Building vs. buying a house: Which is cheaper?

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As inventory remains low and prices and competition rise, it’s not uncommon for buyers to wonder if they should be building a house vs. buying an existing property. As you consider whether you’d like to build, you’ll want to keep in mind the convenience of buying a move-in ready house, the costs of building or buying a house, and the benefits of designing your own custom home.

Building a house vs. buying

While some people have always wanted to live in a brand-new, custom-built home, others are considering the option to build a new construction property for the first time. In the Twin Cities metro area, the median home price is now well above $325,000, meaning that starter homes are hard to find and “move-up” homes are more expensive. As a result, many homebuyers are beginning to consider the benefits and costs of building vs. buying a home.

No matter what you decide, it’s important to start organizing your personal finances early. Be sure to:

  • Get your credit score, which is a number used by financial institutions to determine how capable you are of taking on additional credit. Increasing your credit score to meet a lender’s criteria can take time, so you’ll want to begin that process immediately if your score is low.
  • Understand your total expenses, including the cost of recurring bills (like your car or student loans), as well as what you can expect to pay in mortgage, interest, property taxes and interest. Your lender can help you understand your spending, and how it can affect your home buying budget.
  • Plan your estimated down payment, whether it will come from your own savings or from mortgage gift funds provided by those close to you.

Buying an existing house

Buying a house

Nearly 86% of homebuyers choose to purchase existing homes. Why is this option so much more popular than building a custom home? Here are some typical factors buyers consider when choosing to build or buy:

  • The timeline: Moving into an existing house can usually happen faster than building a new home.
  • The location: Most new-build homes are within new developments, giving buyers fewer options when it comes to selecting a city or neighborhood.
  • The initial cost: Historically, it has been cheaper to buy an existing home than it has been to build a custom home.

Pros and cons of buying a home

There are advantages and disadvantages to buying an existing home — from the cost, to the condition, to the location and opportunity for expansion or remodeling. It’s important for homebuyers to aim for their dream home, while also remembering that every property (whether it’s historic or brand-new) may come with some drawbacks.

Pros of buying a house

Aside from the long-term financial benefits of buying a home, there are also emotional gains to setting down roots in a community you love. Some points in favor of buying an existing home include:

  • A faster moving timeline. If you hope to move quickly, then buying an existing home may be the right path for you.
  • A more established community. In buying an existing home, you’re more likely to move into a neighborhood that has long-established traditions or amenities.
  • A lower cost. Historically speaking, buying a house is often cheaper than building one.
  • Fewer upfront decisions. When you buy an existing house, you can wait until you move in to make decisions about decor, upkeep and more.

Cons of buying a house

Of course, there are also downsides to buying an existing house. Even the best inspector can miss costly issues, and small remodeling projects can end up taking years if you don’t prioritize them. Buyers who aren’t sure if they should build or buy should consider:

  • The cost of upkeep. Even the most perfectly-maintained existing home can hide issues that are costly and time-consuming to fix.
  • The stress of the market. Extremely low inventory means that today’s buyers are faced with a lot of competition and high-stress transactions.
  • Less control over timing. Our fast-paced market means that buyers need to be ready to move now, but must also prepare for months of putting in offers that are rejected or outbid.

Costs involved in purchasing a home

In the Twin Cities metro area, the median price of a single-family home was $327,500 in April of 2021. That’s a new record high, and it may mean that the cost of buying an existing home is creeping ever closer to the cost of building a brand-new home. Of course, there are additional costs to existing homes that buyers should consider:

  • Insurance, taxes and interest: If you’re a first-time homebuyer, remember that the cost of buying a home is not simply your monthly mortgage payment. Be sure to factor in the cost of homeowner’s insurance and your property taxes.
  • Small updates: Whether it’s repainting the walls to better match your decor preferences, replacing hardware on the kitchen cabinets or buying more modern window treatments, there will be expenses as you match an existing home to your personal style.
  • Large upgrades and repairs: Over time, you may have to replace costly home elements, including windows and roofing, or make investments into the plumbing and HVAC systems.
  • Appliance failure: If you’re lucky, you may move into a home with new laundry machines and an updated kitchen. If not, you may need to purchase brand-new appliances as they fail from typical use.
  • Exterior maintenance: Homeowners will incur small annual costs, like tree-trimming and landscaping, and may need to budget for larger projects like new siding or house painting.
  • Remodeling: Most homeowners have a few ideas of how their space could be upgraded. Whether you’d like to add a sunporch, en-suite bathroom or refinish the basement, the cost of remodeling is something to consider.

Timeline for buying a home

Let’s talk about the ideal home buying timeline: If you are fortunate enough to get an offer accepted on a home, you may be able to close in as little as 30 days. This window of time includes the time it takes to get a loan approved and an appraisal and inspection completed. However, with today’s limited inventory, many of today’s buyers are searching for weeks — or even months — before one of their offers is accepted. This means that for buyers seeking existing homes, the timeline can vary quite a bit.

Building your own home

Building a house

Building a house is less popular than buying an existing home; just 11% of homebuyers purchase new construction homes on land they didn't already own. While it’s much cheaper to build a house on your own land, only 3% of homeowners go down this route. So, why do less than 15% of buyers purchase new construction housing overall? Is it because of the house construction cost, or the process of building a house? Or something else altogether?

Homebuyers, here are some things you should know when building a house:

  • Land ownership: Do you already own land you can build on? Or do you need to purchase land in order to build your home?
  • The cost to build a house: Can building a house be cheaper than buying? How can you save costs when building a house?
  • The building construction timeline: How long does it take to have a house built?
  • The process of building a house: How involved will you be in day-to-day decisions? What will the communications between you, your agent and the builder look like?

Pros and cons of building your own home

From the bliss of choosing your kitchen backsplash from a catalog of 1,000 options, to the stress of making dozens of decisions you’ll have to live with for years, there are plenty of pros and cons when building your own home.

Pros of building a house

If you are considering buying land and building a house, the pros might seem pretty obvious: a brand-new home, built with custom finishes, hand-selected design elements and swoon-worthy spaces. But there are other benefits that you may not have considered, including how you can possibly save money when building a house. Let’s review some of the pros of building a home.

  • Your dream home. When you get to build a home from scratch, you call the shots. And that means on move-in day, you’re really going to move into the home of your dreams.
  • No-cost maintenance. Your new home should be defect-free. And in many states, Minnesota included, there are laws requiring builders to provide warranties for their work.
  • Build a community. Many homeowners in developments find that their neighbors become fast friends, as everyone is new to the area and getting settled in at the same time.
  • Enjoy the amenities. If you buy a home in a growing development, you may have access to amenities like a pool, jacuzzi, gym or walking trails. If you’re super lucky, you may even have someone who does your lawn maintenance and snow removal.

Cons of building a house

It’s easy to envision the benefits of building a house, but what are the disadvantages?

