar to what you are looking for that you may have not been aware of. I often find my buyers homes when I am out looking at properties by myself or with another client.  If you have an agent that works with homes in Woodbury they probably won't know a lot about Minneapolis. Realtors can only know so many neighborhoods and cities. I couldn't tell you a lot about Rochester, but I know Minneapolis like the back of my hand.  It is important for you to find someone that specializes where you want to buy.

You also want to feel comfortable with that Realtor. If you are super analytical the Realtor isn't taking the time to answer all of your questions you may be better off working with another agent that will.

Some Realtors won't be available when you need to look at homes. I work with another Realtor as a team that way if I can't go at the needed time she can.  You may find that the one home that is perfect for you may be sold within a day or two. If your agent is only available on Saturday and its Tuesday you may miss out on the home due to your agents lack of availability.

The Realtor helping you can set up an automatic email that sends you every property that is available in the area and the parameters of what you want.  Many buyers will want to look on their own. The problem with this is that every website you can access including Zillow, Trulia, Remax, Edina, and will not show you which properties that accepted offers on them or have accepted offers and are pending bank approval for a short sale. You can waste a lot of time chasing after a property that is already sold.

When you receive the email from the Realtor it is a direct link from the MLS system and you can have it set up where it will eliminate all the properties that already have accepted offers on them.
This will stop you from wasting your time, and also make it so you don't get upset when you see a property you love and then find out it is already sold.

In 2001, 69% of all buyers used their own Realtor when purchasing a home. That percentage has actually increased to 89% in 2011. It was widely predicted that Realtors would disappear like travel agents did with the advent of the Internet. Buyers have actually found Realtors more useful over the past decade and for good reason. In Minnesota, every year the laws change on how a home is purchased. Over a few years time, even if you purchased a property years ago, there will be changes that consumers won't be aware of.

My next article will discuss the process of looking at homes and what you should be paying attention to in that home search. Buyers often get emotional and fail to look at what a future buyer will want and if your home is sellable to a future buyer. The average home buyer stays in their home for around 7 years. You don't want to be stuck with your home if you need to move in the future.

Wednesday, November 20, 2013

Buying Your First Home In Minneapolis Or St. Paul: How Light Rail Will Affect The Value Of Your Home

The affect of light rail on home prices is an interesting topic. Do people pay more to live by a light rail station?  The research that I have found and done on my own would tend to show you that it has a significant positive impact on home prices.

My first finding was back in 2007 when the home prices fell across the board in Minneapolis except for two neighborhoods.  The Seward and Longfellow neighborhoods of Minneapolis actually increased in value by 2%. This figure may seem modest, however we say some areas fall by double digits during that same time.

 A San Francisco Bay Area study found that for every meter a single-family home was closer to a BART station in 1990, its sales price increased by $2.29, all else being equal (Landis et al., 1994). A 1993 study of residential properties near the 14.5-mile Lindenwold Line in Philadelphia, using hedonic price models, concluded that access to rail created an average housing value premium of 6.4% 
(Voith, 1993). 

On a $200,000 home in Minneapolis or St. Paul you would be looking at a $12,800 premium on the property due to the proximity of a light rail station.  

The effect on rental property has also been a Boone for owners. A study with the BART system in the Bay Area of California compared to other properties in the County, the estimated monthly lease premium within one-quarter mile of a station was 3.3 cents per square foot and for properties one-quarter to one-half mile away, it was 6.4 cents per square foot. People don't want to be right next to the station due to noise, however they will pay a significant premium to live within a half mile (walking distance).  

There is one main reason I believe that light rail will have an even higher return for home owners in the Twin Cities than other areas nationally.  Snow!  Would you rather sit on a train and watch all of the accidents and congestion because of one inch of snow or would you rather white knuckle it to work?  A lot of people will pay more to have more time to themselves and less stress.  Two hour commutes are terrible!

I believe we have just started to see the positive effects on property values in Minneapolis and St. Paul.  Once the Light Rail is up and running in St. Paul you will see more building along University Avenue.  If you drive or ride along Hiawatha in South Minneapolis you will see a significant number of new condos and apartment buildings that have been built.  Eventually more of the grain towers will be purchased and more building will go on.  

The splurge of new construction along the light rail in the Dinkytown area of the University of Minnesota has been incredible.  The more these lines connect different parts of the Twin Cities the more valuable the property around each rail line will become.  If you can live in the Western Suburbs of Minneapolis and travel via light rail to downtown St. Paul because you live by the light rail station imagine the time and cost savings.  It will give people more options on where they can work and live and the areas that are convenient to home owners because of this access will be much more valuable.

