Why a minor kitchen remodel may be a homeowner's best investment

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If you know your kitchen could use a little more aesthetic charm or an eco-friendly boost, it may be time for a remodel. Rather than committing to an entire renovation, which would be quite costly, opt for a slightly more modest kitchen upgrade that’s more likely to provide a return on investment when selling.

Why today’s sellers should consider a minor kitchen remodel

The National Association of REALTORS® recently released a remodeling report that details the home upgrade projects that provided homeowners with the highest levels of satisfaction. Per the report, the homeowners with a remodeled kitchen reported the following:

  • 78%: An increased sense of enjoyment when they are at home
  • 77%: A major sense of accomplishment when they think of the project
  • 40%: Better functionality and livability

Now, about the homeowners who are planning to sell in a few months or even a few years, how will these improvements impact them at resale? Both the NAR and the recently-released 2022 Cost vs. Value Report (www.costvsvalue.com) reveal that homeowners tend to recoup 67% of their kitchen remodel investment upon resale.

In short, homeowners who are not ready to sell yet may want to consider a kitchen remodel, as it will pay off both in the short term (in enjoyment) and could help them sell the home for more down the road.

Here’s how a kitchen remodel could benefit home sellers

How can an updated kitchen help you at resale? If you’re planning to sell within a few years, here’s how a facelift for your kitchen could benefit you:

Web appeal. Listing photos are important, and the last thing you’d want to do is turn off buyers before they’ve entered your home. When we list your home for sale, an upgraded kitchen will help your home stand out and could make buyers more likely to book a showing or attend an open house.

Appeal to what buyers are asking for. New appliances are on the top most-wanted list for today’s homebuyers. In fact, 81% of potential buyers listed eco-friendly appliances as an essential or desirable home feature. A renovated kitchen with new appliances can go a long way with buyers.

A customized approach. Adding high-end fixtures, hardware or other touches can give the illusion of a truly transformed and customized kitchen (while keeping you within your budget).

You can enjoy the update, too! If you’re not planning to sell for a few years, you can enjoy the kitchen update in the short term. By getting some use out of the update, you’ll be more likely to justify the cost and stress of the project.

High-ROI kitchen renovation on a budget

The 2022 Cost vs. Value Report (www.costvsvalue.com) serves as a guide for sellers interested in completing home upgrades before listing their properties for sale. According to their latest report for the Minneapolis area, a minor kitchen remodel is a smarter bet than a major kitchen remodel, as:

  • A mid-range, major kitchen remodel in the Minneapolis area will only glean a 51% return on investment
  • A mid-range, minor kitchen remodel will boast 67.2% back at resale

In other words, a minor kitchen renovation will still smooth over eyesores while earning sellers 16% more at the closing table when compared to a major remodel. Let’s get into the details of how to revamp your kitchen on a budget – and with a higher return on investment at resale.

  • Cost: $27,948
  • Resale value: $18,773
  • Cost recouped: 67.2%

To start, you’ll need an already-functional kitchen that could use some cosmetic attention and appliance upgrades. Keep 30 feet of existing cabinets, but replace the fronts with new panels. Then, follow suit by replacing drawer fronts to match the fresh cabinet faces. Polish off the area with new hardware and add new countertops.

Next, focus your attention on appliances. This particular renovation budget allocates funds for a new:

  • Refrigerator
  • Stove
  • Oven

The kitchen transformation will conclude with newly painted walls, trim and ceiling, as well as new flooring.

Moving forward with a kitchen upgrade

It’s true that there are a few projects to avoid when selling, but a minor kitchen remodel is not one of them. In addition to bringing you joy (and better functionality) in the short-term, a kitchen upgrade could help you increase buyer interest and the value of your property when it comes time to sell.

Be sure to reach out directly as you move forward with plans of renovating or selling your home.

If a couple splits, who gets the house?

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When a significant relationship comes to an end, couples are often so emotionally taxed that the logistics of splitting up assets is the least of their concerns. While this is completely understandable, it is important that both parties advocate for themselves during this time-sensitive division of property and belongings.

Here are some tips that can help couples make a reasonable decision on what to do with their house after a divorce or separation. Keep in mind that this advice is meant for a general audience, and you should reach out directly if you need the help of a REALTOR® as you move forward.

Shift into a business mindset

Whether you and your spouse were planning to buy or sell at the time of divorce, a property is one asset that can be a transparent source of income for both parties involved in a split. Even if you suspect your former partner might conceal other financial information, it’s important that you remain amicable and proactive about the decision you make surrounding your home.