  • Rising costs. By selecting custom elements or requesting design upgrades, you may greatly increase the total cost of your home build.
  • The building timeline. The process to build a new home can take several months or up to a year, depending on the customizations and builder you choose.
  • A brand-new community. While many homeowners in new developments find that they love entering into a brand-new community, others may be disappointed by the lack of history and mature trees in their neighborhood.
  • HOA fees. If you purchase in a development with built-in amenities, they will come at a cost. You may have to pay into a homeowner’s association monthly.
  • Location. With only so much land to go around, you likely will have to move farther away from cities and developed areas, and potentially, from your place of employment.

Cost to build a house

Most would-be new home buyers have the same two questions: How much does it cost to build a house? And, can it ever be cheaper to build a house vs. buying a house? Nationwide, the most recent numbers from the National Association of Home Builders show the cost breakdowns for average new home construction:

  • Finished lot costs: $89,540
  • Construction costs: $296,652
  • Builder profit: $44,092

While these are only the average costs, it’s easy to see a few ways homeowners could save money when building a house, or spend even more than they had anticipated. Here are some cost factors to keep in mind when building a home.

  • The cost of land. The easiest way to “save” money when building a house is to already own the land where you hope to build. If you build on your own land, you could save an average of $90,000. Remember, the price will likely go up if you buy land closer to the city, or if you have to demolish an existing home in order to build on a purchased lot.
  • Upgrades and finishes. Together, we can speak with the builder at length to determine what the design and material standards are on your home. Will it include real wood flooring or laminate? Will the doors be solid core or hollow core? Is the deck included? These may not be details you care about — but if you want high-end finishes, you’ll want to know the costs of them in advance.
  • Lot size. One way that developers are able to lower the price on new construction homes is to build them on smaller lots than in the past. If you’re dreaming of a larger plot of land, you may have to pay more or move out further from the city.
  • Cost of materials and labor. As demand for new homes rises, the cost of labor and materials is skyrocketing as well. The price of wood has gone up 180% alone in the last year, leading to an average increase of $24,000 on the average home build.
  • Finished vs. unfinished space. Many new construction homes in the Midwest come with an unfinished basement, or the option to have it refinished before move-in. Each homebuyer can decide if that’s a project they want to take on in the future, or if they want to include it in the initial build.

Timeline for building a home

The building construction timeline varies, depending on the type of home you are buying and building.

  • Production-built homes, which offer pre-set designs and few customizations, can be ready in 3-4 months.
  • Semi-custom homes, where buyers can select from a few different options (such as finishes, appliances, facade) can be ready in 4-6 months. Buyers may also be able to request some small upgrades that aren’t in the original design.
  • Custom builds, which are typically one-off properties in a more established neighborhood, can take up to one year or longer. Custom home buyers will be able to select every element of their property.

Whether you build or buy, partner with Edina Realty for confidence

As with all big decisions, deciding whether to build or buy a house may take a lot of time, thought and research. By working with the right builder and REALTOR®, and selecting the right lot, you may find it’s cheaper to build a house than it would be to buy in your dream area. For buyers who hope to move quickly, buying a move-in ready existing house may be the right choice.

Ready to begin your search for the perfect lot and builder? Reach out today. We can work together to ensure your new construction experience remains seamless and on-budget.

Ultimate curb appeal checklist for sellers

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Key insights:

  • When it comes to curb appeal, a clean home exterior creates a bright canvas for additional features to pop.
  • Add flowers and lights alongside your home’s walkway. This will draw potential buyers’ eyes straight into your front door.
  • Finishing touches like new cushions and fixtures make all the difference when it comes to selling your home.

While today’s market continues to favor home sellers, it’s still important to put your best foot forward when listing your house on the market. Whether you’re looking to attract buyers online or in person, curb appeal is one of the most important things a home seller can master. And you’d better believe that no one knows more about curb appeal than your trusted local agent!

When it comes to curb appeal, the real goal is to draw the buyer from the curb to the front door (or in some cases, the virtual front door). Keep in mind, the more interested buyers you can appeal to, the more likely you are to receive a strong set of offers. Here are some tips you can follow when trying to boost your home’s curb appeal.

Start with these outdoor cleaning tips

Exterior siding is an ultra-important aspect of your home. Not only does siding keep a home sturdy and protected from nature’s elements, but it is also one of the first things people will notice about your home. Clean and maintained siding creates a polished appearance that will set the tone for potential buyers as they enter your space.

To keep your siding looking shiny and new, start by washing the exterior of the home. To do so, either rent a pressure washer (be sure to keep the pressure gauge low near windows) or use a hose. Work to remove dirt and debris with the pressure sprayer and scrub brush. Once the siding is cleaned, you can determine whether the home needs a new paint job or if you can get by with freshening up a few trouble spots.

Next, wash every window on the exterior and the interior of your home until the glass sparkles. Pro tip: the best way to create streak-free windows is to nix the paper towels and use crumpled-up newspapers instead.

Exterior home maintenance to-dos

When it comes to exterior maintenance, we recommend starting from the top down. If your roof is sagging or will bring down the overall appeal of the home in photographs or in person, you may want to consider replacing your roof. Otherwise, you can replace shingles and make sure that all leaks or gaps are filled in. Don’t forget to clean and straighten your gutters, too.

Next, you may want to repaint the areas that see the most wear, including:

  • Trim
  • Shutters
  • Railings
  • Decks and porches

Nearly every home will benefit from painting these surfaces, and it’s much cheaper and less time-consuming than redoing the entire siding of the house.

Finally, look at the walkways and driveway to determine whether they need to be redone or if they have just a few cracks that can be patched. Here’s a great tutorial from This Old House on how to give new life to concrete surfaces that have seen better days.

Prioritize these aspects of your yard

Great landscaping helps pull a buyer’s eye up to the front door of the home. Whether a potential buyer is driving by your property or looking virtually, a thriving yard will help draw their interest.

Be sure to emphasize walkways, no matter how short or long they are. In-ground plants and solar LED lights can help showcase the paths leading up to your front door. Once you get closer to the entry, the landscaping grand finale should include plenty of plants. In-ground flowers or potted arrangements will create a bright and lively invitation for buyers to enter.

Of course, we don’t want to forget about the foundation of your front yard. If your lawn is mostly grass, here’s what you need to do:

  • Fill in any problem areas with new sod.
  • Water your lawn to keep it lush.
  • Mow your yard often.

Last, pack fresh mulch tightly around your existing plants for even coverage and get rid of any dingy mulch.

Finishing touches that make all the difference

Congratulations, you’ve made it to the fun part! The final details are usually the most exciting and cost-effective updates for homeowners.

It’s undeniable that a new front door is the best curb appeal update you can make. Not only will it recoup nearly 70 percent of the cost at resale, it will change the entire vibe of your property’s exterior. Consider painting it a bright, complementary color to really give your home an extra pop.