When you are searching for a home in Minneapolis or St. Paul you may want to consider how close you are to a light rail station.  Even if you don't use it, when you go to sell your home, the next buyer will likely pay you a premium for the home.

Thursday, November 14, 2013

Townhome Vs. Single Family Home Which Is Better?

One of the biggest decisions of your life is about to take place.  You're going to buy your first home! I remember my first purchase and the excitement and also the anxiety.  One of the biggest choices in your first home purchase will be what type of home will you buy?

First time home buyers often wonder which is a better move to buy a single family home or a town home.  Here are the pluses and minuses to buying each:

Town homes:

1. Lack of Maintenance: The biggest allure of a town home is often the fact that you can come home and the lawn is mowed or the snow is magically shoveled.  Depending on your lifestyle this can be a huge positive.  If you have a disability or just don't like doing yard work or home maintenance a town home or condo may be perfect for you.

2. Security: Buyers that are looking for a more secure property will often get it because the garage is often attached to the home, and your neighbors are often watching who comes and goes from your property and theirs.

3. Cost: Town homes are often less expensive than single family homes. When you are buying your first home you may be able to buy in a certain community because you buy a town home. Affordability is a huge plus to town homes.

The negative aspects of town home ownership and the positives of owning a single family home are:

1. Lack Of Land Ownership: If you want to use the land surrounding you like you own it you are often stuck with the bi-laws of the town home associations.  You can't build your own fence for pets or kids. You often can't plant a garden or even display anything on the exterior of you unit.  If you want to do any of these a single family home may be your best bet.

2. Lack of Privacy: I will never forget the goof balls that lived across from me when I owned a town home.  They would watch me like I was their only form of entertainment.  I am not sure what I did that was so interesting, but I even noticed they would move from window to window to watch me as I moved around in my place!  I finally started to get tired of it. So I would turn around and go the opposite direction when they were moving from room to room to watch me then I would point at them when they came back to the other room.  I found it humorous, but I am sure most people wouldn't.

3. Assessments: This is the dark secret of town home and condo ownership.  I will give you an example.  The town home association (the home owners) got together and voted on residing the town homes. The cost was $6,000 per unit.  Being that the bi-laws stated that if 70% of the owners voted on something and it passed the other owners had to oblige. Even though I felt the siding was a little dated, it was in good shape, I had no choice but to pay $6,000 within a matter of months to re-side my place. Buyers often look at the monthly association fee that they pay as a guarantee that there will be extra money for these types of issues.  Often, the association doesn't have extra money, and the owners end up paying for it in on big lump sum.

When you own your own home you have the option of doing work to your home when you see it fit to do so.

4. Appreciation & Saleability: Single-family homes appreciate at a higher rate than town homes on average.  The other issue that you run into with town homes is that when you go to sell the property you will be compared to the other units in the association.  If most owners elect to not fix up their units you will have trouble getting a premium for your property if you renovate it.  You need comparable sales within a 90 day period, and if there aren't properties that match in your association you may have to settle for a lower price.  It is easier to get these better comparable sales with a single-family home.

5. Yard & Outdoor Space: The huge positive to a single family home is privacy and your own yard. Do you want a garden, a deck or patio or another garage?  You have the potential for all of this with a single family home.

6. The Numbers: I advise most people to buy a single family home over a town home for one big reason.  I have found that most people that buy a condo or town home quickly find that they really want a house.  The town home or condo feels like a step up from an apartment, but its not really what they were looking for.  The reason I would buy the home first and avoid this two step process is because the longer you have a mortgage the higher the percentage of your mortgage payment will be paying your principal and adding equity.  Your first couple years of paying on your mortgage are almost exclusively paying interest.  If you keep the same place for 10 years versus having two different places the difference is significant. Owning two $150k properties each for 5 years (one town home and one single family home ) vs. one $150k single family home you will have $28,000 in equity with the town home/ home option and $32,000 by buying the single family home first.  Look further into this scenario and you will pay 5 to 6% commision to a Realtor to sell the town home reducing your equity by $6500 (minimum). You will also pay twice as much to get the loans as you will in buying just one place.  This will be another $5,000 or more.  So your actual purchase of two places versus one will be a difference of a $32,000 equity position with the single family home, and $17,500 with the double purchase.  In the long-run the single family home is usually the best option for first time home buyers.