In the following sections, we’ll cover some popular ways to handle property separation, including:

  • One partner staying in the home – for now.
  • One partner buying the other out.
  • Both partners choosing to sell the property.

If you’re experiencing friction or pushback with a fair division of property, it may be time to hire a mediator who can help set ground rules for how to move forward.

Option 1: One partner temporarily stays in the house

It may be best for one partner to remain in the house, especially if kids are involved in the divorce. With one parent staying put, kids can continue to be involved in their usual activities, classes and sports. If this is the case, be sure to work with an attorney who can help guide conversations regarding:

  • How a separated couple can split the current cost of the mortgage.
  • How to share the profits if the home sells after the divorce.
  • What kind of conditions will be required to eventually sell the home (e.g. a new paint job or a replaced furnace).
  • Who will plan to pay for these presale “fix-up” costs, or how the costs can be evened out at the time of sale.

Option 2: One partner buys the other out

Another option is for one partner to buy the other out. You’ll need to work with a mortgage loan officer if, when the home was first purchased, you and your partner were on the title and qualified for the loan together. Today, the partner who intends to stay in the home now will need to qualify for a loan on their own. We can work together to map out the best process, and if the loan approval is given, you can get a lawyer to help advise you on:

  • Examining the home’s new title and policy.
  • Ensuring the updated title only has the buyout partner’s information.
  • The potential strategies and risks of this path.

Option 3: Both partners sell the house

First, you’ll need to discuss if you want to sell the property immediately or if you’d like to rent out your home for a predetermined period of time. If you owe more on your home than it is worth, you and your former partner may wait to sell. Then, when your home has equity, you will be able to break even or (more likely), turn a profit.

If you’re ready to sell now, be sure to follow these important steps:

  • Get in touch directly for a Realtor’s help facilitating the property transaction.
  • Discuss the final sale details with all parties involved.
  • Create a clear plan to divide the post-sale profits.

Next, we’ll work together to have an open conversation with all parties, where we solidify the final details, including:

  • Who will pay for any repairs before listing the home for sale.
  • Agreement on an initial list date.
  • Agreement on an initial list price.
  • A plan for when to lower the listing price.

Last, you’ll come to an agreement on what percentage of the home’s sale each partner will receive upon closing. And, to ease the stress on the buyer, we can make a plan to receive one payment at closing, which will then be distributed to each party as agreed.

Need help?

There’s perhaps no better time to work with a professional Realtor than when you are dealing with the emotional stress of a split and potential move. Working with someone who has your best interests at heart will help ease your mind as you move into your next chapter. Reach out via email or phone today to have the first conversation — no pressure and no obligation.

What are the average HOA fees for condos?

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When looking for a condo to buy, it can be exciting to imagine all the amazing amenities you could have access to in the future. But it’s also important to remember that condo owners pay for landscaping services, gym access and more, through monthly fees to the condo’s homeowners’ association, or HOA.

HOA fees aren’t something to glance over. In addition to your mortgage and home-related expenses, the cost of HOA dues will have a monthly impact on your budget.

Here’s an explanation of the average cost of condo association fees in Minnesota and Wisconsin and what they offer you in return.

Who controls what, within a condo?

Before we dive into HOA fees, let’s discuss the details of living in a condo. There are two levels of control within a condo: the individual condo owners and the condo complex’s HOA.

A condo buyer owns and is responsible for their private residential unit. This means that after walking through the doors of a condo, owners have the freedom to make design and maintenance decisions for their space, such as:

  • Painting walls
  • Installing new kitchen faucets
  • Upgrading appliances

Then, each individual unit is surrounded by the complex’s commonly-owned property. In most cases, the HOA is responsible for the maintenance and repair of the jointly-owned spaces, including:

  • Indoors: Hallways, entryways and elevators
  • Outdoors: Parking lots, roof and lawn
  • Amenities: Fitness facilities, pools and hot tubs
  • Reserve funds: Large-scale projects, insurance and unexpected emergencies

The HOA needs to raise money to provide services and amenities, and they do that by charging every condo resident a monthly HOA fee.

How much do typical condo HOA fees cost each month?

Each individual condo owner pays a predetermined amount in HOA fees each month; these fees are determined by the HOA and they are non-negotiable. In general, condo HOA fees are determined by the percentage of the complex you own, which typically ranges from 25 to 75 cents per square foot per month. However, some properties may charge more than this average condo fee estimate, such as:

  • Luxury buildings in downtown Minneapolis.
  • Brand-new complexes with many amenities.
  • Units with breathtaking views of the Mississippi River.