Does your home’s front walkway or porch have room for an outdoor seating area? Look into new benches, porch swings or casual chairs to demonstrate how great the home is for entertaining or relaxing.

Last, look at the fixtures — all of them. It’s common for homeowners to replace fixtures only when they break, which results in a hodgepodge of looks. Sync the exterior look by purchasing new fixtures that match in style and finish, including:

  • Doorbells
  • Door knockers
  • House numbers
  • Mailboxes
  • Mail slots
  • Light fixtures

Commitment to curb appeal

Not sure what kind of extra attention your home needs to look its best? Get in touch any time for insights on sprucing up your property, so it will appeal to the highest number of buyers online and in person!

Hot summer trend: Inviting outdoor spaces

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Key insights:

  • Optimize your outdoor space for dining, relaxing, playing or entertaining with these tips.
  • Prepare for the elements by including umbrellas, heaters and citronella candles in your outdoor area.
  • Plants and lights help create ambiance for relaxing and gathering. Consider adding these and other decorative items to your deck or patio.

In the Midwest, homeowners enjoy the treat of all four seasons. However, summer months are limited, so it’s important to maximize the time and space you have to enjoy the sunshine, green grass and longer days.

With summer approaching, homeowners across Minnesota and western Wisconsin are preparing their yards to make the most of the warmer weather. Here are our favorite tips to spruce up your outdoor living spaces. Follow them and you’ll be hosting dinner parties on your deck or soaking up novels in your new lounge space in no time.

How to create an inviting outdoor space

Whether you’re selling your home and you want to bring the outdoor spaces up to par, or you’re a homeowner ready to enjoy fresh air on warmer days, it’s important to have a clean and tidy slate to build upon. Be sure to declutter your garage, lawn care supplies and any outdoor toys that may be lying around.

Once everything is situated, it’s time to begin implementing the latest trends for outdoor spaces in your yard.

Decorate an outdoor dining area

Take advantage of a deck or patio space to create an outdoor dining area. This space is great for entertaining dinner guests and for bringing the family to hang out or eat together throughout the summer.

When decorating your outdoor eating area, create a checklist of items you may need to purchase or dig out of storage to complete the space. Here are some items you may want to include:

  • Durable dish set
  • Carafe for water or sun tea
  • Outdoor table and chairs
  • Heaters for chilly nights
  • Umbrella or other covering for shade
  • Citronella candles to keep mosquitoes away
  • Planter for fresh herbs, or a complete fruit and vegetable garden

Take your lawnside dining area to the next level with a barbeque, grill or entire outdoor kitchen, which allows you to enjoy the complete dining experience — from cooking to table — in your yard. Last, consider adding a firepit or fire table in your outdoor dining space. Not only do these elements exude luxe vibes, they also make a great center for gathering.

Build an oasis for relaxation

What’s more relaxing than lounging in your backyard, enjoying a warm summer day? To build a tranquil space in the comfort of your yard, consider what calms you down and what brings you joy. Here are some additions to consider incorporating in your backyard getaway:

  • Lounge furniture
  • A hammock
  • Wind chimes
  • Bird feeders
  • Outdoor stereos or speakers
  • Glowy lights or candles (for after dark)
  • Textured pillows and light blankets

Plants are another great way to add both life and ambiance to an outdoor space. If you enjoy bird watching or observing butterflies and bees while relaxing on your patio, you may want to plant a pollinator garden. Not only will this garden help support the environment, but it will also add color and life to your calm oasis.

Make room for recreation

After a day’s work in the office or a weekend of lawn care, it’s time to play. Depending on how you enjoy your leisure time, there are a variety of options to create recreation spaces in your yard, such as:

  • A corner for yard games such as cornhole or giant dominos
  • Swings or benches
  • A fire pit with a s’mores station
  • A meditation garden
  • A treehouse, trampoline or playset for kids

If you’re ready for a bigger undertaking and investment, you might think about installing a hot tub or pool — or building a she-shed or detached home office in your yard to satisfy your hobbies and recreational desires.

Optimize your space for entertainment

If you have a beautiful outdoor space, you might as well share it. When making updates to the exterior of your home, remember how to optimize the space for entertainment. These considerations are ultra-important to keep in mind as you set up dining and lounging areas.

Additionally, you can transform the face of your house to include a social front yard. Homeowners have come to realize the benefits of utilizing their front yards to socialize with neighbors. This space is also ideal for less formal occasions and gatherings. To do so, include some of these features in the front of your home and yard:

  • A bench, rocking chairs or other seats on the front porch or near the front door
  • Trees or umbrellas to create a shaded area for conversation
  • Plants, shrubs and potted flowers for extra curb appeal

Enjoy a summer outside

Once your outdoor space is elevated, you’ll be ready to dine, relax, play and entertain! If you’re creating your outdoor living space in anticipation of selling, be sure to reach out before you begin the process. Together, we can determine the best setup and staging of both your outdoor and indoor living spaces.

How to mosquito-proof your yard this summer

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Key insights:

  • Keeping a wood pile to fuel your summer bonfires? Cover it up to avoid building a home and breeding ground for bugs.
  • It’s possible to bug-proof your yard without breaking the bank. Consider citronella candles and good old bug spray.
  • If your bug problem gets out of control, hire a professional to spray your yard.

After being cooped up all winter, you’ll want to enjoy your outdoor living space and not have it overrun by pesky bugs. So how can we ward off the more than 50 species of mosquitoes that live in Minnesota and Wisconsin, and fully enjoy our summers?

Here are tips to bug-proof your yards and homes — making summer days swinging on the porch and evenings grilling out even more enjoyable.

Work now to keep bugs out of your lawn later

If possible, it helps to prep your yard before mosquito season arrives (which is typically around May in Minnesota and Wisconsin). By doing so, you’ll help to decrease the areas in your yard that attract bugs.

To begin, get rid of standing water. Not only will this improve the health and appearance of your lawn, it will also remove the chance of mosquitoes calling this space home. Next, cover up any logs that you may have piled up. Whether you have a stack of wood for home improvement projects or firewood to fuel your summer bonfires, cover them so they don't become breeding grounds for mosquitoes after rainfall.

Effective ways to remove bugs from your yard

Here are some of our favorite simple and cost-effective ways to get bugs out of your lawn. The end game? A summer filled with yard activities, without the bites and itching that can ruin even the most pleasant day or night.

  • 1. Classic bug-free options. Whether you like to sit out on your porch, deck or right in your grass, stash a can of good old bug spray on every outdoor tabletop and shelf that you have. By keeping bug spray constantly within reach, you’ll remember to spray yourself and ward off pesky bugs.
  • 2. Alternative repellents for kids. Mosquito patches or stickers are a great option for kids who may not be jiving with traditional sprays or their strong smells. Many of these stickers are plant-based and free from DEET, too. For another quick-and-easy option, look into mosquito bands.
  • 3. Order an umbrella net. For the effect of a screened-in porch, purchase an umbrella net. You can attach this screen to your patio umbrella to create a pop-up screened-in area. These nets have mixed reviews for durability, so be sure to do your homework before buying.
  • 4. Purchase a spatial repellent. Have you heard of Thermacell rechargeable mosquito repellent devices? This gadget is battery-operated and it keeps mosquitoes away for hours — without any odor! They even offer rechargeable models and more decorative options, such as repellers that look like lanterns.
  • 5. Go natural. You can also try more natural options, including mosquito-repelling candles, which typically use citronella or Citriodiol (also called lemon eucalyptus oil). The scent of citronella is natural yet floral, plus it keeps bugs away. Peppermint, eucalyptus and lavender essential oils have also been known to keep mosquitoes away.
  • 6. Spray-it-yourself options. Not interested in dousing your clothes with repellent or dealing with extra gadgets to keep the bugs away? A DIY yard spray might be for you. To mosquito-proof your backyard with lawn spray, head over to your nearest hardware store or landscaping store. They’ll have a few different effective sprays to recommend.

Invest in a bug-free outdoor space

If you’re done exploring DIY options and you’re ready to get serious about pest control, you may want to think about large-scale options.

First, consider hiring a professional to spray your lawn. Not only are there companies devoted solely to pest control, many landscaping companies also offer spraying as an add-on to their typical services.

Their heavy-duty spray will kill off any existing bugs and prevent future mosquitoes from coming. However, spraying your yard isn’t a one-and-done procedure. To enjoy a bug-free yard throughout the summer, you’ll need to routinely schedule lawn sprays throughout the season. And, keep in mind, spraying for mosquitoes and gnats can potentially harm bugs that we do want to keep around, such as butterflies and bees.

Alternatively, this could be the year you build your long-awaited screened-in porch. This is the perfect option to keep bugs out, without having to do continual upkeep or buying new sprays and products every few weeks. With a screened-in porch, you can enjoy the summer breeze and the sunshine peeking in while avoiding sunburns and pesky bugs.

Moving forward, without mosquitoes

By following these preventative and active bug repeller steps, you’ll be well on your way to a more enjoyable summer in your yard.

If you’re ready to make your yard look its best before you sell, get in touch. By working with a true professional, you’ll be able to search for your next dream home even as you soak up everything this summer has to offer.

What is an MLS listing?

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Buyers and sellers look at online MLS listings every day. But what exactly does it mean for a home to be posted on the MLS? And, what does MLS stand for?

The MLS, also known as the multiple listing service, is a service REALTORS® use to publish property listings so the listings can be found by other agents and potential buyers. In other words, the MLS can help you on your hunt for a new home by providing credible housing data and insights on available properties.

Whether searching for a new property to purchase or selling your current home, it’s important to utilize the MLS. In the meantime, here are some questions and answers that you may have about the MLS:

  • What is an MLS listing in real estate?
  • What are the benefits of an MLS?
  • How does an MLS work?
  • How do I use an MLS?

Multiple listing service: What it means and why it matters

The MLS provides a database of available and sold properties in a given area. This online service constantly updates property information and notifies MLS members, such as Realtors and brokers. There is no single MLS that serves the entirety of the U.S.; instead, over 800 MLSs across the country work to provide housing data for their defined market areas.

Because housing information is tailored to certain regions throughout the country, each MLS is specific to the area that it encompasses. The goal of an MLS is to make it easier for homebuyers, sellers and Realtors to find what they are searching for in a given market.

MLSs are membership-only, and their members tend to be the Realtors and brokers who support the service. This means that MLSs are not usually directly accessible to the public; however, they do license their data to be used by home search websites. So while most consumers will not log into their local MLS, they will view MLS listings on local or national websites that are powered by MLS data. For example, Edina Realty is a member of seven local MLSs, which allows edinarealty.com to publish virtually every listing available in Minnesota or western Wisconsin.

What is an MLS number?

The MLS utilizes a system to assign a number to every home within the database. A new number is attributed to each new home sale. Because listings acquire numbers in sequence, it’s possible to tell which listings are newer and older based on their MLS number.

Keep in mind, if a home sells or is withdrawn from the market, it will receive a new MLS number if it is ever listed again. However, if a pending sale falls through but the home remains on the market, the property will retain its MLS number until the sale is complete.

In short, the MLS number helps keep track of how recently a home was listed for sale and it provides a quick way to reference properties in the system.

How is an MLS real estate listing different from other listings?

To list a home on the MLS, you must be a member of that MLS. Typically, Realtors and brokers pay a membership fee to their local MLS (or to more than one MLS) in exchange for the ability to list and view properties in the system. To get a home listed on the MLS, it is typically necessary to work with an agent who pays dues to that MLS.

Aside from the MLS, other potential home listings include:

  • Pre-list properties. These “pre-market” homes can be marketed internally by agents who are networking with other agents within their brokerage. At Edina Realty, we have access to a network of 2,300-plus agents and the properties they represent for sale. By working together, we may be able to find homes that fit your criteria, even before they are listed on the MLS. If you’re interested in discussing or touring pre-list properties, get in touch.
  • Other withheld properties. Certain high-value and high-profile homes may be listed off the MLS in order to maintain seller safety and privacy. Networking agents may have access to this more exclusive sale information.
  • For sale by owner or FSBO homes. While there are websites that list FSBO properties via the MLS, many self-sellers choose to market their properties independently, if at all.

Benefits of multiple listing services

Thanks to the MLS system, real estate professionals can easily network and share housing information. At the same time, this platform is beneficial to homebuyers and sellers. The MLS makes listings more accessible to buyers and provides a place for sellers and their properties to gain exposure. Additional benefits to utilizing the MLS for your home purchase or sale include the ability to:

  • Access property status. Each MLS listing will include the status of a given property. So, you’ll have up-to-date information including whether a certain home is available, has an active contingent status or is in a pending sale.
  • Display a wide variety of homes. The MLS provides equal access to all members. Buyers and sellers can feel confident that they have access to all active available homes while working with an agent that has MLS access.
  • Showcase a home while maintaining privacy. While the MLS will display a home for sale to all members, and typically the public, certain details will be kept private. This allows the property to be advertised while safeguarding details like the seller’s contact information and whether a property is vacant.

How does an MLS work?

The MLS is paid for and created by real estate professionals as a way to cooperatively market and sell properties across various brokerages. Although there are different MLSs for different geographic areas, the breadth and reputation of the MLS as a whole make it the primary data source for all home listings.

Edina Realty is a member of seven local MLSs, providing access to all available home listings in Minnesota and western Wisconsin.

What does an MLS listing include?