Although most HOAs follow the same general guidelines, condo HOA fees and coverage may fluctuate between properties. Together, we can assess the fairness of the fees you come across as you search for condos.

If a condo’s HOA fees are lower than the average, does it mean the complex is poorly run?

Not necessarily. A well-organized property can function on a modest budget and still preserve the standards of the complex, but it’s important not to cut back so much that the building depreciates.

Modest HOA fees could be the result of motivated tenants and HOA members that help the entire complex save on expenses. A member could act as the property manager rather than hiring an outside management company, or a persistent HOA may renegotiate contracts and find deals (on plowing or HOA insurance) to minimize costs.

Lower association fees for condos could also indicate that the complex has fewer built-in amenities. If a property has low HOA fees, it’s still important to ensure that the HOA:

  • Has secured proper insurance.
  • Is currently maintaining the property’s condition and value.
  • Has future plans for repairs and maintenance.
  • Has saved sufficient reserve funds to pay for future updates.

Key points and next steps

The cost of owning a condo extends beyond the initial sale price. To know where your money is going, make sure to think about:

  • The amount of money you’ll pay to the condo HOA. Does the cost of your condo fee match the services and amenities provided by your HOA?
  • Your financial strategy. Plan in advance to cover monthly HOA dues and possible extra fees requested by the HOA (which are called special assessments).
  • Your involvement in the HOA. Would you want to be an active member of your condo’s association?

Moving forward with a condo, but still have questions? Reach out at any time for specifics on typical HOA fees for our area, or for details on condos within your desired location and budget.

Can I have a pollinator lawn even if my city has yard restrictions?

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Homeownership can be complicated, but we also think it’s one of the most rewarding ventures out there. In our series Ask an Edina Realty Lawyer, we are hoping to demystify some of the trickier aspects of buying, selling and owning a home.

In this edition, one of our lawyers discusses how homeowners can follow their city’s lawn regulations even as they work to create an environment that is more hospitable for pollinators.

Dear Edina Realty Legal,

This spring, I heard a lot about “No Mow May” and now I’m seeing a lot of news about having a pollinator-friendly yard. What does that mean, and am I allowed to create one, even if my city requires me to mow my yard?

This is a great and timely question. “No Mow May” is part of a larger movement to encourage people to maintain their yards in a way that protects the health of pollinators. No Mow May specifically encourages Minnesotans (and our other upper Midwestern neighbors) to avoid mowing their yards during the month of May to allow pollinators the best chance of success in the spring, as they leave winter hibernation and begin to seek food sources and habitation.

Of course, No Mow May is now squarely in the rear-view for this year, but that doesn’t mean that you can’t commit to creating the healthiest habitats possible for bees and other pollinators. In short, allowing native prairie grasses and other pollinator-friendly vegetation to thrive in your yard can provide a better ecosystem for pollinators than the traditional grass yard.

Exploring lawn regulations for your city

Many cities have nuisance laws that may limit what you can do to make your yard more pollinator-friendly. While regulations can vary, most cities have regulations regarding lawn appearance, and it is common to see ordinances place a maximum height for vegetation in a yard. Additionally, there are restrictions on the types of vegetation allowed. For example, “noxious weeds” are required to be removed under state law, so letting your yard run wild is likely not an option—even if you are doing it to help the pollinators.

But that doesn’t mean you can’t be pollinator-friendly and follow the law at the same time. To promote “No Mow May,” for example, some cities took measures to pause the enforcement of grass length ordinances during the month of May. Other cities, including Rochester and Bloomington, have gone even further by adopting ordinances that allow for native prairie vegetation if certain conditions are met.

Unfortunately, there aren’t any comprehensive lists available that state which cities have allowances for native plants or pollinator lawns. However, you can check with your local government to learn what regulations are in place, and if there are any plans or current initiatives to promote pollinator-friendly lawns to local citizens.

Of course, city regulations are only part of the equation. If you live in a Homeowners Association, your HOA might have its own rules regarding the appearance of your yard. In that case, you will want to check your HOA rules before giving away your mower and converting your yard to a pollinator paradise.

Getting started with a pollinator lawn

Ready to get started? Whether you completely transform your lawn, make it more bee-friendly, or simply start with a few native plants, you’ll find that pollinators will be attracted quickly to your yard after the plants begin to grow.

The Edina Realty Legal Department serves as in-house counsel for Edina Realty and does not represent private clients. This Insight is not intended to provide legal advice.

What are mortgage discount points and how can they help today's buyers?