Properties listed on the MLS typically include the following details:

  • Photos
  • Number of rooms
  • Unique home amenities
  • Asking price
  • Status of property (e.g. “coming soon,” “pending” or “contingent”)
  • Availability for showings

MLS listings exist for both sale and rental properties, but the MLS post may look different depending on whether the property is for sale or rent. For instance, a rental property may include monthly costs, duration of the lease and a clear indication that the property is being leased. In some circumstances, a home may be listed for sale and rent simultaneously.

How do I use an MLS?

Buyers and sellers can both use the MLS to their advantage, although they won’t normally use it directly. According to the National Association of Realtors, “MLSs are private databases that are created, maintained and paid for by real estate professionals to help their clients buy and sell property.” There are a few MLSs around the country that allow for public access, but none in Minnesota or western Wisconsin.

Therefore, homebuyers and sellers will use a website or property search tool that is powered by MLS data, such as edinarealty.com, rather than using the MLS directly. To ensure that they are accessing accurate listing information, buyers should confirm their preferred property search is using reputable information from MLS data, and not data that is aggregated from less reputable sources.

How do I find my local MLS?

In our market area of Minnesota and western Wisconsin, only members can see MLS information directly. So, unless you are a member of a local MLS, you will not be able to access the database directly. Nonetheless, property information that has been approved for public view — such as the number of bedrooms, asking price, square footage and listing photos — will be available on any website that has MLS affiliation.

How does Edina Realty use the MLS?

Edina Realty utilizes the MLS to showcase home sellers’ listings and to help home buyers find their next dream home. Edina Realty provides information on properties represented by our brokerage, but also by other brokerages through a system called broker reciprocity.

By participating in broker reciprocity, Edina Realty displays the details of virtually every active and available, coming soon or sold property listing via the property search on edinarealty.com. Simply use the home search feature to see available homes near you, along with their MLS-approved details and features.

What makes Edina Realty different?

When you work with any Edina Realty agent, you’ll have the reassurance that you are working with a licensed Realtor who has agreed to work by the shared code (and high standard) of Realtor ethics.

Additionally, Edina Realty as a company goes above and beyond to ensure that our clients are always receiving the highest quality service.

  • Our MLS listings are updated every 15 minutes, so you know you’re always looking at the most up-to-date property information and availability.
  • Edina Realty is a part of seven local MLS services, allowing us to display every active, available property for sale in Minnesota and western Wisconsin, as well as coming soon listings and sold properties.

Access local MLSs; find your dream home with Edina Realty

In a fast-moving housing market like we’re in today, buyers can rest assured that they're receiving accurate, up-to-date information about homes when they search on websites powered by MLS data. These sites, like edinarealty.com, will include detailed information on the property’s status, price and availability for showings.

If you’re ready to buy, sell or have more questions about how the MLS works for you, reach out any time. Together, we can determine the right step forward.

How and when to cancel your mortgage insurance

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Key insights

  • Conventional loan borrowers are required to pay private mortgage insurance until their loan-to-value ratio reaches 80%.
  • To get their mortgage insurance canceled, borrowers should contact their loan servicer in writing.
  • To get their insurance removed faster, borrowers can also make accelerated payments or get their home re-appraised.

When are borrowers required to pay mortgage insurance?

In order to understand the need for mortgage insurance, it’s important to first discuss the concept of a loan-to-value (LTV) ratio. Your LTV ratio is the total amount you borrowed in your loan, divided by the value of the property that you purchased. As you make contributions to your loan premium, your LTV ratio will decrease.

How loan-to-value ratios are calculated for a $400,000 house:

Percent down

Money down

Total loan amount

LTV ratio at closing

20%

$80,000

$320,000

80%

15%

$60,000

$340,000

85%

10%

$40,000

$360,000

90%

Here’s a faster way to think of it:

  • If you put 20% down at closing, your LTV ratio would be 80%.
  • If you put down 15% at closing, your LTV ratio would be 85%.
  • If you put 10% down at closing, your LTV ratio would be 90%.

If a borrower’s LTV ratio is above 80% at closing, lenders require monthly mortgage insurance premiums. Because borrowers who put down 20% or more at closing are less likely to default on their loan, lenders typically do not require them to pay mortgage insurance.

Conventional loan borrowers will pay private mortgage insurance payments (PMI) until their LTV ratio reaches 80% at minimum. FHA borrowers, on the other hand, will pay an up-front mortgage insurance premium at closing; they will also be expected to pay monthly premiums for the life of their loan.

Read more about mortgage insurance for FHA loans.

When does private mortgage insurance get canceled?

On closing day, conventional loan borrowers will be given two dates to keep in mind. Assuming the new homeowners make all payments on time and do not accelerate their mortgage payments, they’ll be informed of:

  1. The date when the LTV ratio will reach 80%, and their loan servicer is allowed to cancel their mortgage insurance.
  2. The date at which their LTV ratio will reach 78%, and their loan servicer is required by the government to cancel their mortgage insurance.

In most cases, loan servicers drop the insurance requirement at a 78% LTV ratio. If a borrower wishes to request mortgage insurance cancellation at 80%, they can do so in writing to their loan servicer.

What steps can borrowers take to cancel their PMI?

After closing, it’s likely that your loan was sold by your original lender. The vast majority of loans are sold to loan servicers after closing. Your loan servicer is who you currently send your monthly mortgage payments to; this is also the entity that may be able to cancel your mortgage insurance upon request.

At 80% LTV, you can contact your loan servicer to request that they drop your monthly mortgage insurance premiums. To be considered, you must:

  • Put your request in writing.
  • Have a history of on-time payments (though this may be waived if a few payments were delayed due to the COVID-19 pandemic).
  • Not have any outstanding liens on your property.

Your servicer will be in touch to inform you of their decision. Keep in mind that if you aren’t sure if you’re eligible for cancellation, there’s no harm in contacting them. “My guidance is, always call your loan servicer and talk to them,” said Edina Realty home mortgage consultant Enda Moore. “They will be able to guide you through the necessary steps to determine if you are eligible to have your monthly insurance premiums removed. The worst thing they’ll say is, ‘No, it’s not time yet.’”

How else can borrowers get their mortgage insurance requirements removed?

There are a few other ways that you can get your mortgage insurance requirements removed even before the dates you are given at closing.

1. Make accelerated payments to remove PMI

If you make accelerated mortgage payments, you’ll begin paying off your loan premium faster than the schedule set by your lender. This means that your LTV ratio should drop to 80% before the original date you were given at closing. If you have accelerated payments but aren’t sure of your current LTV ratio, divide your current loan balance (which can be found on your latest statement) by your home’s appraised value. Multiply this number by 100 to get your current LTV percentage.

2. Refinance your loan to remove PMI

While most borrowers refinance to take advantage of lower interest rates, it’s also possible to refinance as a way to get your mortgage insurance requirement eliminated. This is especially possible in a housing market with fast-rising home values, like the one we have today.

If your home’s appreciation rises to the point when you have 20% equity, then refinancing could be a smart option to remove your mortgage insurance. Your lender can help you calculate if the cost of refinancing will save you money in the long term, after the cost of closing is factored in.

“If you’re currently financed at a higher rate than what we’re seeing today, and you think your home price has risen over the last few years, it’s worth looking into refinancing,” says Enda Moore. “Even if you don’t remove your insurance altogether, you may see a reduction in your monthly insurance payment, and a lower monthly premium as well.”

3. Get an appraisal to remove PMI

Last, you may be able to get your PMI requirements removed if you get a home appraisal showing your home has increased in value. If your home’s value has risen significantly (either due to the market or updates you’ve made to the property), that could allow you to request an early cancellation of your mortgage insurance from your loan servicer. Be sure to contact your servicer before you go down this path, as they may have special requirements or rules for you to follow.

Ready to get started?

Mortgage and mortgage insurance can be tricky topics, but you don’t have to go it alone. The best way to determine your eligibility for removing PMI is to contact your loan servicer. If you need other help understanding your loan, you can also reach out any time for one-to-one guidance.

*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. Not all borrowers will qualify.

How sellers can stage their home for sale

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Key insights

  • Your color scheme should remain mostly neutral when staging. However, some pops of color can add charm.
  • When staging your home, emphasize the high points of each unique room and space.
  • s your expert in the home transaction process, your REALTOR® can provide insights on staging techniques and how and when to hire a professional stager.

If you’re ready to put your home on the market, you’ll want to create a space that’s appealing to buyers. If someone can imagine themselves living in your curated space, they may be more likely to buy it.

But how much time and money should you spend staging your home? And do you have to renovate every room? Here are answers to your questions as you prep your home for sale.

When it comes to staging your home, you’ll want to know:

  • The basics: How and why people stage their homes
  • Home staging tips for each room in your house
  • Should I hire a stager or can I do it myself?
  • How can I find the best local home stager?
  • All things considered, should I stage my home when selling?

The basics: How and why to stage your home

Over the years, your family has created a home that perfectly suits you. Maybe the traditional living room has transformed into a TV room for your video-game-obsessed kids and the basement is your at-home fitness studio.

Everyone develops a home flow that works best for them. But when it comes time to sell, you don’t want to show buyers how you live. You want to showcase the features of your space and offer potential homebuyers a peek into how their lives can fit into your house.

Staging your home is a process that highlights the property’s potential and minimizes its weaknesses. To stage a home, you’ll want to present the space as a clean slate so that any buyer can picture themselves living there.

The process of staging a home typically includes:

  • Getting rid of clutter. No more baskets of mail to shred or clothes on “that chair” in the bedroom.
  • Neutralizing the space. Paint over bright rooms and rent furniture that doesn’t make a statement.
  • Returning rooms to a more common purpose. The Xbox needs to leave the living room and the space should be reappointed to a more traditional setup.
  • Creating more space. Get rid of bulky furniture, which can make rooms look smaller.

And remember, experts advise sellers to stage their homes because it works. Buyers greatly prefer staged homes. According to the National Association of Realtors (NAR), 83% of buyers’ agents said “staging a home made it easier for a buyer to visualize the property as a future home.”

Home staging tips by room

Although staging a home is important, it’s not necessary to completely redo every nook and cranny. Not every room needs to be completely staged; per the NAR, the most popular rooms to stage are the:

  • Living room (93%)
  • Kitchen (84%)
  • Main bedroom (78%)
  • Dining room (72%)

In your case, you’ll want to stage the most highly-trafficked rooms, and the spaces that have the most potential for “web appeal” to online buyers. Here’s how to transform various areas in your home to appeal to a broader set of buyers:

Living room

  • Remove bulky furniture.
  • Put photos and knick-knacks into storage.
  • Remove outdated decor.
  • Use a subtle wall color (re-paint if necessary) and neutral furniture.
  • Add small pops of color for charm — throw pillows, blankets and baskets work well.
  • Emphasize natural light by opening shades and utilizing side lamps.

Dining room

  • Set up an appropriately-sized table.
  • Select four or six chairs to place around the table.
  • Hang a single pendant-style light over the table.
  • Keep open shelving sparse — don’t display every piece of Granny’s china.
  • Set the table with chic and simple table settings.

Owner’s suite or main bedroom

  • Make the bed, which should have a bed frame and headboard. Use fresh, neutral bedding.
  • Create texture with plush throw pillows.
  • Make the space look and feel open.
  • Remove all furniture in the room except the bed, side table and dresser. Desks and couches are not necessary unless the room has more than enough space to accommodate the extra pieces.

Other bedrooms

  • Follow the same “less is more” theme as the main bedroom, keeping the space well-decorated, bright and airy.
  • Refrain from putting a queen-sized bed in a tiny room.
  • When staging a kid’s room, minimize the number of toys and books that are present.

Kitchen

  • Clean it until it sparkles — inside and out.
  • Pay special attention to cabinets, the top of the fridge and stove, inside the oven and more!
  • Remove clutter and appliances from counters so all surfaces appear spacious.
  • Keep four to six place settings in your cupboards, including cups, mugs, bowls, napkins, etc. Remove extras and mismatched sets.
  • Add a plant or some other decorative charm, like a bowl of lemons or apples.

Bathrooms

  • Clean, clean, clean, including the shower, counters, toilet, fixtures and floors.
  • Consider upgrading the vanity or at least the hardware to something more trendy.
  • Revisit the light fixture if outdated.
  • Reconsider your trays, soaps, towels, rugs and bath mats. Display items that are new and matching.
  • Add candles and other bath items around a soaking tub to remind the buyers of how they could end each day.

Should I hire a stager, or can I do it myself?

It’s important to stage your home for sale. But, when deciding whether to hire a stager:

  • Consult with your agent.
  • Assess the amount of work the space will need.
  • Consider the cost of staging.

Of course, you’ll never be making the staging decision alone. We’ll work together to determine how much effort will need to go into your home in order to have it ready for listing and home tours.

In some cases, a home may only require basic cleaning and reorganizing to be market-ready; in others, the space may need all new furniture and decor. Here, a stager’s discretion could come in handy.

If we do decide to hire a professional stager, we’ll be sure to find the one who:

  • Fits the style and budget.
  • Maintains positive online reviews.
  • Has furniture or staging items that match your house style.
  • Has experience working with private sellers.

Should I stage my home when selling?

In short, absolutely. Fifty-three percent of listing agents say that staging a home decreases the amount of time a home spends on the market, because it increases buyer interest and in-person traffic to the property.