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Key insights:

  • As interest rates rise, buyers may be concerned about their diminished buying power.
  • To combat these rising rates, some buyers are seeking to purchase mortgage discount points, which can lower the overall interest rate on your mortgage.
  • Mortgage discount points can be the right option for buyers who plan to stay in a home past the “break-even point,” but borrowers should speak with their lender about the pros and cons before making a final decision.

After years of historically low interest rates, buyers may be stunned to see that rates are rising quickly. This will not only lead to buyers paying more over the life of their loan, it can also impact the total loan amount for which they could qualify. As we reported earlier this year, a 1% jump in interest rates can be equivalent to an 11% reduction in buying power for an aspiring homeowner.

So, what can hopeful buyers do, aside from maintaining good credit and saving as much as possible for their down payment? Experts say it may also be time to take advantage of mortgage discount points.

What are mortgage discount points?

Mortgage discount points — also called discount points or mortgage points — are fees that a homebuyer pays directly to their lender in exchange for a reduced interest rate.

Each point that a homebuyer purchases typically:

  • Reduces their interest rate by .25%
  • Costs 1% of the total mortgage amount

In other words, if a buyer was taking out a $400,000 mortgage and rates were set at 5%, then they could pay $4,000 for one mortgage point. This investment of $4,000 would (in most cases) reduce their interest rate to 4.75%, allowing them to save on interest over the life of the loan.

How much do you end up saving by purchasing mortgage points?

Purchasing discount points may end up saving you significant money over the loan term. Here is an example of how much a homebuyer would save, over the course of 30 years, by purchasing one (1) point during a time when rates are set at 5.5%.

Loan amount: $300,000

Points and rates

Upfront cost

Monthly payment**

Total savings on a 30-year fixed-rate loan

0 points
5.5%
(5.667% APR*)

$0

$1,703.38

N/A

1 point
5.25%
(5.492% APR)*

$3,000

$1,656.63

$16,832

* Sample points, interest rates, and APRs are for illustrative and educational purposes only and are not an actual rate quote, pre-qualification or commitment to lend. Actual rate buy-down per point varies by loan program and market conditions. Interest rate and annual percentage rate (APR) are based on current market conditions as of 4/25/2022, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. If the down payment is less than 20%, mortgage insurance may be required and could increase the monthly payment and APR. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend.

** This is the cost of monthly principal and interest only. Taxes, property insurance, and mortgage insurance are NOT included in this example.

Who should buy mortgage discount points?

Not everyone is a candidate for buying discount points. If you are cash-strapped and unsure how you’ll afford a down payment, for example, then buying mortgage points may be out of the question.

However, it may make the most sense to “buy down the rate” if you are:

  • Buying in an environment where rates are going up and are not expected to go down in the near-term.
  • Taking out a loan with a fixed-rate mortgage. The points may then allow you to reduce your rate for the life of the loan.
  • Planning to own the home after you reach the “break-even” point, or the time it will take to recoup the cost of buying points.

Other common questions about discount points

Can buyers purchase more than one discount point?

Yes, it’s possible to buy more than one discount point, but each lender will have their own limitations for how many discount points they allow.

Should I put more money into a down payment, or buy mortgage discount points?

There’s no easy answer to this question, because your financial situation is so different from every other buyer and borrower out there. Together, we can work with your lender to help evaluate the benefits of putting down a larger down payment (and borrowing less overall) or buying down the rate (so your rate is lower for the life of the loan).

Are mortgage points tax-deductible?

If you itemize your deductions (rather than taking the standard deduction), you may be able to claim a deduction for your discount points. Remember, though, your taxes reflect your personal financial situation, so you are advised to speak to a tax specialist about the tax consequences of discount points.

Get help navigating the mortgage process

As with all mortgage-related activities and decisions, it’s important to get the personalized help of your home mortgage consultant when making a decision about purchasing mortgage discount points. For help getting in touch with a mortgage consultant near you, reach out today.

Points may not be the best option for all borrowers. Contact your mortgage consultant to determine the best loan option for you.

Not all buyers will qualify. Prosperity Home Mortgage, LLC does not offer financial advice. This information is provided for informational purposes only and does not constitute legal, tax, or financial advice.

Edina Realty Mortgage is an affiliate of Edina Realty. See Affiliated Business Arrangement Disclosure Statement

Prosperity Home Mortgage, LLC may operate as Prosperity Home Mortgage, LLC dba Edina Realty Mortgage in Minnesota and Wisconsin. All first mortgage products are provided by Prosperity Home Mortgage, LLC. dba Edina Realty Mortgage. (877) 275-1762. Prosperity Home Mortgage, LLC products may not be available in all areas. Not all borrowers will qualify. Prosperity Home Mortgage, LLC dba Edina Realty Mortgage is licensed in Minnesota and Wisconsin. Prosperity Home Mortgage, LLC is licensed by the Delaware State Bank Commissioner. Massachusetts Mortgage Lender License ML75164. Licensed by the NJ Department of Banking and Insurance. Also licensed in AK, AL, AR, AZ, CA, CO, CT, DC, FL, GA, ID, IL, IN, KS, KY, LA, MD, ME, MI, MN, MO, MS, MT, NE, NC, ND, NH, NM, NV, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV and WY. NMLS ID #75164 (NMLS Consumer Access at http://www.nmlsconsumeraccess.org/) ©2022 Prosperity Home Mortgage, LLC.

Three home improvements with 100% ROI

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Key insights:

  • The market is hot for sellers, but homeowners may still wonder how to put their best foot forward when listing their home for sale.
  • A recent report shares three low-cost home updates that will earn back their money at resale.
  • Soon-to-be home sellers can consider these projects as a way to boost their home’s value and interest among buyers.

If you’ve lived in your home for a few years (or decades), it likely will need a bit of sprucing up before you list it for sale. But it can be hard to know what buyers really want to see when they’re hunting for homes — and what they’re willing to pay for when they make an offer.

The 2022 Remodeling Impact Report

The National Association of REALTORS® recently released a report sharing the home renovation projects with the best return on investment (ROI) upon resale. The organization found that three of the lowest-cost home updates tend to pay off the most, earning a 100% or better ROI for sellers making updates.

Here are three projects that buyers love to see, and that will earn your money back at the closing table.

1. Refinishing hardwood floors

Cost estimate: $3,400

Resale value estimate: $5,000

Cost recouped estimate: 147%

Hardwood floors are in such high demand among buyers that NAR’s data shows that sellers can earn back 147% of the cost of refinishing their floors when they list their home for sale. This makes sense on a few levels: Well-polished floors will help a listing stand out online, which can lead to more buyers visiting in person. Once buyers enter and see the gleaming floors are as advertised, it may help coax an already-eager party into making an offer.

If your hardwood floors are covered in carpet, linoleum or have simply seen better days, the stats show that refinishing them will pay off when you sell your home.

2. Installing new wood flooring

Cost estimate: $5,500

Resale value estimate: $6,500

Cost recouped estimate: 117%

How much do buyers really want hardwood floors? Not only will refinished hardwood pay off at resale, so will brand-new wood flooring! For homeowners who still have carpet, laminate or other flooring in their main living areas, the replacement cost of new wood flooring will likely pay off at resale; NAR estimates these sellers will recoup 117% when closing on their home.

Note: This project includes real hardwood flooring, rather than laminate flooring. As a seller, you can make the determination whether you’d like to go with the “real thing” or a less expensive alternative.

3. Upgrading the home’s insulation

Cost estimate: $2,500

Resale value estimate: $2,500

Cost recouped estimate: 100%

If your home’s insulation is subpar, you likely experience inconsistent temperatures in your home, as well as high energy bills. Further, a home inspector may take note of your faulty insulation during their pre-sale inspection. To mitigate the issues you could face getting to the closing table, it may be worth paying for your home’s trouble areas to be reinsulated before you take it to the market.

NAR’s most recent data shows that this is a relatively low-price project, at just $2,500 on average. Best of all, NAR estimates you’ll break even at resale with a 100% return on investment at the closing table.

Get expert guidance before you sell

Not sure where to start as you consider selling your home? That’s where a local expert can come in handy! By simply reaching out when you’re ready, you’ll receive personalized insights on the most cost-effective, impactful changes you can make as you prepare to list your property for sale.

How sellers can benefit from reverse contingencies

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Key insights

  • Sellers may find themselves in a tight spot if they sell their property but haven’t yet found a new home to purchase.
  • To avoid this anxiety, sellers may consider adding a reverse contingency to their purchase agreement.
  • In a reverse contingency, the seller adds a clause saying that the home’s sale is contingent on their purchase of a new property.

Worried about not having housing during the time between selling your current home and buying a new one? Here’s how using a reverse contingency can help you ease your mind as you list your home for sale.

What is a reverse contingency?

When there’s a shortage of homes for sale, sellers typically rejoice. After all, the simple dynamics of supply and demand dictate that in a low-inventory market, sellers can benefit from shorter time on the market and increased sales prices.