To stage a house perfectly, a home seller or stager must:

  • Neutralize the property so buyers can picture living (and thriving) in the space.
  • Use smaller furniture so that rooms feel more open.
  • Add pops of color and accent walls for an extra punch of cheer and charm.
  • Emphasize the rooms with the most potential.
  • Focus on tidying up the bathroom.
  • Return rooms to their most natural purpose.
  • Use special considerations based on the season.
  • Eliminate potential odors that will hamper the home tour experience.

Moving forward with a staged home

taging is an important part of selling your home, and even in today’s fast-paced market, great staging can be critical for obtaining the highest offer. Let’s meet to discuss how we can help make your house shine. Reach out to get started.

7 ways to make your home more eco-friendly

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Key insights

  • Reusable household items like beeswax food wraps and wool dryer balls can help save money and reduce waste.
  • Composting is a smart and easy way to minimize food waste and bolster your garden’s fertilization.
  • Technology is on your side! Smart home features can help automate more eco-friendly practices in your home.

Green homes save money, are healthier for you and help support the environment. It’s no wonder why many homeowners have the goal of going green, but where does one start? Making the changes to have a more eco-friendly home can feel intimidating, but these seven practical energy and waste-saving tips are easy to implement.

1. Assess your space

When going green, start by assessing your space and analyzing what you have to work with. After determining your baseline, you can make plans for improvement. To begin your green makeover, we recommend starting with a DIY home energy audit and then decluttering your home.

The self-energy-audit will help you identify what areas of your home could use improvement, whereas decluttering will create space for the changes you’d like to implement.

2. Switch to reusable household items

An average person uses 500 plastic sandwich bags throughout the year. Now imagine the accumulation of waste due to single-use household items every year.

The initial investment in reusable household items can seem expensive, but with repetitive use, you typically save money over time. These items can also help you cut down on trips to the store. Of course, the primary benefit is that you are reducing your own input to landfills when you reduce your reliance on single-use items.

Here are some reusable items that can seamlessly be added to your household:

3. Install energy-efficient appliances

Over the years, home appliances begin to wear down and may need to be replaced. In fact, most appliances last around 10 years before an upgrade is needed. While the waste from replacing these appliances can be frustrating, it is possible to purchase green appliances that will help your home grow more energy-efficient.

Search your local home improvement store for an eco-friendly appliance that matches your budget and home style. And remember, another green practice is to continually get your appliances serviced to ensure they last as long as possible.

4. Start to compost

Composting helps eliminate the production of some greenhouse gases and the burden of waste that enters landfills. Start by designating a food scrap bucket or using compostable trash bags. Then, decide whether you want your compost removed by a local service, added to a compost pile in your yard or put in a designated compost bin.

5. Reassess your cleaning products

What you use in your home impacts the health and safety of your space. Opt for more eco-friendly cleaning products or even DIY cleaning solutions; they’re better for both you and the environment. When picking out your new products, be sure to look for sustainable brands, low-waste or refillable packaging and simple ingredients.

6. Walk to nearby parks and stores

Rather than driving a mile down the road to pick up your Sunday morning coffee, try walking! Walking to parks, trails, stores, events and nearby amenities can help decrease your carbon footprint and fossil fuel emissions. Plus, you’ll get to enjoy a little fresh air around your neighborhood — it’s a win-win.

7. Use technology to your advantage

When establishing a more eco-friendly home, take some of the work off of your back and pass it on to technology! These days, there are plenty of ways to automate greener systems in your home.

  • Set up online bill payment to eliminate paper mail.
  • Invest in smart home features for higher efficiency.
  • Set timed lights so you never have to worry about an “on” switch while at work.
  • Program your thermostat to match your work and school schedule.

Moving forward, go green!

Looking to implement eco-friendly practices in your home for today or hoping to find a green home moving forward? Agents know more than just buying and selling and are always available to talk about your home energy goals or other housing needs. Reach out any time for an honest, no-obligation discussion.

The five best reasons to downsize your home

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Key Insights

  • Downsizing can save you money, with the potential to eliminate your mortgage payment and decrease utility spending.
  • A smaller house can bring bigger opportunities. Free up your space and time with a more manageable property.
  • Start your downsizing journey now; today’s market favors sellers.

As the market continues to favor sellers, and baby boomers enter retirement, it’s no surprise that the nation’s seniors are beginning to sell their homes in larger numbers. In 2020, the National Association of REALTORS® (NAR) reported that sellers over the age of 55 accounted for more than half of the homes sold across the country.

Below, we explore five reasons downsizing to a smaller home can be the best plan of action for homeowners holding on to expensive (and expansive) homes they’ve owned for decades.

1. Buy your next home in cash (and be mortgage-free!)

Some homeowners find that by downsizing, they can earn enough at closing to buy a less expensive home in cash and end up mortgage-free in a new abode. NAR indicates this is a very common route for those nearing retirement. In 2020, sellers aged 65 to 73 sold their homes for a median price of $289,000 and bought for a median price of $279,500. (Keep in mind that in the Twin Cities metro area, the median home price in 2020 was $305,000*. Local downsizers may find that the sales prices of the homes they sell or buy are higher than the national averages.)

Not only will downsizing homeowners save money by decreasing — or eliminating — their monthly mortgage payments, but they may spend less on utilities in a smaller space. It’s a win-win situation for any wallet.

2. Minimize your upkeep, maximize your time

Larger family homes can take up several hours each week to keep up, and those who raised families may find that the three-story home they needed in the past is impractical now. Moving forward, a more manageable property can reduce the hours homeowners spend maintaining their homes, and free up leisure time to enjoy the space.

NAR’s data supports this, showing that the median size home purchased by those over the age of 65 was between 1,800 and 1,950 square feet. By comparison, homeowners aged 40 to 54 tended to buy homes that were an average of 2,300 square feet.

3. Move closer to family and friends

While sellers of this age do tend to downsize, it isn’t always their primary reason for selling. Instead, 28 percent of sellers aged 65 to 73 reported that proximity to family and friends was their number one motivator for selling and moving. During this season of life, situate yourself near those who are most important to you. And consider these additional top reasons for moving:

  • 14 percent state they are moving due to retirement.
  • 10 percent state their home has become too large.
  • 10 percent state they are moving to a more desirable neighborhood.

4. Embrace a long-term solution

Last year, NAR reported that 13 percent of buyers over the age of 50 purchased senior-friendly homes or units in planned communities. In many cases, this age group is not only planning for the “now,” but they are also planning to remain independent and accommodated for the upcoming years of their lives.

Many downsizers look for one-level homes with open floor plans, larger rooms and wider hallways. Not only do these homes prove to be great for entertaining guests, they can also provide wheelchair and senior accessibility for the future.

5. Gain freedom and flexibility

Last, and perhaps most importantly, homeowners who downsize are acknowledging that it’s finally their time to choose. Among last year’s sellers over the age of 65, more than 35 percent had lived in their homes for more than 21 years. By selling their home, they can regain the flexibility they may have given up as they previously pursued career and family aspirations over their preferred property.

Whether it’s finally time for a home on the water, a condo in the city or something else altogether, downsizers may be excited that they finally get to call the shots.

Ready to move forward and downsize?

f you’re preparing to downsize, get in touch. Together, we can discuss how today’s market favors sellers and determine your plan moving forward after the sale of your house.

*Data courtesy NorthstarMLS for the 16-County Twin Cities metro area for January 2020-December 2020.

Co-owning a cabin: Should I buy a property with family or friends?

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Key Insights

  • Communication is key. This saying rings more true than ever when it comes to co-owning a property.
  • Outline the logistical details of joint ownership now so you can rest easy and enjoy the cabin for years to come.
  • Hire professionals, like an attorney and REALTOR®, to guide you as you buy or inherit a cabin with friends or family.

Whether you grew up in Minnesota or Wisconsin, or have vacationed in the area, you’ve likely experienced the joy and peacefulness of lake life. Memories of roasting marshmallows, canoeing across the lake and laughing through family game nights are abundant when summering at a cabin or renting one for the week.

While you may be dreaming of your perfect lakeside abode, purchasing a second property can feel burdensome to some budgets. Luckily, you don’t have to do this solo. If you are ready to purchase a cabin with friends or family, or have jointly inherited a lakeshore property, here are considerations to keep in mind as you move forward with cabin co-ownership.

How to purchase a cabin with friends or family

The excitement of a cabin purchase is likely to prevail at the beginning of your decision to co-own a cabin. While everything may easily align at this stage, it’s important to consider the details of property ownership and potential complications that could arise later down the road. Here are some steps to set you and your co-owners up for a successful shared property — plus, establishing rules now will help safeguard everyone in the future should an issue arise.

Decide on an ownership structure

When spouses or partners purchase a home, they often take ownership in joint tenancy. This means that if one owner dies, their interest automatically passes to the other owner. That might not make sense when we’re talking about a co-owned cabin. In this circumstance, the owners may want to have their interest pass on to their own heirs and not their co-owners. To do this, you can take ownership of real estate as a tenancy in common, which means that each person owns an interest in the property, but if they die, their interest can pass to their heirs.

Another option worth considering is creating an entity, like a limited liability company (LLC), to own the property. The individuals would each have an ownership interest in the LLC. When creating an LLC, the parties can develop all of the necessary agreements and rules to govern the cabin and the parties’ rights. Another benefit of creating an LLC is that it can help reduce everyone’s personal liability in the event that there is an injury on the property. That may be particularly appealing when you don’t have full control over the use of the property.

Choose your partners wisely

It’s important to establish who might be a good fit for this partnership in your life and who wouldn’t — even though you may love hosting them as weekend guests. Apart from sharing laughs and getting along, you’ll need your co-owners to be reliable and communicative. Most importantly, everyone involved should be open to creating strong rules for the arrangement, even if your relationship is typically more casual.

Draft a detailed contract

Take the time to lay out all the technicalities of a co-owned cabin — even more than you think may be necessary — within your contract. By spending the time now to iron out the details, your arrangement is more likely to run smoothly in the future. And that’s important, as it will allow you to spend even more time enjoying the cabin, rather than navigating the logistics of ownership.

In your official contract, consider including these details:

  • Cabin ownership percentages
  • Division of mortgage, down payment and additional costs
  • What happens if someone dies or divorces?
  • What happens if someone can’t pay?
  • What happens if someone wants to sell, or terminate their side of ownership?
  • Who are the beneficiaries of the property, if applicable
  • How do you resolve disputes over whether to make a major repair or upgrade and who should be responsible for the costs?
  • Lake home insurance plans
  • Division of labor and upkeep (financial and labor)
  • Any rules for conduct on the property (e.g., no smoking)
  • Shared lake equipment, including recreational vehicles and boats
  • Schedule for use, including agreements around guests
  • Whether the property may be rented when not in use by the owners

Hire an attorney

Hiring an attorney to address co-ownership issues up front is strongly recommended. An attorney can help draft a contract that protects everyone’s assets and keeps the best interests of all parties in mind. When working with a knowledgeable professional, be sure to include a game plan for if one owner hopes to buy the other out, or if one owner would like to end the ownership and sell the property. Even if you don’t foresee this outcome, it will benefit everyone involved to have peace of mind knowing that a plan exists should anything out of the ordinary happen.

Understand co-owned mortgages

A co-owned mortgage or joint mortgage may make cabin ownership more accessible to those who aren’t ready or able to buy a property alone. However, a mortgage is a long-term financial obligation that needs to be thoroughly thought through by all parties.

Comparable to qualifying for a single mortgage, lenders will consider the income and credit information of all parties involved when approving the joint mortgage.

You inherited a cabin with your siblings. Now what?

Similar to purchasing a cabin with others, you’ll want to carefully consider joint ownership and hire an attorney to assist with a co-ownership contract of an inherited property.

Inheriting a property is often accompanied with the emotional fallout from losing a loved one. If possible, plan a transfer of ownership well in advance. Not only will this help to minimize any confusion associated with the property transfer, it will also allow for heirs to draw up their own co-owned contract should they want to continue ownership together.

If you or someone in your family is planning to pass down a property in the future, no matter how soon or far out, you may want to look into the details of a transfer upon death deed.

Daily details of lakeshore co-ownership

After the bigger details have been settled, it’s time to get on the same page regarding the day-to-day aspects of sharing a cabin. Schedule a time to come together with your co-owners regarding general cabin guidelines not outlined in the contract. Considerations for this list might include:

  • A cabin calendar, including who gets the property when.
  • A plan for hosting guests.
  • A schedule for property management, maintenance and improvement, including off-season prep and winter upkeep.
  • The use of boats, jet skis, life vests and other shared equipment.
  • A plan for how and when you’ll communicate changes, issues or concerns (you may want to schedule an annual meeting).

This is where it can start to get really fun and exciting. While sharing a cabin, you’ll likely end up with even more cabin toys to play with — such as kayaks, bikes and more — depending on how you plan to divide everything up. And, you’ll have double the hands to complete exciting cabin projects like building a bonfire pit or a landscaped path from your property to the lake.

Pro tip: Consider keeping a shared notebook or binder in the cabin to communicate things like when water filters or HVAC filters were last changed, what cabin quirks you’re noticing that might need to be addressed or even memories you want to share with each other. This would also be a good place to keep owner’s manuals or instructions.

Moving forward with a co-owned cabin

For folks who can’t afford their own cabin, co-ownership can be a great option. But the bottom line remains that compromise and good communication will be necessary to a successful and long-lasting lakeside partnership.

Are you moving forward with the purchase of a co-owned property, or are you ready to buy your own lakeshore home? Call or email today, so we can get you on the water early this summer.

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