Of course, sellers who need to buy another home have the same challenge as every other buyer looking for a property in their preferred location and budget. Naturally, this can cause anxiety for sellers who aren’t sure they’ll be able to find an acceptable new home before their current home is sold.

That’s where a creative option, known as a “reverse contingency,” can come into play. In a reverse contingency, sellers insert a clause into the purchase agreement that makes their home sale contingent on finding another home to buy. (Note: This is the opposite of a buyer’s contingency clause, which makes a home sale contingent on whether the buyer can sell their home.)

When should sellers use a reverse contingency?

Let’s say you receive a very attractive offer on your home, but you haven’t yet found another one to buy. In this case, you can consider adding a reverse contingency clause into your purchase agreement.

Together, we will determine the exact language to include in the contract. But in essence, the reverse contingency will give you a period of time to try to find a new home before you are legally bound to close on the sale of your existing home. In short, you get the advantage (and relief) of knowing that your home is under contract, and some extra time to look for a new property.

If you find a home during that period that suits your needs (and your offer on that home is accepted), we will remove your contingency and you’ll move toward closing the sale of your own home. If you don’t find a home during that time, we may be able to:

  • Cancel the purchase agreement and walk away from the deal.
  • Negotiate a longer contingency if the buyer is willing.
  • Negotiate for a longer path to closing, so the sale moves forward and you still have time to continue searching.

Note: When making the decision to pursue a reverse contingency, consider not relying on stats or news stories about the market as a whole. Real estate is hyper-local, and so is buyer demand. Together, we can evaluate the buyer interest for homes like yours and determine if a reverse contingency is the right call.

Alternative options to reverse contingencies

If a reverse contingency doesn’t feel right, there are other seller-friendly options available for sellers who are concerned about finding a home to purchase in time.

Transitional housing

Some sellers opt to arrange short-term or transitional housing, which allows you to sell in a strong market while taking the time you need to find — or build — your perfect house. Common transitional housing options might include a short-term rental, an extended stay at a hotel or staying with friends or family for a month or two.

Home equity loan solution

Most homeowners plan to use the proceeds of their home sale to fund the down payment on their next property. Those who haven’t yet sold their first home may worry about their ability to fund their future property. Today’s lenders are understanding about this predicament and some offer home equity loan solutions*, where homeowners can fund their down payment on the assumed equity of their existing property. When their home is sold, they can pay the lender back and the loan is canceled.

The right team

Selling a home can be stressful. But with a little time, creativity and the right team in place, you can gain the flexibility and freedom needed to find your ideal home. Call or email today for expert advice on how to properly time your home sale and purchase.

*Not all buyers will qualify. Prosperity Home Mortgage, LLC does not offer financial advice. This information is provided for informational purposes only and does not constitute legal, tax, or financial advice.

Edina Realty Mortgage is an affiliate of Edina Realty. See Affiliated Business Arrangement Disclosure Statement

Prosperity Home Mortgage, LLC may operate as Prosperity Home Mortgage, LLC dba Edina Realty Mortgage in Minnesota and Wisconsin. All first mortgage products are provided by Prosperity Home Mortgage, LLC. dba Edina Realty Mortgage. (877) 275-1762. Prosperity Home Mortgage, LLC products may not be available in all areas. Not all borrowers will qualify. Prosperity Home Mortgage, LLC dba Edina Realty Mortgage is licensed in Minnesota and Wisconsin. Prosperity Home Mortgage, LLC is licensed by the Delaware State Bank Commissioner. Massachusetts Mortgage Lender License ML75164. Licensed by the NJ Department of Banking and Insurance. Also licensed in AK, AL, AR, AZ, CA, CO, CT, DC, FL, GA, ID, IL, IN, KS, KY, LA, MD, ME, MI, MN, MO, MS, MT, NE, NC, ND, NH, NM, NV, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV and WY. NMLS ID #75164 (NMLS Consumer Access at http://www.nmlsconsumeraccess.org/) ©2022 Prosperity Home Mortgage, LLC.

What are native plants and how can you use them in your lawn?

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Key insights:

  • Embrace the concept of “No Mow May” by incorporating native plants in your landscaping.
  • Native plants and pollinators are on the decline. Creating a natural habitat in your yard may help to revive these local species.
  • Wildflower and clover yards require less maintenance and water than the traditional grass yard, which saves homeowners money and time.

A recent push for “No Mow May” has taken social media and local governments by storm. This trend encourages the growth of native plants and grasses in order to protect natural wildlife and habitat.

Follow along if you’re interested in replacing your green, manicured lawn with an equally luscious alternative that also supports local pollinators and plant species.

Plant a wildflower or clover yard

While a yard full of wildflowers or clovers may sound like a whimsical fairytale, it’s becoming a desired lawn feature for households across the country – and not just for its beauty. Even though these natural plants offer a beautiful sight, the addition of such greenery serves a greater purpose: to build back lost habitats for insects. Currently, 40% of insect species are on the decline. Building back their natural habitat with wildflowers or clover may help to save these small, vital creatures.

Wildflower

A yard full of wildflowers is one of the best options for encouraging the biodiversity of plants, insects and birds. Once these yards are established, they require much less upkeep than a typical grass lawn. It’s important to use seeds for flowers that grow naturally in your area. Here are some popular native plant species to use in lawns throughout Minnesota and western Wisconsin:

  • Black chokeberry
  • Blue false indigo
  • Blue flag iris
  • Bush honeysuckle
  • Butterfly milkweed
  • Cardinal flower
  • Michigan lily
  • Purple coneflower
  • Red osier dogwood
  • Swamp milkweed
  • Wild columbine
  • Wild geranium

Clover

Clover yards are easy to plant and a breeze to maintain. With this style of yard, homeowners can potentially mix clover with native grasses to add interest to their lawn. Plus, clover requires less water than the standard lawn – and it costs less to plant, too. The most commonly used clover species are:

  • Micro clover
  • Dutch white clover
  • Red clover

The benefits of native flowers and grasses

Creating pollinator gardens, incorporating native plants in your landscaping or planting a full-fledged wildflower or clover yard all offer a variety of benefits. Here are some of the advantages associated with this style of natural yard:

  • Creates a refuge for bees, birds, beetles, butterflies and other pollinators
  • Allows for plants to grow freely, which increases biodiversity
  • Generates visual interest
  • Reduces runoff and erosion
  • Saves you time and money on yard maintenance

Maintain your yard naturally

Here are some tips to create a natural and inviting outdoor space that will help pollinators and plants thrive:

  • Prepare your soil
  • Plant wildflower, clover or natural grass seeds
  • Plant fruits and vegetables that you enjoy
  • Water seeds only when necessary
  • Eliminate or reduce pesticide usage
  • Incorporate shrubs and sections of mulch for visual interest and erosion protection
  • Set up a seating area with citronella candles

Looking for more natural yard tips? Moving forward, reach out for more ways to enhance your home’s yard and boost its sale potential.

Why a higher property value benefits you, even if you don't plan to sell

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When home prices rise, as they have been for the last few years across Minnesota and western Wisconsin, many homeowners may become frustrated by the increase in their annual property taxes. While it's not expected that you celebrate a higher tax bill, there are various reasons that homeowners should accept rising values as a good thing.

Here are insights you can use when assessing your home's rising value and how it affects you.

Short-term benefits of a higher property value

If you didn't put down a hefty down payment when you purchased your home, you may pay mortgage insurance — either private mortgage insurance (PMI) on a conventional loan, or mortgage insurance premium (MIP) on an FHA loan. These insurance payments add up; borrowers can pay hundreds of dollars per year on mortgage insurance for their loan.

These insurance payments are based on the level of risk the lender is taking to loan you money. When your home's value rises, the loan becomes less risky to the lender because its loan-to-value ratio decreases.

Here are the details you need to know about the possibility of canceling your mortgage insurance payments:

  • Conventional loan borrowers can take advantage of their rising property value by canceling their PMI when their loan-to-value ratio reaches 80 percent; it will automatically be canceled when the loan-to-value ratio reaches 78 percent.
  • FHA borrowers, unfortunately, are not able to take advantage of a similar cancellation. They will continue to pay MIP for the entire lifetime of the loan.

In short, a small uptick in your property taxes may signify that your home's value (and equity) is rising — and allow you to bank more each month by canceling your mortgage insurance.

Medium-term effects of a higher property value

Over the last few years, the headlines have focused a lot on the rising property values across the country and in Minnesota and western Wisconsin. On average, homeowners saw their property values increase by 20% in the early months of 2021! That amounted to, on average, $33,000 in equity for the average homeowner. Of course, most folks don’t have tens of thousands of dollars in cash sitting around to pay off bills, take on renovations or fund a new car or college student.

While many homeowners hope to wait until they sell for a big “cash-out,” many are starting to recognize that their increasing home value and home equity gives them some financial options they can explore in the here and now.

There are a variety of options to look at — from tapping into home equity to receive a lump sum payment, to getting a revolving line of credit similar to a credit card, to a cash-out refinance. Each of the options have pros and cons but they all share one similar trait: They offer cash to homeowners who have built up wealth via their home equity, but who are not quite ready to sell their home.

The long-term effects of a higher property value

Explaining the long-term benefits of a higher property value is far less complicated. In short, surprising circumstances can arise that cause you to sell your home — even if you swear that you will never, ever leave it.

Perhaps you'll outgrow the quirks you love now, or maybe it'll be far too much space after your kids grow up. Maybe you'll be offered your dream job on the west coast and have to pack up and move on. In short, you never know what the future holds, so having a higher potential sales price on your property means that you won't lose money if (and when) you eventually come to sell it.

Wondering how to check your home's value?

Get in touch for a personal estimate that goes far beyond the automated options you may see advertised online. There’s no obligation and no risk — you’ll simply receive the professional assessment of a local expert to help guide your way.

Getting outbid? What buyers can do to stay in the game (and win)

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Buyers today are feeling the squeeze. As home prices and interest rates rise, inventory continues to remain low. Even the most hopeful home seekers may be feeling pessimistic, and wondering if the right home will ever be theirs to keep.

Here are some top insights for navigating today’s market as a buyer. Whether you’re just dipping your toes in or have lost in multiple offers a few times, these tips should help you determine the right path forward.

Have the hard conversations

First, it’s time to take a peek at the offers you’ve placed and how you’ve stacked up against the other bids and winning buyer. Together, we’ll work to determine the answers to the following questions:

  • Have we ever been close to winning an offer? Or are we being heavily outbid every time?
  • How many offers are typically being placed on the properties we like best?
  • How much did they end up going for, compared to our offer or budget? Were we close or quite far off?

If you’re in the running for the houses you like best, then it may just be a matter of being patient. If you tend to be in the bottom half every time, it may be time to adjust your expectations or look to other neighborhoods or cities for houses that better fit your budget.

Think through your timeline

Today’s sellers have a keen advantage in the market… until they sell and have to re-enter the market as a buyer! If you have flexibility in your timeline, then you may want to add that into your offer. Whether you end up closing in 90 days to allow the seller more time to find their new home, or renting it back to them before you move in, offering more time to the seller can help your offer stand out — even if your monetary bid comes up a bit short.

Reassess your “must-haves”

“It’s pretty common for buyers to have a long list of non-negotiables… until they find a house that just feels right,” said Edina Realty President Sharry Schmid. “Then, suddenly, having laundry in the basement isn’t such a big deal.”

Of course, it’s fine to have standards. But if you have been ultra-picky about the homes you’ll consider, and you’re losing bid after bid, you may want to take stock in the amenities or features you really need… and let some of the others go.

Try touring a few homes that wouldn’t have passed your original requirements. Discuss the pros and cons of buying a home with only two garage stalls instead of three, or a split-level design, or one that doesn’t have an owner’s suite with an attached bathroom. If you decide to hold strong to your original must-haves, that’s just fine. On the other hand, you may encounter a home that has 90% of your desires, and you might just decide it’s worth it after all.

Reconsider your down payment, if possible

You’ve likely been saving for years for a down payment, so it’s unlikely that you have an extra bank account you haven’t tapped into yet. However, if you’re lucky enough to have family or friends who are willing to provide mortgage gift funds, it may be time to ask for a financial favor. There are regulations in place for how you can legally obtain these funds, so be sure to speak with your home mortgage consultant to follow the proper process.

Alternatively, we can determine if you are eligible for down payment assistance. In Minnesota, funding assistance up to $17,000 may be available; in Wisconsin, the maximum assistance amount is 6% of the home’s purchase price.

Consider other home types

While many buyers are looking for single-family homes with a yard and garage, other housing options are available and can offer just as many advantages. Condos and townhomes tend to have lower price points, while requiring less maintenance.

Plus, multi-family housing is a lot different than it used to be. Condos are no longer available in only the swankiest parts of downtown Minneapolis and St. Paul; they can also be found in most suburbs and neighborhoods. Townhomes are not only being built in large developments, but also in smaller communities near parks, walkable retail and more.

Need help entering the market as a buyer?

If you haven’t hired an agent to represent you in the home buying process, get in touch any time for an honest, open conversation. It’s a tricky time to buy, but having the right professional on your side can make all the difference.

Status Definitions

For sale: Properties which are available for showings and purchase

Active contingent: Properties which are available for showing but are under contract with another buyer

Pending: Properties which are under contract with a buyer and are no longer available for showings

Sold: Properties on which the sale has closed.

Coming soon: Properties which will be on the market soon and are not available for showings.

Contingent and Pending statuses may not be available for all listings